FE Accommodation Pty Ltd v Gold Valley Iron Ore Pty Ltd
[2025] NTCA 8
•14 August 2025
CITATION:FE Accommodation Pty Ltd & Anor v Gold Valley Iron Ore Pty Ltd [2025] NTCA 8
PARTIES:FE ACCOMMODATION PTY LTD (ACN 160 943 082)
and
G&C PASTORAL CO PTY LTD
(ACN 008 039 405)
v
GOLD VALLEY IRON ORE PTY LTD
(ACN 618 094 634)
TITLE OF COURT: COURT OF APPEAL OF THE NORTHERN TERRITORY
JURISDICTION: CIVIL APPEAL from the SUPREME COURT exercising Territory jurisdiction
FILE NO:AP 7 of 2024 (22427907)
DELIVERED: 14 August 2025
HEARING DATE: 19 February 2025
JUDGMENT OF: Kelly and Blokland JJ and Lasry AJ
CATCHWORDS:
APPEAL– contract – appeal against assessment of damages – whether trial Judge erred by awarding nominal damages only to first plaintiff – whether error in construction of s 84 Supreme Court Act – held no error– s 84 permits an award of interest only on “the sum for which judgment is given” - whether trial judge erred by not awarding interest on the principles in Hungerford v Walker – held no error – claim for interest as damages not pleaded and proved - whether trial judge erred in not dismissing the respondent’s counterclaim on the basis of Anshun estoppel – held no error – whether trial judge erred in awarding interest under s 84 Supreme Court Act on amount awarded on respondent’s counterclaim – held no error
CROSS APPEAL - whether trial Judge erred in finding s 52(3) of the Sale of Goods Act did not apply to assessment of second appellant’s damages – held no error - whether error in the assessment of damages concerning values and starting points for assessment – held no error
Federal Court Act 1976 (Cth), s 51A(1)
Sale of Goods Act 1972 (NT), s 38, s 52, s 52(1), 52(3)
Supreme Court Act1979 (NT), s 84
Supreme Court Act1986 (Vic), s 60(1)ABD (Metals and Waste) Ltd v Anglo-Chemical Ore Co Ltd [1985] 2 Lloyds Rep 456; Adrenaline Pty Ltd v Bathurst Regional Council (2015) 97 NSWLR 207; Ajaimi v Giswick Pty Ltd (No 3) (2022) 67 VR 529; Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; Baltic Shipping Co v Dillon (1993) 176 CLR 344; Barrow v Arnaud [(1846) 8 QB 595 at 609-610 (115 ER 1000 at 1006)]; Clark v Macourt [2013] HCA 56 253 CLR1; Commonwealth of Australia v Amann Aviation (1991) 174 CLR 64; Commonwealth v Chessell (1991) 30 FCR 154; Commonwealth v SCI Operations (1998) 192 CLR 285; David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; Ebinger Actien Gesellschaft v Armstrong (1874) 9 QB 473;Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498; FE Accommodation Pty Ltd & Anor v Gold Valley Iron Ore Pty Ltd [2020] NTSC 61; FE Accommodation Pty Ltd & Anor v Gold Valley Iron Ore Pty Ltd [2024] NTSC 61; Ford v Perpetual Trustees Victoria Ltd (2009) 75 NSWLR; Gold Valley Iron Ore Pty Ltd v FE Accommodation Pty Ltd & Anor [2021] NTCA 2; Haines v Bendall (1991) 172 CLR 60; Hegarty v Keogh (No 2) [2023] SASCA; Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358; Hungerfords v Walker (1988) 171 CLR 125; Ikosidekas v Glenis [2023] VSCA 134; Joseph & Co Pty Ltd v Harvest Grain Co Pty Ltd (1996) 39 NSWLR 722; Kwai Tek Chao v British Traders and Shoppers Ltd [1954] 2 QB 459; Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560; Marshall & Co v Nicoll & Son [1919], SC 244; McDonald v Dennys Lascelles Ltd [1933] HCA 25; (1933) 48 CLR 457; Northern Territory v Griffiths (2019) 269 CLR 1; Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221; Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1991) 58 SASR 184; State Bank of New South Wales v Yee (1994) 33 NSWLR 618; Thompson (WL) Ltd v Robinson (Gunmakers) Ltd [1955] Ch 177; Timbercorp Finance Pty Ltd (in liq) v Collins; (2016) 259 CLR 212; Tomlinson v Ramsey Food Processing Pty Ltd; (2015) 256 CLR 507; Walker v FAI Insurance Ltd (1991) Tas R 258, Water Board v Moustakas(1988) 180 CLR 491; Wertheim v Chicoutimi Pulp Co [1910] UKPC 1; [1911] AC 301; referred to.
JW Carter, W Courtney and GJ Tolhurst, ‘Issues of Principle in Assessing Contract Damages’ (2014) 31 Journal of Contract Law
JW Carter, Carter’s Breach of Contract, 2nd ed, 2018, LexisNexis Butterworths
Mason and Carter, Restitution Law in Australia (2016, 3rd Edition)
Professor Michael Bridge, Benjamin’s Sale of Goods (8th Edition)
REPRESENTATION:
Counsel:
Appellants:A Harris KC with E Keynes
Respondent: A Wyvill SC with R Sanders
Solicitors:
Appellants:CCK Lawyers
Respondent: HWL Ebsworth Lawyers
Judgment category classification: B
Number of pages: 80
IN THE COURT OF APPEAL
OF THE NORTHERN TERRITORY
OF AUSTRALIA
AT DARWINFE Accommodation Pty Ltd & Anor v Gold Valley Iron Ore Pty Ltd
[2025] NTCA 8
No. AP 7 of 2024 (22427907)
BETWEEN:
FE ACCOMMODATION PTY LTD (ACN 160 943 082)
First Appellant
AND:
G&C PASTORAL CO PTY LTD
(ACN 008 039 405)
Second Appellant
AND:
GOLD VALLEY IRON ORE PTY LTD
(ACN 618 094 634)
Respondent
CORAM: THE COURT
REASONS FOR JUDGMENT
(Delivered 14 August 2025)
This appeal arises out of proceedings in connection with the termination of a contract between the appellants and the respondent entered into on 17 August 2017 (“the Contract”).
Under the Contract, the first appellant (“FE”) sold the respondent (“Gold Valley”) a mining camp known as the Sawfish Camp (“the Camp”) and the second appellant (“G&C”) sold Gold Valley some plant and equipment (“the Plant and Equipment”). (The Camp and the Plant and Equipment are collectively referred to as “the Chattels”.)
The Chattels were located at the Roper Bar Iron Ore Mine near Borroloola in the Northern Territory which had been operated by WDR Iron Ore Pty Ltd (“WDR”). In 2013 FE purchased the Camp from WDR and agreed to lease it back to WDR for its continued use in the operation of the mine. However, a short time later, WDR was placed into receivership and in April 2016 WDR went into liquidation.
In September 2016, G&C purchased the Plant and Equipment (which comprised essentially all of the assets WRD had used in operating the mine other than the Camp) from the liquidator of WDR.
Under the Contract Gold Valley agreed to purchase the Chattels from FE and G&C for $3.5 million to be paid in instalments. Property in the Chattels was not to pass until the contract price was paid in full. However, Gold Valley was entitled to possession of the Chattels under licence from the date of execution of the Contract (17 August 2017) in exchange for a further payment of $3.5 million in licence fees to be paid in annual instalments. (Details of the apportionment of the purchase prices and licence fees are set out at [91] below.)
On 16 August 2017, following execution of the Contract, Gold Valley took possession of the Chattels. Under the terms of the Contract, Gold Valley was not to remove the Chattels from the mineral leases on which the mine was operated without the prior written consent of the appellants until the full amount of $7 million plus GST had been paid. Clause 15 of the Contract provided:
Both parties agree at signing in consideration of the vendor not requiring guarantees of the purchaser’s directors, the purchaser agrees not to remove the Chattels from the Mineral Lease prior to payment in full of all moneys payable under this contract or otherwise only with the vendor’s consent.
On 25 August 2017, Gold Valley paid G&C $500,000, being the first instalment of the purchase price of the Plant and Equipment.
On 28 September 2017, the parties entered into a variation of the Contract, allowing Gold Valley to pay the $500,000 payable to FE under the Contract in two tranches. These were paid on 2 October and 16 October 2017.
The liquidator of WDR sold the mineral leases comprising the Roper Bar Iron Ore mine to Britmar (Aust) Pty Ltd (“Britmar”) and Britmar became the registered owner of the mine on 18 December 2017.
Between May and July 2018, Gold Valley removed some items of the Plant and Equipment from the mineral leases without the consent of the appellants and without their knowledge. (These are referred to in the damages judgment (and this decision) as “the Removed Items”.)
The second instalment of $500,000 for the Plant and Equipment and the licence fee of $750,000 for the Camp were due and payable on 17 August 2018.[1]
On 17 July 2018, the appellants commenced proceedings against Gold Valley claiming payment of the balance of the purchase price of the Chattels, namely $6 million plus GST pursuant to clause 15 of the Contract.
On 9 August 2018, Gold Valley purported to terminate the Contract for breach. On 30 August 2018, the appellants treated the purported termination as a repudiation of the Contract which they accepted and terminated the Contract.
The Supreme Court ordered that the issue of liability only be tried as a preliminary issue and on 11, 12 and 13 December 2018 there was a trial before Southwood J of the issues in the proceeding on liability only.
Judgment on the liability trial was delivered on 11 September 2020. Southwood J found that Gold Valley was liable to the appellants for wrongful repudiation of the Contract; that the appellants had validly terminated the Contract on 30 August 2018; and that the appellants were entitled to have their damages assessed.
In the liability decision, Southwood J also held that clause 15 of the Contract (set out above at [6]) operated as an accelerated payments clause for the benefit of the appellants so that if Gold Valley removed the Chattels from the mineral leases without the consent of the appellants (which it had done) all payments under the Contract for the Chattels were accelerated and payable in full forthwith.
Gold Valley appealed unsuccessfully against the liability decision.
In the meantime, in March 2019, Britmar commenced proceedings against the appellants and the controlling mind of the appellants, Mr Vivian Oldfield, seeking orders that the appellants remove the remaining Plant and Equipment from the mineral leases. This litigation was settled in accordance with a settlement deed and asset sale deeds whereby:
(a)Britmar purchased a defined portion of the Camp from FE for $5.5 million payable by instalments; and
(b)Britmar purchased the remaining Plant and Equipment which was still on the mineral leases (with the exception of seven fuel pods) for $500,000 payable by instalments.
(That portion of the Camp not purchased by Britmar is referred to in the damages decision (and this decision) as “the Excluded Assets”.)
In about July 2019, G&C arranged for the seven fuel pods to be transported by Roper River Transport (“RRT”), to RRT’s yard in Mataranka at a cost of $33,556.60 inclusive of GST.
In February 2021, G&C retrieved possession of about half of the Removed Items. It did so by engaging RRT to transport those items to G&C’s yard in Alice Springs at a total cost of $107,628.51 payable as follows:
(a)$26,788.51 (inclusive of GST) payable in cash;
(b)$73,500 plus GST in kind consisting of part of the Plant and Equipment the subject of the Contract which was being retrieved by RRT and one of the seven fuel pods previously transported to Mataranka by RRT.
In August 2021, FE sold some of the Excluded Assets, namely 12 of the four room accommodation buildings and one laundry building, to Nathan River Resources (‘NRR’), a related entity to Britmar, for $500,500 plus GST.
FE later transported some of the Excluded Assets (eight accommodation buildings and one laundry building) to the Moura Caravan Park in Queensland, owned by a related company to FE, at a cost of $236,565.51 excluding GST which was paid by the related company.
