Bone v Noonan; Kregor v Noonan
[1991] TASSC 176
•18 October 1991
Serial No B62/1991
List “B”
COURT: SUPREME COURT OF TASMANIA
CITATION: Bone v Noonan; Kregor v Noonan [1991] TASSC 176; B62/1991
PARTIES: BONE, John Harvey
BONE, Joan Elizabeth
v
NOONAN, James Edward trading as
NOONAN'S TRANSPORT
KREGOR, Michael Edward
KREGOR, Dulcie Joy
v
NOONAN, James Edward trading as
NOONAN'S TRANSPORT
FILE NOS: 1563/1988, 1564/1988, 680/1987, 681/1987, 143/1988, 144/1988
DELIVERED ON: 18 October 1991
JUDGMENT OF: Zeeman J
Judgment Number: B62/1991
Number of paragraphs: 35
Serial No B62/1991
File Nos 1563/1988, 1564/1988, 680/1987, 681/1987, 143/1988, 144/1988
JOHN HARVEY BONE & JOAN ELIZABETH BONE
v JAMES EDWARD NOONAN & ORS TRADING AS NOONAN'S TRANSPORT
MICHAEL EDWARD KREGOR & DULCIE JOY KREGOR
v JAMES EDWARD NOONAN & ORS TRADING AS NOONAN'S TRANSPORT
REASONS FOR JUDGMENT ZEEMAN J
18 October 1991
General
The plaintiffs Kregor brought three separate actions against the defendants. In each action they sought relief arising out of a contract made between them and the defendants dated 4 April 1986. The actions were consolidated. By their statement of claim in the consolidated action, Mr & Mrs Kregor claim damages against the defendants for breach of that contract. The plaintiffs Bone also brought three separate actions against the defendants. In each action they sought relief arising out of a similar contract entered into by them with the defendants and also dated 4 April 1986. Again those actions were consolidated. By their statement of claim in the consolidated action, Mr & Mrs Bone claim damages against the defendants for breach of that contract. The two consolidated actions were heard together upon the basis that all the evidence (so far as relevant) was evidence in each action.
Prior to the contracts having been entered into, the defendants operated a clay pit at Forcett. They had an arrangement with the Hobart Brick Company whereby that firm purchased from them supplies of clay required by it in the making of bricks. The clay was transported from the clay pit to the premises of the Hobart Brick Company in trucks owned by the defendants. Those trucks were driven by some of the defendants and by employees of the defendants. At about the time that the negotiations which led to the plaintiffs entering into the contracts with the defendants commenced, two of the defendants had in fact ceased to be actively involved in the partnership business of the defendants. The first and second defendants were the parents of the other defendants, and the partnership business was conducted as a family concern. Two of the sons were minded to follow other pursuits, and this no doubt led the defendants, and in particular the first and second defendants, to become interested in making other arrangements for the cartage of clay from their pit to the Hobart Brick Company.
Mr Bone and Mr Kregor had been friends for some time prior to their entering into contracts with the defendants. Mr Kregor had had some experience in the trucking business. He had operated a business, which involved the use of trucks, for some fifteen years, ending in 1985. Having sold that business, Mr Kregor was engaged in the sale of machinery and in the course of that occupation he called on at least some of the defendants. He was apparently unsuccessful in making a sale to the defendants, but, on the occasion of his visit, or on the occasion of a later visit, the subject of the defendants' willingness to sell two trucks with cartage contracts attached was raised. As a result, Mr Kregor had discussions with Mr Bone, who was then in employment, and both went to the defendants' premises and there spoke to the first and second defendants. Some tentative oral agreements were entered into by Mr Kregor and Mr Bone with the defendants. Bone and Kregor told the defendants that they would require the agreements to be in written form, but, no doubt as evidence of their good faith, each then paid the defendants the sum of $100.00. Bone and Kregor thereupon consulted their solicitor. He drew forms of agreement which subsequently were signed by the parties thereto, save that it appears that one of the defendants signed on behalf of some of the other defendants, but nothing turns on that point. The agreements are in common form. One is expressed to have been made between the defendants as vendors of the one part and Mr & Mrs Kregor as purchasers of the other part. The other agreement is in identical terms, except that Mr & Mrs Bone are shown as the purchasers and the description of the vehicle being sold is different. The relevant clauses of each contract are in the following terms:
"1The Vendor agrees to sell and the Purchasers agree to purchase that part of the assets of the business of cartage contractor carried on by the Vendor pertaining to the plant and equipment comprised and described in the Schedule hereto together with the said plant and equipment and together with the goodwill in relation to the said part at the price of FORTY SEVEN THOUSAND DOLLARS ($47,000.00) in respect of which sum the sum of TEN THOUSAND DOLLARS ($10,000.00) is allocated for the said goodwill and the rights and privilege appertaining thereto and the residue as the price of the said plant and equipment.
2The purchase price shall be paid by the Purchasers to the Vendor on the four (sic) day of April 1986
3This agreement shall be completed on the seventh day of April, 1986 when the Purchasers shall be entitled to delivery of the said plant and equipment together with all licences hereinafter referred to and to the transfer of the said goodwill
4Upon completion in consideration of the said sum of FORTY SEVEN THOUSAND DOLLARS ($47,000.00) the Vendor will do all such acts and things and deliver to the Purchasers all such documents as will be necessary to effect a transfer of registration of the plant and equipment and transfer of the relevant Cart licence to the Purchasers
5(a) In further consideration for the said sum of $47,000.00 the Vendor agrees that he will engage the Purchasers to cart clay from the Vendor's pit at Forcett in Tasmania to the Hobart Brick Company for a minimum of Five (5) days per week for a period of Four (4) years commencing on the 7th day of April next
(b)Rates payable in respect of such cartage shall be as agreed between the parties from time to time PROVIDED HOWEVER that the Vendor agrees to renegotiate such rates at the end of each six month period throughout the said period of Four (4) years".
In each case the schedule to the contract sets forth particulars of a Mack Tipper Truck by reference to model, registration number and engine number. The parties were agreed that in each case the contract erroneously stated the total price to be $47,000.00. They were agreed that in each case the price was $57,000.00 and that the purchase prices were paid to the defendants. It will be observed that there are defects in the form of contract. The operation of the contracts substantially could have been defeated by the defendants failing to agree upon reasonable rates of cartage from time to time. As it happened, a rate was agreed upon at the outset and it was renegotiated on one occasion. More significant difficulty flows from the way in which clause 5(a) is expressed and from the absence of further provisions on the subject matter of that subclause. The contracts do not define the expression "five days per week". The contracts do not specifically provide for circumstances in which the Hobart Brick Company might not require deliveries. I infer that the plaintiffs were only interested in acquiring the trucks as a package, i.e. with assured work for a period of four years. In those circumstances one might have expected the forms of contract to have contained extensive provisions dealing with at least those contingencies which might readily have been foreseeable. However, the contracts are silent on such matters and I must do the best I can in construing the meaning of clause 5(a).
The first question which requires determination is what is meant by the expression, "of five days per week". There are two aspects to this question. The first aspect is whether the expression ought to be read down so that in some weeks the defendants were required to engage the plaintiffs for fewer than five days, eg when public holidays occurred. The second aspect is to determine what is encompassed by a "day" for the purposes of clause 5(a).
As to the first aspect, the parties were agreed that there ought to be implied into each contract a term to the effect that some days ought to be excluded from the days upon which the defendants were obliged to engage the plaintiffs. The plaintiffs have pleaded that those days are "public holidays and days when the Hobart Brick Company was closed for its Christmas/New Year break". The defendants have pleaded that those days are "any day when the Hobart Brick Company was closed." The parties put before me as agreed facts the following: that in each year the Hobart Brick Company closed for business on the day which left one shopping day prior to Christmas; that it remained closed until and including 3 January next; that upon reopening the Hobart Brick Company had a maintenance period of three weeks during which deliveries of clay were not normally taken unless stocks were low. I infer that the Hobart Brick Company did not accept deliveries upon public holidays.
The relevant principles to be applied in determining whether a particular term ought to be implied into a contract are now well settled. The effect of the authorities was stated by Gibbs CJ in Hospital Products Limited v United States Surgical Corporation And Others (1984) 156 CLR 41, at pp65–66, in the following terms:
"The principles governing the implication of terms in contracts have recently been stated by the Judicial Committee in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20, at pp26–27; 16 ALR 363, at pp376–377, and by this Court in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 596, at pp605–606, and Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, at pp345–347, 403–404. It was said by the majority of the Judicial Committee in the first of those cases, and accepted in this Court in the others, that for a term to be implied the following conditions (which may overlap) must be satisfied (BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (supra)):
'(1) it must be reasonable and equitable; (2) it must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it; (3) it must be so obvious that "it goes without saying"; (4) it must be capable of clear expression; (5) it must not contradict any express term of the contract.'"
