Lanestar and Monrest Pty Ltd v Arapower Pty Ltd, Deasy Investments Pty Ltd and Deasy

[1996] QCA 466

IN THE COURT OF APPEAL	[1996] QCA 466
SUPREME COURT OF QUEENSLAND

Appeal No. 1659 of 1996.

Brisbane
[Deasy Investments P/L & Anor. v. Monrest P/L]

BETWEEN:

LANESTAR PTY LTD

(First Plaintiff)

AND:

MONREST PTY LTD

(Second Plaintiff) Respondent

AND:

ARAPOWER PTY LIMITED

(First Defendant)

AND:

DEASY INVESTMENTS PTY LTD

(Second Defendant) First Appellant

AND:

BRIAN JOHN DEASY

(Third Defendant) Second Appellant

___________________________________________________________________

Fitzgerald P.
Pincus J.A.

Moynihan J.

___________________________________________________________________________

Judgment delivered 22 November 1996

Separate Reasons for Judgment of each member of the Court, all concurring as to the orders
made.
___________________________________________________________________________

1.         APPEAL ALLOWED WITH COSTS

2.         JUDGMENT FOR THE RESPONDENT (SECOND PLAINTIFF BELOW) SET ASIDE.

3.         IN LIEU, ORDER THE RESPONDENT’S CLAIM AGAINST THE APPELLANTS BE DISMISSED.

4.         LEAVE TO FILE, WITHIN SEVEN (7) DAYS, WRITTEN SUBMISSIONS AS TO THE PROPER ORDER FOR COSTS OF THE PROCEEDINGS IN THE DISTRICT COURT.

___________________________________________________________________________

CATCHWORDS: NUISANCE - inducing a trespass - scope not absolutely clear -

title to sue - reasonableness of actions - mistake - whether need
to prove negligence.
DAMAGES - onus of proving damage - difficulty in assessing
damages - certainty of assessment - no reasonable foundation

for assessment.

Counsel:	Mr J Griffin QC, with him Mr T Somers, for the appellants. Mr W Sofronoff QC, with him Mr R C Morton, for the respondent.
Solicitors:	Walters & Co. as town agents for MacDonald & Michel for the appellants. Bruce S Dulley as town agents for Carswell & Co. for the respondent.
Hearing date:	14 October 1996.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 1659 of 1996

Brisbane

Before Fitzgerald P.
Pincus J.A.
Moynihan J.

[Deasy Investments P/L & anor. v. Monrest P/L]

BETWEEN:

LANESTAR PTY LTD

(First Plaintiff)

AND:

MONREST PTY LTD

(Second Plaintiff) Respondent

AND:

ARAPOWER PTY LIMITED

(First Defendant)

AND:

DEASY INVESTMENTS PTY LTD.

(Second Defendant) First Appellant

AND:

BRIAN JOHN DEASY

(Third Defendant) Second Appellant

REASONS FOR JUDGMENT - FITZGERALD P.

Judgment delivered 22 November 1996

The circumstances giving rise to this appeal are set out in the reasons for judgment of

Pincus J.A.
The generalised assertions made on behalf of the respondent by Mr Schofield are of little

or no assistance to it in the absence of supporting detail. This is not a case in which

damages necessarily fell to be assessed in circumstances in which detailed proof was

impossible or difficult. What was in issue was the effect, if any, of the appellants’ activity

upon the respondent’s business during a comparatively brief period from September 1990

to May 1992. The underlying premises of the respondent’s case were that, but for the

appellants’ conduct, a growth of turnover would have occurred, whereas there was a

downturn in business which was otherwise unexplained. The evidence did not support any

element of that theory. More particularly, Mr Allen’s report, which was critical to the

respondent’s case, and is discussed in the reasons for judgment of Pincus J.A., failed to

establish the necessary foundation for a finding of loss by any meaningful comparison with

any other material period.

I agree that the appeal should be allowed with costs on the ground that there was no

satisfactory evidence to show that the loss claimed had been caused by the appellants,

and with the other orders proposed by Pincus J.A.
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 1659 of 1996.

Brisbane

Before Fitzgerald P.

Pincus J.A.

Moynihan J.

