Milner, B.J. v Delita Pty Ltd

[1985] FCA 521

GENEFAL DIVISION

IN THE MATTER of the

TRADE PRACTICES ACT, 1974

BETbEEN : BRYAN JOHN MILNER AND 02s.

. Applicants

AND :

DELITA PTY. LIMITED

ROGER McMILLAN GLASSON and

MORRIS bIALTER LEWIN

Respondents and

First Cross-Claimants

-m : ROBERT CW-RLES GOOCH MORRISON and JOHN CHRISTOPHER BENNETT

First Cross-Respondents

and

Second Cross-Clalnmnts

AND	:	ROGER McMILLAV GLASSON	and.
MORRIS WALTEX LEbiIN

Second Cross-Respondents

No. G85 of 1983

BETbEEN : ALLAN JAMES GILL & ORS.

Applicancs

.WJD :	.	EELITA PTY. LIP=
ROGER HcXILLAY C-LASSgN
MORRIS NALTER LEWIN

Respondents and

Flrst Cross-Clalman-s

. _._ .

L .

. . .

AND :	ROBERT CHARLES GOOCH MORRISON and
JOHN CHFISTOPHER BEMNETT

First Cross-Respondents -

and

Second Cross-Clalmants

AND :

ROGER McMILLAN GLASSON and

MORRIS IdALTEX LEWIN

Second Cross-Respondents

16 October 1985

REASONS FOR JUCGMENT

LOCKHART J.

On 19 September 1985 I published my reasons for judgment in

this matter but deferred making any flnal orders so that the parties

could consider the lmpllcations of my reasons, make any further

submissions and bring in short minutes of order.

On Friday last, 11 October 1985, counsel for all partles told

me that they had agreed on all matters to give effect to my reasons for judgment save one, namely, the question of damages in the nature

of interest. I said in my reasons for judgment of 19 September 1985

that the language of ss . 82 and 87 of the Trade Practices Act 1974 is

apt to authorise an award of damages by way of interest, not to recoup

loss due entirely to _ - delay in the payment of money ultlmately held to - .

be due, but to recoup loss suffered as a direct consequence of the

conduct whlch contravened S. 52 mcluding the cost of borrowing the

money lost or the cost of terminating an earller investrent. I said

that the entitlement of a successful applicant to recover damages

3 .

under this head must depend on the circumstances of the case.

I heard submissions last Friday on the questlon of damages in

the nature of interest. It was common ground between the parties that

there was either no evldence or insufficient evidence upon which

reliance could be safely placed to determlne the entitlement of any

particular applicant to damages of this kind if this matter were to be

determined with reference to the indlvldual positlon of each

applicant. Counsel for the applicants submitted that the Court should

approach this question, ngt with reference to the particular position

of each applicant (of whom there are many), but on the basis of the

appllcants as a whole. It was said that each applicant had

contributed funds, whether to the property trusts or the partnerships

(no distinction was drawn by any of the parties between them for this

purpose), as a business venture and that they did so directly o r

indirectly on the recommendation of Messrs. Robert Morrison &

Associates who were professlonal investment advisers. Whether the

applicants used funds from sources that had previously been used for

investment purposes or not and whether those funds would have been

used for profit maklng purposes, If not used for investment In the

guava pro~ects, were said to be immaterial consideratlons.

Counsel for the applicants submitted that the approprlate

measure for computyng ikterest was either the yearly rates of interest

at relevant times (1980-1985) regarded as appropriate to guide the

Supreme Court of New South Wales as published in that Court's Practice

Note No. 30 of 12 December 1984, or the rates of interest available on

4 .

term deposits with the Commonwealth Bank during 1980-1985 or the rates

of interest customarily charged by the Commonwealth Bank during the

same period on overdrafts of less than $100,000. Counsel further

submltted that, if the Court determined that matters should be taken

into account to reduce the amount of damages that otherwlse would be

awarded under this head (for example income tax on the gross amount of

interest received or receivable and possible failure In whole or in

part of or poorer return from other ventures in which the applicants may have invested their funds) this should be done by discounting the

award of damages. It was submltted that the fair approach would be to

award each applicant interest on the amount for which judgment would

be entered (exclusive of interest) at the rate of 13.5% over a four

year period (from the end of December 1980 to the end of December

1984). It was agreed by all parties that 13.5% was a fair rate of interest during that period and that the period of four years itself was fair in the circumstances of the case.

If I were to award interest along the lines suggested by

counsel for the applicants I would do so on the basis suggested of

13.5% over four years from 1 January 1981 to 31 December 1984. I

would discount the figure that emerged by a percentage to reflect the

possibility that the returns would be less than 13.5% due to matters

such as failure of investments or the making of poorer investments

that otherwise might gave oc6urred. In the result, I would allow a

discount from the rate of 13.5% of 3% thus giving an effective rate of

10.5% over the four year period. I reallse, of course, that the

selection by the applicants and the acceptance by the respondents of

5.

the rate of 13.5% and of the four year period to which that rate

applies itself embodies an element of discount because the rate of-

13.5% was the lowest of the rates referred to in the Practice Note of

the Supreme Court of New South Wales over the same period and the

monies were invested by the applicants generally by instalments over a

period of more than four years. I emphasise that this is the approach

that I would take if I were to accede to the submissions of counsel

for the applicants.

Counsel for the respondents objected to any damages in the

nature of interest being awarded on the ground that there was no

evidence of any applicant having sustained loss under this head.

In my opinion the submission of counsel for the respondents

is correct. Although there are many applicants, it is not permissible

to determine damages in the nature of interest otherwise than by

reference to the evidence adduced in favour of each applicant who claims damages under this head. It is well established, of course,

that the fact that it is not possible for the Court precisely to

calculate the extent of loss or damage suffered is no bar to the right

of a successful party to recover that loss or damage: Chaplin v. Hicks

(1911) 2 K.B. 786; Bissin & Co. Limited v. Permanite Limited (1951) 1

K.B. 422; Callashan v. William C. Lynch Pty. Limited (1962) N.S.W.R.

871 and Enzed	Hoi'dins's Limited v. Wvnthea Pty. Limited	(1984) 57
A.L.R. 167.

6.

There are, however, too many variables and possibilities to

justify the global approach upon which the applicants rely in support

of their contention that damages in the nature of interest should be

assessed in this case. Although damages of this kind must be viewed

ultimately from the point of view of each applicant, I encourage the

parties to co-operate for the purpose of taking some course, for

example, a sampling process to determine the facts relating to this

branch of the case.

I am prepared to allow the applicants to reopen their case to

lead evidence on this question and to give them a reasonable time to

adduce it. But the evidence should be by affidavit unless the parties

agree on some more informal approach.