Hogan v BPW Transpec

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

S CI 2010 04944

MERVYN JOHN HOGAN	Plaintiff
v
BPW TRANSPEC PTY LTD (ACN 006 645 272)	Defendant

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JUDGE:	ELLIOTT J
WHERE HELD:	MELBOURNE
DATES OF HEARING:	10-12, 15-16, 18 APRIL 2013
DATE OF JUDGMENT:	16 MAY 2013
CASE MAY BE CITED AS:	HOGAN v BPW TRANSPEC
MEDIUM NEUTRAL CITATION:	[2013] VSC 249

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CONTRACT – supply and installation of crane and tray top – failure of crane to perform to specifications – crane defects rectified by defendant – tray top short in length – whether any loss claimed was suffered – expert evidence – failure to establish loss claimed – failure to mitigate loss – Goods Act 1958 (Vic) ss 19, 61 – whether implied terms negatived by contract – interpretation of exclusion clauses.

TORT – negligence – negligent misstatement – whether claims negatived by contract.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	J. Ribbands	Defteros Lawyers
For the Defendant	R.G. Craig	Clayton Utz

TABLE OF CONTENTS

A. Introduction................................................................................................................................... 1

B. Background................................................................................................................................... 2

C. The pleaded case.......................................................................................................................... 4

D. The Contract.................................................................................................................................. 9

D.1 Written terms......................................................................................................................... 9
D.2 Oral terms............................................................................................................................. 13

E. The alleged Abigroup agreement............................................................................................ 17

E.1 Oral evidence of the alleged agreement.......................................................................... 17
E.2 Letter from Abigroup to Juliana dated 19 June 2009..................................................... 21

F. Problems with the Crane and Tray Top................................................................................. 25

G.. Work by West Trans and the state of the DAF Truck and Crane immediately thereafter..... 27

H. Expert evidence on the DAF Truck and the Crane.............................................................. 29

I. The DAF Truck and the Crane: work performed and problems encountered................ 31

J. The Tray Top................................................................................................................................ 38

K. The Big ACCO............................................................................................................................. 39

L. Loss claimed................................................................................................................................. 40

L.1 Reasons why no loss........................................................................................................... 40
L.2 Contractual issues: exclusion and limitation clauses.................................................... 42

M. The issues................................................................................................................................... 45

M.1 Alleged agreement with Abigroup................................................................................. 46
M.2 Instructions from Hogan to Caligiuri in relation to the Crane.................................... 46
M.3 The First Failure................................................................................................................. 46
M.4 The Second Failure............................................................................................................. 47
M.5 Was the Crane fit for the Intended Purpose?................................................................. 47
M.6 Was the Abigroup Agreement withdrawn?................................................................... 47
M.7 Loss....................................................................................................................................... 47

N. Other alleged defects particularised by Hogan.................................................................... 47

O. Demeanour of Hogan................................................................................................................ 48

P. Other matters............................................................................................................................... 49

Q. Conclusion.................................................................................................................................. 49

HIS HONOUR:

A. Introduction

This case concerns the supply and installation of a crane manufactured by HMF, model number 2003-K3 D (“the Crane”). It also concerns the supply and installation of a tray top (“the Tray Top”). Both the Crane and the Tray Top were installed on a new truck, namely a DAF 2008 FAD CF85 truck (“the DAF Truck”).

Problems were experienced with the DAF Truck and the Crane. There were also issues with the Tray Top. Claims have been made by reason of these events. For the reasons that follow, those claims cannot succeed.

The plaintiff, Mervyn Hogan (“Hogan”), has worked in the crane operations industry for many years. At the time he gave his evidence he was 69 years of age. Since its incorporation in around 1999, Hogan worked for the former plaintiff, Juliana Enterprises Pty Ltd (“Juliana”). He conducted the day-to-day operations of Juliana.

His wife, Frances Foster (“Foster”), handled the finance aspects of Juliana’s business. Foster was the sole director of Juliana. Hogan explained that this was because he had been bankrupted on 2 previous occasions. Juliana commenced this proceeding on 9 September 2010. It was placed into liquidation on 5 June 2012.

On 6 July 2012 a deed of assignment was executed between Juliana and Hogan. The recitals to the deed included the fact that Hogan had incurred costs in the pursuit of the proceeding to date and had guaranteed all of the debts of Juliana arising from and out of the conduct of the proceeding. For the sum of $100, together with a promise to pay 10% of the net proceeds of any amounts recovered by Hogan in this proceeding, Juliana assigned the choses in action the subject of the deed.

Hogan was duly substituted as the plaintiff. There was no dispute that the deed was effective in giving Hogan the right to pursue the causes of action he pursued at trial.

The defendant, BPW Transpec Pty Ltd (“BPW”), was a supplier of truck and trailer equipment. It also supplied parts for the road transport industry. At all relevant times up to 31 December 2008, BPW imported trucks and trailer-mounted cranes pursuant to a distribution agreement with HMF, a company based in Denmark.

In the first quarter of the 2009 calendar year West Trans Service (Vic) Pty Ltd (“West Trans”)[1] became the distribution agent for HMF in Australia.
[1]The defence of BPW referred to “West Trans Equipment”, but the documents tendered referred to the name set out above.

B. Background

Hogan gave evidence that he was “old school”, and did business on a handshake unless someone insisted that a contract be put in writing. This, perhaps, explains the absence or sparcity of documentation in relation to a number of aspects of this case.

In the time leading up to the events the subject of this proceeding, Juliana had the following trucks:

(1)a “little ACCO International” (“the Little ACCO”), which was contracted to work for a company now known as Austress Freyssinet Pty Ltd (“Freyssinet”);
(2)a “double 13 Scania”, which was on permanent hire to a company operating out of Clayton;
(3)a Scania with a 12 tonne payload, which was “working full-time” (though the details of that work were not made clear);
(4)a “big ACCO International” (“the Big ACCO”).

Hogan said his method of operation was to get a job first, and then to purchase a truck to do the job. He also said he would only buy the truck if he had the job for the life of the finance agreement required to be entered into by Juliana for the purchase of the truck. This approach, he said, meant that Juliana’s trucks would then be deployed for a minimum of 40 hours per week. He said this resulted in the trucks operating to approximately 90% capacity.

Having said this, Hogan immediately acknowledged in his evidence-in-chief that the purchase of the Big ACCO occurred without such arrangements being in place. Hogan gave examples of the piecemeal work that the Big ACCO had performed. Hogan said that because the other 3 trucks were in full-time work then, as long as the Big ACCO was making enough to cover its way, the other trucks would “hold up”.

Accordingly, it is plain Hogan was willing to make exceptions to what he said was his method of operation when deciding whether Juliana should purchase a truck.

Although the evidence of the timing is not entirely clear, sometime in or around mid 2008 Hogan says he had discussions with Abigroup Contractors Pty Ltd (“Abigroup”). Hogan said those discussions, broadly speaking, were to the effect that if Juliana could provide a truck with a crane capable of lifting concrete barriers which weighed in excess of 4 tonne, then Juliana would be given work on the Monash-Citylink-Westgate upgrade for a period of approximately 1 year. Hogan gave evidence there were also discussions to the effect that Abigroup would provide work thereafter for a further, much longer, period.

It was pleaded the total length of the agreement was 6 years. There was no evidence to support this definite period. It was accepted by counsel on behalf of Hogan that the further period was indefinite. To maintain the case for a 6 year agreement, it was suggested that Hogan imposed the 6 year limit himself, consistent with his retirement plans. This gives rise to a serious problem with Hogan’s case insofar as it is alleged that Hogan gave specific details of a 6 year agreement at the time he ordered the Crane and the Tray Top. I will return to this.[2]
[2]See pars 20 and 69-86 below.

As a result of his discussions with Abigroup, Hogan then made inquiries about the ability to acquire a truck and a crane that were capable of performing the services he says were required by Abigroup. Hogan approached Scania and Volvo, stating he needed a truck with an 8 metre tray on it and a crane mounted to the back of the tray to lift up to 4.5 tonne. He also instructed that the truck needed to turn in a 25 metre turning circle to be legal. Hogan was informed by Scania and Volvo that they could not provide such a truck unless a steerable axle was affixed. This required Juliana to spend an extra $20,000. Hogan was not willing to incur this additional expenditure.

Based on a recommendation from his finance broker to the effect that Kenworth would be able to do it, Hogan then approached a person by the name of Russell Bond at Paccar.[3] Hogan said that, upon making the same inquiry of Paccar, he was told that it could be done and it was “not a problem”.
[3]It appears that the parties referred to Kenworth and Paccar interchangeably.

C. The pleaded case

By a further amended statement of claim (“FASOC”), Hogan alleged BPW agreed with Juliana “[i]n or about September and November 2008” to supply and install the Crane and the Tray Top to the DAF Truck, together with another HMF crane to one of the Scania trucks. In relation to the DAF Truck, Hogan pleaded that in consideration of BPW agreeing to supply and install these items, Juliana agreed to effect payment from a finance company of $95,480 (“the Contract”).

According to the FASOC, the Contract “constituted oral discussions and written documents”. Insofar as the FASOC referred to oral discussions, it alleged that the discussions occurred between Hogan and Philip Caligiuri (“Caligiuri”) of BPW.

Paragraph 6.2 of the FASOC read as follows:

[Hogan] informed [Caligiuri] that Juliana required [BPW] to supply and install a crane and tray top to the DAF [Truck] to enable the DAF [Truck] and [the Big ACCO] to undertake long term hire agreement works for 6 years for [Abigroup] in respect of the Monash Alliance works for the Monash-Citylink-West Gate Upgrade for 1 year and thereafter works for and on behalf of Abigroup for 5 years (“the Long Term Abigroup Hire Agreement”).

Then by paragraph 6.3 of the FASOC it was alleged that Hogan represented to Caligiuri that Abigroup required the DAF Truck and the Crane to have a certain performance capacity in order to undertake the Long Term Abigroup Hire Agreement. The performance capacity alleged to have been specifically identified by Hogan was as follows:

6.3.1A crane with the ability to lift concrete barriers of up to 4½ tonne in weight;
6.3.2A truck and crane that could lift and carry up to 4 concrete barriers each weighing up to 4½ tonne in weight;
6.3.3A truck and crane that could lift and carry other heavy goods up to 20 tonne per (sic) metre on an 8 metre tray;

(“the Abigroup Specifications”).

It was also alleged that Caligiuri represented to Hogan that the Crane would be fit for the purpose of undertaking the works required under the Long Term Abigroup Hire Agreement.

Insofar as the Contract was said to be in writing, it was said to consist of a quote dated 25 September 2008, a proforma invoice dated 17 October 2008 and a tax invoice dated 13 November 2008, together with an Esanda settlement confirmation dated 19 November 2008.

Implied terms were also alleged. Pursuant to s 19 of the Goods Act 1958 (Vic) (“the Goods Act”), it was alleged that the Crane and the installation of the Crane would be fit for purpose and be of merchantable quality.[4] Another implied term pleaded was that the works undertaken would only be done, where reasonably required, by qualified trades people, mechanics and engineers.[5] It was also said to be an implied term that BPW would effect such certification as was required in respect of the Crane installation works by using qualified trades people, mechanics and engineers as was reasonably required for the certification.[6]
[4]FASOC pars 7 and 13.
[5]FASOC par 8.
[6]FASOC par 9.