The remaining Excluded Assets were not sold and remain on the mine site.
By the date of the trial on damages, the Removed Items that had not been transported by RRT to Alice Springs on behalf of G&C remained at the locations to which they had been taken by Gold Valley.
A further trial was held before Brownhill J on 10, 11 and 12 April 2024, with further written submissions filed on 16 and 26 April 2024, for the purpose of assessing damages. At that trial, Gold Valley raised a counterclaim, seeking repayment by way of restitution of the instalment of $500,000 paid to G&C for purchase of the Plant and Equipment and the instalment of $500,000 paid to FE for purchase of the Camp
On 22 August 2024, Brownhill J delivered judgment in the following terms:[2]
Subject to the impacts of GST, I will make the following orders.
(1) The first plaintiff (FE) is entitled to judgment against the defendant for nominal damages only and the defendant (Gold Valley) is to pay the first plaintiff nominal damages of $1.
(2) The second plaintiff (G&C) is entitled to judgment against the defendant for damages and the defendant is to pay the second plaintiff damages of $382,555, plus interest at the rate prescribed by Order 59.02(3) of the Supreme Court Rules for the period from 30 August 2018 to the date of judgment.
(3) The defendant is entitled to restitution against the first plaintiff on the counterclaim and the first plaintiff is to pay the defendant restitution of $500,000, plus interest at the rate prescribed by Order 59.02(3) of the Supreme Court Rules for the period from 30 August 2018 to the date of judgment.
(4) The defendant’s counterclaim against the second plaintiff is dismissed.
In these reasons, the decision of Southwood J on 11 September 2020 is referred to as “the liability decision”; the decision on Gold Valley’s unsuccessful appeal against the liability decision is referred to as “the liability appeal decision”; and the decision of Brownhill J of 22 August 2024 assessing damages is referred to as “the damages decision”.
FE and G&C have appealed against the damages decision on the following grounds:
(a)Ground 1: The trial judge erred in her determination that the judgment (in order 1) in favour of the first appellant (FE) was only in the sum of $1, and should have found instead that the first appellant is entitled to judgment against the respondent (Gold Valley) for a greater amount.
(b)Ground 2: The trial judge erred in her determination that the judgment (in order 2) in favour of the second appellant (G&C) was only in the sum of $558,358.92 (inclusive of interest), and should have found instead that the second appellant is entitled to judgment against the respondent (Gold Valley) for a greater amount.
(c)Ground 3: The trial judge erred at [133] and [155] which paragraphs in part inform order 2, in assessing the second appellant’s damages by taking into account the amount of $73,500 in respect of the sale of items of plant and equipment to Roper River Transport, without also taking into account the specific loss that was avoided by that sale, and the trial judge should have increased the amount of the assessment at [155] by $73,500.
(d)Ground 4: The trial judge erred in her determination (order 3) that the respondent was entitled to any judgment in respect of its counterclaim against the first appellant for restitution and should have found that the counterclaim is estopped or otherwise precluded as it constitutes an abuse of process.
(e)Ground 5: In the alternative to Ground 4, the trial judge erred in her determination (order 3 and [178]) that the respondent is entitled to interest pursuant to s 84 of the Supreme Court Act for the period from 30 August 2018 to the date of judgment.
The appellants also contend that the trial judge erred in deducting the sum of $37,180 for the legal costs of the Federal Court proceedings with Britmar rather than adding this amount to G&C’s damages. Gold Valley does not dispute this error in calculation, though contending that it should have been dealt with under the slip rule in Rule 36.07.
Gold Valley has cross-appealed against the assessment of damages in favour of G&C, contending that the trial judge:
(a)erred in finding that s 52(3) of the Sale of Goods Act did not apply to the assessment of G&C’s damages;
(b)should in any case have required G&C to establish the values of each subset of the Plant and Equipment at the times when possession of those items reverted to G&C;
(c)erred in finding that the market for the Plant and Equipment was curtailed by reason of its being located on remote mineral leases owned by a third party, and/ or being difficult and expensive to transport;
(d)erred in ascribing values (including nil values) to items of Plant and Equipment in respect of which “there was an absence of raw material to which good sense may be applied” and/ or ascribed values that were too temporally disparate from the appropriate time for assessing damages;
(e)erred in holding that the starting point for the assessment of damages was the value of the unperformed promise to pay $1 million to G&C under clause 15 as the value of the Plant & Equipment retained by G&C should have been used in defining the putative starting point as distinct from merely comprising the basis for an ex post facto adjustment; and
(f)erred in a number of specified ways in accepting certain evidence as to the value of items of Plant and Equipment recovered by G&C.
Gold Valley also filed a Notice of Contention raising issues which overlap with its counterclaim.
In addition to these issues, the appellants sought to raise what they referred to as “an additional issue” which was characterised by Gold Valley as an unpleaded claim to set off a licence fee of $750,000 said by the appellants to have fallen due under the Contract before the Contract was terminated. However, the appellants did not seek judgment for this amount as being an amount payable under the Contract. Rather, they contended that it was relevant to Gold Valley’s counterclaim for repayment of the amounts paid to FE under the Contract in this way. The appellants say that Gold Valley’s claim for restitution of the $500,000 ought not to have been allowed because there had not been a total failure of consideration. Under the Contract, Gold Valley was entitled to possession of the Camp. That was a benefit Gold Valley received under the Contract and the best evidence of the value of that benefit was the agreed licence fee under the Contract which was $750,000. There being no total failure of consideration, Gold Valley was not entitled to return of the $500,000 paid under the Contract. Gold Valley objects to the appellants raising this issue for the first time on appeal. These issues are considered below.
Grounds 1 and 2
These two grounds concern the treatment of pre-judgment interest by the trial judge. Grounds 1 and 2 relate to:
(a)the proper construction of s 84 of the Supreme Court Act and the scope of the discretionary power conferred by s 84(1); and
(b)alternatively, the refusal by the trial judge to award interest as damages in accordance with the principles enunciated in Hungerfords v Walker.[3]
Section 84(1) of the Supreme Court Act provides as follows:
Interest up to judgment
(1) In any proceeding in respect of a cause of action that arises after the commencement of this Act the Court may order that there shall be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of that sum for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.
The trial judge accurately described the appellants’ approach to the treatment of interest in the assessment of damages in the following terms:[4]
The plaintiffs claimed damages assessed essentially as the amount of the unpaid monies due under the Contract of Sale on the date of the plaintiffs’ termination for the defendant’s repudiation, argued to be $6 million due and payable pursuant to cl 15, with interest calculated on a cash flow basis over time, from the date of termination to the date by which judgment was anticipated, deducting the amounts paid by Britmar under the asset sale deeds and the amount paid by NRR for some of the FEA Excluded Assets and adding the legal costs as they were received or paid. …
Her Honour rejected this approach saying:[5]
Interest on damages
The plaintiffs’ claim for interest was put on the basis of s 84 of the Supreme Court Act 1979 (NT) (‘SCA’). Section 84(1) provides that the Court may order that there be included in the sum for which judgment is given interest at such rate as it thinks fit on the whole or any part of that sum for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.
The purpose of pre-judgment interest is to compensate a plaintiff for the loss or detriment which they have suffered by being kept out of their money during the applicable period.
Counsel for the plaintiffs argued that the plaintiffs are entitled to interest calculated in the way particularised because they were kept out of their money until payments were received from Britmar and NRR under sales entered into in mitigation of their loss.
Section 84(1) of the SCA permits the Court to award interest on damages. It expressly, and only, permits the Court to order interest ‘on the whole or any part of’ ‘the sum for which judgment is given’.
If a plaintiff receives payments from a third party in mitigation of their loss, their damages are reduced accordingly. As set out in paragraph [45] above, a fundamental rule governing mitigation of damage is that a plaintiff cannot recover losses which are in fact avoided, whether or not there was an obligation to mitigate in that way. It must follow that any judgment sum for damages is necessarily reduced by, and necessarily excludes, the amount of such payments. It must also follow that there is no power to order interest under s 84 of the SCA on an amount from which such payments are deducted in determining the judgment sum. The purpose of a statutory power to award interest like that contained in s 84 of the SCA is to compensate the plaintiff for being deprived, between the time the cause of action arose and the time of judgment, of the damages to which they were entitled. Damages do not include amounts received in mitigation; damages are reduced by such amounts.
(Footnotes omitted)
There followed a review of relevant authorities and her Honour concluded, so far as the claim for interest was made under s 84:[6]
[T]here is no power to order statutory pre-judgment interest under s 84 of the SCA on an amount from which payments received in mitigation of damages are deducted in determining the judgment sum because the purpose of a statutory power to award interest like that contained in s 84 of the SCA is to compensate the plaintiff for being deprived, between the time the cause of action arose and the time of judgment, of the damages to which they were entitled and damages do not include amounts received in mitigation.
Interest as damages
Given the operation and effect of s 84 of the SCA as set out above, the plaintiffs’ claim for interest is properly characterised as a claim for interest as damages, not interest on damages. …
(Footnote omitted)
The appellants contend that the trial judge was in error in her interpretation of s 84 of the Supreme Court Act.
The appellants contend that the purpose of s 84 is to compensate a plaintiff for the detriment a party suffers by being kept out of its money during the applicable period and that, “just as pre-judgment interest is awarded in cases where the judgment sum is paid by the defaulting party late, such interest is also to be awarded when the defaulting party has had the benefit of mitigatory steps taken by the injured party which involves payment over time”.
This contention assumes as a starting position that “pre-judgment interest is awarded in cases where the judgment sum is paid by the defaulting party late”. That contention cannot be accepted without qualification. One must begin with the plain words of s 84(1) which, as the trial judge correctly stated, permits the Court to award interest on damages. It expressly, and only, permits the Court to order interest ‘on the whole or any part of’ ‘the sum for which judgment is given’. Therefore, if a defendant pays the outstanding sum after the issue of proceedings and before judgment, it is not correct to say that “pre-judgment interest is awarded in cases where the judgment sum is paid by the defaulting party late”. Interest under s 84 can only be awarded on the sum for which judgment is given. The remedy for a plaintiff where the amount claimed is paid before judgment is to plead and prove interest as damages, in accordance with the principle in Hungerfords.
The appellants refer to “the cornerstone principle of contractual damages” that “the party who has sustained loss by reason of a breach of contract is to be placed in the position it would have been in if the contract had been performed”,[7] and submit that the purpose of statutory interest is to satisfy this principle, quoting the following passage from Haines v Bendall:[8]
An award of interest up to the date of judgment is an award of interest in the nature of damages: Fire and All Risks Insurance Co. Ltd., at p 431. This statement acknowledges that the award of interest is an integral element in the attainment of the object of damages, namely, to compensate a plaintiff for injury sustained. Hence the award of interest is compensatory in character. While “(i)nterest should not be awarded as compensation for the damage done” (emphasis added) (Jefford v. Gee (1970) 2 QB 130, at p 146), the award of interest is nevertheless an essential element in the achievement of true compensation for that damage. In Thompson v. Faraonio (1979) 54 ALJR 231, at p 233; [1917] HCA 36; 24 ALR 1, at p 7, the Privy Council stated that “(t)he reason for awarding interest is to compensate the plaintiff for having been kept out of money which theoretically was due to him at the date of his accident” (emphasis added). See also Batchelor v. Burke, per Gibbs C.J. at p 455; M.B.P (S.A.) Pty. Ltd. v. Gogic, at p 205; p 196 of ALR; cf. Ruby v. Marsh [1975] HCA 32; (1975) 132 CLR 642, per Barwick C.J. at pp 652-653. The award of interest for the period of delay in payment between the date of accrual of the cause of action and judgment affords the fair legal measure of compensation: Pheeney v. Doolan (1977) 1 NSWLR 601, per Reynolds J.A. at p 613. Thus, it is the award of damages and, where appropriate, interest awarded on damages for the period up until the judgment takes effect which allows the plaintiff to be placed in or restored to the situation, as far as money can do, in which he or she would have been but for the defendant’s negligence.