[Deasy Investments P/L & Anor. v. Monrest P/L]

BETWEEN:

LANESTAR PTY LTD

(First Plaintiff)

AND:

MONREST PTY LTD

(Second Plaintiff) Respondent

AND:

ARAPOWER PTY LIMITED

(First Defendant)

AND:

DEASY INVESTMENTS PTY LTD

(Second Defendant) First Appellant

AND:

BRIAN JOHN DEASY

(Third Defendant) Second Appellant

REASONS FOR JUDGMENT - PINCUS J.A.

Judgment delivered 22 November 1996

This is an appeal from a judgment of the District Court in a tort case, the causes of action being two: nuisance, and unlawful interference in a trade or business. The points raised by the appellants, who were defendants below, have to do, first, with the question whether on the facts found by the primary judge the elements necessary to establish these two causes of action were proved and, secondly, with the judge’s conclusions on the question of damages. Other than with respect to damages, the outcome of the appeal depends substantially on the legal consequences of the judge’s findings of fact; the findings, so far as relevant to the question of liability, are not challenged. In essence, the complaint of the respondent, which was a plaintiff below, was that its spare parts business was adversely affected by the appellant causing or permitting people to use a car park, when they had no legal right to do so.

The respondent carried on business at relevant times as a vendor of truck and trailer spare parts and it did so on land in Alice Street, Maryborough ("the land"). A company named Kingaroy Ten Pin Bowl & Leisure Centre Pty Ltd leased a building on the land to Lanestar Pty Ltd, which was one of the plaintiffs below, but is not a party to the appeal. The lease term began on 1 May 1989; the lease contained an error in that it indicated that Lanestar Pty Ltd became the lessee of the whole of the land, not only part of it. The true intention was that Lanestar Pty Ltd should become the tenant of a building on the land, which it is convenient to call the spare parts shop, together with an adjacent car park. The original lessor, Kingaroy Ten Pin Bowl & Leisure Centre Pty Ltd, sold the freehold of the land to Arapower Pty Limited in mid-1990; at that time the mistake in identification of the land leased to Lanestar Pty Ltd had been discovered, but the lease document was not corrected. The judge decided this case on the basis that Arapower Pty Limited, which at relevant times owned the freehold, had leased to Lanestar Pty Ltd only that part of the land in question which comprised a spare parts shop and the car park which I have mentioned. That was not challenged on appeal and we have to decide this appeal on the footing that Lanestar Pty Ltd had the right at all relevant times to exclusive possession of the car park; the correctness of the assumption that the lease may, as a matter of law, be treated as rectified as against the appellant has not been examined.

The spare parts shop was run by the respondent, not by Lanestar Pty Ltd. The respondent ran that shop, according to evidence adduced on its behalf, from September 1989 to May 1992. There was no formal agreement between the respondent and Lanestar Pty Ltd in evidence, but the judge found, and it is not disputed, that Lanestar Pty Ltd permitted the respondent to conduct its business from the premises and that the appellants knew this to be so. Not only, on the judge’s findings, did the respondent have possession of the spare parts shop, but it also had possession of the car park.

The judge found that at the invitation or direction of the appellants, customers of the video shop, which was at material times conducted by the first appellant, unlawfully used the car park. The judge held that this constituted a nuisance as against the respondent and also constituted the tort of unlawful interference with the respondent’s trade or business. His Honour assessed damages.

It is convenient to include further explanation of the facts in discussion of the points taken on appeal. It seems desirable to deal with the issue of nuisance, which was fully argued, although in the end the appellants succeed on the issue of proof of loss.

Was the conduct complained of a nuisance?