It was alleged that pursuant to the Contract, BPW supplied and installed the Crane and the Tray Top to the DAF Truck, and that Juliana paid $95,480 (inclusive of GST) for them “through Esanda” on or about 13 November 2008.[7]
[7]FASOC pars 10 and 11.

The allegations in relation to breach of the Contract were set out in paragraphs 12 and 13. In relation to the pleaded express term concerning the Abigroup Specifications, the allegations were as follows:

12.The Crane as installed to the DAF [Truck] by the defendant breached the express term of the agreement that the DAF [Truck] and Crane be fit for purpose in respect of the Abigroup Specifications.

Particulars
12.1On or about January 2009 the [Crane] when lifting an empty 20 foot container for Abigroup failed to do so despite the lift being within the parameters of the Abigroup Specifications;
12.2On or about January 2009 the [Crane] dropped a 3 tonne wire cable coil during a lift for Abigroup despite the lift being within the parameters of the Abigroup Specifications;
(“the Abigroup Failures”). (Emphasis added.[8])

[8]The date of January 2009 was pleaded in the original statement of claim filed in September 2010 and each subsequent version of the statement of claim. No explanation was given as to the discrepancy between the pleading of the timing of the First Failure (see par 148 below) and the Second Failure (see par 152 below) and the evidence led at trial to the effect that these events occurred in late April or early May 2009.

The more general allegations concerning terms relating to the proper performance of the Crane (alleged to be both express and implied) were as follows:

13.The Crane as installed to the DAF [Truck] by the defendant breached the express and implied terms of the agreement and/or the implied terms of quality or fitness implied by application of s 19 of the Goods Act 1958 (Vic) as it was:
a)        not fit for purpose; and
b)        not of merchantable quality;
c)        unsafe.

Particulars[9]
[9]The particulars that end with an asterix, namely pars 13.8-13.14, 13.16 and 13.17, were not the subject of any evidence to support them. The particulars in par 13.15 were not pressed.
13.1Welded joints of medium tensile members had poor bead penetration;
13.2Crane to chassis mounting base bolt guides were adrift due to incorrect bolt lengths and reinforcement spacers;

13.3 The Crane slew limitation system was inoperative;
13.4An audible, visible load indicator to warn the crane operator of a load approaching the maximum safe working load was not installed to the Crane;
13.5The pressure transducer was disconnected and tied off with another fitting being attached to the main boom load holding valve body;
13.6The pressure transducer was disconnected and tied off with another fitting being attached to the main boom load holding valve body presenting a hydraulic leakage condition with inadequate sealing of the end coupling;
13.7The outrigger hydraulic hose system was not routed in a merchantable fashion so as to prevent fouling and damage to the hoses;
13.8The hydraulic service pipe on the left outrigger was deformed with fouling on the vehicle body frame;*

13.9 Oil leak from breather on crane base;*
13.10 Crush blocks able to be moved by hand;*
13.11Able to lock out slew by lowering crane to main boom level on lower;*

13.12 The hydraulic system was not free of leaks;*
13.13The crane mounting method was not approved by the chassis manufacturer;*
13.14The crane mounting method was not approved by the crane manufacturer;*
13.15The welding did not conform to all relevant Australian standards;
13.16The mounting bolts were not correctly torqued;*
13.17The crane software installation was not properly and/or adequately configured and/or installed;*
13.18The Crane and/or Tray [Top] was attached to the DAF chassis using inappropriate chassis drilling and bolting causing the DAF chassis to be compromised in terms of structural integrity;
13.19The plaintiff repeats the allegations in paragraphs 12, 12.1 and 12.2.

It was also alleged that the works and certifications undertaken by BPW were carried out by persons who were not fit and/or qualified to undertake such works and certifications.[10]
[10]FASOC par 14.

It was then alleged that as a consequence of BPW failing to meet the Abigroup Specifications and the Crane having the defects particularised, Abigroup terminated the Long Term Abigroup Hire Agreement between Abigroup and Juliana.[11] This was said to have occurred by a letter dated 19 June 2009.[12]
[11]FASOC par 15.
[12]See pars 87-100 below.

Damages were claimed in the sum of $849,666.20 in respect of the DAF Truck for “the lost opportunity of deriving an income over 6 years” from the Long Term Abigroup Hire Agreement. In addition, it was alleged that work to be performed with the use of the Big ACCO was also the subject of the Long Term Abigroup Hire Agreement. Damages were claimed over a 6 year period in relation to the Big ACCO on a like basis. This was not fully particularised in the FASOC, though an amount of $1,421,550 was identified as the “gross lost opportunity damages”.[13] In short, for these damages to be properly the subject of a claim, it was necessary for Hogan to establish the existence of the Long Term Abigroup Hire Agreement.
[13]FASOC par 16.

A claim for loss and damage was also made in relation to rectification works said to be required. It was pleaded[14] that rectification works were required in relation to the chassis of the DAF Truck and the Crane (both to be able to meet the Abigroup Specifications and also to “perform works consistent with the Crane manufacturer specifications”). Accordingly, it was only this aspect of the loss claimed that, in part at least, was not dependent upon establishing the existence of the Long Term Abigroup Hire Agreement.
[14]FASOC pars 16.14-16.17.

Claims were also made for negligent works and for negligent misstatements.[15] There is no need to go through these in any detail. In substance tortious claims were made for the same loss and damage claimed in contract.
[15]FASOC pars 17-33.

D. The Contract

On or about 26 September 2008 Foster, on behalf of Juliana, executed a credit application form provided by BPW. The credit application form included a director’s guarantee, a notice of disclosure and the terms and conditions of sale (“the Terms and Conditions”), each of which was also executed by Foster. It was common ground between the parties that the Terms and Conditions applied to the Contract.

As noted above, the Contract was alleged to be oral and written (as well as partly implied).[16]
[16]See pars 18-24 above.

D.1 Written terms

In relation to the written terms, the Contract included the following acknowledgment:

I/We acknowledge that all contracts for the sale of goods by [BPW] to the Customer shall be strictly subject to the following Terms and Conditions as amended by [BPW] from time to time pursuant to Clause 16.

The Terms and Conditions referred to in the acknowledgement included the following:

1.1“Contract” means the contract resulting from this acceptance by [BPW] of an Order in accordance with clause 2.3;
“Loss” means any damage, loss, liability, expense or cost whether direct or indirect, consequential or incidental;
“Order” means an order placed by an intending Customer with [BPW] for the supply of Goods;
…
2.1These Terms and Conditions supersede all previous terms and conditions imposed by [BPW].
2.2Each Order will constitute an offer by the Customer to acquire Goods from [BPW] upon and subject to these Terms and Conditions and any purported qualification of these Terms and Conditions (including any terms and conditions contained in any purchase order or other document of the Customer which are inconsistent with these Terms and Conditions) will be treated as inapplicable and of no effect.
2.3A contract will be made between [BPW] and the Customer for the sale and purchase of the Goods only if an Order has been made according to clause 2.2 and that Order has been accepted by [BPW], which acceptance may be by delivery of the Goods described in the Order.
…

7.1[BPW] agrees and acknowledges that the Customer is entitled to all rights and remedies in respect of Goods which the Customer has under the Trade Practices Act 1974 and State and Territory legislation and which cannot be lawfully excluded, restricted or modified. These Terms and Conditions do not purport to, and do not have the effect of, excluding, restricting or modifying the exercise of any such right or remedy or the liability of [BPW] in respect of any such right or remedy.
7.2Subject always to clause 7.1:
(a)all conditions, warranties and guarantees other than those expressly provided for or referred to in these Terms and Conditions or agreed and confirmed by [BPW] in accordance with these Terms and Conditions are excluded to the fullest extent permitted by law;
(b)[BPW] will not be liable to the Customer for any loss caused directly or indirectly by the Goods or any defect in the Goods or the failure of the Goods to operate in accordance with their specification; and
(c)[BPW] will not be liable for any Loss which results from the supply of or failure to supply the Goods.

7.3Where [BPW] is permitted by the Trade Practices Act 1974 and similar State and Territory laws to limit its liability for the breach of a condition or warranty which is implied by the Trade Practices Act or similar State and Territory laws, [BPW’s] liability is limited to any one or more of the following as determined by [BPW] in its absolute discretion
(a)in the case of any goods any one or more of the following:
(i)the replacement of the goods or the supply of equivalent goods;
(ii)the repair of the goods;
(iii)the payment of the costs of replacing the goods or of acquiring equivalent goods;
(iv)the payment of the costs of having the goods repaired; or

…
7.4The Customer acknowledges that it has not relied upon any representation made by [BPW] which has not been stated expressly in these Terms and Conditions.
…

7.6The Customer acknowledges that in purchasing the Goods the Customer relied upon the Customer’s own skill and judgment in the selection of the Goods and in the use and result the Customer intended to obtain from the Goods.
7.7The Customer does not have any rights or remedies in respect of the sale and/or delivery of Goods (including any rights in respect of negligence) other than the rights and remedies expressly provided for in these Terms and Conditions.[17]

[17]I have not quoted any of the headings the subject of the Terms and Conditions as the headings were included for convenience only: cl 1.2(d). The Contract was governed by the laws of Victoria: cl 13.1.

There was some uncertainty about what precisely was said by BPW to be the subject of the Contract. This gave rise to an issue of the required capacity of the DAF Truck and the Crane.

A quotation was sent to Darren Barbary, a person Hogan described as “our finance bloke”. This quote, dated 25 September 2008, was not sent to Hogan, who said he had not seen it until after the commencement of this proceeding. The quote described the Crane to be supplied by BPW as follows:

To supply one (1) HMF 2003-K3, 18.5 tonne metre capacity fully hydraulic truck loading crane with a maximum hydraulic reach of 10.8 metres where the capacity is 1,560kgs. A capacity of 4,100kgs. is achieved at a radius of 4.5 metres. Our quoted crane includes … (Emphasis added.)

The price quoted for the supply and fit of the Crane was $75,800 plus GST.

This quote also provided for the supply of an 8 metre Tray Top for the price of $11,000 plus GST.

An invoice, described as a proforma invoice, was issued by BPW dated 17 October 2008. It described the Crane as a “20 Tonne Metre Capacity Truck Loading Crane fully installed”. The prices recorded in this proforma invoice were the same as the previous invoice for both the Crane and the Tray Top.

The final invoice was dated 13 November 2008. It described the Crane as a “HMF 20 Tonne Metre Crane”.

BPW led evidence from Caligiuri. Caligiuri is the sole proprietor of a business known as Hydraulic Crane Services. Prior to commencing that business some time in 2009, he was employed by BPW as, amongst other things, a product specialist for HMF cranes.

Caligiuri explained that a proforma invoice was issued by BPW in the usual course so that all paperwork could be done before a proper invoice was sent out. Caligiuri referred to the reference to the “20 Tonne Metre Crane” as the generic term for the model of the Crane. He said in fact that the end result of what was supplied was an 18.5 tonne metre crane.

