National Engineering v Chilco

[1999] NSWSC 1105

CITATION:	National Engineering v Chilco [1999] NSWSC 1105
CURRENT JURISDICTION:	Equity
FILE NUMBER(S):	2259 of 1997
HEARING DATE(S):	12, 13, 14, 15 October 1999
JUDGMENT DATE:	17 November 1999
PARTIES :	National Engineering Pty Ltd (Plaintiff/Cross Defendant) Chilco Enterprises Pty. Ltd. t/as Trojan Contracting (First Defendant/Cross Claimant) Ray Bradbury (Third Defendant) Sean Bradbury (Fourth Defendant)
JUDGMENT OF:	Windeyer J at 1

COUNSEL :	Mr M S Willmott (Plaintiff/Cross Defendant) Mr D J Cochrane with him Mr M.W. Papallo (Defendants/Cross Claimant)
SOLICITORS:	Haille Paine (Plaintiff/Cross Defendant) Larry Noble & Associates (Defendants/Cross Claimant)
CATCHWORDS:	CONTRACTS - existence of a contract - whether there was a contract between plaintiff and defendant - termination of contract - termination for breach of conditions - termination for anticipatory breach - whether at date of purported termination defendant unable to comply with contract - repudiation through wrongful termination - acceptance - cross-claim for damages - onus on cross-claimant to show ability to perform
ACTS CITED:	Trade Practices Act 1974 ss 51AA, 51AB, 51A 52
CASES CITED:	Bridgewater v Leahy (1998) 194 CLR 457 Blomley v Ryan (1956) 99 CLR 362 Commercial Bank of Australia Limited v Armadio (1983) 151 CLR 447 Foran v Wight (1989) 168 CLR 385 Sunbird Plaza Pty Limited v Maloney (1988) 166 CLR 245
DECISION:

15

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

WINDEYER J

17 NOVEMBER 1999

2258/97 NATIONAL ENGINEERING PTY LTD v CHILCO PTY LTD

JUDGMENT

General Outline

1    The questions for decision are:

A. On the summons

1. Whether there was a contract between the plaintiff, National Engineering Pty Ltd (National Engineering) and Chilco Pty Ltd trading as Trojan Contractors (Chilco) for the lease by Chilco to National Engineering of a crane to be used in connection with the construction of the Olympic stadium at Homebush.
2. If there were a contract, whether it was properly terminated by National Engineering for breach, entitling it to recover a deposit of $144,000 paid.

B. On the cross-claim - whether National Engineering's purported termination amounted to a repudiation of the contract accepted by the defendant/cross claimant entitling it to damages for breach.

2    If the plaintiff succeeds it is entitled to recover $144,000 plus interest plus costs. If the defendant succeeds in defending the claim, and succeeds on the cross-claim, the quantum of damages will remain to be determined, either by me or by inquiry before a Master.

Facts

3    National Engineering had a contract with Multiplex Constructions Pty. Ltd, (Multiplex) for certain construction work on the Olympic stadium site at Homebush. Multiplex was the head contractor. The work which National Engineering had contracted to perform required a crane of substantial capacity to be available.

4    Mr Ray Bradbury (Bradbury), who had been a substantial crane operator or owner in the 1980s through various companies, which had suffered misfortunes, was anxious to get back into the business and secure a presence on the Olympic site. He knew that he or any company he controlled would need to have in place an enterprise bargaining agreement (EBA) to gain any work. To that end he commenced negotiations with a Mr Owens in late 1996, Mr Owens being a man who stated he could get union approval for such agreements.

5    In December 1996 Bradbury had discussions with Mr Favelle of Favelle Favco Cranes about the availability of a particular crane for the stadium work, and later had discussions with Multiplex senior employees and Mr Favelle with the intention of showing that the crane National Engineering proposed to hire was unsuitable for the work involved, thereby obtaining for himself, a chance to put in a quote for the work to be done with the crane. He arranged for Chilco to be formed or purchased for this purpose.