However, the legislation providing for pre-judgment interest under consideration in Haines v Bendall is materially different from s 84. The provision which empowered the Court to award pre-judgment interest under consideration in that case was s 94 of the New South Wales Supreme Court Act which conferred power on the Supreme Court to order that there shall be included, in the sum for which judgment is given, interest at such rate as it thinks fit on the whole or any part of the money between the date when the cause of action arose and the date when the judgment takes effect.[9] That effectively allows the court to calculate interest on amounts owing from time to time if payments are made or amounts received in mitigation before judgment in a way that s 84 does not.
In any event, Haines v Bendall was not concerned with whether a plaintiff can be awarded interest on an amount paid in reduction of damages. As the trial judge said:[10]
It [Haines v Bendall] does not concern an amount received by the plaintiff in reduction of damages. Rather, it concerns an amount received by the plaintiff which serves the same purpose as the award of damages. The High Court held (at 72) that, as the plaintiff had enjoyed the benefit of that amount before judgment, that enjoyment must be taken into account in ascertaining the amount on which interest should be awarded as compensation for being kept out of the money to which he was entitled by way of damages. It is clear that the calculation made by the High Court (at 73) did not reduce the overall award by the sum of $49,037, it only reduced the interest awarded. That is because the workers’ compensation did not reduce the plaintiff’s entitlement to damages. The workers’ compensation legislation simply required the plaintiff worker to repay to their employer any workers’ compensation which had been paid to them from any common law damages award they received.
The appellants rely on a number of interstate authorities including Commonwealth v SCI Operations,[11] and Ikosidekas v Glenis.[12]However, these authorities do not assist the appellants for the same reason as Haines v Bendall does not assist.
In Commonwealth v SCI, the High Court was considering s 51A(1) of the Federal Court Act which relevantly provided:
In any proceedings for the recovery of any money (including any debt or damages or the value of any goods) ... the Court or a Judge shall, upon application, unless good cause is shown to the contrary, either:
(a) order that there be included in the sum for which judgment is given interest at such rate as the Court or the Judge, as the case may be, thinks fit on the whole or any part of the money for the whole or any part of the period between the date when the cause of action arose and the date as of which judgment is entered; or
(b) without proceeding to calculate interest in accordance with paragraph (a), order that there be included in the sum for which judgment is given a lump sum in lieu of any such interest.
The Commonwealth argued that s 51A(1) did not authorise the payment of interest where the moneys claimed in legal proceedings were paid in full prior to judgment. The High Court rejected that argument. While holding that s 51A(1) “cannot be construed as conferring a discretion to award interest independently of the existence of a cause of action or for a period prior to the date on which the cause of action arose,”[13] Gaudron J stated that “the power conferred by s 51A(1), being a power conferred on a court, is not to be construed as subject to limitations which its terms do not require”.[14] Her Honour concluded:[15]
Sub-section (1) of s 51A does not specify that interest may be included in a judgment for a sum of money claimed in legal proceedings. Rather, it provides that it may be included “in the sum for which judgment is given”. Clearly, s 51A(1) requires that there be a “sum for which judgment is given” before interest can be included. But that does not mean that interest cannot be awarded if payment of the moneys claimed in the proceedings is made prior to judgment. The mere payment of a debt or other money sum claimed in legal proceedings does not deprive a court of power to enter judgment for the costs of those proceedings. And judgment may be entered for costs in a fixed sum. In that event, there is, in terms of s 51A(1), a “sum for which judgment is given” and, in my view, there may be included in that sum interest pursuant to par (a), or, a lump sum in lieu of interest pursuant to par (b).
This does not assist the appellants in the present case. The trial judge in this case did not impose any artificial limitation on the power to award interest under s 84 which the terms of the section do not require. Her Honour applied the plain words of the section which, unlike s 51A(1) of the Federal Court Act, expressly, and only, permits the Court to order interest ‘on the whole or any part of’ ‘the sum for which judgment is given’.
In Ikosidekas v Glenis, relevantly for the present appeal, the Victorian Court of Appeal was considering s 60(1) of the Victorian Supreme Court Act which provided:
Interest in proceedings for debt or damages
(1) The Court, on application in any proceeding for the recovery of debt or damages, must, unless good cause is shown to the contrary, give damages in the nature of interest at such rate not exceeding the rate for the time being fixed under section 2 of the Penalty Interest Rates Act 1983 as it thinks fit from the commencement of the proceeding to the date of the judgment over and above the debt or damages awarded.
Ikosidekas was defrauded of $160,000 by Glenis, an employee of MWL. Glenis fraudulently represented to Ikosidekas that he had arranged for him to lend $160,000 to a director of MWL, at high interest rates and secured by a caveat over real estate purportedly owned by the director. Ikosidekas sued Glenis for $160,000 plus interest, and costs and exemplary damages. Before judgment, Ikosidekas received payment of $160,000 from MWL’s professional indemnity insurer in settlement of Ikosidekas’ claim against MWL.
One of the issues on the appeal was whether Ikosidekas would have been entitled to interest under s 60.[16] Glenis contended that there was no basis for awarding interest under s 60(1) of the Act unless a judgment for debt or damages was first ‘awarded’, because there is otherwise no amount ‘over and above’ which damages in the nature of interest may be ‘given’ under that section. The Victorian Court of Appeal rejected that approach saying:[17]
In summary, Glenis contends that there is no basis for awarding interest under s 60(1) of the Act unless a judgment for debt or damages is first ‘awarded’, because there is otherwise no amount ‘over and above’ which damages in the nature of interest may be ‘given’ under that section. While we accept that this may be so, that proposition says nothing about the time at which the Contribution ought to have been taken into account. For the following reasons, we are of the view that the judge ought to have first assessed all of the monetary relief to which Ikosidekas was entitled at the date he received the Contribution on 31 May 2020 — including his entitlement to interest under s 58(1) or s 60(1) of the Act — before subtracting the amount of the Contribution. Our reasons follow.
First, a successful plaintiff’s entitlement to statutory interest under either s 58 or s 60 is ‘an additional head of damages’ to which the plaintiff is entitled to recover judgment.
Second, the judge’s approach gives a narrow meaning to s 60(1). This is contrary to the beneficial purpose of the Court’s power to award penalty interest as compensation to a successful plaintiff for being kept out of money which could otherwise have been utilised, as summarised by Tate and Kyrou JJA in Carbone v Melton City Council:
The statutory power to award interest has a twofold beneficial purpose. First, to compensate a party who has been obliged to take proceedings to recover a money sum and who in the meantime has been kept out of moneys which could otherwise have been used or upon which interest could have been earned. Secondly, to encourage the early resolution of litigation. In A J Lucas Drilling Pty Ltd v McConnell Dowell Constructors (Aust) Pty Ltd, this Court stated that s 58 should not be given a narrow meaning and that its beneficial purpose should be given a broad application.
Third, the position is analogous to the common sense approach in the offer of compromise regime under O 26 of the Supreme Court (General Civil Procedure) Rules 2015. Rule 26.08(5) provides that, where the Court is considering whether a plaintiff obtains a judgment on the claim which is no less favourable to the plaintiff than the terms of an offer of compromise, the amount of the plaintiff’s interest entitlement to the day of the offer of compromise is to be taken into account.
This reasoning turns on the wording of s 60, in particular that under that section the court is directed to “give damages in the nature of interest” a different proposition from the wording of s 84 that “there shall be included in the sum for which judgment is given interest at such rate as [the court] thinks fit on the whole or any part of that sum”.
The appellants urge upon this Court the reasoning of the Victorian Court of Appeal that to give a narrow meaning to the pre-judgment interest provision in the legislation would be contrary to the beneficial purpose of the Court’s power to award interest as compensation to a successful plaintiff for being kept out of money which could otherwise have been utilised. However, the “beneficial purpose” of the legislative provision empowering the Court to award pre-judgment interest – in this case s 84 – must be derived from the words of the section and the wording of s 84 is clear and unambiguous: the Court is empowered to award interest only on “a sum for which judgment is given”. There was no error in the trial judge’s construction of s 84.[18]
The appellants contend that the words in s 84 “interest on the whole or any part of that sum for the whole or any part of the period between the date when the cause of action arose and the date of the judgment” should be construed to empower a Court to include interest on amounts owing by a defendant to a plaintiff during a part of the period between the date when the cause of action arose and the date of the judgment in calculating the amount of damages, as was done by the appellant’s expert, Mr Morris. This contention cannot be accepted. It would involve construing s 84 as permitting interest to be awarded on “money owing from time to time”, rather than “a sum for which judgment is given” contrary to the plain words of the section.
The appellants contend that, in the alternative to awarding interest under s 84, the trial judge should have awarded the appellants interest by way of damages in accordance with the principles in Hungerfords. The trial judge rejected the appellants claim for Hungerfords interest in the following terms.[19]
Interest as damages
Given the operation and effect of s 84 of the SCA as set out above, the plaintiffs’ claim for interest is properly characterised as a claim for interest as damages, not interest on damages.[20] The distinction between the two was expressed by Brennan and Deane JJ in Hungerfords v Walker (1988) 171 CLR 125 (at 152) as follows:
There is, in our view, a critical distinction between an order that interest be paid upon an award of damages and an actual award of damages which represents compensation for a wrongfully caused loss of the use of money and which is assessed wholly or partly by reference to the interest which would have been earned by safe investment of the money or which was in fact paid upon borrowings which otherwise would have been unnecessary or retired. On the one hand, there is no common law power to make an order for the payment of interest to compensate for the delay in obtaining payment of what the court assesses to be the appropriate measure of damages for a wrongful act. If such interest is to be awarded at common law, it must be pursuant to statutory authority. On the other hand, there is no acceptable reason why the ordinary principles governing the recovery of common law damages should not, in an appropriate case, apply to entitle a plaintiff to an actual award of damages as compensation for a wrongfully and foreseeably caused loss of the use of money.
As this extract explains, where interest is awarded as damages, it is awarded not under statutory provision but at common law, and it is awarded for a proved loss.[21] To sustain a claim for interest as damages, the plaintiff’s loss and its quantum are to be found as a fact and assessed on the evidence, not assumed from the withholding of the money and automatically assessed by the application of current market rates of interest.[22]
Counsel for the plaintiffs initially expressly disavowed a claim for interest as damages under the principles enunciated in Hungerfords v Walker.[23] However, subsequently, counsel for the plaintiffs argued that a claim for interest as damages (if that was what they had made) has been pleaded and proved.[24]
The Further Amended Statement of Claim filed on 28 February 2024 pleaded as follows:
(a) Under the heading ‘Loss and damage’ – that on 11 September 2020, judgment in favour of the plaintiffs was delivered, with reasons finding that the plaintiffs’ termination of the Contract of Sale was valid and the plaintiffs are entitled to have their damages for the defendant’s repudiation assessed.
(b) Under the heading ‘Damages for repudiatory breach of contract’ – that the plaintiffs are entitled to be paid damages representing the loss suffered by the plaintiffs as a result of the defendant’s breach, which is particularised as follows:
The quantum of the plaintiffs’ loss, and the basis upon which such loss is quantified, is set out in the expert report of Brian Morris (‘Morris Report’)...
(c) Under the heading ‘The Camp and the Conveyor’ – that the plaintiffs entered into the asset sales deeds with Britmar and the facts of Britmar’s payments to the plaintiffs under those deeds are pleaded.