Caligiuri’s explanation (which was clearly speculation) for the final invoice referring to a “20 Tonne Metre Crane” was that it was “obviously copied straight from the proforma invoice”.

I expect that very little turns on this issue for 2 reasons.

First, evidence was led on behalf of BPW that an 18.5 Tonne Metre Crane was part of the “20 Tonne Metre Nominal Crane Family”. Apparently, it is possible to purchase software, at a cost of around $2,000-$3,000, to increase the capacity of an 18.5 Tonne Metre Crane to a 20 Tonne Metre Crane. This evidence was not challenged in cross-examination.

Secondly, when it was put to Hogan that he never complained to BPW that the DAF Truck had a payload capacity less than 18 tonnes,[18] Hogan said that BPW did not have to guarantee Juliana 18 tonnes. He said all BPW had to do was make the Tray Top and put the Crane on it. Suffice to say that it was not part of Hogan’s case that he relied upon the contents of any of these invoices at the time they were issued, or thereafter.
[18]The evidence was that Hogan ultimately discovered, or at least believed, that the DAF Truck had a payload capacity of only 16 tonnes. The agreed expert evidence was that the capacity of the DAF Truck was less than 18 tonnes for what could legally be transported on Victorian roads, but that the DAF Truck was capable of carrying in excess of 18 tonnes in private areas, such as construction sites.

D.2 Oral terms

In BPW’s conduct of the case no reliance was placed on the operation of cl 7.4 of the Terms and Conditions. It was not raised in cross-examination or closing submissions. Although the clause was pleaded in the defence, it was also pleaded that the Contract was partly oral. Accordingly, it is not necessary for me to consider what effect, if any, cl 7.4 had on the terms of the Contract.

The only 2 persons engaged in contractual negotiations were Hogan and Caligiuri. Hogan said he told Caligiuri that he wanted a crane that could lift an empty 20 foot container weighing 2.2 tonne and also could lift a 4.5 tonne concrete barrier at a distance of 6 metres. Further, he said that he told Caligiuri that he wanted a crane to be able to load 4 concrete barriers onto the Tray Top. The concrete barriers were 4 metres in length.

Hogan said he requested each of the matters referred to above because that is what he had agreed to do for Abigroup.

Caligiuri categorically denied Hogan had given such specific instructions. Caligiuri said the Crane provided could never have achieved a lift of 4.5 tonne at a distance of 6 metres. He said this was apparent from the specifications in relation to the Crane, which were set out in a brochure that was provided to Hogan at the time of the relevant discussions. Caligiuri said if Hogan had made such requirements known, he would have recommended a larger crane that was capable of achieving such a lift. Caligiuri said he had such a crane available for sale at the time.

Having considered all of the evidence carefully, I cannot be satisfied that Hogan was as specific as he suggests when stating his requirements to Caligiuri.

The evidence, including contemporaneous objective evidence, militates against acceptance of Hogan’s account of the discussions. First, the quote prepared by BPW at the time[19] states a very different, and lesser, capacity.[20]
[19]The evidence is that Hogan did not see this quote.
[20]See par 38 above.

Secondly, BPW was capable of providing a crane with a greater capacity that would meet the alleged requirements. There is no apparent reason why, if it had been sought, BPW would not have offered a crane with the appropriate capacity.

Thirdly, the brochure provided by Caligiuri to Hogan at the time of the discussions contained the actual specifications and capacity of the Crane (see also paragraph 63 below).

Fourthly, at the time of delivery, the Crane had affixed to it a conspicuous decal. This decal recorded that at a distance of 4.5 metres the capacity of the Crane was only 4.1 tonne, and that at a distance of 6.5 metres the capacity of the Crane was only 2.725 tonne.[21] At no time after the delivery of the DAF Truck, with the Crane installed, did Hogan make any complaint about the fact that the information contained on the decal was inconsistent with what he said he told BPW.[22]
[21]Thereby demonstrating that the Crane could not lift 4.5 tonne at 6 metres.
[22]It was common ground between the parties that the Crane did not have the capacity to lift 4.5 tonne at 6 metres.

Fifthly, for reasons set out below,[23] I am not satisfied Abigroup in fact had the lifting requirements that Hogan says that Abigroup had.
[23]See pars 72-86 below.

Sixthly, under cross-examination, when it was put to Hogan that Hogan could not remember where or when he spoke to Caligiuri, Hogan gave an answer, albeit unresponsive, which was quite inconsistent with the case advanced. Hogan said he spoke to Caligiuri and told Caligiuri “what size crane I wanted and what size tray”. He also said he left it up to Caligiuri and others “to finish the thing while I was in Queensland attending to my father-in-law’s business because he was dying”. This evidence strongly suggests that it was Hogan, not Caligiuri, who specified the size of the crane required.[24]
[24]This is not to ignore the more specific evidence given by Hogan. But it is fair to say this evidence was quite inconsistent on a number of occasions. For example, in another version of the conversation with Caligiuri, Hogan did not say he told Caligiuri specifically that he wanted a Crane that could lift 4.5 tonnes at 6 metres, but rather said: “He was told that they were 4.5 tonne barriers and the tray is 8 metres long and I have to put them one behind the other. Now, if the man is a great person as he is supposed to be, he would automatically know that that’s what you want.” (Emphasis added: T182.30-183.04.)

Seventhly, under cross-examination Hogan was taken to a document provided to his expert for the purposes of this proceeding. The document had been produced by the expert pursuant to a subpoena issued by BPW. The instructions to the expert included the following:

Abigroup did not give me any specifications on the barriers to be lifted other than saying that the crane would need to lift concrete barriers weighing up to 4.5 tonne.

In other words, there was nothing in the instruction about the need to lift 4 of them on to the DAF Truck, or that they were required to be lifted to a distance of 6 metres. One would have expected these further matters would have been the subject of the instructions to the expert if in fact Abigroup had provided those specifications to Hogan.

I accept the submissions of counsel for Hogan that Caligiuri’s evidence of the relevant discussions was vague and his recollection was not specific on a number of matters. But this is not surprising. The events were 4½ years ago. Hogan said he only had one discussion about the details of the Crane with Caligiuri. Caligiuri was attending to the installation of approximately 25 cranes at the time. He also said he was dealing with a large number of sales inquiries at that time.

That said, Caligiuri was very clear on 2 things. He said he never heard any mention of Abigroup and there was no discussion about lifting 4 metre concrete barriers onto the DAF Truck. In fact, Caligiuri had no recollection of concrete barriers being discussed at all.

Caligiuri said he was given a weight by Hogan, in response to which he gave Hogan a brochure and specifications for the Crane. He said he looked at the brochure with Hogan. He was not challenged on this evidence. It therefore seems highly improbable that Caligiuri and Hogan, 2 persons highly experienced in cranes, looked at the brochure and the relevant specifications of the Crane and both made a mistake as to the capacity of the Crane. Tellingly, Hogan gave no evidence about the provision of the brochure or discussions relating to it.[25]
[25]I did not find all of the evidence given by Caligiuri entirely satisfactory. For example, he gave evidence about another witness in the case, Paul Wowk (“Wowk”), approaching him to take over the HMF distributorship from BPW with funding from Juliana. Both Hogan and Wowk gave evidence before Caligiuri was called to give evidence. However, this evidence of Caligiuri was not put to either Hogan or Wowk by BPW’s counsel. It appeared to be a recent invention of Caligiuri, who had previously had a difficult working relationship with Wowk when Wowk was employed at BPW. However, on the whole I found Caligiuri’s evidence to be satisfactory.

In relation to the container, there was no real dispute that BPW was made aware of the fact that Hogan wanted the DAF Truck and the Crane to lift and carry empty containers. Although Caligiuri could not recall any discussion about this, he readily acknowledged that, as he was asked to install pins on the Tray Top to secure a container, he understood there was an intention that the Crane would be deployed to lift containers onto the Tray Top. He said he knew that an empty container weighed approximately 2.3 tonnes.

It follows that BPW knew at the time it agreed to supply the Crane and the Tray Top that a purpose of the purchase by Juliana was to have a crane truck with a capacity to lift empty containers weighing up to 2.3 tonnes. It also follows that BPW knew Juliana wanted to be capable of transporting such containers on the Tray Top.

The other aspect of the case concerns the length of the Tray Top. All the documentary evidence corroborates Hogan’s account that he told Caligiuri it had to be 8 metres in length. This documentary evidence included a diagram prepared by Caligiuri at the time. Hogan gave evidence, which was not challenged, that the Tray Top was probably 6 inches shorter than 8 metres.

Accordingly, there is no issue that the Contract was breached in this regard. However, by reason of other findings I have made,[26] this fact does not entitle Hogan to any relief.
[26]See pars 163-166 below.

Finally, in relation to the discussions between Hogan and Caligiuri, Hogan gave no evidence to support a contention that he told BPW any agreement with Abigroup was for 6 years.

E. The alleged Abigroup agreement

A curious aspect of this case was the inability of Hogan to lead cogent evidence as to the existence of an agreement between Juliana and Abigroup.

Given BPW was not a party to any of the discussions between Hogan and Abigroup, one might have expected it would have been a relatively straight-forward exercise for Hogan to prove the agreement, and its key terms. However, Hogan fell well short of achieving this.

Hogan sought to prove the existence of the agreement with Abigroup by 2 means: first, by oral evidence of his discussions with Abigroup; and, secondly, by reference to a letter from Abigroup dated 19 June 2009.

E.1 Oral evidence of the alleged agreement

Hogan said his discussions in relation to Juliana’s agreement with Abigroup were always with Sandra Chahda, now known as Sandra Deed (“Deed”). This evidence is significant. Although there were introductory discussions with others (to which I refer below[27]), it was the discussions with Deed that were relied upon by Hogan. He said that Deed told him if Hogan could build a truck that would take 4 concrete barriers, lift them on and off a truck, and do it to Abigroup’s specifications, there would be a job for Hogan, no problem. (In this context, I took the evidence of there being a job to be a reference to Juliana rather than to Hogan personally.)
[27]See pars 73-77 below.

Hogan said his opportunity to do work for Abigroup arose by reason that he knew Ian Hunter (“Hunter”). Hunter was a foreman at Abigroup. Hogan said he got to know Hunter from doing work on different sites “and one thing and another”. Hogan said it was Hunter’s suggestion that Juliana consider doing work for Abigroup.

As a result of this, Hunter introduced Hogan to another person employed by Abigroup who was introduced to Hogan as “Fletch”. Hogan said he only ever knew this person as Fletch and he was another foreman of Abigroup. That person was in fact Ian Fletcher (“Fletcher”).

In the initial discussions Hogan said that Hunter did most of the talking, and, by the time he met Fletcher, Hogan believed Fletcher “sort of knew what we were looking at”.

Hogan said that Hunter and Fletcher then introduced him to Deed. During that discussion Hogan said it was explained to Deed what they were thinking of doing and that she said it was a good idea. Hogan explained in “roundabout terms” that he did not know what the price of the truck would be and that he would not be building a truck like that unless he had a long term contract. Hogan said he told Deed it would take around 3 months or a bit longer to build the truck. He said to her once it was built he could come back and discuss it and look over it to make sure it was what Abigroup wanted.