Effectively I must put myself in the position of the parties at the time they entered into the contracts. Had the question then been raised whether the defendants were obliged to engage the plaintiffs to cart clay on public holidays or on days during the brick company's Christmas break (including the maintenance period) all parties undoubtedly would have replied in the negative. An implied term to the effect that the defendants were not obliged to engage the plaintiffs on public holidays and during the Christmas/New Year period when the Hobart Brick Company did not normally accept deliveries is so obvious that it goes without saying. It ought to be implied into the contracts. Such an implied term satisfies the requirements laid down in BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (supra), because:
1It is reasonable and equitable;
2It gives business efficacy to the contracts which otherwise would require the cartage of clay to the brick company upon days as to which at the outset of the contract it was known that the brick company would not be open to receive them;
3It is so obvious that it "goes without saying";
4It is capable of clear expression;
5It does not contradict an express term of the contract in a relevant sense, in that there would be such a contradiction only if the contracts expressly provided that the defendants were to engage the plaintiffs upon any of the days the subject of the implied term.
I turn to the second aspect of this question.
Counsel for the plaintiffs submitted that that expression is to be construed as meaning five normal working days per week and that a normal working day was to be equated with carting 6 loads. Counsel for the defendants submitted that the expression is to be construed as meaning some period of time on each of five days in each week. I reject the latter submission. It might have been tenable if the contracts used the expression "on five days per week" rather than "of five days per week". Taken literally, it might be said that the obligation imposed by clause 5(a) is to engage the plaintiffs for at least five periods of twenty–four hours each. However, the expression is to be governed by the terms of the contract in which it appears. That contract indicates that what is spoken of is a day considered to be the normal working day in the circumstances. As to what is such a normal working day is a question of fact for me to determine. The plaintiffs have pleaded that it was an implied term of each of the contracts that the defendants would engage the relevant plaintiffs to the extent of engaging them to cart six loads of clay on each day. I do not consider that any question of an implied term arises in this context. The relevant task is to construe clause 5(a). The obligation imposed by that clause is to engage the plaintiffs to cart clay throughout the normal working day, but subject to the plaintiffs being willing and able to cart. I am satisfied that during the course of a normal working day (which the parties appear to have accepted as being of about 8.5 hours duration) it was possible to cart six loads of clay from the defendants' clay pit to the Hobart Brick Company, although very occasionally Mr Bone or Mr Kregor (who normally drove the trucks purchased from the defendants) carted seven loads. At the same time there were occasions when the plaintiffs carted fewer than six loads a day, sometimes for reasons which were unrelated to any act or omission of the defendants. Such reasons included truck breakdown, rain or Mr Bone or Mr Kregor simply taking some time off. The obligation of the defendants was to engage the plaintiffs to cart such clay as they could cart in the course of a normal working day to the extent that the plaintiffs were willing and able to do so. On some days that obliged the defendants to engage the plaintiffs to cart six loads. On other days that obliged the defendants to engage the plaintiffs to cart fewer than six loads. On other days again that did not oblige the defendants to engage the plaintiffs at all.
Each of the plaintiffs claims that the defendants were in breach of the relevant contract in that they did not engage the plaintiffs to the extent required by clause 5(a) and that the defendants ultimately repudiated the contracts. In addition Mr & Mrs Kregor claim damages on another basis. They assert that their agreement contained an implied warranty on the part of the defendants that there was in existence a cart licence capable of being transferred to them, whereas in fact there was no such cart licence. They allege that as a result they suffered damage by being unable to operate the truck purchased by them for some time after 4 April 1986 until they managed to procure the issue of a cart licence. The provisions of the Traffic Act 1925 made it unlawful for the Kregors to perform their contract without a cart licence. The contract required the defendants to transfer "the relevant cart licence" to the Kregors. I am satisfied that a warranty on the part of the defendant that there would be in existence a cart licence relating to the truck purchased by the Kregors at the time that the provisions of clause 5(a) of their contract became operative ought to be implied.
The action by J H & J E Bone
The Bones commenced carting clay pursuant to the provisions of the contract on 7 April 1986. The truck was driven by Mr Bone for this purpose. On occasions Mr Bone drove the truck in the course of doing work for persons other than the defendants. No complaint is made of that by the defendants and no question of any breach of contract on the part of the defendants is alleged in relation thereto. The plaintiffs' claim for damages may be divided into two categories, namely damages said to flow from breaches of contract by the defendants when they continued to engage Mr Bone and damages in respect of a subsequent period when the defendants did not engage Mr Bone at all. The number of loads of clay carried varied from day to day. On each of two days Mr Bone carried seven loads. Otherwise he carried six loads or fewer on any day. His claim for damages of the first category to which I have referred is formulated upon the basis that when he was carting clay and he carted fewer than six loads in a day, then a breach of contract on the part of the defendants is asserted. The evidence does not enable me to conclude that that was universally true. In respect of some days when, for example, five loads were carried, there was no evidence as to why a greater number of loads had not been carried. In the absence of any such explanation, I feel unable to conclude that a failure to carry six loads was as a result of any breach of contract or other form of default on the part of the defendants. Unless I specifically find a breach, I do not conclude that a failure to carry at least six loads on any day was the result of any breach of contract on the part of the defendants.
I have found it convenient to deal with the breaches of contract on the part of the defendants which the plaintiffs assert occurred up until and including 24 February 1987 in the form of appendices to these reasons. In Appendix A I consider each of such alleged breaches of contract and make my findings thereon. Appendix B contains my findings which lead me to the conclusion that the average number of loads carted by the plaintiffs on a normal working day when the defendants engaged the plaintiffs as required by the contract or were willing to do so was 4.8. That calculation takes into account contingencies such as rain preventing the plaintiffs from carting. The calculation of this average is necessary for the purpose of assessing damages. As to many of the days as to which I find that the defendants were in breach of contract by not engaging the plaintiffs at all or not engaging them to the extent required, the evidence does not enable me to make an express finding as to the number of loads which the plaintiffs would have carted had the defendants not been in breach. I do not consider the defendants to have been in breach where there were minor delays at the clay pit or at the brick company. Such minor delays must be taken as having been anticipated and accepted by the plaintiffs when they entered into the contract and in any event, any delays at the premises of the brick company caused by the defendants could not constitute a breach of contract. In the averaging process I have also taken into account those days when on the evidence the defendants would have engaged the plaintiffs but the plaintiffs were prevented from carting or were not minded to cart for the reasons appearing in the notes to Appendix B. Those days must be taken into account in determining damages because they represent the types of contingencies affecting the quantum of the real loss to the plaintiffs. For example the defendants were in breach by not engaging the plaintiffs during most of August 1986. It would be wrong to proceed upon the basis that if the defendants had not been in breach the plaintiffs would have carted six loads of clay on each working day during the relevant period. For some of those days the plaintiffs might not have been able to cart for reasons such as rain, vehicle breakdown or illness. In Appendix C I set forth my findings as to the profits lost by the plaintiffs as the result of the breaches of contract referred to in Appendix A.
On 24 February 1987 the second defendant telephoned Mr Bone. She told him that he was to cart four loads only the following day, and that thereafter he was not to cart further until 9 March, as "the company" (I infer the Hobart Brick Company) was "filled up". In fact, Mr Bone carted three loads only on 25 February 1987. The reason for Mr Bone having been told not to make deliveries for the period 26 February 1987 to 9 March 1987 was that the Hobart Brick Company did not require deliveries during this period. In my view that provides no defence to the plaintiffs' claim in respect of that period. Undoubtedly the defendants were aware at the time that they entered into the contract that there was a real risk that matters might arise which would prevent them from performing their promise to provide effective full time driving work between their quarry and the Hobart Brick Company. The history of deliveries up until the date when the plaintiffs entered into their contracts with the defendants was such that they must have foreseen a real risk that the Hobart Brick Company would not require deliveries of clay on an on–going basis for a period of four years sufficient to provide full time work for the plaintiffs and the plaintiffs Kregor. The deliveries made by the defendants themselves during the period of the year immediately preceding 4 April 1986 were such that actual deliveries made may have fallen short of the quantity of clay which could have been delivered by the plaintiffs and the plaintiffs Kregor had they been operating on a full time basis during the whole of that period. Prima facie the risk of that occurring must be borne by the defendants (see Scanlon's New Neon Limited v Tooheys Limited (1943) 67 CLR 169, per Latham CJ, at p200). In any event the plaintiffs contributed to the high stock levels held by the brick company which led the brick company to suspend deliveries. Notwithstanding the fact that they had assumed obligations to the plaintiffs and the plaintiffs Kregor to provide them with cartage work, the defendants continued making deliveries themselves.