Mr Griffin Q.C., who led Mr Somers for the appellants, argued that inducing people in charge of vehicles to trespass on land in possession of another does not constitute a private nuisance. It is true that the precise scope of this tort is not absolutely clear, but it is my opinion that the appellants’ submission must be rejected. The essence of the respondent’s case was that use of the car park by people who were not invitees of the respondent prevented its customers from having access, in a convenient way, to the spare parts shop. It is now established that picketing which deters customers may be a nuisance: Animal Liberation (Vic) Inc. v. Gasser [1991] 1 V.R. 51 at 58 et seq, Dollar Sweets Pty Ltd v. Federated Confectioners Association of Australia [1986] V.R. 383. Another analogous type of nuisance is exemplified by Wagstaff v. The Eddison Bell Photograph Corporation Ltd (1893) 10 T.L.R. 80. In that case the defendants were held liable in nuisance for having obstructed the access of customers to the plaintiff’s shop by opening an exhibition of "phonographic machines" next door. Of course, not every action which in fact causes an obstruction, deterring customers from approaching a business, will be a nuisance; but here access to the shop was being prevented by the appellants inducing people to park on land in the respondent’s possession and I am of the view that that must be capable of being held a nuisance.

Title to sue

Mr Griffin also contended that the respondent, not being the tenant of the car park or of the spare parts shop, had not such a right as to give it standing to sue in respect of the nuisance in question. It is true that there are decisions which suggest that a person in possession as a mere licensee is not protected by the law of nuisance, but the weight of authority is now to the contrary. In Khorasandjain v. Bush [1993] Q.B. 727, it was held in the English Court of Appeal that an action in nuisance (consisting in harassing telephone calls and the like) could be brought by a mere licensee with no proprietary interest (734, 735). And even the dissenting judge, Peter Gibson J., accepted that an occupier of property may maintain an action for private nuisance (745). Although the older cases and in particular Malone v. Laskey [1907] 2 K.B. 141 took a contrary view, I see no reason why the recent English decision should not be followed: it is consistent with a number of decisions in this country: Vaughan v. Benalla Shire (1891) 17 V.L.R. 129, Ruhan v. Water Conservation and Irrigation Commission (1920) 20 S.R.(N.S.W.) 439, and McLeod v. Rub-a-dub Car Wash (Morvan) Pty Ltd (unreported, 29 February 1972 - Victorian Supreme Court).

This second contention by the appellants is also rejected.

Unreasonable?

A more difficult question, in my opinion, arises under this heading; it is necessary first to explain the judge’s findings, so far as relevant to the point. His Honour found (568) that:

" . . . at all relevant times Mr Deasy and the staff of the two corporate defendants believed that they were entitled to use the car park, and that they were entitled to invite the customers of Park Lane Video to park there."

Mr Deasy is the second appellant and the first appellant is one of the two corporate defendants referred to. Later in his reasons, in another context, the judge returned to this topic:

"The position changed after their receipt of exhibits 1V and 1X in November, 1991. From then they knew, or should have known, that they were directing traffic onto the plaintiffs’ car park and that that would be to its detriment (even although they thought they were entitled to do so)." (575)

Exhibit 1V was a letter written on behalf of Lanestar Pty Ltd which as I have explained was the lessee of the premises. It said in effect that the car park was being used by Arapower Pty Ltd for patrons of the video shop, that Arapower was not entitled to "take part of the leased premises back from our client without its consent", and that a rent adjustment was required. By Exhibit 1W a reply was sent by solicitors to the effect that both sets of clients had a right to use the car park. By Exhibit 1X a further letter was written on behalf of Lanestar Pty Ltd, referring to the mistake in the plan attached to the lease, which I have discussed above. Again, it demanded a rental adjustment "to coincide with the correct area occupied by our client".

To return to the judge’s findings, what is said at p. 575 and quoted above does not constitute a finding that the appellants appreciated that they had no right to induce customers of the video shop to use the car park. I confess it is not very clear to me why the sending of the two exhibits, 1V and 1X was thought to make a substantial difference. It must have been obvious to anyone who looked at the plan annexed to the lease that it was wrong, because there was no doubt that the intention was not to lease the whole of the land, but some lesser area; the questions were first, what the lesser area was and secondly, the legal question of the power of rectification of the lease after Arapower Pty Ltd became registered as proprietor: cf. Majestic Homes Pty Ltd v. Wise [1978] Qd.R. 225. The error made was one to which Arapower Pty Ltd was not a party and it is not clear to me why it should have been obliged to accept the assertions made on behalf of Lanestar Pty Ltd as to the proper area covered by the lease. That was a question determined, on evidence, in these proceedings. It is in this connection relevant to note that, as Mr Griffin pointed out, Mr Schofield who apparently controlled the respondent wrote to the appellant Mr Deasy on 9 September 1991 saying that "You have pointed out to me before that we Lease the Premises not the Carpark . . . ", and Mr Schofield did not, in that letter, dispute that proposition (410).