When asked by his own counsel about whether Hunter or Fletcher commented on the proposal discussed with Deed, Hogan stated he could not remember whether he was just talking to Deed or whether Fletcher had spoken to Deed. He said he did not know. He observed that the events were a long time back and a lot had happened in the 4½ years.

There is no evidence to suggest that the discussions became any more detailed than what is set out above. In particular, there is no suggestion as part of Hogan’s case that there was any discussions with Abigroup concerning:

(1) the rate at which Juliana was to charge Abigroup;[28]
[28]Under cross-examination on this point, Hogan said that whatever the final cost of the truck was would determine how much an hour it would be charged out at: T153.13. However, Hogan said he could not remember when he found out the final price of the truck (T153.22), and gave no evidence to suggest that once he found out the final price he discussed a rate with Abigroup.
(2)the date upon which the contract was to start;[29]
(3)whether or not it was necessary to reduce any contract to writing before it was binding;[30]
(4)the number of days a week Juliana would be engaged;
(5)the number of hours per week Juliana would be engaged;
(6)whether there would be overtime, and if so on what basis;
(7)how long the long term contract was to remain on foot; or
(8)any other material terms of engagement.

Further, there was no evidence to suggest that Hogan ever took the DAF Truck back to Abigroup after the installation of the Crane and the Tray Top was completed to make sure it was what Abigroup wanted.[31]

[29]See, for example, South Australia v The Commonwealth (1962) 108 CLR 130, 144.8-147.1 (Dixon CJ). Also, Hogan said the agreement was not to start until the truck started to work for Abigroup and as a result of the problems “there was no contract, there was nothing drawn up”: T162.10.

[30]See Masters v Cameron (1954) 91 CLR 353, 360.4-362.5. Compare PRA Electrical Pty Ltd v Perseverance Exploration Pty Ltd (2007) 20 VR 487, 497 [37], 500 [48], 504-506 [65]-[71]; Robertson v Unique Lifestyle Investments Pty Ltd [2007] VSCA 29, [7], [45]-[46]. Implicit in Hogan’s evidence was that a contract needed to be prepared. He said on a number of occasions that he could not give specifics about the contract because it was “never drawn up” or words to that effect. Also, in the context of denying that he asked Deed to write the letter dated 19 June 2009, he said he never asked her to “write anything anywhere except the contract” (T227.14).

[31]The only evidence given by Hogan of Abigroup checking the DAF Truck was that, in March 2009, an engineer made sure the blinkers, the reverse beepers “and all that” were working (T87.27).

None of Hunter, Fletcher or Deed were called to give evidence by Hogan. Deed gave evidence as part of BPW’s case. No adverse inferences may be properly drawn from the fact that BPW did not call Fletcher. (Hogan seemed to submit they should be drawn.) If anything, one might have expected Hogan to call Fletcher (and Deed) as part of his case in attempting to prove the existence of the alleged Abigroup agreement.

Presently, I put to one side the evidence given by Deed, to which I will come to shortly. On Hogan’s own evidence it must be concluded that whatever the arrangement was between Juliana and Abigroup, that arrangement was an incomplete agreement and did not give rise to a legally enforceable contract.[32] Of course, it would have been possible for Hogan and Abigroup to have agreed that many of the outstanding matters would have simply been determined by the costs Juliana was required to incur,[33] or unilaterally at the discretion of 1 of the parties.[34] That said, there was simply no evidence to that effect.
[32]See Booker Industries Pty Ltd v Wilson Parking (Qld) Pty Ltd (1982) 149 CLR 600, 604.8.
[33]Ibid.
[34]See Thorby v Goldberg (1964) 112 CLR 597, 605.2 (Kitto J, with whom McTiernan and Windeyer JJ agreed), 613.7 (Menzies J, with whom Owen J agreed).

It is convenient to note at this point that the case advanced by Hogan was put largely on the basis that there was a long term contract in place with Abigroup at the time the alleged failures of the Crane occurred.[35] Relevantly, there was no alternate case put by Juliana that, if in fact a legally binding contract with Abigroup did not exist, there was a lost opportunity to obtain further work (with Abigroup or anyone else) by reason of the failures of the Crane. Accordingly, it is not necessary for me to consider the principles derived from the line of authority commencing with Sellars v Adelaide Petroleum NL[36] concerning the loss of an opportunity to enter into a contract or to obtain further work.
[35]A more extensive discussion of the pleaded case is set out at pars 18-32 above.
[36](1994) 179 CLR 332.

Turning to Deed’s evidence, she said that she had never met Hogan in person. She said her only discussion with Hogan was over the telephone and that was in relation to the contents of the letter of 19 June 2009.

In challenging Deed’s evidence about whether or not she had met Hogan, counsel for Hogan provided Deed with a rough sketch of the layout of her office. This sketch had been prepared by Hogan. The sketch also depicted the compound around her office. Deed confirmed that the sketch was substantially accurate.

I find that Deed is mistaken about her recollection insofar as she said she had never met Hogan. Deed’s role at Abigroup required her to meet with numerous subcontractors. Although Deed looked at Hogan in court and said she did not recognise him, and I accept this was honestly said, it is likely that, with the lapse of over 4 years, Deed has simply forgotten the meeting (and Hogan).

The matter does not rest there. The absence of any recollection by Deed of Hogan is probably indicative of the superficial nature of the discussions between Hogan and Deed about any proposed contract with Abigroup. If there had been a detailed discussion with very specific requirements concerning a 6 year contract, as Hogan alleges, it is likely Deed would have remembered it. This is particularly so given that her recollection of events concerning the 19 June 2009 letter was very good.

I find that there was no discussion of a contractual nature between Hogan and Deed. Deed gave evidence that in relation to the Monash-Citylink-Westgate upgrade she did not engage any of the crane truck subcontractors. There was no apparent reason why Juliana might have been treated as an exception to this. Further, when the specific allegation was put to Deed, namely that she had a discussion with Hogan about lifting 4 concrete barriers at a time onto a crane truck, her response was “I definitely did not have that conversation with Mr Hogan”. I accept this evidence. Deed was an entirely independent witness who had no interest in the outcome of the proceeding.[37]
[37]In the circumstances of this case, whether or not a contract existed with Abigroup was of no consequence. Hogan has always accepted since mid 2009 that Juliana was not in a position to perform works for Abigroup and he has never suggested there was any claim against Abigroup by reason of any alleged agreement.

E.2 Letter from Abigroup to Juliana dated 19 June 2009

I now turn to the letter relied upon.

The relevant contents of the letter are as follows:

In January 2009 the Monash Alliance had arranged for the long term hire of 2 No (sic) Crane Trucks from Juliana Enterprises who had procured the items of Plant for the specific intended uses on the Monash Freeway Widening.
…
The Engineering Report identified the crane assembly as “critically unsafe”. Due to this Monash Alliance regretfully had to cancel the long term hire arrangement in place for the 2 crane trucks. The crane trucks would have been on permanently (sic) daily hire for a minimum of 6-12 months with ongoing hire considered for further Abigroup Projects.
The Monash Alliance has withdrawn the hire agreement on the sole basis of the Crane Trucks being unfit for purpose and shown to be “critically unsafe” in the Engineering Report provided by Transport Certification Services on 13 May 2009.[38]

[38]This is a reference to a report provided by Transport Certification Services to Juliana, which in turn was provided by Juliana to Abigroup. That report contained the conclusion that the “status of the crane assembly [was] ‘critically unsafe’.” It also stated the failure of the Crane might potentially cause serious damage or threaten public safety and that all defects and non-compliance issues needed to be rectified. It was tendered on the limited basis that it was a report that was created and received in May and June 2009. The author of the report was not called to give evidence.

The precise manner in which the contents of this letter came about is not clear. Deed said the information was provided to her by Hogan and Fletcher. Which part of the letter was referable to Fletcher was not identified. When it was suggested to Deed by Hogan’s counsel that she would not have included in the letter anything unless it was supported by Fletcher, Deed said she could not guarantee that. She said she had no recollection of going back to Fletcher to check the details of the letter after she spoke to Hogan and obtained details from him. Deed candidly stated that she drafted the letter not knowing the full implications of it.

There is a conflict in the evidence as to how this letter came about. Hogan insisted that he did not ask Abigroup to send him the letter. Deed stated that Fletcher came to see her and explained there was an issue with Hogan’s crane truck and that the Crane had failed. She said Fletcher told her that Hogan was after a letter from Abigroup that explained that, because the Crane had failed, Hogan would not be allowed to work on the site. Deed also said Hogan himself requested a letter from her. She said Hogan told her he needed the letter to be able to go back to the crane company and explain he could no longer work on the site because of the failure.

I find that Hogan is mistaken in his recollection about how the letter came to be sent to Juliana. The letter contains specific detail that Hogan must have given Deed,[39] and it seems likely he was doing this for a specific purpose. Moreover, Deed’s evidence on this topic was unequivocal. In any event, there seems to be no obvious reason why Abigroup would send a letter such as the one that was sent to Juliana unless it was requested to do so. Certainly no other explanation as to why the letter was sent was proffered by counsel for Hogan. In particular, it was not suggested by Hogan or Deed that any letter was necessary to terminate an existing agreement between Abigroup and Juliana.
[39]See pars 72 above and 93 below.

The letter was put in evidence by Hogan not to establish the terms of the agreement with Abigroup, but rather to establish that an agreement existed.[40]
[40]It was acknowledged by counsel for Hogan that subsequent conduct of the parties could not relied upon to establish the actual terms of the agreement. See, for example, Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570, 582 [35]; FAI Traders Insurance Company Ltd v Savoy Plaza Pty Ltd (1993) 2 VR 343, 350.5-351.10. See also Talacko v Talacko (2011) 31 VR 340, 351-352 [40] (Neave and Harper JJA, obiter dictum, with whom Tate JA agreed).

Based on the evidence before me, I have no basis of determining what parts of the letter came from Hogan and what parts came from Fletcher. Deed was not asked the specific question, and therefore the position was left entirely unclear. Given that Hogan gave evidence that he spoke always to Deed about the terms of the agreement with Abigroup,[41] it must necessarily follow that, save for any information that might have been provided by Deed to Fletcher, Fletcher could give to Deed little, if anything, by way of detail as to the terms of the agreement. Accordingly, it is highly likely, and I so find, that insofar as the letter purports to set out the terms of an agreement with Abigroup, those details were provided by Hogan.
[41]See par 72 above.

This gives rise to material difficulties in Hogan’s case, as there are a number of statements made in the letter which are inconsistent with the case put by Juliana.[42]
[42]I note there was no suggestion by Hogan when he received the letter in 2009 that it contained any errors.

First, the date of the agreement is said to be January 2009. This is contrary to the evidence of Hogan that the agreement was struck around June 2008, alternatively some time thereafter when the price of the DAF Truck and the Crane were known (which must have been in or before November 2008, when the DAF Truck, with the Crane installed, was delivered).