As at the end of February 1987 the Hobart Brick Company had on hand 8,963 cubic metres of clay from the defendants' pit. During the period from 7 April 1986 to 25 February 1987 the defendants delivered about 14,000 cubic metres of clay to the brick company using the defendants' truck. The breaches of contract on the part of the defendants up until the end of February 1987 deprived Bone and Kregor of the cartage of about 3,500 cubic metres. It follows that had the defendants not carted to the extent that they did the brick company's stock would not have reached levels unacceptable to the brick company which led it to suspend deliveries. That is not to say that had the defendants not made any deliveries, except to the extent that Bone and Kregor were unable to cart the total clay requirements of the brick company, there would not have come a time, within the four year contract term, when the brick company would have suspended deliveries because of a stock surplus. The evidence suggests that this would have happened due to a reduced level of usage of the defendants' clay by the brick company.
On 9 March 1987 the plaintiff Bone telephoned the defendants and spoke to the second defendant. She informed him that there was no work until further notice. No further notice was ever given by the defendants. I find that Mr Bone continued to telephone the second defendant from time to time enquiring about cartage work. On each such occasion he was told that there was no work available. The second defendant denied that such further calls had been made, but I do not accept her denials. Mr Bone said that eventually he was tired of telephoning and being told there was no work available. He ceased telephoning. It was plain from the second defendant's evidence that she took the view that the defendants were under no obligation to seek out Mr Bone to tell him that there was work, but rather that it was a matter for him to enquire as to whether work was available if he wanted it. She referred to industry practice. Any such industry practice was entirely irrelevant to the contractual relationship between the Bones and the defendants. The obligation assumed by the defendants was to engage the plaintiffs. Notwithstanding the fact that the Bones were never offered work again, the defendants resumed carting clay themselves to the Hobart Brick Company on 30 March 1987 and, except for a number of short breaks, continued to do so until the end of the contract period. It is plain to me that the defendants were minded not to make use of the Bones' services (or indeed the Kregors' services) but were minded to cart clay themselves. I should say that the second and fourth defendants, who were alone amongst the defendants in entering the witness box, did not impress me. They gave me the impression that their view was that once the plaintiffs had parted with their money it was perfectly permissible for the defendants to attempt to earn income by carting clay themselves, even if that deprived the plaintiffs of that to which they were entitled under the contract. It seems to me that they did not consider that they had any greater obligations towards the plaintiffs than if the plaintiffs had been cartage contractors seeking work without the benefit of having a contract. I disbelieve the evidence of the second defendant that had Bone or Kregor asked for work after March 1987 then it would have been provided. The evidence of the fourth defendant satisfies me that by the end of March 1987 the defendants had decided to do the cartage work themselves and had decided not to offer any such work to Bone or Kregor.
The defendants were in continuing breach of their contract with the Bones from 26 February 1987. All clay required by the Hobart Brick Company from 30 March 1987 was carried by the defendants' own vehicles. None of the work was offered to the plaintiffs. I am satisfied that the defendants considered it to be more profitable to do the necessary cartage work themselves rather than engaging the plaintiffs. Mr & Mrs Bone have pleaded that by the defendants' conduct in failing to engage them to cart clay on five full working days per week, the defendants evinced an intention no longer to be bound by the agreement and thereby repudiated the same. They have further pleaded that the repudiation was accepted by them by instituting the last of their actions and serving the writ therein. The defendants have pleaded that the plaintiffs repudiated the agreement by not carting clay after 25 February 1991. There was an effective inability of the defendants to perform their contract with the plaintiffs during the period in February–March 1987 in that the Hobart Brick Company did not then require clay to be delivered, albeit that that situation had been caused by the defendants that did not amount to repudiation. The contract still had a substantial period of time to run and there was then no indication that the period of time for which the brick company would not require deliveries of clay would be significant.
A party to a contract may be taken to have repudiated a contract in circumstances giving rise to a right on the part of the innocent party to rescind or accept the repudiation and recover damages for the failure to perform the contractual obligations in the following circumstances:
(a)if that party renounces his liabilities under it;
(b)if that party intends to fulfil the contract only in a manner which is substantially inconsistent with his obligations;
(c)if that party, although wishing to perform his obligations, proves himself unable to do so to a degree making the further commercial performance of the contract impossible.
(d)if that party is in breach of a breach of a fundamental or essential term of the contract.
(See Shevill v The Builders Licensing Board (1981–1982) 149 CLR 620 per Gibbs CJ at pp625–627).
I am satisfied that the defendants renounced their liabilities under the agreement at about the end of March 1987 when they determined not to re–engage the plaintiffs and in fact did not seek to do so. If the defendants had not then renounced their liabilities there would have come a time when the defendants would have been unable to perform the agreement owing to the lack of demand for clay on the part of the Hobart Brick Company. Nevertheless their repudiation occurred before that stage had been reached. What the future held cannot affect that. If subsequently the reduced demand had resulted in the defendants being unable to perform their obligations making the further commercial performance of the contract impossible they would then have been taken to have repudiated the agreement. If the reduced demand had fallen short of amounting to repudiation the defendants would have been required to bear the resultant losses to the plaintiffs. In short, reduced demand by the brick company cannot ameliorate the defendants' liability to compensate the plaintiffs for the damage suffered by them. The renunciation of liability by the defendants was accepted by the plaintiffs at least by the time that they served the last of their writs.
I turn to the question of frustration pleaded by the defendants. For reasons to which I have adverted earlier, the defendants must be taken to have known of the existence of the risk that the requirements of the Hobart Brick Company would fall short of those required to enable clause 5(a) of the contract to be performed. An absence of foreseeability is an essential condition of the operation of the doctrine of frustration (see, eg, Simmons v Hay [1964–5] NSWR 416, per Sugarman J, at p420) in that the critical issue in determining whether frustration has occurred is whether there has come into existence a situation resulting from a completely unforeseen event and that situation is fundamentally different from the situation contemplated by the contract (Codelfa Constructions Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337, per Mason J, at p360, Aicken J, at p378 and Brennan J, at p407). A failure to provide contractually for a foreseen risk leads to the inference that such risk was assumed by the person whose obligations are affected upon such a risk becoming a reality. Fluctuations in demand on the part of the brick company affecting the extent to which it required deliveries of the defendants' clay must be taken to have been a foreseen risk. The risk is to be taken as having been assumed by the defendants. The agreement was not frustrated.
The defendants are liable in damages to the plaintiffs for the losses sustained by the plaintiffs from the time that the defendant ceased to engage them. Initially those losses flowed from breaches of the obligation to engage the plaintiffs whilst the contract remained on foot and thereafter upon the basis of the wrongful repudiation of the contract by the defendants which repudiation was accepted by the plaintiffs. Again I have found it convenient to deal with the losses of the plaintiffs from 26 February 1987 in the form of an appendix to these reasons. My findings and conclusions appear as Appendix D.
Upon the basis of my findings the defendants' breaches of contract and their repudiation thereof resulted in the plaintiffs being deprived of the following profits:
As appears in Appendix C $2,892.86
As appears in Appendix D 15,055.20
$17,948.06
Counsel for the plaintiffs submitted that the plaintiffs ought to recover damages to compensate them for the loss of the goodwill purchased by them. I do not consider that they are entitled to such damages for the following reasons:
1The only "goodwill" purchased by the plaintiffs was that they acquired the right to be engaged to cart clay for a period of four years.
2By assessing damages upon the basis of compensating the plaintiffs for the loss of the profits which they would have derived from that contract had the defendants not breached it (subject to mitigation which occurred) the plaintiffs are fully compensated for the loss of that goodwill. The fact they do not claim to have suffered damage in respect of any period after 11 February 1988 does not alter that situation.
3The evidence does not persuade me that there was any goodwill value attached to the contract. The allocation of the consideration between the purchase price of the truck and goodwill may not have reflected true values at all. It may have amounted to an allocation suitable to the defendants so as to reduce the possibility that they might be liable to taxation on recouped depreciation or by way of capital gains tax.
4There was no evidence of a market for cartage contracts of this nature.