(d) Under the heading ‘Remedies’ – that the plaintiffs claim against the defendant: damages as set out in the Morris Report; interest; and costs.
Theoretically perhaps, the pleading that the plaintiffs claim damages as set out in the Morris Report could be construed as a claim for interest as damages in the sense that the Morris Report calculates the plaintiffs’ claim with interest. However, there is no pleading of any actual loss to the plaintiffs as a consequence of being kept out of the $6 million. There is no plea, for example, of material facts to the effect that, as a consequence of being kept out of the money, the plaintiffs had to source money through borrowing at specific rates of interest, or were unable to repay debt at a specific rate of interest, or had to spend money they would otherwise have invested, whether into their businesses or elsewhere, at specific rates of interest.
The only thing that might be considered to be a plea or evidence of a loss of the use of money such as to found a claim for interest as damages is contained in the evidence of Brian Morris.
Mr Morris is a chartered accountant in the business of providing accounting and valuation services. He holds qualifications in accountancy, law, arbitration and mediation and has performed forensic accounting investigations and reports for courts for decades.[25]
Mr Morris was asked by the plaintiffs’ solicitors to calculate the difference between the actual cash flows of each plaintiff (comprising the initial sum received under the Contract of Sale, plus the actual amounts paid by Britmar and NRR under the asset sales deeds, less the actual amounts of legal costs paid by each plaintiff) and the hypothetical cash flows that would have been received if the defendant had performed its obligations under the Contract of Sale, and he did so, yielding the sums set out in paragraph [71] above.[26]
Mr Morris was then asked by the plaintiffs’ solicitors how he would measure the plaintiffs’ losses based on the cash flows he had calculated.[27] He responded that the plaintiffs’ losses should be calculated as the difference between the cash flows that would have been received if the defendant had performed its obligations under the Contract of Sale and the cash flows that the plaintiffs have received and will receive under the asset sales deeds entered in order to mitigate the loss.[28] He was then asked how he would ‘calculate the plaintiffs’ losses based on a claim for loss of use of money from 30 August 2018 to 10 October 2024’.[29] He responded that, at all relevant times, the amounts that the plaintiffs were entitled to receive from the defendant exceeded the amounts that the plaintiffs received in mitigation, and consequently, the plaintiffs have been denied the opportunity to make use of the money that they were entitled to receive from the defendant pursuant to the Contract of Sale.[30]
Mr Morris calculated the plaintiffs’ loss of use of money measured by way of simple interest on the sums outstanding from time to time, on the basis of three potential interest rates which he was asked to adopt, namely 10% per annum (which is a rate referred to in the Contract of Sale for late payments of instalments), the Supreme Court’s pre-judgment interest rates and the Supreme Court’s post-judgment interest rates.[31] Those calculations yielded the sums referred to in paragraph Error! Reference source not found. above.
In cross-examination, Mr Morris agreed that he had not been given any instructions or information or documents about the actual cost of finance to either plaintiff, and he agreed that none of the interest rates he had been asked to apply would reflect that actual loss to the plaintiffs of not having the funds the defendant had contracted to pay.[32] He said that the manner in which the funds would be utilised is possibly relevant if the focus was what has been lost by the plaintiffs under the principle in Hungerfords v Walker.[33] He said that the 10% interest rate was a right under the Contract of Sale so ‘that’s their loss of use’.[34] In re-examination, Mr Morris said that the particular financial arrangements or funding arrangements of the plaintiffs were not relevant to the interest calculations he made in his report.[35] Mr Morris’s opinion was that a cash flow approach is the most appropriate way to measure the plaintiffs’ loss because it takes into account the timing of the monies coming in and the monies going out.[36]
Even if that is so from an accounting or commercial perspective, Mr Morris’s evidence is insufficient evidence upon which to establish a claim for interest as damages under the principles in Hungerfords v Walker, which Mr Morris himself expressly disavowed. Effectively, the plaintiffs’ claim for interest is for a loss: (a) assumed from the withholding of the money, not proven from evidence establishing the use to which the plaintiffs would have put the money; and (b) quantified by the application of various possible rates of interest which bore no established relation to the actual cost to the plaintiffs of being held out of the money.
There is no error in the trial judge’s careful and thorough analysis of the pleadings and evidence in the appellants’ case and the application of the principles in Hungerfords. Put simply, the appellants failed to properly plead and prove a claim for interest as damages.
Grounds 1 and 2 of the appeal must be dismissed.
Ground 3: the contended error in the treatment of the $73,500 agreed to be paid by G&C to RRT by way of “in kind” payment
The appellants contend that the trial judge erred in the calculation of the damages payable by Gold Valley to G&C in her Honour’s treatment of $73,500 agreed to be paid by G&C to RRT by way of “in kind” payment at paragraphs [133] and [155] of the damages judgment.The trial judge took into account the amount of $73,500 in respect of items of Plant and Equipment sold to RRT by deducting that amount from the damages otherwise payable to G&C. The appellants contend that her Honour should also have taken into account on the other side of the ledger that it cost the appellants $73,500 to transport those goods into Alice Springs.
At [133] the trial judge said:
Just as the amounts actually paid by Britmar to the second plaintiff should be deducted from the second plaintiff’s damages, so too should any other amounts actually received by the second plaintiff on account of items of Plant and Equipment it sold. The second plaintiff sold to RRT four categories of Plant and Equipment in exchange for reduction in the cost of transportation of items of Plant and Equipment charged to the plaintiffs. The cost reductions were: $17,000 (exc GST) for a truck, $30,000 (exc GST) for three modular buildings, $25,000 (exc GST) for a fuel pod, and $1,500 (exc GST) for a communications tower.[37] Those amounts also comprise losses actually avoided by the second plaintiff and the second plaintiff’s damages must be reduced accordingly by a total of $73,500 (exc GST).
Accordingly, at [155], her Honour calculated G&C’s damages as follows.
Second plaintiff’s damages award
For the above reasons, the second plaintiff is entitled to an award of damages as follows:[38]
Amount owing under cl 15 on 30 August 2018
$1,000,000
Principal paid by Britmar under G&C asset sale deed
( 500,000)
Interest paid by Britmar under G&C asset sale deed
( 6,765)
Amount credited by RRT
( 73,500)
Value of Plant and Equipment not sold
( 0)
Legal costs in relation to Federal Court proceeding
37,180
Total
$382,555
Gold Valley contends that this approach by the trial judge was correct; that G&C made a decision to incur a liability in the amount of $73,500 (excluding GST) to transport its own property to yards in Alice Springs and, rather than pay for it with its own funds, G&C chose to discharge the liability by assigning the four items mentioned in [133] to RTT. That cannot absolve G&C from the obligation to account for the benefit it received from those four items and the amount of $73,500 was rightly deducted from G&C’s damages.
The appellants contend that this analysis of the transaction ignores the fact that the items that were being transported to Alice Springs by RRT were not “G&C’s own property” external to the dealings between G&C and Gold Valley. The items that were transported to Alice Springs at a cost of $73,500 were items of Plant and Equipment that Gold Valley had wrongly removed from the mineral leases without the knowledge or consent of G&C in breach of the Contract. The transport costs of $73,500 were costs incurred by G&C in retrieving wrongfully removed Plant and Equipment for which Gold Valley is liable in damages. G&C did not get a net benefit of $73,500 from those four items; its net benefit was nil.
The actual cost to G&C of transporting the items wrongly removed by Gold Valley was $107,628.51 of which G&C paid $26,788.51 to RRT in cash and $73,500 in kind by way of transferring ownership of those four items referred to in paragraph [133]. The trial judge dealt with the payment of $26,788.51 by treating it as a loss to be offset against the value of the items that were retrieved and of which G&C retained ownership. Her Honour said:[39]
… I accept that Mr Oldfield’s evidence about the effects of weather and lack of maintenance since 2014 also explains why the eight vehicles, three items of machinery (including the drilling rig), 11 shipping container buildings, six fuel pods, a communications tower and eight wheelie bins and four spill kits in the Table 4 Items had very little value, specifically less than the $26,778.51 in transportation costs paid by the second plaintiff to retrieve them, by the date they were returned to the second plaintiff’s physical possession in February 2021. I consider that to be the relevant date for the purpose of assessing whether a deduction should be made on their account from the second plaintiff’s damages because the defendant had removed them from the mineral leases in breach of the Contract of Sale, had refused to tell the second plaintiff of their location and did not do so until after the plaintiffs commenced proceedings in the Supreme Court, and had not taken any steps thereafter to return the Removed Items to the second plaintiff’s physical possession. I find, on the balance of probabilities, that the Table 4 Items (including the six fuel pods) were, at that date, of no material value after deducting the transportation costs.
The trial judge treated 28 other items that had been removed by Gold Valley the same way saying:[40]
I consider that no deduction to the second plaintiff’s damages is necessary or appropriate to reflect the second plaintiff’s retention of ownership and right to possession of these 28 Removed Items because they were not, from late May to early July 2018, in the second plaintiff’s physical possession as a consequence of the defendant’s conduct in breach of the Contract of Sale. In any event, I infer, on the balance of probabilities, from the evidence relating to the Table 4 Items that the same conclusions would apply equally to these 28 Removed Items such that they were, by February 2021, of no material value after deducting likely transportation costs to relocate them to the second plaintiff’s physical possession.
Logically, the payment of $73,500 in kind should be treated the same way. The transport costs were incurred for the purpose of retrieving wrongly removed Plant and Equipment. The appellants are correct and the $73,500 should not have been deducted from G&C’s damages; it should be brought to account on both sides of the ledger: $73,500 worth of Plant and Equipment recovered and deducted from G&C’s damages and $73,500 transport costs incurred for retrieving wrongly removed Plant and Equipment added to those damages, cancelling each other out.
Ground 3 should be allowed and $73,500 added to G&C’s damages.
Ground 4: asserted error in allowing Gold Valley’s counterclaim against FE for restitution
The appellants contend that the trial judge erred in allowing Gold Valley’s claim against FE for repayment of the $500,000 paid under the Contract by way of an instalment of the purchase price of the Camp. This ground of appeal stands on two bases:
(a)Anshun estoppel; and
(b)an argument advanced on appeal for the first time, that the precondition for ordering restitution – namely failure of consideration – was not present. (This is the issue referred to by the appellants as “the additional issue”. Gold Valley objects to it being raised for the first time on appeal.)
Anshun estoppel
In Port of Melbourne Authority v Anshun,[41] the Port of Melbourne Authority had hired a crane to Anshun. A worker was severely injured while the crane was being operated by Anshun. The worker sued the Authority and Anshun for damages for personal injury. The Authority and Anshun claimed contribution from each other. The notice of contribution served by the Authority claimed contribution only, not an indemnity, notwithstanding the existence of an indemnity given by Anshun in the hiring agreement for the crane. In the worker’s action, judgment was entered for the worker against both defendants; Anshun recovered contribution from the Authority to the extent of 90 per cent of the worker’s damages and the Authority recovered from Anshun contribution to the extent of 10 per cent of the damages. The damages were paid in those proportions. Subsequently, the Authority commenced an action against Anshun claiming the amount of damages it had paid the worker plus legal costs and disbursements pursuant to the indemnity in the agreement for hire of the crane. Anshun defended the claim on the basis of estoppel, the substance of the defence being that the Authority could have raised its claim against Anshun in the worker’s action. When the matter eventually reached the High Court, the plurality (Gibbs CJ, Mason and Aickin JJ) upheld Anshun’s defence making the following observations:
In this situation we would prefer to say that there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking, it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in the earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings e.g. expense, importance of the particular issue, motives extraneous to the actual litigation, to mention but a few. ...
It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in a judgment which conflicts with an earlier judgment. ...
...
