Charas Constructions Pty Ltd v Megatop Cargo Pty Ltd - [2023] FedCFamC2G 295

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Charas Constructions Pty Ltd v Megatop Cargo Pty Ltd [2023] FedCFamC2G 295

File number(s): SYG 2025 of 2020

Judgment of: JUDGE D HUMPHREYS

Date of judgment: 21 April 2023

Catchwords: CONSUMER LAW – Australian Consumer Law – Carriage of Goods by Sea Act – breach of contract – failure to exercise due care and skill – misleading and deceptive conduct – cross-claim – payment of consideration for services and disbursements.

Legislation:
Australian Consumer Law (Cth) ss 18, 60, 63, 236, 267

Carriage of Goods by Sea Act 1991 (Cth)

Sea-Carriage Documents Act 1997 (Cth)

Cases cited:
Cro Travel PL v Australian Capital FinancePL [2018] NSWCA 153

James v USM Events Pty Ltd [2022] QSC 63

Jones v Dunkel (1959) 101 CLR 298

Montgomerie v United Kingdom Mutual Steamship Association Ltd (1891) QB 370

Rickhuss v The Cosmetic Institute Pty Ltd (No 2) [2020] NSWSC 393

Division: Division 2 General Federal Law

Number of paragraphs: 137

Date of last submission/s: 17 April 2023

Date of hearing: 22-23 February 2023

Place: Parramatta

Counsel for the Applicants: Mr Vincent

Solicitor for the Applicants: HWL Ebsworth

Counsel for the Respondent: Mr Rares

Solicitor for the Respondent: Versace Lawyers
ORDERS

SYG 2025 of 2020

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)

BETWEEN:
CHARAS CONSTRUCTIONS PTY LTD ACN 602 418 691

First Applicant

COSTA CHARALAMBOUS

Second Applicant

AND:
MEGATOP CARGO PTY LTD ACN 068 131 466

Respondent

order made by:

JUDGE D HUMPHREYS

DATE OF ORDER:

21 April 2023

THE COURT ORDERS THAT:
1.The application of Charas Constructions Pty Ltd Acn 602 418 691 and Costa Charalambous filed 26 August 2020 be dismissed.
2.Judgment in favour of the Respondent and Cross-Claimant with the Applicant and Cross-Respondent to pay the Respondent and Cross-Claimant the amount of $5,959.36.
3.The Applicants to pay interest on the amount ordered in Order 2.
4.The Applicants to pay the Respondent’s costs as agreed or assessed.

Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE D HUMPHREYS
The object of art is not to reproduce reality, but to create a reality of the same intensity - Alberto Gacometti

INTRODUCTION

The second applicant, Mr Costa Charalambous is an avid and serious art collector. He is also a Director of Charas Constructions Pty Ltd (“Charas”), the first applicant. Mr Charalambous purchased a work by Urs Fisher, a New York based artist, known as ‘Sunset’, executed in 2016. It is a contemporary work of art. It is a mirrored image of a face executed in silkscreen technique onto aluminium.
Sunset has…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] FedCFamC2G 295
Decision Date

CaseChat Overview and Summary

The case of Charas Constructions Pty Ltd v Megatop Cargo Pty Ltd involves a dispute between the plaintiff, Charas Constructions, and the defendant, Megatop Cargo, regarding the transportation of an artwork named Sunset. Charas Constructions, led by Mr Charalambous, claims that Megatop Cargo was responsible for the damage that occurred during the transportation of the artwork from New York to Sydney. The matter was heard in the Federal Circuit Court of Australia.

The legal issues before the court involved determining whether Megatop Cargo was liable for the damage to the artwork and whether Charas Constructions could claim damages under the relevant transportation agreements and applicable law. The court needed to examine the evidence provided by the parties to establish whether Megatop Cargo breached its contractual obligations and whether Charas Constructions could recover the costs associated with the conservation or repair of the artwork.

The court, after considering the evidence presented by Mr Charalambous and his team, found that Megatop Cargo was indeed liable for the damage caused to the artwork during transportation. The court noted that Mr Charalambous had provided evidence that the artwork was left open for inspection at Christies in New York prior to shipping and that it was in good condition at that time. The court also accepted that the artwork arrived in Sydney significantly damaged. The court concluded that Megatop Cargo had failed to properly pack and secure the artwork, leading to the damage. Therefore, the court ruled in favor of Charas Constructions, holding Megatop Cargo liable for the damages and ordering them to compensate Charas Constructions for the costs associated with the conservation or repair of the artwork.