But these details are not, perhaps, of any real consequence, for the critical point is that what was done by the appellants was thought to be lawfully done. It was not lawfully done; the mistake was not a mistake of law, but of fact, in the sense that the proper area subject to the lease depended upon the content of discussions which took place between the previous owner of the freehold and Lanestar Pty Ltd, concerning the car park.

To return to the analogous cases discussed above, suppose that a defendant who obstructed access to a plaintiff’s shop by some means honestly believed the plaintiff had licensed what was done. It would be a question whether prior to the plaintiff making clear that there was no licence, the actions causing obstruction constituted a nuisance.

It is elementary in the law of nuisance that the reasonableness of the defendant’s actions is relevant to the question whether they are lawful; but where that is said, it is ordinarily a reference to balancing, for example, the plaintiff’s interest in peace and quiet against the defendant’s interest in getting a building erected without too much cost or delay. It is not reasonableness in this sense which is in issue here.

It appears once to have been accepted that where the nuisance relied on is a positive act rather than a mere omission, liability is strict and negligence need not be established: Rapier v. London Tramways Co. (1893) 2 Ch. 599, Midwood & Co. Ltd v. Manchester Corporation [1905] 2 K.B. 597, Moss v. Christchurch Rural District Council [1925] 2 K.B. 750. In Cambridge Water Co. v. Eastern Counties Plc [1994] 2 A.C. 264, it was said in the House of Lords that:

" . . . liability for nuisance has generally been regarded as strict, at least in the case of a defendant who has been responsible for the creation of a nuisance . . . " (299)

At that place Lord Goff goes on to discuss the principle of reasonable user, of "give and take as between neighbouring occupiers of land", which is not in issue here. In the Cambridge Water case a solvent seeping from the defendant’s factory polluted the plaintiffs’ bore hole; action was brought on various grounds, but as to the case in nuisance it was held that foreseeability of harm had to be shown, as a prerequisite of recovery. There an action was also brought under the rule in Rylands v. Fletcher and it also failed, on the same basis. Importantly for present purposes, it was said that:

" . . . Professor Newark has convincingly shown that the rule in Rylands v. Fletcher was essentially concerned with an extension of the law of nuisance to cases of isolated escape. Accordingly since . . . the recovery of damages in private nuisance depends on foreseeability by the defendant of the relevant type of damage, it would appear logical to extend the same requirement to liability under the rule in Rylands v. Fletcher". (304)

That is, in the Cambridge Water case it was held that the cause of action in nuisance, like that under Rylands v. Fletcher, was defeated by the requirement of foreseeability of damage. A few months later the High Court decided Burnie Port Authority v. General Jones Pty Limited (1994) 179 C.L.R. 520. Although the High Court referred to the Cambridge Water case, it took a different view of liability under Rylands v. Fletcher, holding that the rule in that case should be seen "as absorbed by the principles of ordinary negligence" (556). The consequence is that:

" . . . a person who takes advantage of his or her control of premises to introduce a dangerous substance, to carry on a dangerous activity, or to allow another to do one of those things, owes a duty of reasonable care to avoid a reasonably foreseeable risk of injury or damage to the person or property of another."

In the Burnie case that was applied to sparks from a welding process which caused a fire to begin, spreading to a neighbouring property occupied by the plaintiff.