The plaintiffs submitted that their award of damages should reflect the fact that, had the defendants not been in breach of their contract, the amount of income tax payable by them on profits which they would then have earned would have been less than the income tax which will be payable on an award of damages which essentially compensates them for the loss of those profits. It appears that an award of damages to the plaintiffs will be taxable in their hands in the year of receipt (Income Tax Assessment Act 1936 (Cth), s26(j) and see Commissioner of Taxation v Wade (1951) 84 CLR 105).
The plaintiffs relied on a dictum of Bray CJ in his dissenting judgment in Lonie v Perugini (1977) 18 SASR 201 at p209. Bray CJ said that "there is a case for saying that an award should be loaded to cover the excess tax resulting from the money being paid in one taxation year instead of being spread over the period of the loss". He referred to The Talemachus [1957] p47 as supporting that proposition, but also referred to authority said to be to contrary effect: The Makedonia [1958] QB 365 and Parsons v BNM Laboratories Ltd [1964] 1 QB 95. In the latter case, Pearson LJ said, at p139:
"... as a general rule at any rate, in a case where both the lost earnings or profits and the damages are taxable, no account should be taken of taxation in assessing the damages. The present practice of ignoring the taxation in such a case is sound and should not be disturbed. That is my conclusion, subject to a proviso that there may be exceptional cases in which a departure from the practice may be required for the doing of justice in special circumstances.
... I am inclined to think the right evaluation of Gourlay's case is to say that it was dealing with a very special case of tax discrepancy, or tax anomaly, and was not intended and should not be construed as generally requiring or authorising the incidence of taxation to be taken into account in the assessment of damages."
What was said in Gourlay's case (British Transport Commission v Gourlay [1956] AC 185) represents the law in Australia (Cullen v Trappell (1979–1980) 146 CLR 1). Nothing was said in Cullen v Trappell about cases such as the present. Counsel for the plaintiffs did not refer me to any case where damages of the type contended for were awarded. I do not read The Talemachus (supra) as being authority for the proposition that such damages may be awarded. It involved no more than a policy decision that an award for salvage services made to a master and crew ought to be made upon the basis that the quantum thereof ought to take into account that the same would be subject to income tax in the hands of the recipients. I propose following what was said by Pearson LJ as correctly explaining the effect of Gourlay's case. I will ignore the question of income tax.
In the result the plaintiffs are entitled to damages calculated by reference to their loss of profits alone. Rounding off the sum which I have calculated, I assess the plaintiffs' damages in the sum of $18,000.00.
The action by M E & D J Kregor
The truck purchased by the plaintiffs was driven by Mr Kregor. Initially Mr Kregor used the truck to perform cartage work at the Craigbourne Dam which was under construction at the time. Whilst that type of work was not the subject of the contract, I accept that the possibility of some such work being performed had in fact been discussed between Mr Kregor and some of the defendants prior to the agreement being entered into. The plaintiffs do not complain of any breach of contract on the part of the defendants relevant to any day upon which work was performed at the Craigbourne Dam. That work ceased when operations at the Craigbourne Dam were temporarily suspended. The occasion to commence carting from the defendants' clay pit to the Hobart Brick Company then arose. For the plaintiffs to lawfully commence and carry out those operations there needed to be in force an appropriate cart licence issued pursuant to s15 of the Traffic Act. The nature of the work to be performed by the plaintiff pursuant to the agreement was of the type referred to in s15(3)(g) of that Act. For so long as no cart licence was in force in relation to the vehicle purchased by the plaintiffs from the defendants, Mr Kregor could not cart clay pursuant to the agreement for reward without committing an offence under s24(1) of the Act. There was direct oral evidence from the fourth defendant that at the time the defendants entered into the agreement, a cart licence had been applied for and approved but that it had not yet issued. I infer from the evidence of Mr Kregor that he went to the Transport Commission to "have the licence on the truck with the plate that was on the truck transferred into my name"; that he did not in fact obtain a cart licence until he sought the assistance of a Member of Parliament; that he then obtained some form of interim cart licence; and that he was advised on 8 July 1986 that a cart licence had been issued, that there was not in existence any form of cart licence until Mr Kregor himself obtained one. I have already concluded that by the agreement the defendants gave an implied warranty that there was a cart licence in existence. The obligation assumed by the defendants was to transfer such a licence to the plaintiffs. They were unable to do so. They were in breach of their contractual obligations in that respect. As a result, the plaintiffs could not lawfully perform any engagements to cart clay until a cart licence was obtained. I am satisfied that the plaintiffs took all reasonable steps to obtain a cart licence. I infer that they obtained the temporary cart licence on or about 7 July 1986. I infer that from the form of interim receipt which went into evidence (which I find related to such a temporary licence) and from the fact that the plaintiffs commenced carting clay on 9 July 1986. I am satisfied that prior to the issue of the cart licence when no work was available at the Craigbourne Dam, the plaintiffs suffered damage in that they were not lawfully able to cart clay pursuant to the contract even if the defendants had sought to engage them. That damage was suffered as a result of the breach of warranty by the defendants for which the plaintiffs are entitled to be compensated by way of damages.
On 9 July 1986 Mr Kregor commenced carting clay. The last load was carted by him on 6 February 1987. In the meantime, there had been periods when the plaintiffs had done work for persons other than the defendants, although most of that was done at a time when the defendants did not make available any cartage work to the plaintiffs. I deal with the breaches of contract alleged against the defendants in the same manner as I have dealt with those alleged by the plaintiffs Bone. Appendices E, F and G to these reasons deal with matters relevant to the plaintiffs' case in the same manner in which equivalent matters relevant to the case of the plaintiffs Bone is dealt with in Appendices A, B and C respectively.
On 19 February 1987 the first defendant told Mr Kregor that that was the last time he worked for the defendants and that there would be no more work until further notice. The first defendant said that he would contact Mr Kregor. He never did. That action may have constituted a repudiation by the defendants of their contract, but at the latest the defendants repudiated the contract when they commenced carting clay to the brick company without offering to engage the plaintiffs for this purpose, having determined to offer no further work to the plaintiffs in the circumstances to which I have referred in dealing with the action by the plaintiffs Bone. The plaintiffs accepted that repudiation, at the latest, when they served their last writ. Generally my findings and conclusions expressed in relation to the plaintiffs Bone as to the circumstances surrounding the repudiation also apply to the plaintiffs. I conclude that the contract was not frustrated for the same reasons as I have expressed in relation to the plaintiffs Bone.
The defendants are liable in damages to the plaintiffs for the losses sustained by the plaintiffs from the time that the defendants ceased to engage them upon the same basis as that which I have expressed as applying to the plaintiffs Bone. My findings and conclusions as to the relevant loss of profits appear in Appendix H.
Upon the basis of my findings the defendants' breaches of contract and their repudiation thereof resulted in the plaintiffs being deprived of the following profits:
As appears in Appendix G $5,161.40
As appears in Appendix H – Part B 5,044.25
As appears in Appendix H – Part C 52,750.27
$62,955.92
The plaintiffs claim to be entitled to have their damages assessed upon the basis that allowances were made for loss of goodwill and for an increased liability for income tax upon the same bases as I have already discussed in dealing with the action by the plaintiffs Bone. For the reasons I expressed in dealing with the Bone action I make no allowances for these items.
In the result the plaintiffs are entitled to damages calculated by reference to their loss of profits alone. Rounding off the sum which I have calculated, I assess the plaintiffs' damages in the sum of $63,000.00.
Orders
In the result there will be the following orders:
1That there be judgment for the plaintiffs J H & J E Bone against the defendants for $18,000.00.
2That there be judgment for the plaintiffs M E & D J Kregor against the defendants for $63,000.00.
Appendix A
Consideration of the plaintiffs J H & J E Bone's claims as to each day up to and including 24 February 1987 upon which they claim to have suffered damage as the result of the defendants' breach of contract.
