Meredith & Anor – v – Eggins
[2006] QDC 164
•7 June 2006
DISTRICT COURT OF QUEENSLAND
| CITATION: | Meredith & Anor – v – Eggins [2006] QDC 164 |
| PARTIES: | MEREDITH, Louis John First Plaintiff And MEREDITH, Louis John as Executor of Second Plaintiff Against EGGINS, Stephanie Defendant |
| FILE NO: | 259/04 |
| PROCEEDINGS: | Claim for damages for conversion |
| DELIVERED ON: | 7 June 2006 |
| DELIVERED AT: | Townsville |
| HEARING DATE: | 7 June 2006 |
| JUDGE: | C.F Wall Q.C |
| ORDERS: | Judgment for the first plaintiff against the defendant for $195,342.29 together with costs to be assessed on a standard basis unless agreed. |
| CATCHWORDS: | DAMAGES – TORT – CONVERSION – fishing vessel and its plant and equipment – wh. conversion occurred – consideration of the market value of the goods at the date and place of the conversion – calculation of appropriate interest DAMAGES – LOSS OF CHANCE – claim for consequential loss being loss of profits due to the inability to generate income from the use of the vessel – calculation based comparable earnings by another fisherman – consideration of contingencies resulting in discount of claim by 10% – calculation of appropriate interest Cases referred to: Legislation referred to: |
| COUNSEL: | Mr A Moon for the First Plaintiff and the Second Plaintiff |
| SOLICITORS: | Alex Nelson & Associates Lawyers for the First Plaintiff and the Second Plaintiff |
HIS HONOUR: The first plaintiff's claim against the defendant is for damages for conversion of the fishing vessel Shanendale and its plant and equipment including four dories, together with consequential loss being loss of profits by reason of an inability to generate income from the use of the vessel as a fishing vessel. See paragraphs 11 to 14 of Exhibit 4.
The claim of the second plaintiff is in the alternative to that of the first plaintiff. If the first plaintiff succeeds in his action the second plaintiff has no claim.
The defendant did not appear for the trial and the action proceeded in accordance with rule 476 of the Uniform Civil Procedure Rules.
Brief oral evidence was given by Mr Steven Larkin, a consulting marine engineer and ship surveyor. The balance of the plaintiff's case consisted of evidence given by way of affidavit.
I accept the evidence led by the plaintiffs.
On the 1st of September 2001 Samuel Meredith leased the vessel to the defendant. The lease was not for a fixed term but for a term determinable by will. For lease payments the defendant was to pay to Mr Meredith an amount equal to a certain percentage of the catch of the vessel during the term of the lease. See paragraph 12.3 of the further amended statement of claim.
The defendant took possession of the vessel on the 1st of September 2001. On about the 7th of December 2001 Samuel Meredith, pursuant to a contract between himself and the first plaintiff, sold all of his right title and interest in the vessel together with the dories and other plant and equipment and licences to the first plaintiff for $110. See paragraph 5 of the further amended statement of claim and paragraphs 9 to 12 of Exhibit 5 and Exhibit VK1 to the affidavit Exhibit 5.
The first plaintiff allowed the lease to continue. See paragraphs 4 and 5 of Exhibit 4. "Sam" in those paragraphs is a reference to Samuel Meredith. See also paragraphs 15 to 17 of Exhibit 5.
Samuel Meredith died on the 19th of October 2002. The evidence establishes that on or about the 28th of October 2002 and not early January 2003 as pleaded in paragraph 6 of the further amended statement of claim the first plaintiff attempted to register his interest in the vessel at Maritime Safety, a division of the Queensland Department of Transport.
When he attempted to do this he was told by Queensland Transport that the defendant was registered as a half owner of the vessel and that his application for registration could not be processed and approved without the consent of the defendant. See paragraph 7 of the further amended statement of claim and also paragraph 6 of Exhibit 4.
I am satisfied that the defendant in fact converted the vessel to her own use at Innisfail and that this occurred in November 2002. The evidence establishing these facts comes from Veronica Kaehne, the first plaintiff's mother, of a conversation she had with the defendant in November 2002; see paragraphs 18 and 19 of Exhibit 5; and from a letter from the defendant's then solicitors, Arnell and Cooper of Innisfail dated the 8th of May 2003 to the plaintiff's solicitors. The letter is Exhibit LJM2 to Exhibit 4. I am unable to accept the statement by the defendant, (see paragraph 19 of Exhibit 5), that she owned half the boat because she bought it from the deceased. That is inconsistent with the fact, as I find it to be, that the deceased had earlier sold the vessel to the first plaintiff. In the conversation and in the letter I am satisfied that the defendant asserted ownership of the vessel. I am satisfied that the date that the defendant converted the vessel was no later than the beginning of January 2003.
The defendant was clearly repudiating the first plaintiff's right to the vessel and exercising dominion over it inconsistent with that right. The evidence, in my view, is sufficient to establish that she clearly asserted ownership and control of the vessel in a manner inconsistent with the ownership of the first plaintiff.
As well as being the owner of the vessel the first plaintiff had a right to possession of it notwithstanding the lease. The defendant's assertion of ownership of the vessel was inconsistent with the continuation of the lease and amounted to a repudiation of that arrangement.