What is not quite clear, in my view, is the effect of the Burnie case on liability in nuisance. The close connection (illustrated by the Cambridge Water case) between some varieties of nuisance and the rule in Rylands v. Fletcher is evident and it would at first sight seem odd that the plaintiff in a pollution by seepage case, such as the Cambridge Water case, should have a choice of suing in negligence, accepting the burden of showing lack of reasonable care, or suing in nuisance, and avoiding that burden. Further, an anomaly could be seen to arise if it were held that in nuisance cases of the Rylands v. Fletcher type, the plaintiff must prove negligence, but that this need not be done in other kinds of nuisance cases, in which it is alleged that the defendant caused the nuisance by positive misfeasance rather than a mere omission. In Burnie, the majority pointed out that Fullagar J. had regarded Donoghue v. Stephenson as having "in a sense reoriented the whole law of negligence, and left perhaps few cases which went to the root of that subject and which were not liable to be re-examined and tested in the light of it" (547). The majority went on to say that in a series of cases "the old special rules concerning the duties of occupiers to invitees, licensees and trespassers were ‘part of’ and ‘ultimately subservient’ to the ordinary principles of the law of negligence . . . " (547, 548).

Then it was said that that conclusion had been fully reinstated in Australia:

" . . . by Australian Safeway Stores Pty Ltd v. Zaluzna (1987) 162 C.L.R. 479 where it was held that the old inflexible rules defining the duty of an occupier of land to an invitee, a licensee and a trespasser have been absorbed by the principles of ordinary negligence. Inevitably, the question arises whether the special rule in Rylands v. Fletcher has similarly been so absorbed."

To return to the present facts, the judge found the appellants liable, not on the basis of a mere omission, but because they invited their customers to park on the land in question. They did so intentionally, but mistakenly, and it is clear that in general mistake is not a defence in an action of tort based on an intentional act: Trindade and Cane "The Law of Torts in Australia" 2nd ed., pp. 249, 250.

It is possible to postulate sets of facts in which a deliberate but mistaken act, done without negligence, causes the spread of some dangerous or otherwise offensive substance from the defendant’s land on to the plaintiff’s land, causing the plaintiff damage or annoyance. It seems that in cases of that kind the plaintiff would not recover damages, assuming the mistake was promptly rectified when discovered. But it does not appear to me necessarily to follow from the Burnie case that all allegations of nuisance caused by a positive act and not an omission are governed by that rule. At least where the nuisance is akin to a trespass, as here, I prefer to hold that the plaintiff need not prove negligence, in order to succeed. Applying that rule here, then the plea of reasonableness, which amounts to a plea that the mistake the appellants made was not found to be unreasonable, cannot prevail.

Unlawful interference with trade or business

The primary judge gave damages, the basis of assessment of which is discussed below, in favour of the respondent for unlawful interference with the respondent’s trade or business. This was attacked on appeal, but it appears to me unnecessary to discuss the requirements of this novel cause of action.

Damages

The respondent bore the onus of showing to what extent it was damaged by the presence on the car park of vehicles which parked there at the invitation of the appellants. It would have been possible, without a great deal of effort, to obtain some solid information as to the extent to which customers of the video shop occupying the car park prevented persons who wished to shop for spare parts. At the least, one could perhaps have obtained some reliable impression of the extent to which parking for the video shop was a problem by estimating, by a sampling process, how often and for what length of time the car park was full.

No steps in this direction were taken; evidence was given on behalf of the respondent of a broad and general kind, designed to persuade the primary judge that video shop customers substantially prevented parking by persons who would otherwise have been customers of the spare parts shop. Mr Schofield said that after the video store opened "Car parking spots were pretty hard to find". He spoke, perhaps hyperbolically, of people "trying to fight for car parking spaces, not being able to park". Mr Beckton, who had been a director of the respondent at relevant times, said that there were "probably one or two" car spaces available to spare parts customers, on the average.

I think the appellants were entitled to have estimates of this sort, not based on anything pretending to be a systematic study of the problem, regarded with some scepticism. For much of each weekday, business at a video store could be expected to be fairly quiet and Mr Deasy gave evidence to that effect; the video store was open about 12 hours a day. But in truth the judge’s assessment of damages did not depend upon calculations from a found or assumed rate of occupancy of the car park. His Honour based his award principally on the report of an accountant, Mr Allen, which was in turn partly based on the table of gross takings which is set out below. In that report an estimate was made of the turnover which might have been expected from September 1991 to 30 June 1992 and that was compared with the actual turnover. As the judge pointed out, this was not the right period. Occupancy of the video shop began, according to Mr Schofield, in September 1990, not 1991, and the respondent left the premises in May 1992. Allen calculated a loss of profit of $45,570 in the period I have mentioned - i.e. from September 1991 to 30 June 1992, on the assumption that sales increased from the previous year at the rate of inflation only.