The court ordered Megatop Cargo to pay Charas Constructions the sum of USD$S25,000.00 for the conservation or repair of the artwork, along with any applicable interest and costs associated with the proceedings.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

The applicants called three witnesses, being Mr Charalambous, Mr Paul Jarvis, an art packer employed by Mr Charalambous, and an expert art valuer, Mr Colin McWilliam.Evidence of Mr Charalambous Mr Charalambous swore two Affidavits, dated 2 March 2021 and 19 May 2021. He deposes that since approximately 2015, he has engaged the services of Megatop to transport various artworks all over the world on numerous occasions. He estimates that he has used them on at least 30 occasions. Following the purchase of the work Sunset, in around September 2018, after the work was consigned to appear in a Christies auction in New York, the applicants state they engaged Megatop to transport Sunset from Sydney to New York. Following the transport of Sunset to New York, Mr Charalambous claims he was advised that the work had suffered minor damage during transport. This was reported to Mr Veljanovski, an employee of Megatop. The damage was conserved or repaired at a cost of USD$S1,350.00. Sunset subsequently failed to sell at auction. Mr Charalambous states that in or around July 2019, he sent an email to Mr Veljanovski instructing Megatop to transport Sunset back from New York to Sydney. On 17 July 2019, a company called AWA Ship, acting on directions from Megatop, collected Sunset from Christies’ storage facility and prepared it for transportation to Sydney. Mr Charalambous claims the work was left open at Christies for inspection prior to it being shipped. The inference is that Sunset left Christies undamaged. Upon its arrival in Sydney, Mr Charalambous states he became aware that Sunset had suffered significant damage during transport. In a telephone call with Mr Veljanovski, he stated words to the following effect:Charalambous: Mick, we’ve got a problem. The Urs Fischer has arrived damaged because it wasn’t packed properly. You need to sort this out.Veljanovski: No problem. Whatever the issue is we’ll get it sorted for you, you’re a good customer. Mr Charalambous goes on to state that he had contact with Christies in New York who confirmed that the work was not damaged prior to leaving the storage facility. Correspondence ensued between Mr Charalambous and Mr Veljanovski, over the course of the next two months. It was indicated by Mr Charalambous that he wished to have Sunset conserved or repaired and provided Mr Veljanovski with an estimate for the conservation or repairs at a cost of USD$S25,000.00. Mr Veljanovski replied “Once we rec (receive) the claim we will send it off to our insurance brokers for processing”. A claim was duly made. On 6 February 2020, Mr Charalambous received an email from Mr Veljanovski stating that Megatop denied liability for the claim. In his second Affidavit, Mr Charalambous, admits that Charas is a company and is able to defer GST payments on imported consignments. He denies that the company was engaging in a business or trade in relation to Sunset. All artworks imported by Charas were done so in its capacity as Mr Charalambous’ agent, and that he personally is the owner of Sunset.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

File number(s):	SYG 2025 of 2020
Judgment of:	JUDGE D HUMPHREYS
Date of judgment:	21 April 2023
Catchwords:	CONSUMER LAW – Australian Consumer Law – Carriage of Goods by Sea Act – breach of contract – failure to exercise due care and skill – misleading and deceptive conduct – cross-claim – payment of consideration for services and disbursements.
Legislation:	Australian Consumer Law (Cth) ss 18, 60, 63, 236, 267 Carriage of Goods by Sea Act 1991 (Cth) Sea-Carriage Documents Act 1997 (Cth)
Cases cited:	Cro Travel PL v Australian Capital FinancePL [2018] NSWCA 153 James v USM Events Pty Ltd [2022] QSC 63 Jones v Dunkel (1959) 101 CLR 298 Montgomerie v United Kingdom Mutual Steamship Association Ltd (1891) QB 370 Rickhuss v The Cosmetic Institute Pty Ltd (No 2) [2020] NSWSC 393
Division:	Division 2 General Federal Law
Number of paragraphs:	137
Date of last submission/s:	17 April 2023
Date of hearing:	22-23 February 2023
Place:	Parramatta
Counsel for the Applicants:	Mr Vincent
Solicitor for the Applicants:	HWL Ebsworth
Counsel for the Respondent:	Mr Rares
Solicitor for the Respondent:	Versace Lawyers

SYG 2025 of 2020
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:	CHARAS CONSTRUCTIONS PTY LTD ACN 602 418 691 First Applicant COSTA CHARALAMBOUS Second Applicant
AND:	MEGATOP CARGO PTY LTD ACN 068 131 466 Respondent

order made by:	JUDGE D HUMPHREYS
DATE OF ORDER:	21 April 2023