The defendant dealt with the vessel in a manner repugnant to the immediate right of possession of the first plaintiff who was the owner of the vessel. See Halsbury's Laws of Australia paragraph 315-585 and Penfolds Wines Pty Ltd v. Elliott (1946) 74 C.L.R. 204 at 229. The defendant's assertion of ownership coupled with her actual possession of the vessel support this conclusion. See Halsbury's Laws of Australia paragraph 315-625 and Australian Provincial Assurance Co Ltd v. Coroneo (1938) 38 SR(NSW) 700.
The claim for loss of profits is expressed in the further amended claim and the further amended statement of claim to relate to the period from December 2002 until about the 22nd of March 2006 when the vessel was destroyed by Cyclone Larry. See paragraph 24(b) of the further amended statement of claim and paragraph 11 of Exhibit 4.
The evidence establishes that it would only have been viable to use the vessel for fishing in the period from about December 2002, in fact commencing in January 2003, until July 2004. This is because of changes to fishing licensing regulations and the costs associated with pursuing that livelihood.
The evidence to establish this claim for loss of profits was by necessity evidence of comparable earnings by another fisherman because, of course, the first plaintiff was not able to use the vessel to fish. The other fisherman is Ian Johnson and he conducted a business similar to that which the first plaintiff would have conducted had he been able to use the vessel. See the affidavit of Mr Johnson Exhibit 6.
As to Mr Johnson's business the evidence establishes the following relevant income: for the financial year 2002-2003 he made a net profit of $51,845; for the financial year 2003-2004 he made a net profit of $40,285. In the second of these years Mr Johnson employed a skipper, in the first of these years he himself was the skipper.
The plaintiff's claim for loss of profits is in the nature of a claim for damages for the loss of a chance to use the vessel to generate income from fishing. Such a claim is allowed in an action for damages for conversion. See Halsbury's Laws of Australia paragraph 135-1130 and Egan v. State Transport Authority (1982) 31 S.A.S.R. 481 at 528-9. The vessel was clearly a "profit-earning chattel".
Taking into account contingencies of the nature referred to by Mr Moon during his opening and presentation of the plaintiff's case the first plaintiff's claim under this heading should, I consider, be discounted by about 10 per cent.
During both of the years referred to Mr Johnson owned his fishing licence, the first plaintiff did not, and to earn the income claimed he would have had to lease a fishing licence from another fisherman or a fishing broker at a cost of about $16,000 per annum for the vessel and four dories. See Exhibit 7. The evidence establishes that such licences were readily available and I am satisfied that more probably than not the first plaintiff would have been able to lease such a licence.
Mr Johnson's net income for the two financial years referred to was an average of about $45,000 per year. From this should be deducted the annual cost of the fishing licence, namely $16,000; the net annual figure is $29,000. Discounted by 10 per cent this produces an annual figure of $26,100 or $13,050 for six months.
The period of the claim amounts to 18 months from January 2003 to July 2004. The evidence supports the claim for this period of $39,150 and that is the amount I allow.
I think that the fact that the cost of a fishing licence for a full year has been deducted for the 2002-2003 year rather than only half the annual licence fee is balanced by the fact that Mr Johnson and not another employee was the skipper of his vessel in that year.
As to damages for conversion, the normal measure of damages in an action of conversion is the market value of the goods converted at the date and place of the conversion. See Halsbury's Laws of Australia paragraph 135-110 and Associated Midland Corp Ltd v. Bank of New South Wales (1983) 1 N.S.W.L.R. 533 at 536 and 550.
The evidence satisfies me that the value of the vessel and its plant and equipment including the four dories as at the date of conversion at Innisfail was about $110,000, made up as follows:
Vessel $50,000
Dories $60,000 being $15,000 eachThe evidence establishing these amounts is contained in the evidence and reports of Steven Larkin Exhibits 2 and 3. Mr Larkin is well qualified to give this evidence as is apparent from his company profile and his resume, Exhibit 1.
The evidence therefore establishes that the value of the vessel and its plant and equipment including the four dories as at the date and place of conversion was $110,000 and that the damages for loss of profits should be assessed at $39,150. This should be found also to be a claim by the first plaintiff rather than the second plaintiff.
The first plaintiff is also entitled to interest. Interest should be calculated on the sum of $110,000 at the rate of 10 per cent from the 1st of January 2003 to the 7th of June 2006, today, and doing that the amount is $37,761.64.
In the case of the amount of $39,150 it is appropriate in my view that interest on that amount recognise the fact that the amount accrued over a period of time and did not start off at that amount. I will allow five per cent for 18 months, namely $847.35, and from the 1st of July 2004 to the 7th of June 2006, today, interest at 10 per cent amounting to $7,583.30, a total of $8,430.65. The total interest amounts to $46,192.29.
The first plaintiff is thus entitled to and has established a right to damages amounting to $149,150 plus interest of $46,192.29, a total of $195,342.29.
I give judgment for the first plaintiff against the defendant for $195,342.29 together with costs to be assessed on the standard basis unless agreed. I give liberty to the defendant to apply in respect of any of the calculations in this judgment on three days' notice to the first plaintiff.
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