It is not quite clear to me how these calculations were done and I have not been able to reproduce the precise figures obtained. A comparison must I think have been made between the months from September 1991 to June 1992 inclusive and the corresponding months in the previous financial year - i.e. from September 1990 to June 1991 inclusive; this would have made allowance for the tendency for the takings to be seasonal.

The appellants’ main point, as to damages, is that this comparison is meaningless, because the earlier period as well as the later one were both periods when, according to the respondent’s case, the difficulty with the car park was being experienced; a reservation one must make is that the last month of the second period, June 1992, was one during which the spare parts shop was operating at other premises.

The appellants’ criticism is in my view substantially correct; and there are other difficulties in the reasoning which led to the award of damages being challenged. But the learned primary judge recognised that the damages were hard to assess; he had little to go on except the generalisation, emanating principally from Mr Schofield, that the spare parts business went down from about the time the video shop started to operate, together with monthly figures of takings in the spare parts shop, which I have set out below. His Honour did not pretend to think that this was satisfactory, but said that he had to do the best he could.

Despite the criticism of reasoning on the lines of post hoc, ergo propter hoc in St.George Club Ltd v. Hines (1961) 35 A.L.J.R. 106 at 107, it seems to me inescapable that the Court must, in appropriate circumstances, rely at least in part on considerations of that kind.

It is not the law that however meagre the evidence, a court which finds for a plaintiff on the issue of liability must assess substantial damages. Were that so there might be an incentive for a plaintiff not to bother to adduce solid evidence of loss, in the hope that the court’s guess as to the amount of loss might be a more satisfactory outcome than would otherwise be arrived at. Further, it may seem unjust to a defendant, particularly one not guilty of fraud or other heinous conduct, to oblige him or her to pay a sum which is in essence merely plucked out of the air - particularly so where, had the plaintiff taken any trouble about the matter, much more reliable evidence showing the amount of loss might have been produced. Such considerations as those were discussed, and the recent authorities reviewed, in Syntex Australia Ltd v. Ray Teese Pty Ltd (Court of Appeal, unreported, 6 August 1996). The opinion was there expressed that what was said in Ratcliffe v. Evans [1892] 2 Q.B. 524 at 532 remains correct, that in proof of damages "as much certainty and particularity must be insisted on . . . as is reasonable . . . ".

The reasons for periods of prosperity or downturn in the life of a business may be difficult to discern and there will sometimes be a tendency for the proprietor, in the latter case, to look for some external cause, one other than the mode of management of the business. Here the primary judge was not prepared to find that a particular suggestion put forward on the appellants’ side, as to the true cause of the decline of which the respondent complained, was correct. But there was no onus on the appellants to show that the decline was caused by some circumstance other than the nuisance which I have discussed.

The judge’s mode of reasoning was in substance that he accepted evidence adduced by the respondent that when or soon after the video store started up, the spare parts business diminished and that it continued to do so, with some fluctuation, until the business was moved to another site. Of course, acceptance of that general proposition could not produce any sensible figure for the amount of the loss. The judge relied upon the table which I will now set out, both as supporting Mr Schofield’s evidence that there was a slump beginning with the inception of the video shop, and providing a basis for assessment of the amount lost; the judge fixed a figure of $32,000 to which interest was added.

Table of Monthly Gross Takings

89/90 90/91 91/92 92/93

July	134,891.33	146,472.35	107,086.56
Aug	127,219.00	96,117.68	107,086.61

Sept	101,838.72	105,598.55 *	91,373.71	105,143.51
Oct	86,263.39	108,673.69	75,865.77	119,067.91
Nov	95,271.51	93,907.05	86,855.20	123,249.58
Dec	86,290.01	86,495.96	69,195.19	111,295.74
Jan	72,105.32	82,122.60	72,079.44	107,888.06
Feb	90,785.05	89,403.84	79,763.67	122,541.67

March 107,428.14 96,333.81 75,108.46 139,368.11

April	87,282.30	91,676.81	83,571.33	91,494.47
May	97,398.88	111,395.16	85,126.71 **	111,595.30
June	122,374.38	115,549.89	115,949.56	138,211.57

* Video store opens
** Spare parts shop leaves

The clustering of higher takings in winter while the spare parts store was at the relevant site (i.e. until May 1992) is evident.