Date Loads agreed to have Whether breach resulting Findings
been carried in damage established
7 April 1986 5 No (1)
11 April 1986 5 No (1)
28 April 1986 3 No (2)
22 May 1986 0 No (2)
23 May 1986 0 No (2)
29 May 1986 5 No (1)
2 June 1986 5 No (1)
10 June 1986 0 No (2)
17 June 1986 5 No (1)
18 June 1986 5 No (1)
20 June 1986 0 No (2)
23 June 1986 0 No (2)
24 June 1986 1 No (3)
30 June 1986 5 No (1)
3 July 1986 5 No (1)
10 July 1986 3 Yes (4)
11 July 1986 0 Yes (4)
14 July 1986 5 No (1)
24 July 1986 4 No (5)
29 July 1986 5 No (1)
1 August 1986 2 Yes (6)
4 August 1986 0 Yes (7)
5 August 1986 0 Yes (8)
6 August 1986 0 Yes (8)
7 August 1986 0 Yes (8)
8 August 1986 0 Yes (8)
11 August 1986 0 Yes (8)
12 August 1986 0 Yes (8)
13 August 1986 0 Yes (8)
14 August 1986 0 Yes (8)
15 August 1986 0 Yes (8)
18 August 1986 0 Yes (8)
19 August 1986 0 Yes (8)
20 August 1986 0 Yes (8)
22 August 1986 0 Yes (8)
3 September 1986 3 No (2)
4 September 1986 5 No (1)
8 September 1986 4 No (2)
10 September 1986 1 No (2)
11 September 1986 0 No (2)
12 September 1986 2 No (9)
15 September 1986 3 No (9)
16 September 1986 4 No (9)
22 September 1986 4 Yes (10)
26 September 1986 1 No (2)
29 September 1986 5 No (1)
30 September 1986 5 No (1)
6 October 1986 5 No (1)
7 October 1986 5 No (1)
9 October 1986 5 No (1)
20 October 1986 0 Yes (11)
21 October 1986 0 Yes (11)
22 October 1986 1 Yes (12)
27 October 1986 5 No (1)
29 October 1986 1 Yes (13)
19 November 1986 0 Yes (14)
20 November 1986 0 Yes (14)
21 November 1986 0 Yes (14)
25 November 1986 5 Yes (15)
27 November 1986 4 Yes (16)
10 December 1986 4 No (2)
19 December 1986 5 No (1)
22 December 1986 0 Yes (17)
23 December 1986 0 Yes (17)
6 January 1987 0 No (17)
7 January 1987 0 No (17)
8 January 1987 0 No (17)
9 January 1987 0 No (17)
12 January 1987 0 No (17)
13 January 1987 0 No (17)
14 January 1987 0 No (17)
15 January 1987 0 No (17)
16 January 1987 0 No (17)
19 January 1987 0 No (17)
20 January 1987 0 No (17)
21 January 1987 0 No (17)
22 January 1987 0 No (17)
23 January 1987 0 No (17)
26 January 1987 0 Yes (17)
27 January 1987 0 Yes (17)
30 January 1987 0 Yes (17)
6 February 1987 3 Yes (18)
9 February 1987 5 Yes (19)
13 February 1987 4 Yes (20)
17 February 1987 3 Yes (21)
18 February 1987 4 Yes (22)
19 February 1987 4 Yes (22)
20 February 1987 4 Yes (22)
23 February 1987 4 Yes (22)24 February 1987 4 Yes (22)
Notes:
(1)The plaintiffs carried 5 or fewer loads. Their general assertion was that had the defendants engaged them to the extent required by the plaintiffs then they would have carried 6 loads. There was no specific evidence as to why fewer than 6 loads were carried on this date. There was evidence in general terms that the reasons for carrying fewer than 6 loads included delays in loading through the unavailability of the required personnel engaged for the purpose by the defendants or the fact that the defendants' own vehicle was being loaded. I am satisfied that a further reason was delay in unloading at the Hobart Brick Company because the defendants' own vehicle was discharging its load of clay. I do not regard the latter as constituting a breach of the relevant contract. As to the former the delays generally amounted to no more than short delays generally to be expected in the course of a normal working day and amounting to contingencies to be allowed for determining what was encompassed in such a day.
(2)I had no express evidence as to why no loads or the small number of loads (as the case may be) were carted. The explanation may be found in reasons such as those referred to in note (1) or a factor such as rain making cartage impossible. In the absence of express evidence I am not prepared to find a breach of contract on the part of the defendants.
(3)I find that only 1 load was carted as the result of the plaintiffs' truck breaking down and not as the result of any breach of contract on the part of the defendants.
(4)Whilst I had no express evidence from Mr Bone as to why only 3 loads were carted on 10 July and none were carted on 11 July, I had the evidence of Mr Kregor that at about that time he complained to the second defendant that he was not being provided with loads which he was prepared to carry. I accept that evidence and infer that on the relevant days the defendants were declining to provide cartage work to all of the plaintiffs which they were able to perform during the course of a normal day. I find that the defendants were in breach of their contract in not providing such work.
(5)Mr Kregor gave evidence, which I accept, that on 24 July the defendants informed him that there was no work that day. I infer that Mr Bone carted 4 loads only that day because the defendants declined to provide more. In so doing they were in breach of their contract. Nevertheless the plaintiffs earned a further sum of $114.57 by working for Hazell Bros on 24 July and I am unable to find that any loss was suffered by the plaintiffs.
(6)I find on the basis of Mr Kregor's evidence that on 1 August each of Mr Bone and Mr Kregor was "stood down" by the defendants for approximately 6 weeks after the first two loads had been carried by each of them. In doing so the defendants were in breach of their contracts with all the plaintiffs.
(7)On the relevant date the defendants were in breach of their contract in failing to provide the plaintiffs with any cartage work, the plaintiffs having been "stood down" in the circumstances referred to in note (6). The plaintiffs were unable to procure alternative work on this day.
(8)On the relevant dates the defendants were in breach of their contract in the manner referred to in note (7). However Mr Bone did find alternative work with Hazell Bros Some of that was paid at the rate of $27.00 per hour, which I infer was for the provision of a truck and driver. Other of that was described in the plaintiffs' diaries as "wages" or "labour" and I infer that that was for the provision of Mr Bone's labour only although it appears to have been treated as partnership income. I will treat it as income received by the plaintiffs jointly. I have no evidence as to the rate at which those wages were paid although I infer that it was at a rate substantially less than $27.00 per hour. Having regard to the figures agreed between the parties as being the profit per load of clay carted I am able to form some conclusions as to the cost to the plaintiffs of operating their truck. I infer that when providing labour as distinct from a truck and driver the relevant rate was arrived at bearing in mind that no vehicle is being operated by the plaintiffs. Doing the best I can with the scanty material I proceed upon the basis that when Mr Bone provided his labour only to Hazell Bros he was paid at the rate of $15.00 per hour. I suspect that that may be unduly favourable to the defendants. If that is the case then the reason is to be found in the paucity of the evidence adduced by the plaintiffs. On each of the relevant dates the plaintiffs are to be taken as having been deprived by the defendants' breach of contract of carrying 4.8 loads of clay (that figure being derived from the calculations in Appendix B) so that on each of those days they would have earned a profit of $141.84 based on the agreed profit figure of $19.55 per load. That leads to the following results for the days on which wages only were earned.
Date Wages Earned Loss
7 August 1986 127.50 14.34
8 August 1986 120.00 21.84
11 August 1986 127.50 14.34
12 August 1986 127.50 14.34
23 August 1986 52.50 89.34
14 August 1986 127.50 14.34
15 August 1986 52.50 89.34
18 August 1986 127.50 14.34
19 August 1986 127.50 14.34
20 August 1986 127.50 14.3422 August 1986 127.50 14.34
On 5 August 1986 Mr Bone was engaged with his truck by Hazell Bros for 3½ hours and the plaintiffs were paid $91 for this. I infer that in this time the plaintiffs could have carted 2 loads of clay and earned $96. I assess damages for this day as if in breach of contract the defendants had engaged the plaintiffs to cart 2 loads only. On 6 August 1986 Mr Bone was engaged with his truck by Hazell Bros for 8 hours and the plaintiffs were paid $208 gross for this. Had the defendants not breached their contract with the plaintiffs and had engaged them to cart clay on this day then on the basis of the calculations in Appendix B the plaintiffs would have received the gross sum of $230.40. I assess damages in respect of this day at $22.40 being the difference, on the assumption that overhead expenses were the same whether the plaintiffs carted for the defendants or Hazell Bros.
(9)The reason for Mr Bone carrying a low number of loads appears to be that for a portion of the day he was engaged in removing over burden at the clay pit for which he was paid separately. In the absence of any evidence to the contrary I assume that this was done by agreement with the defendants. In any case the evidence does not enable me to conclude that the defendants were in breach of contract.
(10)I find on the basis of Mr Kregor's evidence that the defendants wrongfully declined to provide loads in addition to those actually carted and that at least one load would have been carted had the defendants provided the same.
(11)I find upon the basis of the plaintiffs' diaries that the defendant declined to engage Mr Bone on 20 and 21 October 1986. The evidence of Mr Kregor, given by reference to his diary, satisfies me that the reason for this was that the defendants' loader had broken down and that their excavator, which was capable of loading, had been removed from the site. In those circumstances the defendants were not excused from performing their contractual obligations.
