MacLean v Rottnest Island Authority

[2001] WASCA 323

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT :   THE FULL COURT (WA)

CITATION:   MACLEAN -v- ROTTNEST ISLAND AUTHORITY [2001] WASCA 323

CORAM:   WALLWORK J

McKECHNIE J
EINFELD AJ

HEARD:   5 SEPTEMBER 2001

DELIVERED          :   24 OCTOBER 2001

FILE NO/S:   FUL 98 of 2000

BETWEEN:   IAN JAMES MACLEAN

Appellant (Plaintiff)

AND

ROTTNEST ISLAND AUTHORITY
Respondent (Defendant)

Catchwords:

Misleading and deceptive conduct - Issues of fact - Damages - Whether assessment in error - Costs - Relevance of Calderbank letter

Legislation:

Rottnest Island Authority Act 1987 (WA)

Rottnest Island Mooring Regulations 1987 (WA)

Result:

Appeal and cross-appeal dismissed

Category:    B

Representation:

Counsel:

Appellant (Plaintiff)        :     Mr M J Buss QC & Mr L A Tsaknis

Respondent (Defendant) :     Mr K J Martin QC

Solicitors:

Appellant (Plaintiff)        :     Peter J Whyte

Respondent (Defendant) :     Phillips Fox

Case(s) referred to in judgment(s):

Dobb v Hacket (1993) 10 WAR 532

Hendrie v Rusli [2000] WASCA 11

Case(s) also cited:

Australian Coal & Shale Employees' Federation v Commonwealth (1953) 94 CLR 621

Bonham­Carter v Hyde Park Hotel (1948) 64 TLR 178

Commonwealth v Amann Aviation (1991) 174 CLR 64

Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1

Gronow v Gronow (1979) 144 CLR 513

House v The King (1936) 55 CLR 499

Permanent Building Society v Wheeler (No 2) 10 WAR 569

Zoneff v Elcom Credit Union (1990) ATPR 41­009

JUDGMENT OF THE COURT: 

Introduction

1. From 1984, Mr Maclean held a mooring licence at Narrow Neck, Rottnest Island.

2. In 1991 he had the opportunity of purchasing a pontoon, upon which he could construct a houseboat.  The pontoon was to be auctioned on 16 October 1991.

3. Just before the auction, Mr Maclean enquired of the Rottnest Island Authority, and in particular the Chief Executive Officer, Dr Back, their reaction to his proposal to permanently moor a houseboat at Rottnest.  He was told by Dr Back there were no objections to the proposal.  He therefore purchased the pontoon and fitted it out at a total cost of $113,658.

4. In 1993, as a result of a letter from Dr Back, the appellant expended further sums on the upgrading of the houseboat, known by this time as "Le Shed", to a total sum of $9390.

5. In July 1997, the Rottnest Island Mooring Regulations, made pursuant to the Rottnest Island Authority Act 1987 (WA), were altered in a way which effectively meant that Le Shed could not comply with the regulations and therefore has been unable to be moored at Rottnest ever since.

6. In due course, Mr Maclean sued the Rottnest Island Authority for damages for negligent misrepresentation, breach of the Fair Trading Act 1987 s 9 and 2 10, and for estoppel.

7. The first negligent misrepresentation was said to have occurred on 16 October 1991 in the course of the telephone conversation already referred to, the contents of which were subsequently confirmed by letter. The second negligent misrepresentation was said to have occurred on 21 October 1993 in the further letter from Dr Back.

8. After trial, Scott J held that Mr Maclean failed in respect of the first representation but succeeded in respect of the second misrepresentation and awarded Mr Maclean $6000 in damages.  After an argument about costs, Scott J directed that the Rottnest Island Authority should pay Mr Maclean's costs, to be taxed on the routine Local Court scale, equivalent to a judgment of $6000.

9. Mr Maclean appeals against the judgment dismissing his claim in respect of the first misrepresentation and against a failure to allow certain aspects of damages.  The Rottnest Island Authority appeals against the award of damages and the order for costs.