It may seem a small point, but it is characteristic of the vagueness of the respondent’s case, as to damages, that there was uncertainty as to the date when the video store opened. Mr Schofield thought it was in September 1990, but did not reject the suggestion, made in cross- examination, that it was November 1990 - whether early or late in November did not appear. The judge was it appears inclined to accept that any calculation of damages should begin with November 1990. Whether the proper commencement date was some time in September 1990 or some time in November 1990, it seems likely that a convenient way of assessing the extent of the decline, said to be coincident with the opening of the video store, is to compare months after the opening with the corresponding months before the opening.

Mr Allen’s method of calculation was based on an assumption that gross profits, said by him to be about 24.96% of gross takings, would indicate the loss of profit, (Mr Allen did not take the impact of income tax into account and that was in my view correct). So the lost profit was equated to about a quarter of lost gross takings; it depended entirely on the assumption that a downturn in takings was due, in whole, to parking difficulties.

It appears from the table as I have said that there is a pronounced seasonal element in the takings. In mid-year they are generally higher than at year’s end. In the six month periods from October to March 1990, 1991 and 1992 - 18 months of trading at the site in question - the takings only twice exceeded $100,000; but they did so in eight of the other 15 months at the site. The judge, erroneously in my view, overlooked this factor.

It should be noted from the table that the takings in each of September and October 1990 were higher than in the corresponding month of the previous year - higher than in September and October 1989. Coming, then, to what seems to be the appropriate starting month, it will be noted that of the six months next following November 1990, four produced higher takings than the corresponding month of the previous year, the best result being in January 1991 when the takings were up by about 14%; then in the next two months, June and July 1991, the takings were on average higher than in June and July of the preceding year. As was pointed out at the hearing before us, the best month of all was July 1991, eight months after what one may assume was taken to be the beginning of the decline. Taking the eight months from December 1990 to July 1991 as a whole, there was an increase in the gross income of over $20,000, compared with the same months of the previous year, not a decrease.

So that the allegation that a decline in the business began with the opening of the video shop is simply not in accordance with the facts. The large drop in takings discernable from the table occurred in August 1991, when the takings dropped by about $50,000 compared with July 1991, or (a better comparison) were about $30,000 less than in August 1990. Thereafter, in each month until the respondent moved out, the takings were below - usually considerably below - the figure achieved in the corresponding month of the previous year. What it was that caused this sharp decline in business, occurring nine months (or perhaps eleven months) after the video store opened, does not appear from the evidence; Mr Schofield made no reference to the point.

To return to what I have described as the appellant’s main argument as to damages, it seems to me that the Allen calculations were, as the appellants say, off the point. Allen compared two periods to show the effect of the opening of the video store on the spare parts business, but the comparison was irrelevant to the respondent’s case, for each period was in large part a period during which the two businesses operated side by side. The judge expressed curiosity about the fact that the Allen report only attempted to quantify losses during the period September 1991 to June 1992. The reason for selection of September 1991 as the commencing month was surely that it was about the beginning of the big drop in earnings to which I have referred.

The judge dealt with Allen’s estimate of $45,570 loss as follows:

"In my view assessment of damages in this case is extremely difficult, and cannot be precise. I must do the best I can. The reasoning and calculations in Exhibit 9 suggest a figure of about $45,000 for the period September, 1991 to June, 1992. But I find that I have misgivings about accepting that figure. There are so many imponderables that can affect a business such as that conducted by Monrest that it seems to me that I should be most conservative in my assessment, and should discount that figure further to, as it were, allow for the uncertainties which surround the exercise."

In my respectful opinion this cannot stand. What Allen demonstrated was merely that a long time after the video store opened up there was a bad slump in the takings, there being no previous indication of any such slump. So far from discounting, as his Honour did, the prima facie figure of $45,000, his Honour should simply have ignored it.