Secondly, the letter speaks in terms of a long term hire agreement for 2 crane trucks. There is no evidence that there was any discussion whatsoever between Hogan and Abigroup in relation to a second truck. Notwithstanding this, the letter purports to record that both trucks were purchased for the specific intended uses on the Monash Freeway. There is simply no evidence to support this. Indeed, Hogan gave direct evidence to the contrary.[43]
[43]Hogan said the Big ACCO was not purchased for the Abigroup work and was not the subject of any works to enable it to perform works for Abigroup (T136.20-.24). See par 12 above.

Thirdly, the letter refers to a “long term hire arrangement” without specifying the duration of any such arrangement. There is certainly nothing in the letter which would support a contention that the long term hire arrangement was for 6 years or more.

Fourthly, the letter speaks in terms of “[permanent] daily hire for a minimum of 6-12 months”. Self-evidently, even for this shorter period, the duration of any alleged agreement is unclear. Counsel for Hogan suggested the reference to 6-12 months should be understood as being a reference to the duration of the Monash Alliance work on the Monash Freeway. Again, there is no evidence to support such a contention.

Fifthly, the letter suggests that beyond the period of 6-12 months, Juliana would only be entitled to be “considered” for further work with Abigroup. This falls well short of the case being put, which was that there was a legally binding agreement between Juliana and Abigroup for a period of 6 years.

In summary, the letter undermines a number of key aspects of Hogan’s case. He was responsible for giving the relevant details of the letter in mid 2009. Thus, there can be no satisfactory explanation for the material discrepancies referred to above.

F. Problems with the Crane and Tray Top

There is no doubt that there were some problems with the installation of the Crane by BPW. There was a dispute as to whether there were any problems arising out of the installation of the Tray Top. Further, there are issues arising out of the consequences of any defects with the Crane or the Tray Top.

After Hogan experienced difficulties with the Crane in late April and early May 2009 (the details of which I refer to in paragraphs 146 to 153 below), the DAF Truck was transported to Serviceworks for an inspection. Serviceworks issued a condition report on 4 May 2009. That report stated the Crane had been tagged “DO NOT USE” as it was “highly unsafe and does not comply with Australian standards”. Serviceworks also prepared a defect report of the same date. This listed various matters as being defects of the Crane.

After these reports were received the DAF Truck was taken to a yard in Werribee. The yard was on the premises of Damorange Transport (“Damorange”). Hogan was permitted to leave the DAF Truck at the yard so he did not incur storage charges. It was at this location that the DAF Truck and the Crane were inspected by Transport Certification Services. As noted above,[44] after this inspection a report was prepared and provided to Juliana on or about 13 May 2009.
[44]See fn 38 above.

The Crane and the DAF Truck were the subject of a further inspection. This inspection was by BPW and West Trans on 27 May 2009. At that time the DAF Truck was still located at Damorange’s premises. The New South Wales branch manager of BPW, Donald Carpenter (“Carpenter”), attended on behalf of BPW. Carpenter was also the manager of HMF Cranes at BPW, a position he had held since 1985. Jim Whittle attended on behalf of West Trans. He was described as the proprietor of West Trans.

At trial, Carpenter conceded there were some obvious issues with the Crane. He said:

(1)       the welding on the jib assembly was “most untidy”;
(2)       there were quite a few hydraulic leaks;
(3)       the transducer was not in the cylinder;
(4)       the mounting pockets had started to come adrift.

Carpenter said he did not have a recollection of any other matters being pointed out to him on that day.

Carpenter also said that, having observed the Crane on 27 May 2009, he said words to the effect that the Crane should never have left the workshop in the state that it was in. Precisely what Carpenter was referring to by way of defects to the Crane, when he made this remark at the meeting, was not clear on the evidence.

A witness called for Hogan was more extreme in his criticism of the welding. Laurence Splatt (“Splatt”) was the sole director of Damorange and had many years of experience in the industry. Splatt described the welding as the worst he had seen in his life. Splatt’s evidence as to the state of the DAF Truck and the Crane in May 2009 was not the subject of any cross-examination.

Splatt attended the meeting on 27 May 2009. Splatt gave evidence that in May 2009 he observed there were bolts missing from the cross-members of the chassis and that there were holes drilled into the chassis.

Another witness called for Hogan, Damorange’s head mechanic at the time, corroborated Splatt’s evidence. Craig Harrison (“Harrison”) was not a qualified mechanical engineer, but was qualified as a diesel and petrol mechanic. He said he had worked on trucks and trailers since he was 18, including spending 11 years looking after 60 trucks and 70 trailers at Damorange.

Harrison also attended the meeting on 27 May 2009. He gave more specific evidence in relation to the perceived problems with the holes in the chassis. He said the plates on each side of the chassis, that had been put on to support the Crane, did not line up with the holes that were already drilled in the chassis. Harrison said instead of making the plates fit the holes in the chassis, BPW had just drilled more holes. He suggested this was against the law because it weakened the steel, which could lead to hairline cracks and splitting. The evidence also demonstrated that the container mountings (also referred to as pins), required to affix a container to the DAF Truck, were too big. This issue was not in dispute (but the mountings were the subject of the remedial works referred to below).[45] Harrison also said the rods that held the Crane to the DAF Truck were not big enough.
[45]See pars 113-114 below.

For completeness, I note that Hogan was also present at Damorange on 27 May 2009. Because he said he was upset with the issues concerning the DAF Truck, he did not take an active role in the meeting. The evidence discloses that for the most part Hogan was not privy to the discussions that took place in relation to the state of the DAF Truck and the Crane. There were also others who attended, but they were not called to give evidence, and nothing turns on their presence at this meeting.

G.Work by West Trans and the state of the DAF Truck and Crane immediately thereafter

BPW’s position was that although there were certain defects in May 2009, they were capable of being remedied.

After the meeting on 27 May 2009, the DAF Truck was sent to West Trans for remedial works. This was done with the agreement of BPW, and at its expense. BPW was invoiced $4,794.90 by West Trans, which it duly paid.

The description of the work performed by West Trans included:

Labor (sic) to repair HMF 2000 Crane, mountings & plates.
Labor (sic) to make and fit new cotrol (sic) lever rods.
Labor (sic) to fit Diverter Valve and replace Hydrualic (sic) hoses.
Labor (sic) to repair K2 & K3 Jibs.

None of the work described on the invoice related to the DAF Truck or Tray Top. In other words, all works performed by West Trans were to fix problems with the Crane and its installation.

After the remedial works were completed by West Trans, the DAF Truck was made available to VicRoads for assessment. That assessment occurred at the premises of West Trans on 8 July 2009.

On 9 July 2009 a VicRoads vehicle assessment signatory scheme approval certificate was issued by a duly authorised assessor. That certificate included the following statement:

I have reviewed the data, calculations, drawings and specifications upon which the vehicle work is based. I inspected the vehicle on: 08/07/2009 at West-Trans Service … The vehicle work is approved. The vehicle meets the Standards for Registration.

Accordingly, the evidence suggests that after the works had been performed by West Trans, the DAF Truck and the Crane were in working order and capable of general use. In relation to the DAF Truck, this view is fortified by a question and answer also contained in the certificate, namely:

Is the attachment of the body capable of supporting the maximum loads imposed by the payload and the body weight at the extreme conditions, while evenly distributing the load throughout the chassis?

The question was answered in the affirmative. The expert evidence led at trial was to the effect that the question and answer referred to above were directed to the structural integrity of the chassis.

No evidence of any substance was given by Splatt or Harrison as to their opinion on the state of the DAF Truck after the remedial works had been performed by West Trans. Indeed, when the certificate of 9 July 2009 was put to Harrison, he responded: “I’m telling you what I know. This must have been done after I looked at it.”

H. Expert evidence on the DAF Truck and the Crane

Expert engineers were called by both parties. Mr John Lambert[46] (“Lambert”) was called by Hogan. Andrew Enkelman[47] (“Enkelman”) was called by BPW.
[46]Qualifications: MIE Aust, CPEng 180785, RMIT (Mechanical), Bachelor of Engineering (Agriculture); director and company secretary of John Lambert & Associates Pty Ltd.
[47]Qualifications: Bachelor of Engineering (Mechanical); principal of Enkelman Technologies Pty Ltd.

Four reports were filed and served by the experts. Much of those reports dealt with matters that went to issues beyond those raised at the trial. Further, after I directed that the experts confer before giving their evidence, they were able to agree on all but 1 issue.

In light of my factual findings, it is not necessary to refer to each of the matters upon which the experts opined for the purposes of the trial of the proceeding. There are only 3 matters that I refer to presently.

First, it was agreed by Lambert and Enkelman that there was nothing about the chassis of the DAF Truck which demonstrated that it was compromised in terms of structural integrity. Accordingly, notwithstanding the views of Hogan (views which I believe he genuinely held), all the objective evidence suggests the chassis of the DAF Truck was structurally sound.[48]
[48]See also pars 116-118 above.

Secondly, when the Crane was tested by Lambert in 2011 it was able to perform a lift of 2.944 tonnes at 6.35 metres. This indicated that the Crane was capable of lifting the weights in accordance with the published specifications, and as specified on the decal. The test conducted by Lambert also indicated the alarm was working and that the Crane was correctly calibrated. Accordingly, the only evidence before me strongly suggests the Crane is capable of performing in accordance with the specifications for the Crane (though not, of course, in accordance with what Hogan says he stated the Crane was required to do).

Thirdly, the experts expressed their opinions in relation to the likelihood, or even possibility, of the Crane being able to “drop” a load if the capacity of the Crane was exceeded. This evidence was adduced from the experts in light of Hogan’s account of the second failure of the Crane (see paragraph 152 below).

Lambert stated that as a load was moved out by the Crane, and the pressure of the hydraulic system increased, it would reach a point where back-flow was possible in the hydraulic system. Lambert stated once the back-flow was possible, the load would go to the ground but at a rate he could not determine without knowledge of the hydraulic system at the time.

Enkelman said he was in partial agreement with Lambert’s evidence. However, he said he could not provide any explanation for a sudden descent of a load once the Crane’s capacity had been exceeded. Indeed, Enkelman went so far as to say that a sudden descent of the boom was not possible. He said this was due to the hydraulic system of the Crane. Enkelman also said that there was a remote possibility that a slow descent could accelerate if the operator were to bring the control valve into neutral and a contaminant had entrained in the sealing surface of the pilot-operated check valve, which would allow the flow back to the tank more quickly. (Caligiuri also gave evidence to the effect that once the load capacity of the Crane was exceeded, the boom of the Crane would descend slowly, not rapidly.)

The difference between the experts on this third point seems to amount to no more than possibly having a differing view on the rate at which the boom could descend once the capacity of the Crane had been exceeded. This matter was considered important by the parties in light of Hogan’s evidence that on one occasion, when the Crane failed, it “dropped” its load. However, Hogan’s evidence itself was not clear as to the rate of descent. Moreover, I do not believe it matters how quickly the load was “dropped”. The more pertinent point is the suggestion that the Crane did not perform as it should have.