The likelihood that the omission to plead a defence will contribute to the existence of conflicting judgments is obviously an important factor to be taken into account in deciding whether the omission to plead can found an estoppel against the assertion of the same matter as a foundation for a cause of action in a second proceeding. By “conflicting” judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction.
It is for this reason that we regard the judgment that the Authority seeks to obtain as one which would conflict with the existing judgment, though the new judgment would be based on a different cause of action, a contractual indemnity.
In Tomlinson v Ramsey Food Processing Pty Ltd,[42] the High Court confirmed the basis for Anshun estoppel in the following terms:
Three forms of estoppel have now been recognised by the common law of Australia as having the potential to result from the rendering of a final judgment in an adversarial proceeding. The first is sometimes referred to as “cause of action estoppel”. Estoppel in that form operates to preclude assertion in a subsequent proceeding of a claim to a right or obligation which was asserted in the proceeding and which was determined by the judgment. It is largely redundant where the final judgment was rendered in the exercise of judicial power, and where res judicata in the strict sense therefore applies to result in the merger of the right or obligation in the judgment. The second form of estoppel is almost always now referred to as “issue estoppel”. Estoppel in that form operates to preclude the raising in a subsequent proceeding of an ultimate issue of fact or law which was necessarily resolved as a step in reaching the determination made in the judgment. The classic expression of the primary consequence of its operation is that a “judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies”. The third form of estoppel is now most often referred to as “Anshun estoppel”, although it is still sometimes referred to as the “extended principle” in Henderson v Henderson. That third form of estoppel is an extension of the first and of the second. Estoppel in that extended form operates to preclude the assertion of a claim, or the raising of an issue of fact or law, if that claim or issue was so connected with the subject matter of the first proceeding as to have made it unreasonable in the context of that first proceeding for the claim not to have been made or the issue not to have been raised in that proceeding. The extended form has been treated in Australia as a “true estoppel” and not as a form of res judicata in the strict sense. Considerations similar to those which underpin this form of estoppel may support a preclusive abuse of process argument.
(citations omitted)
Similar observations were made by the plurality (French CJ, Keifel, Keane and Nettle JJ) in Timbercorp Finance Pty Ltd (in liq) v Collins:[43]
It was mentioned at the outset of these reasons that the appellant does not contend that an issue estoppel arises with respect to the claims that the respondents now seek to pursue. That is to say, it is not argued that they involve an issue of fact or law which was necessarily involved as a step in reaching the determination of the group proceeding. Rather, it is contended that these claims ought to have been raised and determined in that proceeding. An estoppel of this kind, an “Anshun estoppel”, will preclude the assertion of a claim or of an issue of law or fact if the claim or issue was so connected to the subject matter of the first proceeding as to make it unreasonable, in the context of the first proceeding, for the claim or issue not to have been made or raised in it.
(citations omitted)
The appellants argue that Southwood J in fact dismissed Gold Valley’s counterclaim for repayment of the $1 million it had paid toward the purchase price of the Chattels saying:
The defendant counterclaims for the return of the instalment payments totalling $1 million it paid towards the purchase prices for the chattels in 2017 and ancillary damages.[44]
...
As a result of the alleged wrongful repudiation of the Contract of Sale by the plaintiffs, the defendant has counterclaimed for the repayment of the $1 million it has paid to the plaintiffs in instalments.[45]
...
I find that the defendant’s termination of the Contract of Sale was invalid and constituted a repudiation of the contract. I find the plaintiffs’ termination of the Contract of Sale was valid. Consequently, the defendant’s Defence and Counterclaim must be dismissed and the plaintiffs are entitled to have their damages for the defendant’s repudiation of the Contract of Sale assessed.[46]
After the liability decision was handed down, and before the appeal against that judgment was heard, Gold Valley filed a further amended defence and counterclaim which included a new paragraph 29.4A seeking orders for restitution of the $1 million paid under the contract of sale less any amount which is set off.
The liability appeal decision was handed down in August 2021.[47] The Court of Appeal held at [113(a)]:
The appeal is dismissed save for grounds 19 and 20. Consequently, the trial Judge’s conclusion at [195] of the Reasons should stand and the purchaser is liable to the vendor for the wrongful repudiation of the Contract, with damages to be assessed.
The appellants filed a reply and defence to counterclaim on 13 September 2023 asserting that the claim for restitution in the further amended defence and counterclaim should be dismissed on the basis of estoppel, res judicata or abuse of process.
The trial judge in the damages decision held that no Anshun estoppel had arisen and allowed Gold Valley’s claim against FE for restitution of the $500,000 paid under the Contract. In doing so her Honour said:[48]
Counsel for the plaintiffs argued that it was not open to the defendant to counterclaim for the instalments of the purchase price paid by the defendant because the defendant’s counterclaim had been dismissed by Southwood J in the liability hearing. It was said that res judicata, issue estoppel or Anshun estoppel precluded this counterclaim being made and determined because the counterclaim has been dismissed and finally determined.
I reject these submissions.
On 14 August 2018, the Supreme Court ordered that the issue of liability only be tried as a preliminary issue.
In its Amended Defence and Counterclaim filed in Court on 11 December 2018, the first day of the liability hearing, the defendant alleged that the plaintiffs had breached and repudiated the Contract of Sale, the defendant had terminated the Contract of Sale and the plaintiffs were liable to the defendant for damages for breach of contract. The damages were particularised as the loss of profit from the Contract of Sale of the plaintiffs (had they performed their obligations), plus the $1 million paid under the Contract of Sale and the other costs and expenses incurred in respect of the Contract of Sale or, alternatively, return of the $1 million paid under the Contract of Sale and other costs and expenses. The counterclaim also alleged that the plaintiffs had breached and repudiated the Contract of Sale, that the defendant had terminated the Contract of Sale, and that the plaintiffs were liable to the defendant for damages for breach of contract as claimed earlier in the defence.
The order made by Southwood J after the liability trial, on 15 September 2020, was that there be judgment for the plaintiffs on the question of liability, with damages to be assessed. No order was made dismissing the defence and counterclaim.
The defendant’s claim and counterclaim to repayment of the instalment payments, rested on the allegation that the plaintiffs had breached the Contract of Sale and the defendant had validly terminated it, entitling the defendant to damages. That is the way Southwood J understood the case. Ultimately, Southwood J found that the defendant’s termination of the Contract of Sale was invalid and constituted a repudiation, and that the plaintiffs’ termination of the Contract of Sale was valid, holding that the defendant’s Defence and Counterclaim must be dismissed and the plaintiffs are entitled to have their damages for the defendant’s repudiation of the Contract of Sale assessed.
On 15 September 2020, Southwood J ordered the plaintiffs to file and serve an amended statement of claim dealing with its claim for damages and the defendant to file and serve an amended defence dealing with the plaintiffs’ claim for damages.
On 14 December 2020, the defendant filed a Further Amended Defence and Counterclaim, which included: (a) a plea that the plaintiffs’ damages were to be assessed pursuant to s 52(3) of the SGA, a plea that the plaintiffs’ damages could not exceed the loss (if any) suffered on resale of the Camp and the Plant and Equipment, and a plea that the plaintiffs’ damages are subject to a set off of the sum of $1 million paid by the defendant under the Contract of Sale; and (b) an amended counterclaim seeking orders for restitution of the $1 million paid under the Contract of Sale.
No res judicata arose such that the right or cause of action claimed or put in suit (a claim in restitution) has passed and merged into judgment. The defence and counterclaim determined by Southwood J did not include a claim for $1 million founded on restitution as the cause of action. Rather, the cause of action as determined by Southwood J was breach of contract.
Similarly, no issue estoppel arose because no state of fact or law is alleged or denied in the present counterclaim the existence of which was a matter necessarily decided by Southwood J’s judgment.
Nor has an Anshun estoppel arisen. The principle of Anshun estoppel prevents a party from later relying on a claim or defence which it has unreasonably refrained from raising in earlier proceedings, being proceedings so closely connected with the later subject matter that it might reasonably have been expected that the claim or defence would have been raised in those earlier proceedings. Even if the liability hearing and the assessment of damages hearing could be considered as separate but closely connected proceedings to which the principle could apply (a matter I am not deciding), it is clear that the issues to be determined in the liability hearing were: (a) which side repudiated the Contract of Sale, and (b) which side validly terminated the Contract of Sale, so as to identify which side was liable to the other for damages for breach of contract. I do not accept that the defendant unreasonably refrained from raising the issue of recovery of instalments of the purchase price in the liability hearing because that claim is founded on the valid termination of the Contract of Sale by the plaintiffs and so would not reasonably have been expected to have been raised by the defendant in its case seeking damages for breach of contract by the plaintiffs. Furthermore, the principle of law referred to above is well-settled and the facts of payment by the defendant of instalments of $500,000 to each of the plaintiffs are not in dispute.
Consequently, I find that the defendant is entitled to recover the sum of $500,000 paid to the first plaintiff in part payment of the purchase price for the Camp under the Contract of Sale.
The appellants do not contend that the trial judge was in error in holding that there was no res judicata (in the sense that the cause of action claimed has passed and merged into the judgment) and that no issue estoppel had arisen. The appellant’s contention is that the trial judge ought to have dismissed Gold Valley’s counterclaim by reason of Anshun estoppel.
The appellants contend that the judge was in error in finding that it was not unreasonable for Gold Valley to have refrained from raising the issue of recovery of instalments of the purchase price in the liability trial on the ground decided by the trial judge, namely that the restitutionary claim is founded on the valid termination of the Contract of Sale by the plaintiffs and so would not reasonably have been expected to have been raised by the defendant in its case seeking damages for breach of contract by the plaintiffs.
The appellants contend that the focus by the trial judge on the case being conducted in the liability trial by Gold Valley ignores the fact that on 30 August 2018, the appellants filed a reply and defence to counterclaim pleading, in response to Gold Valley’s further amended defence and counterclaim, that the appellant’s termination of the Contract was valid. An issue to be determined on the liability trial was whether Gold Valley was entitled to repayment of the $1 million it had paid to the appellants under the Contract. Although Gold Valley’s counterclaim asserted the right to repayment based on what it claimed to be a valid termination of the Contract by Gold Valley, the defence to that Counterclaim squarely put in issue that contention by Gold Valley. The appellants contend that in those circumstances, if Gold Valley wished to contend that, should the Court find that the termination by the appellants was valid (as pleaded in the defence to counterclaim) Gold Valley was in any event entitled to be repaid the $1 million on restitutionary grounds, it could and should have done so shortly after delivery of the reply and defence to counterclaim on 30 August 2018.
The appellants also rely on the fact that on 16 August 2018, Southwood J ordered that all issues of liability be tried separately from issues of quantum at the December 2018 liability trial and contend that whether a restitutionary cause of action arises is a liability issue, not a quantum issue.
The appellants also contend that the decision of the trial judge to allow Gold Valley to pursue the restitutionary claim has resulted in “conflicting judgments” as that term was used by the plurality in Anshun in the passage quoted at [66] above.
By “conflicting” judgments we include judgments which are contradictory, though they may not be pronounced on the same cause of action. It is enough that they appear to declare rights which are inconsistent in respect of the same transaction.
The appellants contend that the judgment of the trial judge giving judgment for Gold Valley on the counterclaim in the damages decision is inconsistent with the judgment of Southwood J in the liability decision at [181]:
I find that the defendant’s termination of the Contract of Sale was invalid and constituted a repudiation of the contract. I find the plaintiffs’ termination of the Contract of Sale was valid. Consequently, the defendant’s Defence and Counterclaim must be dismissed and the plaintiffs are entitled to have their damages for the defendant’s repudiation of the Contract of Sale assessed.