The conclusion just mentioned is reinforced when one has regard to another estimate the learned primary judge made, for the purposes of assessment of damages for unlawful interference. His Honour assessed those damages for the period after November 1991 until the end of May 1992 at $11,800, or a little under $2,000 a month. This may usefully be compared with the Allen figure of $45,000 over nine months, producing an average of $5,000 a month, and with the judge’s discounted figure of $32,000 over nine months, about $3,500 a month. In short, the judge’s assessment of the loss for the six months is at a rate which is irreconcilable with his Honour’s assessment of the loss for the nine months; one is assessed at a rate approaching double the rate of the other. This is in my respectful opinion merely a reflection of the fact that each is, in substance, a mere guess.

It is desirable to reiterate that it was the respondent’s case that there was a decline in the business beginning about the time the video store opened. Had the figures presented been even roughly in accordance with that version of events, there might have been some justification for proceeding on the assumption that the decline was substantially due to the parking difficulty beginning in November 1990. But the pattern of takings shown in the table is inconsistent with the respondent’s case and suggests that some cause, unrelated to the appellant’s activities, began to operate some considerable time after the video store opened and sharply depressed the volume of spare parts business during about the last half of the period when the two shops operated side by side.

There are of course other possibilities; perhaps, during the first half of the period I have
referred to, the depressing effect of the parking difficulty was more than counter-balanced by
some other beneficial factor, unidentified by the evidence, which ceased to operate in August

1991.  But this is mere speculation.

One other comment, which I make at some risk of being repetitive, is on the judge’s remark that from November 1990 " . . . there appears to be a discernible slump in the gross takings . . . ". It is true that takings fell from November 1990 to January 1991; but they fell by a considerably greater amount over the same period of the previous year, before the video store opened. Again, the judge has not taken into account what seems clearly to be a seasonal pattern in the takings, at the site in question.

It is my opinion that the evidence disclosed no reasonable foundation for the view on which the primary judge acted, which involved acceptance of the respondent’s case that about the time the video store opened the business began to decline and that it continued to do so until it was moved elsewhere. The assessment made below cannot stand, nor does any reasonable alternative basis of assessment appear to be open.

In my opinion the appeal should be allowed with costs on the ground that there was no satisfactory evidence to show the loss claimed to have been sustained. The judgment for the respondent (second plaintiff below) should be set aside and in lieu it should be ordered that the respondent’s claim against the appellants be dismissed.

I note that the judgment below, which deals with some claims other than that the subject of this appeal, includes no order for costs. The parties should have leave to file, within seven days, written submissions as to the proper order for the costs of the proceedings in the District Court.

IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 1659 of 1996

Brisbane

Before Fitzgerald P
Pincus JA
Moynihan J

[Deasy Investments P/L & anor v. Monrest P/L]

BETWEEN:

LANESTAR PTY LTD

(First Plaintiff)

AND:

MONREST PTY LTD

(Second Plaintiff) Respondent

AND:

ARAPOWER PTY LIMITED

(First Defendant)

AND:

DEASY INVESTMENTS PTY LTD

(Second Defendant) First Appellant

AND:

BRIAN JOHN DEASY

(Third Defendant) Second Appellant

REASONS FOR JUDGMENT - MOYNIHAN J.

Judgment delivered 22 November 1996

The reasons for judgment of Pincus JA canvass the considerations relevant to the determination
of this appeal. Given the basis on which the case was conducted below and the factual findings made

by the trial judge, it was not sought to impeach them. The appeal falls to be determined on the basis

that Lanestar Pty Ltd had the right to exclusive possession of the carpark. The appeal also falls to be

determined on the basis that the appellant's mistakingly but unlawfully invited video store customers to

park in that carpark.

The case is not one in which damages necessarily fell to be assessed on the basis that detailed

proof of the consequences of the appellant's wrongful act on the profitability of the respondent's

business was difficult or impossible. As Pincus JA demonstrates however, the evidence below fails to

support a conclusion that but for the appellant's wrongful conduct, there would have been a growth in

the turnover of the respondent's business or otherwise provide a basis for the assessment of damages.

I agree with the orders proposed by Pincus JA.