(12)I find that the defendants did not have a loader available at the commencement of the working day which I infer was for the reasons referred to in note (11). Later in the day it rained whereby Mr Bone was not able to cart further. In the circumstances I conclude that the plaintiffs, as a result of the defendants' breach, were deprived of the benefit of carting 2 loads.
(13)I find that the defendants declined to load the plaintiffs' truck without lawful excuse until early afternoon. As a result the plaintiffs were deprived of carting the normal number of loads.
(14)The defendants declined to provide any cartage as they had no loading facilities available for reasons similar to those referred to in note (11).
(15)I find that the defendants did not supply loading facilities at the commencement of the working day. That failure constituted a breach of contract. Had there not been such a breach Mr Bone could have carted one further load on this day.
(16)I further find that the defendants wrongfully declined to provide loading facilities after 12.50pm and thereby deprived the plaintiffs of one load.
(17)The parties agreed facts to the following effect:
(a)The Hobart Brick Company always closed prior to Christmas on a day leaving one shopping day prior to Christmas and remained closed until and including 3 January next following.
(b)Upon reopening the company had a maintenance period of three weeks during which staff were on annual leave and deliveries of clay were not normally taken.
(c)Occasionally deliveries of clay were made by the defendants during this maintenance period but only if stocks of their particular type of clay were low. Such stocks were not low in January 1987.
I have already concluded that upon a proper construction of clause 5(a) of the contract it did not require the defendants to engage the plaintiffs during the Christmas closure period (including the maintenance period). Christmas Day 1986 fell on a Thursday so that I infer that the Brick Company remained open for deliveries up until and including 23 December 1986 and reopened for deliveries on 26 January 1987. It follows that I find that the defendants were in breach of their contract in declining to provide cartage on 22 and 23 December 1986 and 26, 27, and 30 January 1987 but not otherwise in respect of the relevant days.
(18)I find on the basis of Mr Bone's evidence and the plaintiffs' diaries that the defendants' employee wrongfully declined to load Mr Bone's truck when he arrived to collect the next load at 12.45pm.
(19)I find on the basis of the plaintiffs' diaries that Mr Bone arrived at the quarry to collect a sixth load but that the first defendant declined to have the truck loaded. The defendants were thereby in breach of contract and the plaintiffs were deprived of carting one further load.
(20)I find on the basis of the plaintiffs' diaries that Mr Bone arrived at the quarry to collect his fifth load but that the fourth defendant wrongfully declined to provide him with any further loads. The plaintiffs were deprived of at least one load.
(21)I find on the basis of the plaintiffs' diaries that Mr Bone arrived at the quarry to collect his fourth load but that the first defendant wrongfully declined to provide him with any further loads. Mr Bone would have carted at least one more load.
(22)On each of these days the defendants provided Mr Bone with four loads only. On the last of these days (24 February 1987) Mr Bone noticed a sign at the quarry reading "Subbies 4 loads a day". I conclude that the defendants had determined that the plaintiffs would be engaged to cart four loads per day only. This was substantially less than the cartage to which the plaintiffs were entitled under the contract. The defendants were in breach of the contract in that on each of these days the plaintiffs should have been provided with at least one further load which Mr Bone would have carted.
Appendix B
Particulars of days taken into account in determining the average number of loads carted by the plaintiffs JH. and JE. Bone for the defendants on a normal working day.
Date Loads Actually Carried Notes
7 April 1986 5
8 April 1986 6
9 April 1986 6
10 April 1986 7
11 April 1986 5
28 April 1986 3
26 May 1986 6
27 May 1986 6
28 May 1986 6
29 May 1986 5
30 May 1986 7
2 June 1986 5
10 June 1986 0
13 June 1986 6
16 June 1986 6
17 June 1986 5
18 June 1986 5
19 June 1986 6
20 June 1986 0
23 June 1986 0
24 June 1986 1 (1)
25 June 1986 0 (1)
26 June 1986 0 (1)
27 June 1986 0 (1)
30 June 1986 5
1 July 1986 6
2 July 1986 6
3 July 1986 5
4 July 1986 6
7 July 1986 6
8 July 1986 6
14 July 1986 5
28 July 1986 6
29 July 1986 5
30 July 1986 6
31 July 1986 6
16 August 1986 6
27 August 1986 6
28 August 1986 6
29 August 1986 5
1 September 1986 6
2 September 1986 6
3 September 1986 3
4 September 1986 5
8 September 1986 4
9 September 1986 6
10 September 1986 1
17 September 1986 6
18 September 1986 6
19 September 1986 6
23 September 1986 6
29 September 1986 5
30 September 1986 5
2 October 1986 6
3 October 1986 6
6 October 1986 5
7 October 1986 5
8 October 1986 6
9 October 1986 6
10 October 1986 6
13 October 1986 6
14 October 1986 3 (2)
15 October 1986 0 (3)
16 October 1986 0 (3)
17 October 1986 6
22 October 1986 3 (4)
27 October 1986 5
28 October 1986 6
30 October 1986 6
31 October 1986 6
3 November 1986 6
4 November 1986 6
5 November 1986 6
7 November 1986 6
12 November 1986 6
14 November 1986 6
24 November 1986 6
25 November 1986 6
27 November 1986 6 (5)
28 November 1986 5
1 December 1986 6
2 December 1986 6
3 December 1986 6
5 December 1986 4 (6)
8 December 1986 0 (2)
9 December 1986 6
10 December 1986 4
11 December 1986 6
12 December 1986 0 (2)
15 December 1986 6
17 December 1986 1 (1)
18 December 1986 0 (1)
19 December 1986 5
2 February 1987 6
4 February 1987 6
5 February 1987 69 February 1987 6 (7)
Summary
Total Number of Days : 97
Total Number of Loads : 472
Average Number of Loads per Day : 4.8 (approximately)
Notes:
(1)The lack of cartage was as the result of the plaintiffs' truck suffering a break down.
(2)The lack of cartage was as the result of rain.
(3)The lack of cartage was caused by the plaintiffs' truck undergoing repairs and thereby being unavailable.
(4)Only one load was actually carried. The number of loads shown in the table is that which I have found would have been carried if there had been no breach of contract by the defendants. (Appendix A, note (12)).
(5)Only 5 loads were actually carried. The number of loads shown in the table is that which I have found would have been carried if there had been no breach of contract by the defendants. (Appendix A, note (16)).
(6)The reduced level of cartage was as the result of Mr Bone attending a funeral.
(7)The circumstances were similar to those referred to in note (5) (Appendix A, note (19)).
Appendix C
Calculations of loss of profits of the plaintiffs J H & J E Bone up until and including 25 February 1987 flowing from breaches of contract on the part of the defendants.
Date Number of Loads Lost (1) Monetary Loss Notes
10 July 1986 1.8 $ 53.19
11 July 1986 2.8 $ 141.84
1 August 1986 2.8 $ 82.74
4 August 1986 4.8 $ 141.84
5 August 1986 2.8 $ 82.74 (2)
6 August 1986 NA $ 22.40 (3)
7 August 1986 NA $ 14.34 (3)
8 August 1986 NA $ 21.84 (3)
11 August 1986 NA $ 14.34 (3)
12 August 1986 NA $ 14.34 (3)
13 August 1986 NA $ 89.34 (3)
14 August 1986 NA $ 14.34 (3)
15 August 1986 NA $ 89.34 (3)
18 August 1986 NA $ 14.34 (3)
19 August 1986 NA $ 14.34 (3)
20 August 1986 NA $ 14.34 (3)
22 August 1986 NA $ 14.34 (3)
22 September 1986 1.0 $ 29.55 (4)
20 October 1986 4.8 $ 141.84
21 October 1986 4.8 $ 141.84
22 October 1986 2.0 $ 59.10 (5)
29 October 1986 3.8 $ 112.29
19 November 1986 4.8 $ 147.60
20 November 1986 4.8 $ 147.60
21 November 1986 4.8 $ 147.60
25 November 1986 1.0 $ 30.75 (6)
27 November 1986 1.0 $ 30.75 (7)
22 December 1986 4.8 $ 147.60
23 December 1986 4.8 $ 147.60
26 January 1987 4.8 $ 147.60
27 January 1987 4.8 $ 147.60
30 January 1987 4.8 $ 147.60
6 February 1987 1.8 $ 55.35
9 February 1987 1.0 $ 30.75 (8)
13 February 1987 1.0 $ 30.75 (9)
17 February 1987 1.8 $ 55.35
18 February 1987 1.0 $ 30.75 (10)
19 February 1987 1.0 $ 30.75 (10)
20 February 1987 1.0 $ 30.75 (10)
23 February 1987 1.0 $ 30.75 (10)
24 February 1987 1.0 $ 30.75 (10)$2,892.86
Notes:
(1)Unless otherwise indicated the number of loads lost is calculated upon the basis that the average number of loads carried during a full working day was 4.8 (see Appendix B) from which has been deducted the actual number of loads carried.