The appellants submit that, in these circumstances, given that Gold Valley was counterclaiming in the liability trial for repayment of the $1 million paid under the Contract, and that the appellants had specifically pleaded in their defence to counterclaim that their termination of the Contract was valid (thus traversing Gold Valley’s contract based claim for repayment) the issues in the restitution counterclaim are so connected with the subject matter of the liability trial as to have made it unreasonable for the restitution claim not to have been made or the issue not to have been raised in that trial. The appellants contend that if the issues of liability and quantum had been determined at the same time, and Gold Valley had sought to initiate fresh proceedings to prosecute its restitutionary claim, the Court would have inevitably found that it was unreasonable for Gold Valley not to have made that claim in the present proceeding and to have dismissed the second proceeding on the grounds of Anshun estoppel.
We agree that if Gold Valley’s restitutionary claim had been raised in fresh proceedings after final judgment in this proceeding dismissing Gold Valley’s counterclaim, the Court would likely have dismissed that claim on the grounds of Anshun estoppel. However, the present situation is different. Although Southwood J stated that “the defendant’s Defence and Counterclaim must be dismissed”, he did not make an order dismissing the counterclaim or give judgment for the appellants on the counterclaim. Further, he was referring to the counterclaim based on contract. There are, therefore, no “conflicting judgments”. All that happened was that Gold Valley amended its pleadings in the present proceeding to claim repayment of the money paid under the Contract on a different basis before any order of the Court determining the counterclaim.
The respondent contends that it was not unreasonable for Gold Valley not to raise in the liability trial a claim that only arose if it lost the liability trial. It was an issue, like damages, which followed from the determination of the contest at the liability trial as to which party repudiated the Contract and which, like damages, would not have been determined at the liability trial even if it had been raised.
We do not accept that the issue of liability on the restitutionary counterclaim could not have been determined at the liability trial had it been raised there (subject to issues of set-off). However, that does not determine the issue of whether the issues in the restitution counterclaim are so connected with the subject matter of the liability trial as to have made it unreasonable for the restitution claim not to have been made or the issue not to have been raised in that trial.
In our view it was not unreasonable for Gold Valley not to have raised the restitutionary claim in the liability trial. Given that it was a split trial in the same proceeding and there was no order in the liability trial disposing of the counterclaim, we consider the trial judge in the damages trial was not in error to allow Gold Valley to pursue its claim for restitution. The claim for restitution is intimately connected with the assessment of damages and was logically and appropriately dealt with in the damages trial. If FE’s damages had turned out to be in excess of $500,000, for example because it was unable to resell the Camp at the price it obtained and/ or it had pleaded and proved a claim for Hungerfords interest, the $500,000 paid by Gold Valley would simply have been accounted for in the calculation of those damages as was the case with the calculation of G&C’s damages.[49]
The appeal ground based on Anshun estoppel must fail.
The “additional matter”: no failure of consideration and hence no basis to order restitution
The appellants contend that Gold Valley was not entitled to repayment of the money paid under the Contract because it had not established the precondition for an order for restitution, namely a failure of consideration.
The trial judge addressed Gold Valley’s claim for restitution against FE in the following terms.[50]
The question then arises as to whether the defendant is entitled to recover the $500,000 it paid to the first plaintiff.
It is clear that, in the absence of an express agreement giving the vendor of land an absolute right to retain them, instalments of the purchase price of property already paid may be recovered by a defaulting purchaser when the vendor elects to discharge the contract. [McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 477-478 per Dixon J (Rich and McTiernan JJ agreeing). See also at 470 per Starke J.] This principle applies equally to sales of goods. [See Moffet Farms v Pauls Services & Sales Pty Ltd (1991) 7 SR (WA) 351 at 355 per Hammond J, citing Dies v British and International Mining & Finance Corp Ltd [1939] 1 KB 724 at 742, 744 per Stable J.]
There is nothing in the Contract of Sale to suggest, by the use of the word ‘deposit’ or otherwise, that the payments made to each plaintiff which were due on execution of the Contract of Sale.
The appellants contend that the trial judge applied the wrong test and that the correct legal analysis of Gold Valley’s claim for restitution is as follows.[51]
(a)The claim was based upon a failure of consideration. That is, Gold Valley paid $500,000, and claimed it got nothing in return because the Contract was terminated.
(b)In Baltic Shipping Co v Dillon Mason CJ observed:[52]
The action to recover money paid on a total failure of consideration is on a common money count for money had and received to the use of the plaintiff.
(c)In Pavey & Matthews Pty Ltd v Paul, Deane J explained that unjust enrichment is not an independent cause of action but a “unifying legal concept” underpinning actions for money had and received:[53]
... the concept of unjust enrichment in the law of this country... constitutes a unifying legal concept which explains why the law recognises, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary processes of legal reasoning, of the question whether the law should, in justice, recognise such an obligation in a new or developing category of case...
(d)In Equuscorp Pty Ltd v Haxton, French CJ, Crennan and Kiefel JJ described the ‘distinct categories’ instead as ‘distinct classes of qualifying or vitiating factors’ as follows.[54]
In David Securities Pty Ltd v Commonwealth Bank of Australia, this Court explained the part played by unjust enrichment in a claim for money had and received (in that case for recovery of a payment made under mistake of law). That explanation may be expressed, at a fairly high level of abstraction, as an approach to determining such claims. In summary:
·recovery depends upon the enrichment of the respondent by reason of one or more recognised classes of “qualifying or vitiating” factors;
·the category of case must involve a qualifying or vitiating factor such as mistake, duress, illegality or a failure of consideration, by reason of which the enrichment of the respondent is treated by the law as unjust;
·when identified in this way, unjust enrichment gives rise to a prima facie obligation in a respondent to make restitution;
·this prima facie obligation can be displaced by circumstances which the law recognises would make an order for restitution in favour of the claimant unjust.
(e)Accordingly, the correct question for the trial judge to ask was whether there was in this case a ‘qualifying or vitiating factor’, namely failure of consideration.
(f)It was Gold Valley’s onus to prove the existence of a ‘qualifying or vitiating factor’. The Court of Appeal of South Australia observed in Hegarty v Keogh (No 2):[55]
The claimant bears the onus of proving the existence of a recognised qualifying or vitiating factor [Alexiadis v Zirpiadis (2013) 302 ALR 148, [30] (Kourakis CJ]. The respondent is not required to demonstrate the “justice” of the receipt or retention of a benefit. The claimant bringing the claim must first show that the facts of the claim fall within an established category of unjust enrichment [K Mason, J W Carter and G J Tolhurst, Restitution Law in Australia (LexisNexis Australia, 2nd ed, 2008), [2204]]:
It is wrong to treat the defendant as having a general onus to establish the justice of the receipt or retention of the benefit. The error lies in inconsistency with the idea that there are recognised cases in which a prima facie obligation to make the restitution arises. The idea of a prima facie case asserts that the injustice element of unjust enrichment is a matter which must be proved, not assumed, by bringing the facts within one of the established categories such as mistake.
(g)As those observations make clear, Gold Valley was not simply required to prove that it had paid money under a contract which had been discharged. Rather, it was required to bring the facts of this case within the established category of failure of consideration so as to establish that it would be unjust for Gold Valley not to have the funds returned.
(h)This is also consistent with the observations of Mason and Carter, Restitution Law in Australia (2016, 3rd Edition) at [1 103]:
Discharge is not in itself sufficient: the requirements of unjust enrichment must be satisfied. As always in the ineffective contract context, the problematic elements are benefit and injustice.
(i)It is also consistent with the observations of Allsop P and Young JA (with whom Sackville AJA agreed) in Ford v Perpetual Trustees Victoria Ltd:[56]
[120]No separate defence of change of position or any other particular restitutionary defence was pleaded.
[121]The relevant enquiry as to the availability of the order for payment or repayment does not cease with the identification of the relevant qualifying consideration, such as mistake. The enquiry is as to the injustice of the retention of any money or benefit. This lies at the root of the claim and of any defence such as change of position: Lipkin Gorman v Karpnale Ltd [1991] 2 AC 548 at 560 (per Lord Templeman) and 578 (per Lord Goff) .
...
[123]The question of request, payment, receipt and benefit should be viewed as matters of substance and not form or legal technicality: Australia and New Zealand Banking Group Ltd v Westpac Banking Corporation (at 673-674).
...
[126]None of the above paradigms covers the facts here precisely, but all reveal the necessity to look to the substance of the matter. In Quek v Beggs (1990) 5 BPR 11,761, McLelland J (as he then was) was concerned with a case of undue influence. This was not a case of money had and received, but rather undue influence by a spiritual adviser. The judge found that Pastor Beggs had used undue influence and the question was whether he should make restitution. The judge said (at 11,779): "There is an analogy with proceedings to enforce restitution of money payed by one person to another under a fundamental mistake of fact." He then quoted the Australia and New Zealand Banking Group case noting that the courts paid regard to substance rather than to form as to what had occurred. McLelland J thought that it would not be appropriate to order restitution looking at the substance of what had occurred.
(j)Those passages from Ford were cited with approval by Leeming J (with whom Macfarlan and Ward JJA agreed) in Adrenaline Pty Ltd v Bathurst Regional Council.[57]
(k)When the substance of what occurred in this case is identified it should be clear that there was no failure of consideration. Whilst Gold Valley paid $500,000, it received $750,000 in value, being the licence for use and possession of the Camp for one year. That is the ‘substance’ of what occurred.
(l)Gold Valley did not prove that there had been a failure of consideration by reference to all the facts. The trial judge made no mention of the licence fee in her reasoning.
The appellants contend that these authorities establish that Gold Valley carried the onus to prove that the facts of the present case fall within an established category of unjust enrichment such as failure of consideration. It was not for FE to demonstrate the justice of the receipt of the money.
The appellants contend that Gold Valley failed to prove that there had been a failure of consideration with respect to the $500,000 paid to FE, or that there was any ‘injustice’ in the retention of that money by FE, and, further, that there was no failure of consideration and no injustice because Gold Valley had the use and possession of the Camp for one year, a right which was valued under the Contract at $750,000.
Gold Valley did not respond to these contentions in written submissions, being apparently under the misunderstanding that the appellants’ case on “the additional matter” was that FE was entitled to set off the licence fee of $750,000 which fell due before the Contract was terminated against Gold Valley’s restitution claim.[58]
In oral submissions Mr Wyvill SC for Gold Valley referred to the fact that this section of the trial judge’s decision was short and explained:[59]
There are only two paragraphs there because it wasn’t contested on the merits by the appellants below. The appellants didn’t make any substantive submission that there wasn’t a restitutionary right for a party who had paid more than a deposit under a contract of sale to recover that in restitution even they’re the wrongdoer.
And Dennys Lascelles is authority for that in relation to real property, and there are other authorities at 129 in relation to personal property. Going back to Dyes v British Steel(?)[60]which is a 1939. So the two - there are authorities there going back to the 1930s, which, of course is before the law of restitution was even recognised as a separate area of legal principle.
We didn’t run a case based on this being a total failure at consideration. Our case was based on those authorities. This - it may be that on examination, academics might say that, “Well, the jurisdiction or the juridical foundation for the remedy is total failure of performance, total failure of consideration or some other remedy.” But we just relied upon the establishment common law principles that said it was applicable, where even if you’re the wrongdoer or you’ve paid more than the deposit. And that’s - as I said, that’s well‑established.
Now, that wasn’t contested down - which is why her Honour’s judgment is so short in that respect. It was never said to her Honour that, “Look, the juridical foundation for this is total failure of consideration.” And there hasn’t been a total failure of consideration for the reasons my learned friend has explained today.