If the evidence of Enkelman (and Caligiuri) was led with the purpose of seeking to undermine Hogan’s evidence that the Crane failed to perform as it should have on the occasion where the Crane “dropped” its load, it failed to achieve that purpose. All the evidence concerning the state of the Crane before it was repaired by West Trans suggests that in late April or early May 2009 the Crane was not operating satisfactorily.

The DAF Truck and the Crane: work performed and problems encountered

A considerable amount of evidence was given about the performance of the DAF Truck and the Crane after its delivery to Juliana in November 2008. Before turning to those matters I set out briefly the events leading up to the delivery of the DAF Truck with the Crane installed.

On 20 October 2008 Paccar delivered the DAF Truck to BPW for the installation of the Crane and the Tray Top. Shortly thereafter BPW installed the Crane and the Tray Top.

On 12 November 2008 BPW carried out a pre-delivery inspection and completed a report for the purposes of the log book of the Crane. That report commenced with the words:

Before delivery of the loader to the customer, the following items must be checked
…
Load and stability test
Checking of LMB pressure-transducer pressure (the loader must stop operating)
…

Each item in the check list had been ticked. This check list was signed off by Caligiuri. He acknowledged that in fact he had not completed the check list and that this was done by Fabian Pachecko, a workshop foreman for BPW. In fact, the sign-off was computer generated, rather than the signature being executed or affixed by Caligiuri. However, Caligiuri said he was directly involved in undertaking the load and stability test for the Crane. Caligiuri said it was required by law for a crane to exceed its published specifications by 25% before it could be delivered to the customer. Caligiuri said the Crane passed the test, and that it was “rock solid”. He also said he checked the transducer to ensure the Crane stopped operating at the required distance for the weight being lifted. He said the Crane also operated as required in this regard.

After the pre-delivery inspection had been completed by BPW, it was returned on the same day to Paccar. Paccar attended to the registration of the DAF Truck. Delivery of the DAF Truck to Juliana then took place on 20 November 2008.

Hogan did not perform any work at the Abigroup work site until 17 March 2009. Accordingly, there was a lapse of some 4 months between the delivery of the DAF Truck to Juliana and work performed by Juliana pursuant to the alleged Abigroup agreement.

It appears from exhibit D1[49] that Juliana commenced work with the DAF Truck on 1 January 2009. No explanation was given by Hogan as to why no work was performed with the DAF Truck between 20 November 2008 (when the DAF Truck was delivered) and the commencement of 2009. Given the evidence adduced about Hogan’s father-in-law in Queensland, I place no significance on this period of non-use of the DAF Truck.
[49]Exhibit D1 was a list of the work performed by Juliana with the DAF Truck, and was an agreed document between the parties.

The evidence is not clear as to precisely when, but it appears that in early January 2009 Juliana performed works using the DAF Truck for a total of approximately $4,000 worth of work, charged at approximately $125 per hour. Then there was no work until early March 2009. This absence of work is to be explained by a major oil leak from the gear box of the DAF Truck.[50] Hogan gave evidence that the Truck was unusable for approximately 3 months as a result of this problem. (The evidence of the use of the DAF Truck indicates it was around 2 months, rather than 3 months.) The DAF Truck was taken back to Kenworth for fixing. In other words, it was not an issue that needed to be addressed by BPW.
[50]The DAF Truck was taken for repairs on 2 occasions. After the first occasion, Hogan said within 2 days it was leaking and so it was taken back to Kenworth again.

Juliana put the DAF Truck back in use on 3 March 2009. From 3 March 2009 until 16 March 2009 it performed work under the description “Crane hire” for Freyssinet. While performing this work for Freyssinet, Juliana made no offer to provide any services to Abigroup. Hogan admitted there was nothing stopping the DAF Truck from working at Abigroup on these days, or subsequent days in March and April 2009 when the DAF Truck was deployed for Freyssinet’s requirements.

Then, on 17 March 2009, Juliana did its first work for Abigroup. For this to occur it was necessary for Hogan to have an induction card issued in his name, which card was issued on 17 March 2009. No explanation was given by Hogan as to why he did not seek to obtain an induction card earlier.

Pausing there, as no works could be performed for Abigroup without an induction card, it follows that Hogan was not in a position to perform works for Abigroup before 17 March 2009. It also follows from the matters I have set out so far that any inability to do so was totally unrelated to any goods provided, or work performed, by BPW.

The invoice issued by Juliana in relation to the work performed on 17 March recorded the work as “Crane hire”.

On 18 March 2009 the DAF Truck was deployed to provide services to Freyssinet. The next day the DAF Truck was used again at the Abigroup site.

Also on 19 March 2009, Hogan himself filled out a form entitled “external equipment hire order”, being a form issued by Abigroup. In addition to recording the work performed (which included using the Crane), the form had a daily safety check list. There were 11 separate items listed on the check list, which items included “Hydraulics – leaks, damage, connections”. All items listed on the check list were ticked as having no defects. This form was signed by Hogan himself, together with a supervisor from Abigroup.

Notwithstanding Hogan’s case that Juliana had an agreement with Abigroup to work full time at Abigroup, after 19 March 2009 Juliana again deployed the DAF Truck to provide services to Freyssinet. It did this on numerous dates between 20 March 2009 and 29 April 2009. Hogan sought to explain this by stating that he wanted to get all of the problems out of the road before the DAF Truck worked at Abigroup.

There are 2 difficulties with this explanation. First, the DAF Truck did in fact work at Abigroup on 17 and 19 March 2009, including work involving the use of the Crane. Secondly, and more significantly, the evidence discloses that the oil leak had been fixed. There was no suggestion that the oil leak prevented works being performed in March and April 2009. Indeed, the evidence collated in exhibit D1 demonstrates that the DAF Truck was capable of performing a substantial amount of work during that period.

Put at its highest, it might be that Hogan refrained from using the DAF Truck continuously at Abigroup until he had operated the DAF Truck for a sufficiently lengthy period of time, so that he could be satisfied the oil leak would not occur again. Even if that were the case, this further demonstrates the delay in commencing at Abigroup cannot in any way be attributed to the goods supplied, or the conduct of, BPW.

In late April or early May 2009 Juliana was asked to perform works for Abigroup. These works involved attending some premises in Werribee to lift an empty container which had been placed in the wrong position by another company.

Upon his arrival in Werribee, Hogan hooked up the container to the Crane. When he attempted to lift the container he said all the alarms went off. He said at the time there was approximately 5½ metres between the centre of the Crane and the point where the load was attached for lifting.[51]
[51]Caligiuri gave evidence that he believed it was about 7 metres between the Crane and the point at which the load was attached, however nothing turns on this. Whether it was 5½ metres or 7 metres, the Crane ought to have been able to lift it according to the specifications displayed on the decal affixed to the Crane. Evidence was led from BPW’s expert that the Crane’s capacity to lift 2.6 tonnes was 6.9 metres. However, this did not assist BPW’s suggestion that, at 7 metres, Hogan had taken the load to the outer limits of the Crane’s capacity. The evidence was that an empty container weighed between 2.2 and 2.3 tonnes, not 2.6 tonnes.

As a result of this failure (“the First Failure”), Hogan rang BPW. BPW advised Hogan he should call Caligiuri. Caligiuri no longer worked for BPW. As advised, Hogan rang Caligiuri. After Hogan had explained the problem, Caligiuri suggested Hogan break a seal to override the safety mechanisms of the Crane. Hogan refused to do this. Hogan said he was not qualified to interfere with the safety mechanisms of the Crane. Accordingly, Caligiuri agreed to attend and look at the Crane in Werribee on that day.

Upon attending at the Werribee premises, Caligiuri attempted to lift the container but it would not lift. Caligiuri then overrode the safety mechanisms. Having done so, he was able to lift and move the container as required.

The DAF Truck was then driven by Hogan to Caligiuri’s premises for Caligiuri to repair and service the Crane. Hogan left the DAF Truck with Caligiuri so that he could attend to fixing the Crane. Hogan says that later that day Caligiuri told him that the Crane was right to go. Caligiuri gave a different account of what was said at the time he returned the DAF Truck to Hogan. He said that because he did not have a service terminal with him he would need to have the Crane back to have another look at it. Nothing turns on which account of this particular conversation is correct.

Caligiuri also said that, during the course of the work he did that day, he looked at the transducer. He said he removed the wire and fitted another transducer. As a result he was able to determine that the electronics were functioning “okay at the bottom end of the scale”. Caligiuri frankly accepted the possibility that when he handed back the Crane to Hogan he might have forgotten to actually reconnect the transducer that he had disconnected. However, Caligiuri said this would not affect the operation of the Crane, but it would only mean the absence of the safety feature that the transducer provided.[52]
[52]BPW submitted the cause of the Second Failure (see par 152 below) was Caligiuri’s mistake in failing to reconnect the transducer. In light of this evidence of Caligiuri, which was not contradicted by any witness, I reject this submission.

On a date that is not clear on the evidence, but shortly after the First Failure, Hogan again attended the Monash Freeway site to provide services to Abigroup. This time he was required to lift a 3 tonne wire coil. Hogan was asked to put the wire coil inside a steel frame, which required it to be lifted approximately 1½ metres from the Crane. Hogan said he lifted the coil about 4 feet off the ground, but the coil just dropped to the ground (“the Second Failure”). He said, as a result of the Second Failure, a person from Abigroup who had been standing there (who was not identified) said that this was the third incident that Abigroup had had with the Crane and Hogan had to take it to somebody to get it fixed properly.[53] Hogan said as a result he drove the DAF Truck to Serviceworks. Hogan said he did not contact Caligiuri because Caligiuri had not performed the work satisfactorily the day before.
[53]It is not clear as to what is being referred by way of the third incident. It appears on the evidence there were only 2 incidents with the Crane.

The DAF Truck was then out of operation until the end of August 2009.[54] After August 2009 Juliana performed a substantial amount of work for the remainder of 2009. None of this work was for Abigroup. All of the work was described as “Crane hire”, though Hogan explained that this did not necessarily mean that the Crane was used.
[54]Some of the events between May 2009 and late August 2009 are referred to in pars 102-111 above.

In addition there were 3 jobs done in 2010; on 5 January, on 15 March and on 31 May respectively. No explanation was given as to the downtime between these 3 dates.

The total amount of moneys earned by Juliana by deploying the DAF Truck from 1 January 2009 until 31 May 2010 was $67,260.74. Of this, $42,042.74 was earned after the letter was sent by Abigroup on 19 June 2009.

Hogan said he ceased using the DAF Truck at the end of May 2010. Hogan said he just wanted to write-off the DAF Truck. Hogan said Juliana was not willing to spend any money on the Crane at this time as “we had put enough money into it”. Hogan was not willing to use the DAF Truck even if there were a different Crane on the back of it because BPW had already destroyed the chassis rails. He also said it was a problem that there were no bolts in the chassis. Hogan said he believed that the DAF Truck was unsafe at all times at least since March 2009.

He also said that prior to May 2010 he had tried to return the Truck to Kenworth because there had been nothing but problems since day 1.