(2)The number of loads lost has been calculated upon the basis of it being assumed that the plaintiffs in fact carried 2 loads of clay for the reasons set forth in Appendix A, note (8).
(3)The monetary loss has not been calculated by reference to the number of loads lost but in the manner set forth in Appendix A, note (8).
(4)The loss of one load is the subject of findings appearing in Appendix A, note (10).
(5)The loss of two loads is the subject of findings appearing in Appendix A, note (12).
(6)The loss of one load is the subject of findings appearing in Appendix A, note (15).
(7)The loss of one load is the subject of findings appearing in Appendix A, note (16).
(8)The loss of one load is the subject of findings appearing in Appendix A, note (19).
(9)The loss of one load is the subject of findings appearing in Appendix A, note (20).
(10)The loss of one load is the subject of findings appearing in Appendix A, note (22).
Appendix D
Calculations of loss of profits of the plaintiffs J H and J E Bone from 26 February 1987 (1) to 11 February 1988 (2) (both inclusive) flowing from breaches of contract on the part of the defendants.
Number of days which the plaintiffs did not have work available for the truck 112 (3)
Less number of days in respect of which the defendants are not liable 10 (4)
102
Calculation of loss of profits:
102 days x 4.8 loads (5) x $30.75 (6) = $15,055.20
Notes:
(1)This is the first day after the expiration of the period the subject of the calculations in Appendix C.
(2)The plaintiffs claim no loss beyond this date.
(3)This is the number of days upon which the plaintiffs claim they were not able to find alternative work for their truck. I find that to be the fact upon the basis of the evidence of Mr Bone and the contents of one of the plaintiffs' diaries.
(4)I do not consider the defendants liable in respect of the dates falling in the period 5 to 22 January 1987 (both inclusive). I have come to that conclusion upon the basis of the findings contained in Appendix A, note (17).
(5)I have selected this number of loads upon the basis of the calculations in Appendix B.
(6)It is agreed between the parties that this amount represents the profit per load to the plaintiffs.
Appendix E
Consideration of the plaintiffs M E and D J Kregor's claims as to each day up to and including 19 February 1987 upon which they claim to have suffered damage as the result of the defendants' breach of contract.
Date Loads agreed to Whether breach Findings
have been carried resulting in damage
established
19 May 1986 0 Yes (1)
20 May 1986 0 Yes (1)
21 May 1986 0 Yes (1)
22 May 1986 0 Yes (1)
23 May 1986 0 Yes (1)
26 May 1986 0 Yes (1)
27 May 1986 0 Yes (1)
28 May 1986 0 Yes (1)
29 May 1986 0 Yes (1)
30 May 1986 0 Yes (1)
2 June 1986 0 Yes (1)
9 July 1986 3 Yes (2)
10 July 1986 1 Yes (2)
14 July 1986 5 No (3)
24 July 1986 0 Yes (4)
30 July 1986 5 No (3)
1 August 1986 2 Yes (5)
4 August 1986 0 Yes (6)
5 August 1986 0 Yes (6)
6 August 1986 0 Yes (6)
7 August 1986 0 Yes (6)
8 August 1986 0 Yes (6)
11 August 1986 0 Yes (6)
12 August 1986 0 Yes (6)
13 August 1986 0 Yes (6)
14 August 1986 0 Yes (6)
15 August 1986 0 Yes (6)
18 August 1986 0 Yes (6)
19 August 1986 0 Yes (6)
20 August 1986 0 Yes (6)
21 August 1986 5 No (3)
22 August 1986 0 Yes (6)
29 August 1986 4 No (7)
3 September 1986 3 No (16)
22 September 1986 3 Yes (8)
29 September 1986 5 No (9)
6 October 1986 5 No (9)
7 October 1986 4 No (16)
9 October 1986 5 No (9)
20 October 1986 0 Yes (10)
21 October 1986 0 Yes (10)
22 October 1986 2 Yes (11)
27 October 1986 5 No (9)
29 October 1986 1 Yes (12)
10 November 1986 5 No (3)
11 November 1986 5 No (3)
18 November 1986 2 Yes (13)
19 November 1986 0 Yes (13)
20 November 1986 0 Yes (13)
21 November 1986 0 Yes (13)
25 November 1986 5 Yes (14)
27 November 1986 1 No (15)
28 November 1986 4 No (16)
2 December 1986 5 No (9)
5 December 1986 5 No (9)
10 December 1986 4 No (16)
19 December 1986 5 No (9)
22 December 1986 0 Yes (17)
23 December 1986 0 Yes (17)
6 January 1987 0 No (17)
7 January 1987 0 No (17)
8 January 1987 0 No (17)
3 February 1987 0 No (18)
4 February 1987 0 No (18)
5 February 1987 0 No (18)
6 February 1987 1 Yes (19)
9 February 1987 5 Yes (20)
13 February 1987 4 Yes (21)
17 February 1987 3 Yes (22)
18 February 1987 4 Yes (23)19 February 1987 4 Yes (23)
Notes:
(1)The plaintiffs were unable to cart clay for the defendants as there was not in existence a cart licence enabling them to do so. For the reasons appearing in this judgment the plaintiffs were deprived of their ability to cart by reason of the defendants' breach of warranty.
(2)I repeat Appendix A, note (4) and in particular rely on the evidence of Mr Kregor referred to in that note.
(3)I repeat Appendix A, note (1).
(4)I find on the basis of the plaintiffs' diary that the defendants wrongfully declined to provide the plaintiffs with cartage. This was notwithstanding that both Mr Bone and the defendants personally carted clay to the Hobart Brick Company on this day.
(5)I repeat Appendix A, note (6).
(6)I repeat Appendix A, note (7).
(7)Upon the basis of the plaintiffs' diary I find that for part of this day Mr Kregor was employed by Mr N. Pitt. The evidence does not enable me to conclude that the plaintiffs suffered any damage even if the defendants were in breach of their contract by not providing sufficient cartage.
(8)Upon the basis of the plaintiffs' diary I find that the defendants wrongfully refused to provide more than 3 loads. Whilst Mr Kregor worked for Mr Pitt for one hour on this day, I infer that this was insufficient to make good losses suffered by the defendants' breach of contract.
(9)I find that the plaintiffs carted 5 loads of clay and would have been able to cart 6 loads had they not been delayed by the defendants' truck being unloaded at the Brick Company. For reasons already expressed I do not consider there to have been a breach of contract.
(10)I repeat Appendix A, note (11).
(11)I repeat Appendix A, note (12) which equally applies to Mr Kregor.
(12)Upon the basis of the plaintiffs' diary I find that the defendants wrongfully refused to provide Mr Kregor with more than 1 load.
(13)I repeat Appendix A, note (14), save and except that on 18 November 1986 the plaintiffs' truck was loaded twice before loading facilities ceased to be available.
(14)I repeat Appendix A, note (15) which equally applies to Mr Kregor.
(15)Upon the basis of the plaintiffs' diary I find that Mr Kregor carried 1 load only because he took the rest of the day off to attend a function associated with the visit of the Pope. I reject the suggestion that no loading facilities were available at the clay pit due to the defendants attending such a function because the evidence discloses that Mr Bone carted 5 loads of clay on this date.
(16)I repeat Appendix A, note (2).
(17)I repeat Appendix A, note (17).
(18)Upon the basis of the plaintiffs' diary I find that on 4 January 1987 one of them was informed by the second defendant that there would be no cartage until 27 January 1987. On 6 February 1987 one of the plaintiffs telephoned the second defendant to enquire why they had not been asked to resume carting. In the light of the advice given on 4 January it was not incumbent upon the defendants to make such a request. It was incumbent upon the plaintiffs to have their truck at the clay pit on 27 January although it would not have been unreasonable for them to have sought confirmation that that was required prior to arriving. I conclude that on these days the plaintiffs did not cart because they did not return to the pit on 27 January 1987, and not because of any breach of contract by the defendants.
(19)I find that Mr Kregor arrived later than usual and thereby lost two loads through no fault of the defendants. He carried one load but then the defendants wrongfully refused to provide any further loads at 1.20pm.