The contentions by the appellants on the additional matter cannot be accepted. An examination of McDonald v Dennys Lascelles Ltd[61] shows that the basis for allowing a purchaser to recover instalments of the purchase price paid before termination of a contract is, in essence, failure of consideration. Dixon J (with whom Rich and McTiernan JJ agreed) said:
When a party to a simple contract, upon a breach by the other contracting party of a condition of the contract, elects to treat the contract as no longer binding upon him, the contract is not rescinded as from the beginning. Both parties are discharged from the further performance of the contract, but rights are not divested or discharged which have already been unconditionally acquired. Rights and obligations which arise from the partial execution of the contract and causes of action which have accrued from its breach alike continue unaffected. When a contract is rescinded because of matters which affect its formation, as in the case of fraud, the parties are to be rehabilitated and restored, so far as may be, to the position they occupied before the contract was made. But when a contract, which is not void or voidable at law, or liable to be set aside in equity, is dissolved at the election of one party because the other has not observed an essential condition or has committed a breach going to its root, the contract is determined so far as it is executory only and the party in default is liable for damages for its breach. (See Boston Deep Sea Fishing and Ice Co. v. Ansell; Hirji Mulji v. Cheong Yue Steamship Co.; Cornwall v. Henson; Salmond and Winfield, Law of Contracts, (1927), pp. 284-289; Morison, Principles of Rescission of Contracts (1916), pp. 179, 180.) It does not, however, necessarily follow from these principles that when, under an executory contract for the sale of property, the price or part of it is paid or payable in advance, the seller may both retain what he has received, or recover overdue instalments, and at the same time treat himself as relieved from the obligation of transferring the property to the buyer. When a contract stipulates for payment of part of the purchase money in advance, the purchaser relying only on the vendor’s promise to give him a conveyance, the vendor is entitled to enforce payment before the time has arrived for conveying the land; yet his title to retain the money has been considered not to be absolute but conditional upon the subsequent completion of the contract. “The very idea of payment falls to the ground when both have treated the bargain as at an end; and from that moment the vendor holds the money advanced to the use of the purchaser” (Palmer v. Temple). In Laird v. Pim, Parke B. says: “It is clear he cannot have the land and its value too”; the case, however, was one in which conveyance and payment were contemporaneous conditions (see Laird v. Pim). It is now beyond question that instalments already paid may be recovered by a defaulting purchaser when the vendor elects to discharge the contract (Mayson v. Clouet).
Gold Valley contends, in the alternative to Grounds 1 to 4 of the cross-appeal considered above, that the trial judge should have found that Gold Valley failed to prove the value of the items of Plant and Equipment not sold to Britmar.[120] The trial judge dealt with the valuation of the items of Plant and Equipment not sold to Britmar as follows:[121]
The Plant and Equipment not purchased by Britmar or RRT consisted of:
(a) the six fuel pods transported to Mataranka and then to Alice Springs, being one x 20 feet (or five metres long) and five x 40 feet (or 12 metres long);
(b) the 24 Removed Items recovered by the second plaintiff and transported to yards in Alice Springs (‘Table 4 Items’); and
(c) the 28 Removed Items remaining at the locations to which they were taken by the defendant.
As regards the fuel pods and the Table 4 Items, Mr Oldfield deposed that the second plaintiff purchased those items of Plant and Equipment on 7 September 2016, then located on the mineral leases, for the amounts attributed to them in the Pickles Invoice. Those amounts totalled from $106,863.62 to $108,499.98, the difference being attributable to items with the same descriptor in the Pickles Invoice having different amounts. After deducting the cost of transporting those items from where the defendant had taken them to the yards in Alice Springs ($26,778.51), the Pickles Invoice prices totalled from $80,085.11 to $81,721.47 (exc GST). Mr Oldfield deposed that it was his expectation that, during the almost two years between the second plaintiff’s purchase and the date of breach of the Contract of Sale, the second plaintiff had not performed any works on the fuel pods and the Table 4 Items which could have increased their value, and they would have deteriorated in condition as they were left exposed to the weather and they were not maintained in any way, with the consequence that their value would have declined below the prices in the Pickles Invoice.
As regards the fuel pods, counsel for the defendant argued that each fuel pod had a value of $25,000 because that was the amount credited to the RRT invoice for one of the 40 foot fuel pods it took in exchange for transportation costs. Consequently, it argued that the six fuel pods had a total value of $150,000.
As regards to the Table 4 Items, counsel for the defendant argued that each of the Table 4 Items had a value that was 370% of the amount set out in the Pickles Invoice because that was the average difference between the amounts charged in the Pickles Invoice and the amounts credited to the RRT invoice for the truck, the three modular buildings and the communications tower. Counsel for the defendant argued therefore that the Table 4 Items had a value of around $300,000.
In cross-examination, Mr Oldfield rejected the proposition that the amounts attributed in the RRT invoice to the ‘modular buildings’ of $10,000 was effectively five times the amounts attributed to ‘shipping container buildings’ in the Pickles Invoice ($1,818), saying that some of the buildings were in better condition and had a higher value than others, and RRT would have chosen the buildings that were in the best condition. When shown that the truck acquired by RRT for $17,000 was priced at $5,000 in the Pickles Invoice, Mr Oldfield said that he took what he was offered by RRT for it, and that price was for the item located in RRT’s yard. As for the fuel pods, which were all priced at $8,636.36 in the Pickles Invoice, one of which was exchanged with RRT for $25,000, Mr Oldfield said again that RRT would have picked out the best of the seven tanks, only some of them had pumping units and some had dirty fuel in them. Mr Oldfield agreed that the amount attributed to the communications tower in RRT invoice was around $100 more than the price in the Pickles Invoice. Mr Oldfield agreed that the Table 4 Items (including the six fuel pods) had been in Alice Springs since February 2021, he had not done anything with them, had not sold or rented them, and it was his intention to do that once the litigation concludes.
In re-examination, Mr Oldfield said that his expectations about selling or renting the Table 4 Items was that some of them, such as the vehicles, would be ‘just trashed’, some of the equipment would have reached the end of its economic life and someone may buy it if they have a use for it, but the mine shut in 2014 and some of the equipment has not operated since then and has been sitting idle until the present time. Mr Oldfield said that leaving machinery in the elements all that time causes them to suffer break downs in the seals and contamination of the oils, hydraulics, filters and intakes, so that the chances of someone wanting to buy them can be remote unless they have a specific need and they are really desperate and want to use them for parts. He said that he did not have any great expectations for them. He said that he had had Pickles, Lloyds and Hassels auctioneers come and look at them and tell him these items have no commercial value. He said that there will be a range of where it sits, but some of them are basically a burden.
I accept Mr Oldfield’s evidence as set out above regarding the condition of the Table 4 Items, their deterioration and their consequent diminution in value from the starting point of the prices set out in the Pickles Invoice. I accept that Mr Oldfield’s evidence explains why the amounts credited to the RRT invoice cannot be taken to represent the value of the other Table 4 Items, given that the items varied in condition, RRT would have chosen the items in the best condition, and the amounts were a credit against transportation costs of items already at RRT’s yard in Mataranka rather than amounts paid upon a sale in an open market. I accept that Mr Oldfield’s evidence about the effects of weather and lack of maintenance since 2014 also explains why the eight vehicles, three items of machinery (including the drilling rig), 11 shipping container buildings, six fuel pods, a communications tower and eight wheelie bins and four spill kits in the Table 4 Items had very little value, specifically less than the $26,778.51 in transportation costs paid by the second plaintiff to retrieve them, by the date they were returned to the second plaintiff’s physical possession in February 2021. I consider that to be the relevant date for the purpose of assessing whether a deduction should be made on their account from the second plaintiff’s damages because the defendant had removed them from the mineral leases in breach of the Contract of Sale, had refused to tell the second plaintiff of their location and did not do so until after the plaintiffs commenced proceedings in the Supreme Court, and had not taken any steps thereafter to return the Removed Items to the second plaintiff’s physical possession. I find, on the balance of probabilities, that the Table 4 Items (including the six fuel pods) were, at that date, of no material value after deducting the transportation costs.
Consequently, no deduction to the second plaintiff’s damages is necessary or appropriate to reflect the second plaintiff’s retention of ownership and possession of the Table 4 Items.
(Extensive footnoted references to the evidence omitted.)
Gold Valley contends that the trial judge should not have accepted Mr Oldfield’s evidence saying that G&C paid WDR over $106,000 for the Table 4 Items on 7 September 2016 out of a total price of $495,000 and that, less than a year later, Gold Valley agreed to pay a total of $1.5 million for the same items which, Gold Valley argues, suggests that, applying the same apportionment to the purchase price paid by Gold Valley as the apportionment of the purchase price paid by G&C, a reasonable apportionment of Gold Valley’s contract price would see around $300,000 apportioned to the Table 4 items. Gold Valley goes one step further and contends that an analysis of the prices obtained for the other items sold after 30 August 2018 (ie the sales to Britmar and the other company) shows that those prices were about 370% more than the price G&C paid to the liquidator of WDR. Gold Valley argues that these values should have been applied to the Table 4 items.
This argument ignores the fact that the Table 4 Items were items wrongfully removed by Gold Valley and later retrieved by G&C. Gold Valley contends that the only evidence led by G&C as to the condition of these items was from Mr Oldfield who testified that he expected their value would have declined. Gold Valley points to the fact that there was no evidence led from a valuer and that G&C did not tender photographs or other evidence of their condition. However, Mr Oldfield did give evidence of how it was that the value of the items had declined.
The question relates to the items that are in the yard and the suggestion that you’ll try and either sell or rent them somehow deal with them after the litigation is over. What’s your expectation of your ability to be able to do that?---Well, some items, Mr Harris, will be – they’ll be just trashed. I mean I could hand her Honour – I’ve got photos of the vehicles which you won’t need an expert to decide what they’re worth. And some of the other equipment is – your Honour, probably the best way to describe some of this stuff is all equipment has an economic life and value. So when it’s new, it starts off it’s worth X and then the maintenance, you know, go down along this line and you say maintenance. And as a lifetime expands, the maintenance increases. So the maintenance curve goes up, the value economic life goes down. And when it hits a point, it’s basically lost its value. It’s got no economic value. And – or limited. Somebody may buy it if somebody’s got a use for it. But we use the old adjective at work a bit of machinery, if you’ve got a use for it in a contract is worth something, but as a doorstop is very expensive. And when you’ve got the likes of some of this equipment that – remember it was – the mine shut 2014. Some of this hasn’t operated and been sitting idle for the period up until now. Now, the components of machinery are made from seals, hydraulics, oils, whatever. And when they’re placed in the element and they’re not stored, there’s the possibilities of contamination, condensation, it gets in the oils, rain gets in the filters or gets in the intakes and unless you pull them down for a big inspection, the chances of somebody wanting to come and buy them off you can be remote, unless they had a specific need and they’re really desperate and want to use some for parts. But I haven’t got any great expectations for them. But you can hope but I – I’ve had Pickles and guys come around and auctioneers. I’ve had Lloyds, I’ve had Hassles(?). And someone there saying having no commercial value. So there’ll be a range of where it sits, but some of the items are just basically burden.[122]
Gold Valley contends that this passage from the evidence of Mr Oldfield demonstrates that G&C failed to prove its damages “with a degree of precision which reflects the proof that was reasonably available to G&C” and refers to the evidence of direct relevance to the value of these items which G&C did not call: photos, “the Pickles guys” etc. We disagree. Assessment of the evidence was primarily a matter for the trial judge and her Honour was entitled to accept the evidence of Mr Oldfield that the Table 4 items had essentially no commercial value (ie were worth less than the $26,588 G&C paid to transport them) for the reasons given by him in evidence.
Grounds 12 to 14 and 17 to 21 of the cross-appeal must also be dismissed.