I do not doubt that Hogan held the views that he says he did about the safety of the DAF Truck. However, as can be seen from the discussion about the chassis above,[55] Hogan was mistaken in his view. Hogan appeared to be of the view that because additional holes had been put in the chassis that necessarily made it unsafe. In contradistinction to this evidence was not only the expert evidence, and the VicRoads certificate, but also the evidence of Caligiuri. Caligiuri gave evidence that BPW regularly put holes in the chassis of trucks for the purposes of affixing cranes and trays. He said BPW did it as a matter of practice.
[55]At pars 116-117 above.

In the circumstances, I am driven to the conclusion that the DAF Truck ceased to earn any income after May 2010 because of the mistaken, albeit honest, belief of Hogan that he could not safely use the DAF Truck anymore.

Further, if Hogan had not made this decision, it is probable he could have continued to earn revenue from the DAF Truck. He stated if the DAF Truck had been in proper working order another customer of Juliana would have wanted the DAF Truck 7 days a week. In those circumstances, it must follow that if Juliana did suffer any loss, it failed to take reasonable steps to mitigate that loss.[56]
[56]Sherson & Associates Pty Ltd v Bailey (2001) Aust Torts Reports 81-591 at 66,503 [77], and the cases there cited.

Before leaving this topic in relation to the DAF Truck, it must also be noted that by May 2010 the DAF Truck had 27,000 kilometres on its odometer. This demonstrates that the Truck was able to perform a substantial amount of work, which fact is corroborated by the evidence the subject of exhibit D1.

This still leaves the 2 occasions where the Crane failed to perform in accordance with the specifications provided by BPW (the First and Second Failures). There seems little doubt that on these 2 occasions the Crane did fail to perform even at a level that BPW said it should. In my view, this does not make out Hogan’s case. The 2 events occurred more than 5 months after the Truck had been delivered. Prior to that time the DAF Truck had been utilised for the purpose of numerous works, including using the Crane. There was no complaint about the performance of the Crane during that time. Further, it appears that after July 2009, whatever problems the Crane may have had were fixed. As noted above, this was done at the expense of BPW.[57] Based on this evidence, I cannot be satisfied that the cause of the First Failure or the Second Failure could be attributed to any conduct of BPW as at, or prior to, November 2008 (when the DAF Truck was delivered with the Crane installed).
[57]For completeness, I note no claim is made by Hogan solely on the basis of the downtime when the works were being done on the Crane; ie from early May 2009 until some time in July 2009.

J. The Tray Top

As noted above, the Tray Top was not in accordance with Juliana’s requirements because it was approximately 6 inches short of the 8 metres specified.

In relation to the purpose made known to BPW that the DAF Truck was required to lift and transport containers, there was no suggestion that the shorter Tray Top prevented the DAF Truck from performing this work. Indeed, once the pins were fixed by West Trans, there was no basis for suggesting that the Tray Top could not carry a 20 foot container. No claim is made by Juliana for the inability of the DAF Truck to properly carry containers prior to the remedial work performed by West Trans.

As the Crane was located at the rear of the Tray Top, there was no ability to have any overhang in relation to concrete barriers transported on the DAF Truck. It follows that the shorter Tray Top meant that the Tray Top was not capable of lifting 4 concrete barriers, each 4 metres in length, with 2 pairs mounted end to end.

Although this aspect of Hogan’s case is made out insofar as a breach of contract is established, I cannot properly award any relief for a number of reasons. First, I have found there was no agreement with Abigroup to lift concrete barriers. Indeed, it seems on the evidence that Juliana never attempted to perform such works (ie lift even 1 concrete barrier). Therefore, I cannot be satisfied that Juliana forwent any works by reason of the shorter Tray Top. Secondly, no claim for loss is independently made by Hogan on this basis. Thirdly, the DAF Truck was still capable of earning revenue in and after May 2010. It did not do so because Hogan decided not to deploy the DAF Truck after this time.

K. The Big ACCO

Evidence was also before the court in relation to the work done by the Big ACCO. As there was no evidence of any discussion between Abigroup and Hogan about the Big ACCO being part of the alleged agreement with Abigroup (until it came to the drafting of the 19 June 2009 letter), there is no need to consider this evidence.

In short, there is no proper basis to find the existence of any agreement between Abigroup and Juliana in relation to the Big ACCO. Although the letter on 19 June 2009 refers to such an agreement or arrangement, this was information provided by Hogan[58] after the First and Second Failures, and, in the circumstances, was not probative of any pre-existing agreement.
[58]See pars 90-93 above.

Even if, contrary to my findings, there were an agreement for work between Abigroup and Hogan, which work included the use of the Big ACCO, any claim for work lost by the Big ACCO would plainly be too remote. The possibility of the Big ACCO performing work for Abigroup was never discussed by Hogan and Caligiuri. Put succinctly, any such loss could not be considered as fairly and reasonably either arising naturally from the breach of the Contract itself, or such as may be reasonably be supposed to have been in the contemplation of both Hogan and BPW, at the time they made the Contract, as the probable result of the breach of it.[59]
[59]Hadley v Baxendale (1854) 9 Ex 341 at 354 [156 ER 145 at 151.2].

There was a further complication in relation to any claim based on the non-utilisation of the Big ACCO in respect of an alleged agreement with Abigroup. This is because after Juliana ceased doing work with Abigroup, the Big ACCO was kept in work and Juliana received revenues in relation to that work. However, it was said that this work was done in lieu of work that could have been done by the Little ACCO, which was then left idle. This was explained on the basis that Juliana chose to use the Big ACCO instead of the Little ACCO because the Big ACCO was financed, and by reason of this Hogan wanted to keep the Big ACCO in work.

In light of my findings above, it is not necessary to consider this issue any further.

L. Loss claimed

Regardless of the outcome on issues of liability, in my view Hogan has not established that it has suffered any loss the subject of a claim in this proceeding.

There are a number of reasons for this.

L.1 Reasons why no loss

First, by reason that Hogan has failed to prove key terms of an agreement with Abigroup,[60] there is simply no factual substratum upon which to ascertain how any loss would be quantified. This observation is made in the context of a claim that is based largely upon loss of profits from an alleged agreement with Abigroup.
[60]See pars 69-100 above.

Secondly, Hogan relies upon a report of Peter Bruce Wilkinson (“Wilkinson”), of Munday Wilkinson, Chartered and Forensic Accountants, dated 21 February 2013. This was admitted into evidence without objection. Wilkinson’s report[61] sets out the assumptions he was instructed to make for the purposes of the report. Those assumptions included:
[61]At pp 6-7.

(1)the DAF Truck and its driver would be provided with a minimum of 50 hours work per working week;
(2)the rate at which Juliana would have charged Abigroup was $120 per hour, excluding GST, for week days;
(3)Juliana would provide a minimum of 10 hours work each Saturday, comprising 4 hours at time and a half and 6 hours at double time;
(4)Juliana would be provided work on each Sunday for a minimum of 10 hours at double time.

Similar assumptions were made in relation to the Big ACCO.

In addition to the assumptions referred to above, there were numerous assumptions made in relation to rostered days off, variable expenses (such as wages, fuel costs, tyre replacements and servicing) and other expenses. These assumptions were made in relation to both the DAF Truck and the Big ACCO.

With the possible exception of the rate of $120 per hour for week days for the DAF Truck,[62] there was simply no evidence led to establish any of these matters.
[62]Which would only be a matter of inference rather than direct evidence.

Under cross-examination, Wilkinson expressly acknowledged that he relied upon the assumptions given to him. He also accepted he had conducted no analysis of what the variable costs of Juliana’s business had been historically.

It is fundamental that for the expert evidence to be of any probative value, the party adducing that evidence must prove the underlying facts through admissible evidence.[63] Further, in pursuing “expectation damages”, the mere fact that the calculation of any loss is hypothetical does not relieve a plaintiff of the obligation of putting probative evidence before the court.[64]
[63]This was described by Spigelman CJ in ASIC v Rich (2005) 218 ALR 764, 798 [155], as “the basic principle” in relation to expert evidence. See also Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, 743-744 [85] (Heydon JA).
[64]See, for example, Longden v Kenalda Nominees Pty Ltd [2003] VSCA 128 at [10]-[14] (Buchanan JA, agreeing with Chernov JA, with whom Phillips JA also agreed); Narni Pty Ltd v National Australia Bank Ltd [2001] VSCA 31 at [31]-[32] (Tadgell JA, with whom Buchanan and Chernov JJA agreed).

Given the dearth of evidence led by Hogan, there might have been a real issue as to whether or not Wilkinson’s report was admissible at all.[65] However, nothing turns on this as the cross-examination by counsel for BPW demonstrated that the probative value of the report ought to be put at nought as there is simply no empirical evidence to support it.
[65]See for example, Rhoden v Wingate [2002] NSWCA 165, [86] (Heydon JA, with whom Sheller JA agreed).

Thirdly, the only financial information in relation to Juliana before the Court (other than the fact that it went into liquidation on 5 June 2012) is the financial statements of Juliana for the financial years ended 30 June 2009, 30 June 2010 and 30 June 2011. Those statements show that Juliana suffered losses of $50,521, $5,974 and $9,568 respectively for each of those years. In short, there is simply no basis upon which it might be inferred that Juliana would have made a profit if it had engaged in the work it says it was entitled to do under the alleged Abigroup agreement. This position is fortified if Hogan’s evidence is accepted[66] that Juliana’s trucks were working to approximately 90% capacity at all relevant times.
[66]See par 11 above.

Fourthly, on the evidence as set out above,[67] I simply cannot be satisfied that each of the DAF Truck and the Big ACCO[68] could not have been deployed by Juliana at commercial rates in other projects unrelated to Abigroup.
[67]See pars 160 and 170 above.
[68]Alternatively the Little ACCO, by reason that the Little ACCO stood idle at times when Juliana deployed the Big ACCO to do work that otherwise would have been performed by the Little ACCO.

Finally, there remains the issue of claims made for rectification works. Those claims cannot succeed as I have found both the chassis of the DAF Truck and the Crane were fit for purpose and of merchantable quality on and from July 2009 onwards. Accordingly, no rectification works are required. For completeness, I note that the amount of these claims were not the subject of any quantification by Hogan in any event.

L.2 Contractual issues: exclusion and limitation clauses

The Terms and Conditions included both exclusion and limitation clauses.

Clauses 7.2 and 7.7 effectively sought, so far as was lawfully possible, to exclude all terms relating to the quality of the goods supplied and to exclude the remedies which might have been available in relation to the sale and delivery of the goods.[69]
[69]Clauses 7.2 and 7.7 are set out in full in par 36 above.

BPW submitted that the natural and ordinary meaning of cll 7.2 and 7.7 resulted in those clauses excluding liability for the causes of action advanced in this proceeding; that is the contractual claims and the negligence claims.

Hogan submitted the relevant clauses were not specific enough in their terms. It was submitted that the clauses must be read contra proferentum.

In relation to cl 7.2, it was said by Hogan that the exclusion was not specific in relation to terms implied by statute. Counsel for Hogan submitted words to the effect of “including those implied by statute” needed to be included after the words “all conditions, warranties and guarantees” for the clause to be effective in excluding terms implied by statute.