(20)I repeat Appendix A, note (19) which equally applies to Mr Kregor.
(21)I repeat Appendix A, note (20) which equally applies to Mr Kregor.
(22)I repeat Appendix A, note (21) which equally applies to Mr Kregor.
(23)On each of these days the defendants provided Mr Kregor with four loads only. The defendants were in breach of contract in that on each of these days the plaintiffs should have been provided with at least one further load which Mr Kregor would have carted.
Appendix F
Particulars of days taken into account in determining the average number of loads carted by the plaintiffs M E and D J Kregor for the defendants on a normal working day.
Date Loads Actually Carried Notes
14 July 1986 5
25 July 1986 0 (1)
28 July 1986 6
29 July 1986 6
30 July 1986 5
31 July 1986 6
27 August 1986 6
3 September 1986 3
18 September 1986 4
23 September 1986 7
24 September 1986 6
29 September 1986 5
3 October 1986 6
6 October 1986 5
7 October 1986 4
8 October 1986 6
9 October 1986 5
13 October 1986 6
14 October 1986 3 (2)
15 October 1986 6
17 October 1986 6
22 October 1986 4 (3)
27 October 1986 5
28 October 1986 6
30 October 1986 6
31 October 1986 6
3 November 1986 5
4 November 1986 6
5 November 1986 6
7 November 1986 6
10 November 1986 5
11 November 1986 5
12 November 1986 3 (4)
13 November 1986 0 (4)
14 November 1986 0 (4)
24 November 1986 6
26 November 1986 6
27 November 1986 1
28 November 1986 6
1 December 1986 6
2 December 1986 5
3 December 1986 6
4 December 1986 0
5 December 1986 5
8 December 1986 0 (2)
9 December 1986 5 (4)
10 December 1986 4
12 December 1986 0 (2)
15 December 1986 6
16 December 1986 6
17 December 1986 1 (2)18 December 1986 0 (2)
19 December 1986 5
Summary:
Total number of days : 53
Total number of loads : 237Average number of loads per day : 4.5 (approximately)
(1)Mr Kregor did not cart due to his illness.
(2)The lack of cartage was as the result of rain.
(3)Only two loads were actually carried. The number of loads shown in the table is that which I have found would have been carried if there had been no breach of contract by the defendants (Appendix E, note (11)).
(4)The lack of cartage was the result of the plaintiffs' truck having broken down.
Appendix G
Calculations of loss of earnings of the plaintiffs M E and D J Kregor up until and including 19 February 1987 flowing from breaches of contract on the part of the defendants.
Date Number of Loads Lost (1) Monetary Loss Notes
19 May 1986 4.5 $ 132.98
20 May 1986 4.5 $ 132.98
21 May 1986 4.5 $ 132.98
22 May 1986 4.5 $ 132.98
23 May 1986 4.5 $ 132.98
26 May 1986 4.5 $ 132.98
27 May 1986 4.5 $ 132.98
28 May 1986 4.5 $ 132.98
29 May 1986 4.5 $ 132.98
30 May 1986 4.5 $ 132.98
2 June 1986 4.5 $ 132.98
9 July 1986 1.5 $ 44.33
10 July 1986 3.5 $ 103.43
24 July 1986 4.5 $ 132.98
1 August 1986 2.5 $ 73.88
4 August 1986 4.5 $ 132.98
5 August 1986 4.5 $ 132.98
6 August 1986 4.5 $ 132.98
7 August 1986 4.5 $ 132.98
8 August 1986 4.5 $ 132.98
11 August 1986 4.5 $ 132.98
12 August 1986 4.5 $ 132.98
13 August 1986 4.5 $ 132.98
14 August 1986 4.5 $ 132.98
15 August 1986 4.5 $ 132.98
18 August 1986 4.5 $ 132.98
19 August 1986 4.5 $ 132.98
20 August 1986 4.5 $ 132.98
22 August 1986 4.5 $ 132.98
22 September 1986 NA $ 30.00 (2)
20 October 1986 4.5 $ 132.98
21 October 1986 4.5 $ 132.98
22 October 1986 2.0 $ 59.10 (3)
29 October 1986 3.5 $ 103.43
18 November 1986 2.5 $ 76.88
19 November 1986 4.5 $ 138.38
20 November 1986 4.5 $ 138.38
21 November 1986 4.5 $ 138.38
25 November 1986 1.0 $ 30.75 (4)
22 December 1986 4.5 $ 138.83
23 December 1986 4.5 $ 138.83
6 February 1987 1.5 $ 46.13 (5)
9 February 1987 1.0 $ 30.75 (6)
13 February 1987 1.0 $ 30.75 (7)
17 February 1987 1.5 $ 46.13
18 February 1987 1.0 $ 30.75 (8)
19 February 1987 1.0 $ 30.75 (8)
$5,161.40
Notes:
(1)Unless otherwise indicated the number of loads lost is calculated upon the basis that the average number of loads carried during a full working day was 4.5 (see Appendix F) from which has been deducted the actual number of loads carried.
(2)I refer to my findings contained in Appendix E, note (8). Doing the best I can I assess the plaintiffs' loss at $30.
(3)The loss of two loads is the subject of findings appearing in Appendix E, note (11).
(4)The loss of one load is the subject of findings appearing in Appendix E, note (14).
(5)Upon the basis of the findings appearing in Appendix E note (19), the loss of loads is calculated as if the plaintiffs had carted 3 loads.
(6)The loss of one load is the subject of findings appearing in Appendix E, note (20).
(7)The loss of one load is the subject of findings appearing in Appendix E, note (21).
(8)The loss of one load is the subject of findings appearing in Appendix E, note (23).
Appendix H
Calculations of loss of profits of the plaintiffs M E and D J Kregor from 20 February 1987 (1) to 3 April 1990 (2) (both inclusive) flowing from breaches of contract on the part of the defendants.
A Period 20 February 1987 to 30 June 1987
Number of days on which the plaintiffs did not
have work available for truck. 35 (3)
Calculation of loss of earnings:
35 days x 4.5 (4) x $30.75 (5) = $ 4,843.13
Less wages received by M E Kregor from
Blackwood Hodge from 1 April 1987 to
30 June 1987 (both inclusive) –
13 weeks x $380.00. $ 4,940.00
( 96.87)
I conclude that there was no loss of earnings for this period.
B Period 1 July 1987 to 30 June 1988
Number of days on which the plaintiffs ought
to have been engaged by the defendants. 230 (6)
Calculation of loss of earnings:
230 days x 4.5 (4) x $30.75 (5) = $31,826.25
Less income received $26,782.00 (7)
$ 5,044.25
C Period 1 July 1988 to 4 April 1990
Number of days on which the plaintiffs ought to have been
engaged by the defendants: 230 (6)
1 July 1988 to 30 June 1989 170 (8)
1 July 1989 to 4 April 1990 400
Calculation of loss of earnings:
400 days x 4.5 (4) x $30.75 (5) = $55,350.00
Less income received $ 2,599.73 (9)
$52,750.27
Notes:
(1)This is the first day after the expiration of the period the subject of the calculations in Appendix G.
(2)This is the last day upon which the defendants were required to engage the plaintiffs pursuant to the contact.
(3)No account has been taken of those days upon which the plaintiffs' truck was hired to the Forestry Commission in respect of which the plaintiffs made quantified claims. The evidence does not enable me to conclude that the plaintiffs suffered damage as a result of the truck being so utilized rather than carting clay for the defendants pursuant to the contract.
(4)I have selected this number of loads upon the basis of the calculations in Appendix F.
(5)It is agreed between the parties that this amount represents the profit per load to the plaintiffs.
(6)I have selected this figure on the basis of there being 260 days (excluding Saturdays and Sundays) in a year and making an allowance for public holidays and the Christmas closure of the Hobart Brick Company (see Appendix A, note (17)).
(7)The evidence establishes that the whole of this amount was received by Mr Kregor. The plaintiffs conceded that it should be set off against the loss of profits so that I do not need to consider whether each of the ingredient amounts ought to be taken as going in reduction of damages. I do not set off the further sum of $5,419.02 earned by the plaintiffs jointly. It has its origin in the profit made on the resale of a land cruiser.
(8)I have selected this figured upon the basis set forth in note (6) and then deducting 60 days for that part of the financial year not covered by this period.
(9)I accept that the plaintiffs received drawings of $2,599.73 from the business conducted during this period. Upon the evidence I conclude that those drawings approximated the actual profit derived from that business.
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