Gold Valley’s notice of contention
Gold Valley contends that, if this Court accepts Gold Valley’s argument that G&C is only entitled to nominal damages, then G&C’s counterclaim for repayment of the $500,000 paid to G&C on account of the purchase price for the Plant Equipment must succeed. As we have not accepted this argument by Gold Valley, this issue does not arise.
ORDERS:
Appeal
(a)Grounds 1 and 2 of the appeal are dismissed.
(b)Ground 3 of the appeal is allowed and $73,500 is added to G&C’s damages.
(c)Ground 4 of the appeal is dismissed.
(d)Ground 5 of the appeal is dismissed.
(e)The $37,180 for the legal costs of the Federal Court proceedings with Britmar mistakenly deducted from G&C’s damages should be reversed and added to those damages (ie adding a further $74,360).
Cross-Appeal
(a) Grounds 1 to 4 of the cross-appeal are dismissed.
(b) Grounds 12 to 14 and 17 to 21 of the cross-appeal are dismissed.
----------
[1] FE Accommodation Pty Ltd & Anor v Gold Valley Iron Ore Pty Ltd [2020] NTSC 61; (“the liability decision”) at [154.14].
[2] FE Accommodation Pty Ltd & Anor v Gold Valley Iron Ore Pty Ltd [2024] NTSC 61(“the damages decision”) at [180]
[3] (1989) 171 CLR 125 (“Hungerfords”)
[4] the damages decision at [39]
[5] the damages decision at [73] to [77]
[6] the damages decision at [84] and [85]
[7] Citing Commonwealth of Australia v Amann Aviation (1991) 174 CLR 64 at 136, 148 and Haines v Bendall (1991) 172 CLR 60 (“Haines v Bendall”) at [1]
[8] the damages decision at [9]
[9]See Haines v Bendall at [8]
[10] the damages decision at [80]
[11] (1998) 192 CLR 285 at [26] per Gaudron J (“Commonwealth v SCI”)
[12][2023] VSCA 134 (“Ikosidekas v Glenis”)
[13] Commonwealth v SCI per Gaudron J at [22]
[14] Gaudron J at [26]
[15]Ibid at [27]
[16] The appeal was decided in Ikosidekas’ favour on other grounds.
[17] Ikosidekas v Glenis at [37]–[39]
[18] A more apt authority is the English case of IM Properties Plc v Cape & Dalgleish [1999] QB 297, cited by the trial judge at [82]-[84].
[19] the damages decision at [85]-[96]
[20] See Ajaimi v Giswick Pty Ltd (No 3) (2022) 67 VR 529 at [28] per M Osborne J.
[21] See Northern Territory v Griffiths (2019) 269 CLR 1 at [355] per Edelman J, citing Hungerfords v Walker; Commonwealth v Chessell (1991) 30 FCR 154 at 161-162 per Sheppard J and 163 per Wilcox J, citing Hungerfords v Walker; Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 364 per Giles J.
[22] Hobartville Stud Pty Ltd v Union Insurance Co Ltd (1991) 25 NSWLR 358 at 364 per Giles J. See also Commonwealth v Chessell (1991) 30 FCR 154 at 161-162 per Sheppard J and 163 per Wilcox J. See also Pooraka Holdings Pty Ltd v Participation Nominees Pty Ltd (1991) 58 SASR 184; Walker v FAI Insurance Ltd (1991) Tas R 258; State Bank of New South Wales v Yee (1994) 33 NSWLR 618; Commonwealth v Chessell (1991) 30 FCR 154.
[23] See Oral submissions at Transcript, p 179; Plaintiffs’ Further Outline of Submissions dated 16 April 2024 at [23]-[25].
[24] See Plaintiffs’ Further Outline of Submissions dated 16 April 2024 at [33]-[35].
[25] Transcript, pp 75-77; Exhibit P3, Appendix 11
[26] Exhibit P3, [2.1]-[2.14], [5.7]-[5.8], [6.6]-[6.7]. The payment times under the Contract of Sale was varied by the parties by a deed of variation executed on 28 September 2017 (Ex D1).
[27] Exhibit P3, [2.15]
[28] Exhibit P3, [2.16]-[2.17]
[29] Exhibit P3, [2.18]
[30] Exhibit P5, [2.19]-[2.21]; [2.25]-[2.26]
[31] Exhibit P5, [2.22]-[2.23]; [2.27]-[2.28]
[32] Transcript, p 106
[33] Transcript, p 108
[34] Ibid
[35] Transcript, p 111
[36] Transcript, pp 113-114
[37] Transcript, pp 58-59
[38] These amounts do not take into account GST.
[39] the damages decision at [142]
[40] the damages decision at [145]
[41] (1981) 147 CLR 589 at 602-604 (“Anshun”)
[42](2015) 256 CLR 507 at [22]
[43] (2016) 259 CLR 212 at [27]
[44] the liability decision at [12]
[45] the liability decision at [166]
[46] the liability decision at [181]
[47] Gold Valley Iron Ore Pty Ltd v FE Accommodation Pty Ltd & Anor [2021] NTCA 2 (“the liability appeal decision”)
[48] the damages decision at [163]-[174]
[49] See the damages decision at [156]-[158]
[50] the damages decision at [160]–[162]
[51] Appellants’ further reply submissions dated 18 February 2025 at [22]
[52] (1993) 176 CLR 344 at 355 (“Baltic Shipping”)
[53] (1987) 162 CLR 221 at 256-257
[54] [2012] 246 CLR 498; HCA 7 at [30] (French CJ, Crennan and Kiefel JJ) citing David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; cited in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560 at [6] (French CJ), at [138] (Gageler J). See also Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560 at [213] (Nettle, Gordon and Edelmann JJ).
[55] [2023] SASCA 30 at [194] (Livesey P, Doyle and Bleby JJA)
[56](2009) 75 NSWLR 42 (“Ford”) at [119]-[126]
[57] (2015) 97 NSWLR 207 at [86]–[87]
[58] Gold Valley’s written submissions dated 13 December 2024 at [55]-[57]
[59]Appeal Transcript p72
[60] This is plainly a reference to Dies v British and International Mining & Finance Corp Ltd [1939] 1 KB 724 referred to by the trial judge at [170] of her Honour’s reasons.
[61] [1933] HCA 25; (1933) 48 CLR 457
[62] [1993] HCA 4; (1993) 176 CLR 344; (1993) 111 ALR 289; (1993) 67 ALJR 228 per Mason CJ at [13]
[63]the liability appeal decision at [19]–[22]
[64] Cl 2.1
[65] Cl 1.0(a)
[66]Cl 1.0(j)
[67] Cl 2.2
[68]Cl 2.3, 2.4
[69]Defined by cl 1.0(k) to mean the date on which the parties executed the Contract.
[70]Defined by cl 1.0(g) to mean two years after the Execution Date.
[71] Defined by cl 1.0(f) to mean the date falling on the commencement of the fifth year after the Execution Date.
[72] Cl 2.6
[73]Cl 2.7
[74](1988) 180 CLR 491. (See judgment of Mason CJ, Wilson, Dawson and Brennan JJ at 497.)
[75] Damages judgment at [161]
[76] Appellant’s written submissions filed 15 November 2024 at [157]
[77] Appellant’s written submissions filed 15 November 2024 at [168]
[78] the damages decision at [113]-[119]
[79] the liability decision at [33]
[80] the liability decision at [34]
[81] the liability decision at [35]
[82] the liability decision at [58]
[83] the liability decision at [65]
[84] the liability decision at [71]
[85] the liability decision at [80]
[86] the liability decision at [76]
[87] the liability decision at [78]
[88] the liability decision at [81]
[89] the liability decision at [82]
[90] the liability decision at [85], [91] and [96]
[91] the liability decision at [154]
[92] the damages decision at [121]-[122]
[93] JW Carter, W Courtney and GJ Tolhurst, ‘Issues of Principle in Assessing Contract Damages’ (2014) 31 Journal of Contract Law, 171 at 185.
[94] Ibid
[95] Ibid
[96] Ibid
[97] Ibid at 186
[98] JW Carter, Carter’s Breach of Contract, 2nd ed, 2018, LexisNexis Butterworths, [13-04], p 596.
[99] Ibid, pp 596-697. See also JW Carter, W Courtney and GJ Tolhurst, ‘Issues of Principle in Assessing Contract Damages’ (2014) 31 Journal of Contract Law, 171 at 197: ‘It goes without saying that prima facie measures may be displaced by the facts’. It is expressly acknowledged in Clark v Macourt that the prima facie measure can be displaced: see at [28], [30] per Crennan and Bell JJ, at [107], [132] per Keane J. See also at [68] per Gageler J.
[100] JW Carter, W Courtney and GJ Tolhurst, ‘Issues of Principle in Assessing Contract Damages’ (2014) 31 Journal of Contract Law, 171 at 199.
[101] [2013] HCA 56; (2013) 253 CLR 1 (“Clark v Macourt”); See the damages decision at [121].
[102] the damages decision at [122] to [129]
[103] See, for example, Joseph & Co Pty Ltd v Harvest Grain Co Pty Ltd (1996) 39 NSWLR 722 at 726-727 per Moore DCJ, citing Thompson (WL) Ltd v Robinson (Gunmakers) Ltd [1955] Ch 177 at 187 per Upjohn J.
[104] (1996) 39 NSWLR 722
[105] Benjamin’s Sale of Goods 16-066 p1014; Marshall & Co v Nicoll & Son [1919], SC 244 at p 245 (affirmed 1919 SC (HL) at p 129; Thompson (WL) Ltd v Robinson (Gunmakers) Ltd [1955] Ch 177 at p 187
[106] Benjamin’s Sale of Goods 16-066 p 1015; ABD (Metals and Waste) Ltd v Anglo-Chemical Ore Co Ltd [1985] 2 Lloyds Rep 456 at p466 (followed in Shearson Lehman Hutton Inc v Maclaine Watson & Co Ltd (No 2) [1990] 3 All ER 723 at p 730
[107] Benjamin’s Sale of Goods 16-066 p 1015; The concept of a geographical extent of an “available market” may nowadays have to be modified by the existence of online markets, but the cost of transport from a remote location will still be a relevant consideration.
[108] Benjamin’s Sale of Goods 16-066 p 1015; Examples given range from several days to about two weeks.
[109] Professor Michael Bridge, Benjamin’s Sale of Goods (8th Edition) 16-069 p1016; Kwai Tek Chao v British Traders and Shoppers Ltd [1954] 2 QB 459 at p 498
[110] Professor Michael Bridge, Benjamin’s Sale of Goods (8th Edition) 16-0667; Ebinger Actien Gesellschaft v Armstrong (1874) 9 QB 473 at pp 476-477; This may apply by analogy to the Camp which was specially designed for the mine on which it was located.
[111] See, for example, Joseph & Co Pty Ltd v Harvest Grain Co Pty Ltd (1996) 39 NSWLR 722 at 726-727 per Moore DCJ, citing Thompson (WL) Ltd v Robinson (Gunmakers) Ltd [1955] Ch 177 at 187 per Upjohn J.
[112]Gold Valley’s written submissions dated 13 December 2024 at [70]
[113] Gold Valley’s written submissions at [70] and 72]
[114] Gold Valley’s written submissions at [70.3]
[115] [2013] HCA 56; See the damages decision at [121].
[116] (1846) 8 QB 595 at 609-610 (115 ER 1000 at 1006)
[117] Clark v Macourt at [130]
[118] [1910] UKPC 1; [1911] AC 301 at 307-308
[119] Clark v Macourt at [66]
[120] These were the only other grounds of the cross appeal pressed.
[121] the damages decision at [136]-[143]
[122] Transcript Brownhill J 10 April 2024 at p 71-72
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