Further, it was submitted cl 7.7 was ambiguous as it did not expressly negative remedies that would otherwise have been available pursuant to terms implied by statute. Finally, it was submitted that BPW bore the onus of establishing that s 61 of the Goods Act could be relied upon to negative the operation of s 19 of the Goods Act.

The law in relation to the interpretation of exclusion clauses in commercial contracts in Australia is well settled. In Darlington Futures Ltd v Delco Australia Pty Ltd[70] the High Court, after considering a number of authorities, stated:[71]

These decisions clearly establish that the interpretation of an exclusion clause is to be determined by construing the clause according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract, and, where appropriate, construing the clause contra proferentum in case of ambiguity. … [T]he same principle applies to the construction of limitation clauses. … And the principle, in the form in which we have expressed it, does no more than express the general approach to the interpretation of contracts and it is of sufficient generality to accommodate the different considerations that may arise in the interpretation of a wide variety of exclusion and limitation clauses in formal commercial contracts between business people where no question of the reasonableness or fairness of the clause arises.

[70](1986) 161 CLR 500.

[71]At 510.6-511.1.

More recently the Court of Appeal considered the proper approach to the construction of exclusion clauses in the context of considering ss 19 and 61 of the Goods Act. In Victorian Alps Wine Co Pty Ltd v All Saints Estate Pty Ltd[72] the exclusion clause was held to be effective. The clause sought to exclude liability, “[t]o the full extent permitted by law”, of any conditions or warranties as to suitability or fitness of the goods supplied. Further, the clause expressly provided “[a]ll statutory and implied conditions and warranties except as to title are excluded”.
[72][2012] VSCA 81.

The Court of Appeal stated that it was the party relying upon the exclusion clause that bore the onus of persuasion under s 61 of the Goods Act.[73] The Court of Appeal also confirmed that the approach of the High Court referred to above remained the correct approach in Victoria to the interpretation of exclusion clauses in commercial contracts.[74]
[73]At [39] (Hansen JA, with whom Warren CJ agreed), [58] (Bell AJA).
[74]At [24] (Hansen JA), [56] (Bell AJA).

I accept that the actual decision in Victorian Alps Wine Co Pty Ltd v All Saints Estate Pty Ltd is distinguishable by reason that the exclusion clause in that case made express reference to terms implied by statute. That said, I do not consider there is any ambiguity in either cl 7.2 or cl 7.7 of the Terms and Conditions. Given there is no ambiguity, the clauses should be given their natural and ordinary meaning without considering how they might be read contra proferentum.

On their face, the clauses do purport to exclude all implied terms to the extent permitted by law, which would include statutory implied terms. There is nothing in the nature or object of the Contract which suggests these clauses ought to be read down in any particular way. No submissions were made on behalf of Hogan in that regard.

Accordingly, to the extent that Hogan’s case relies upon purported implied terms by operation of s 19 of the Goods Act, it cannot succeed. Section 61 expressly provides that a right, duty or liability that otherwise would have been implied “may be negatived or varied by express agreement or by the course of dealing between the parties”. The express terms of cll 7.2 and 7.7 negatived the terms which might have been implied by operation of s 19.

Further, to the extent that Hogan’s case advances claims in negligence, it must also be subject to the exclusion clauses. Clause 7.7 expressly excludes rights or remedies in respect of negligence other than those expressly provided for in the Terms and Conditions. In my view, the language in cl 7.2 is clearly broad enough to encompass any claim made in negligence that may be lawfully excluded.

As the Court of Appeal has acknowledged,[75] the approach of the High Court in Darlington Futures Ltd v Delco Australia Pty Ltd[76] is equally applicable to ascertaining whether or not an exclusion clause has excluded tortious claims or remedies that might have otherwise been available. There is no proper basis to read down or limit the clear language of the relevant exclusion clauses.
[75]MWH Australia Pty Ltd v Wynton Stone Australia Pty Ltd (in liq) (2010) 31 VR 575, 596 [87] (Buchanan and Nettle JJA), [24] (Warren CJ, dissenting in part, but relevantly agreeing).
[76](1986) 161 CLR 500; see par 190 above.

The Terms and Conditions also contained a limitation clause, namely cl 7.3. In light of the other findings I have made, it is unnecessary to say anything further on this issue. As can be seen, the same approach is to be adopted in construing limitation clauses as is taken in construing exclusion clauses.

M. The issues

Counsel helpfully identified the factual questions required to be determined. Those are as follows:

(1)Was there an agreement reached between Abigroup and Juliana for the hire of the DAF Truck and the Big ACCO, and, if so, when was that agreement reached?
(2)What was communicated by Hogan to Caligiuri as to the purpose of the Crane (“the Intended Purpose”)?

(3) Whether the First Failure occurred in the manner alleged by Hogan?
(4) Whether the Second Failure occurred in the manner alleged by Hogan?
(5)Whether either of the answers to questions (4) and (5) support a conclusion that the Crane was not fit for the Intended Purpose at the time Juliana took delivery of it?
(6)If the answers to each of questions (1) and (5) is “yes”, was the agreement between Abigroup and Juliana withdrawn as a result of the Crane not being fit for the Intended Purpose?
(7)If the answer to question (6) is “yes”, has Juliana suffered loss for which it ought to be compensated?

It is convenient to deal with each of these questions in turn.

M.1 Alleged agreement with Abigroup

I am not satisfied that an agreement was reached between Abigroup and Juliana as alleged by Juliana. See paragraphs 69 to 100 above.

M.2 Instructions from Hogan to Caligiuri in relation to the Crane

I refer to paragraphs 50 to 68 above. In summary, notwithstanding the limited recollection of Caligiuri of some of the relevant events, Hogan has failed to make out his case. In short, I am not satisfied that Hogan gave specific instructions to Caligiuri and BPW that he required a crane that could lift 4.5 tonne to a distance of 6 metres. I am also not satisfied Caligiuri was told the DAF Truck was required to have a capacity to hold 4 x 4 metre concrete barriers. The “Intended Purpose” was, therefore, confined to the Crane performing in accordance with the published specifications.

M.3 The First Failure

I refer to paragraphs 146 to 149 above. The First Failure occurred as alleged by Hogan.

M.4 The Second Failure

I refer to paragraph 152 above. The Second Failure occurred as alleged by Hogan.

M.5 Was the Crane fit for the Intended Purpose?

At the specific times of the First Failure and of the Second Failure the Crane was not fit for the Intended Purpose. The Crane remained unfit for the Intended Purpose until the works were completed by West Trans. See paragraphs 113 to 118 above.

However, I cannot be satisfied as to the reason or reasons why the Crane was not fit for the Intended Purpose from late April 2009 until early July 2009. See paragraph 162 above.

M.6 Was the Abigroup Agreement withdrawn?

By reason of my answer to question (1) above, it is not necessary to answer this question.

M.7 Loss

By reason of my answer to question (6) above, it is not necessary to answer this question. In any event Juliana could not prove it had suffered any loss. See paragraphs 172 to 183 above.

N. Other alleged defects particularised by Hogan

The FASOC particularised a large number of matters said to demonstrate the Crane was not fit for purpose, not of merchantable quality and unsafe.[77] However, many of the matters particularised were not the subject of any evidence.[78]
[77]See par 27 above.
[78]See fn 9 above.

As to those matters the subject of evidence, only a general submission was made on behalf of Hogan. It was contended:

As a consequence of the matters alleged in paragraph 13 and the fact of the failures, we submit that the [C]rane as supplied was not of merchantable quality, and more importantly, not fit for the purposes which on BPW’s own case it should have been able to achieve. In that regard we specifically point to the failure of the [C]rane to achieve the lift of the 20 foot container and the 3 tonne coil, each of which were in the specifications of the actual crane supplied.

The evidence disclosed that, with 1 exception, each of the matters particularised in paragraphs 13.1 to 13.7 of the FASOC were matters that could be rectified. Further, it appears that they were rectified by the work conducted by West Trans.

The exception is the matter particularised in paragraph 13.3. There was no evidence about whether the issue of the slew system could be rectified.

BPW’s expert, Enkelman, accepted that the Crane slew system was flawed. Hogan himself gave evidence about the unsatisfactory state of the slew system. Although Hogan gave evidence on this topic, there was nothing that demonstrated to me that the Crane could not operate satisfactorily notwithstanding the inadequacies of the slew system. The evidence suggests the contrary by reason of the fact that the DAF Truck carried out a substantial body of work both before and after the First and Second Failures. Further, this position was fortified by the expert evidence of Enkelman to the effect that the flawed slew system “did not make the [C]rane ‘critically unsafe’ as it simply stopped the unit from slewing any further”. Accordingly, although the defect definitely existed, there is no basis upon which I can find that it caused any loss or damage to Juliana.

O. Demeanour of Hogan

Hogan indicated to the court on a number of occasions that he was finding it difficult giving evidence. At times his frustration was obvious. This was apparent not only when he was the subject of cross-examination, but generally when he was giving his evidence.

Hogan said he was hard of hearing by reason that he had driven trucks for so many years. Hogan is also missing the top of his left thumb which, at times, made it difficult for him to turn the pages of the court book when asked to do so. Hogan also said at times he struggled to understand, at one point noting that he finished his schooling in grade 6.

As a result of his frustration, at times Hogan behaved in a manner which was somewhat unbecoming. This included swearing while expressing his annoyance with the process and also making veiled threats at opposing counsel during cross-examination. After each of these episodes, Hogan was extremely contrite and apologetic.

I am of the view that this conduct of Hogan, although unfortunate, does not reflect poorly on his credit. It was more a reflection of the difficulty he experienced at giving his evidence rather than any disrespect to the court or the trial process.

P. Other matters

Hogan’s pleaded case raised issues in relation to the qualifications of those who performed the works for BPW at the time the Crane was installed.[79] However, no submissions were made that these allegations resulted in any consequence above and beyond the consequences of the alleged defects in the Crane. Although it is clear that some of the works performed by BPW were unsatisfactory, these matters were identified and rectified. In light of the fact this matter was not pressed in closing submissions I do not address it further.
[79]See par 28 above.

BPW raised some further issues, including issues about the legality of the DAF Truck. These issues were said to relate to matters demonstrating that Juliana could not have performed any works lawfully pursuant to any alleged Abigroup agreement in any event. The issues concerned the suspension of the DAF Truck, the overhang of the DAF Truck and also the 5^th axle, which was a lift axle, installed by Paccar on the DAF Truck.

In light of my findings above, it is not necessary to consider these matters and I refrain from doing so.

Q. Conclusion

It follows that the claim must be dismissed. Presently, I am not aware of any circumstance that would make the usual order as to costs inappropriate. I will give the parties 14 days from today to make any application in relation to the costs order. Liberty to apply is granted for that purpose, and in the meantime I will stay the operation of the costs order.

I intend to make the following orders:

1.        The plaintiff’s claim is dismissed.
2.        The plaintiff pay the defendant’s costs, including any reserved costs.
3.        Order 2 above be stayed for 14 days.
4.        Liberty to apply within 14 days in relation to order 2.

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[2013] VSC 249

16 MAY 2013