The first representation

1. The appellant's argument before the Full Court was similar to that mounted at trial.  The appellant argued that in his oral conversation of 16 October 1991, confirmed by his letter of 21 October 1991, the CEO of the Rottnest Island Authority gave advice which was false or misleading because he failed to qualify his advice by informing the appellant that the Rottnest Island Mooring Regulations could be amended at any time to prevent the appellant from continuing to moor his proposed houseboat on the island so that the mooring could not be said to be a permanent mooring. 

2. In [2000] WASC 106, delivered on 4 May 2000, the trial Judge held at 49:

   "… At that time, there is no dispute that there were no proposals either under consideration or contemplated that would exclude an unpowered houseboat from a permanent mooring at Rottnest.  It is not to the point to contend, as counsel for the plaintiff does, that the plaintiff should have been advised that at some time in the future there might be the prospect that either the Act or regulations would be amended in such a way as to exclude the plaintiff's vessel from mooring at the Island.  The plaintiff's contention on this cause of action fails, in my view, simply because there was no misrepresentation.  Dr Back was entitled to assume, as indeed was the plaintiff that, under the law as it then stood, there was no reason why the plaintiff could not permanently moor an unpowered houseboat on his mooring in Narrow Neck.  In my opinion, Dr Back had no obligation in law to point out to the plaintiff that at some time in the future, by way of amendment either to the Rottnest Island Act or the Rottnest Island Regulations there was the possibility that his vessel could be excluded from moorings on the Island."

3. In our opinion, such a finding was open on the whole of the evidence and it ought not to be disturbed.

4. There was no evidence upon which it could be inferred that a duty to warn of the possibility of amendments had arisen.  As at 16 October 1991, no issue had arisen in the Rottnest community about mooring houseboats.

The claim for damages

1. The appellant claims that the trial Judge erred in holding that the cost of berthing the houseboat for the purposes of sale constituted loss or damage occasioned by the respondent and that he should have been awarded damages for inconvenience, disruption and wasted time.

2. In respect of this claim the trial Judge said at par 67:

   "… In my opinion, however, the plaintiff is entitled to no further damages with respect to the negligent misrepresentation as further damages which the plaintiff claims are a result of the vessel being moored at various locations and the cost of berthing.  That expenditure is a direct result of the amendment to the regulations, which caused the plaintiff to leave the vessel at Fremantle.  It is a consequence of the fact that the vessel has proved difficult to sell."

   With respect, the learned trial Judge's conclusions are plainly right.

3. As to the claim for distress, inconvenience, disruption and waste of time, the trial Judge said at par 69:

   "Whilst the plaintiff in one paragraph of his proof of evidence does indicate that he sustained such damage, I am not persuaded that this is an appropriate case for any award to be made even if such damage is allowable: see Carroll v Azolia Pty Ltd [2000] WASC 95 per Master Bredmeyer. In my opinion, any distress, inconvenience, disruption or waste of time occasioned to the plaintiff was not caused by the actions of the defendant but were a consequence of the amendments to the regulations discussed earlier in these reasons."

4. The only relevant paragraph in the witness statement of the appellant is at par 31 which reads as follows:

   "The period since August 1997 when I have not been able to moor my houseboat on Rottnest Island has been enormously stressful on me."

5. Again, the stress is limited in the statement to a period from the introduction of the regulations which made it impossible for the appellant to moor the houseboat at Rottnest.  Such damage is not causally related to any misrepresentation.

Conclusion

1. In our opinion the appeal should be dismissed.

The cross-appeal

1. The trial Judge found that the second misrepresentation in 1993 did cause damage to the appellant.

2. The appellant's case was that, as a result of that letter, he had upgraded Le Shed by the sum of $9390 by adding certain accessories which are listed at par 17 of the trial Judge's reasons.

3. The trial Judge seems to have accepted the sum of $9390 but noted that some of the items could be described as routine maintenance or replacement items for wear and tear.  Furthermore, the appellant had the use of the items until Le Shed left Rottnest during 1997 and some of the items would still be available on the houseboat and would be part of the total value of the fittings which, if sold, might realise, on the evidence, some $20,000.

4. The trial Judge then held at par 66 and par 67:

   "66It is not possible to be precise as the damage sustained by the plaintiff in this regard, but an analysis of the items claimed by the plaintiff and allowing for the use that the plaintiff would have had of those items whilst "Le Shed" was moored at Rottnest, leads me to conclude that a discounted figure should be allowed.  In making that assessment, it should also be borne in mind that some of those items of equipment, as I have already indicated, can be sold so that the plaintiff will not entirely lose their value.

   67Doing the best I can with the figures provided to me, in my opinion it would be fair to allow the plaintiff the sum $6,000 with respect to this claim.  In my opinion, however, the plaintiff is entitled to no further damages with respect to the negligent misrepresentation as further damages which the plaintiff claims are a result of the vessel being moored at various locations and the cost of berthing.  That expenditure is a direct result of the amendment to the regulations, which caused the plaintiff to leave the vessel at Fremantle.  It is a consequence of the fact that the vessel has proved difficult to sell."

5. The respondent complains that effectively the appellant has failed to prove its damages.  It would argue that only the wind generator batteries and the upgraded toilet system were non‑recurrent capital expenses, capable of being linked to the damages claim, but that the trial Judge should have discounted for the use of enjoyment between 1993 and 1997 and the fact that they are available for sale.

6. In our opinion the course undertaken by the trial Judge was open to him.

7. The total claim was comparatively small.  The trial Judge necessarily accepted Mr Maclean had suffered some damage.  Where there is imprecision as to the precise amount of the damage, it does not necessarily follow that the appellant must completely fail.  Such a result would not be just.  In this case the trial Judge took into account those matters which in his view reduced the claim and allowed for damages at approximately two‑thirds the claimed sum.  In the circumstances of this case, we do not consider that the trial Judge fell into error either in his approach or in his assessment.

Costs

1. The respondent argues that the award for costs was in error, bearing in mind that the respondent had in fact succeeded on the first and major representation.

2. The question of costs is generally in the discretion of a trial Judge who is in a better position than the Full Court to judge the manner in which the issues were fought and the interrelationship between them.  The fact that, at the conclusion of analysis by a trial Judge, the issues may be able to be categorised does not mean they were easily able to be categorised at the commencement of the action.

3. In this respect the trial Judge held in [2000] WASC 124, 17 May 2000, at par 12:

   "… In this matter it would have been unrealistic to distinguish facts relating to any one cause of action from the others.  It would have made little difference to the time and costs involved with the trial had those unsuccessful pleadings not been pursued.  I do, however, accept the defendant’s submission that there were some additional costs involved as a result of the plaintiff’s unsuccessful pleading on the first representation.  I am also of the opinion that this matter could have been appropriately litigated in the Local Court."

4. It has not been demonstrated that the trial Judge's discretion miscarried in relation to the order for costs.

Calderbank letter

1. On the Tuesday prior to the trial (which commenced on Monday 27 March 2000) the Rottnest Island Authority's solicitors served on Mr Maclean's solicitors a Calderbank letter dated 21 March for the sum of $10,000, together with a $5000 contribution of costs, the offer remaining open until noon on Friday 24 March 2000.  It was not accepted.

2. Counsel for the respondent referred, in particular, to two judgments of Murray J, Dobb v Hacket (1993) 10 WAR 532 and Hendrie v Rusli [2000] WASCA 11 in support of the proposition that the court should impress on litigants the conscious consideration that their behaviour may place them at risk as to costs if they receive reasonable offers of settlement before trial.

3. The provisions of O 24A allow a period of 28 days for consideration of a formal offer of compromise.

4. It may be accepted that a Calderbank letter can be made within that period and that on occasions its existence will have a bearing on the issue of costs.

5. Calderbank letters may be useful in advancing the administration of justice by putting parties pursuing small or doubtful claims on notice and forcing them to review their position.

6. However, the Court should not encourage the use of a Calderbank letter delivered shortly before trial when the other party might reasonably be expected to have their minds on a number of matters.  The use of a Calderbank letter is an aid to the administration of justice and should be encouraged.  Its use as an indiscriminately wielded tactical weapon should be discouraged.

7. Cases will vary as to their circumstances, but in the circumstances of this case we do not consider that the trial Judge fell into error in declining to accord the Calderbank letter much weight.

Conclusion on cross‑appeal

1. The cross‑appeal should also be dismissed.

Conclusion

1. Both the appeal and the cross‑appeal are dismissed.