6    In the course of sourcing appropriate cranes for the stadium job, Bradbury had some discussions with persons who could provide cranes having a capacity to lift 80 tonnes at a radius of 40 metres over a height of 50 metres, these being, he was told, the requirements for the capacity of any crane. One such supplier discussed a crawler type crane described as a Demag CC4800. This led to Bradbury being contacted by Van Seumeren (Singapore) Pte Limited, (Van Seumeren), a large world-wide crane owner and hirer, as a result of which Van Seumeren provided details and subsequently hiring charges for a crane known as an MDC 3500. This was an 800 tonne crane, being one capable of a vertical lift at minimum radius of 800 tonnes.

7    At about the same time, namely in January 1997, Bradbury obtained details of the Demag 4800 including relevant load charts, which he discussed with Mr Burns (Burns) the general manager of National Engineering and later lent to him for detailed perusal.

8    Discussions between Bradbury and Burns revealed that it would be necessary for a tender to be put in at under $1,500,000 for it to be successful. There were negotiations between Bradbury and Van Seumeren along those lines as a result of which Bradbury obtained offers from Van Seumeren all relating to the MDC 3500 crane type which was an 800 tonne capacity crane but which was truck mounted. The tender offers received from Van Seumeren provided that the contract would be placed with whatever subsidiary it nominated, within its worldwide organisation. On 25 January Bradbury sent to Burns an offer to supply "a 800 tonne heavy lift crane for the Olympic 2000 site at Homebush NSW". Terms as to payment and the like were included. The tender price of $1,600,000 was for a six month hire period based on an average week of sixty hours and included cost of assembly and disassembly. This was rejected by National Engineering as being outside its price range, but suggesting an acceptable price as $1,440,000 and on 27 January 1997 Bradbury put forward a revised tender based on that lower figure.

9    There can be no doubt that at this stage Burns believed that the tender related to a Demag CC4800 crawler crane because that was the last crane discussed between him and Bradbury, and equally there can be no doubt that the crane which Van Seumeren proposed to supply to Chilco was the MDC 3500 crane in accordance with its offer document.

10    At this time Van Seumeren had a Demag 4800 under hire to BHP at Port Hedland in Western Australia and there were discussions about bringing that crane to the Olympic site after it was finished at Port Hedland. It seems from the evidence that there would have been considerable difficulty with this in view of the import licence restrictions and the requirements for sales tax if that crane were not exported by a time earlier than the conclusion of the six months' hire for the Olympic site. The fact that National Engineering thought that the quote from Bradbury on behalf of Chilco was in respect of the Demag CC4800 crawler crane is made perfectly clear by a letter of intent issued by National Engineering to Chilco Contracting on 28 January 1997, which commences as follows:

Ray,
Re: Hire of Demag CC4800
We wish to advise our intent to enter into a contract with Trojan for the hire of the Demag CC4800 Crawler Crane as quoted in your fax dated 27.1.97.

11    The next day, namely 29 January 1997, there was a meeting between Bradbury and Messrs Bakker and Robinson on behalf of Van Seumeren. Mr Robinson was apparently in charge of the crane at Port Hedland. After that meeting the three of them went to the Homebush site to inspect it and to talk to Burns. After that Bakker and Robinson had a discussion with Mr Rolls, who was apparently a site manager for Multiplex. It later turned out that Multiplex was for some unexplained reason very concerned about having Bradbury or any of his employees on the site. Burns said, and I accept, that at the meeting he was told by the Van Seumeren people that they were not guaranteeing that a Demag CC4800 crane would be available, but was told that they had ten cranes around the world which could do the job and one of these would be made available. It was for this reason he said, and I accept, that a revised letter of intent was issued to Chilco, the first paragraph of which was as follows:

Further to our discussions on site of 31/1/97, we wish to reconfirm and advise our intent to enter into a contract with Trojan for the hire of the Demag CC4800 Crawler Crane or equivalent as quoted in your fax dated 27.1.97.

If there were a contract, it is this document which was the first of the contract documents. It is of some significance so I will set it out in full.

3rd February 1997
Trojan Contracting
Attention: Mr Ray Bradbury
Fax No: 02 9252 4634
Ray,
RE: HIRE OF Demag CC4800
Further to our discussions on site on 31/1/97 we wish to re-confirm and advise our intent to enter into a contract with Trojan for the hire of a Demag CC4800 Crawler Crane or equivalent as quoted in your fax dated 27.1.97.
We confirm the agreed costs of $1,440,000.00 for hire of the crane for a period of 6 months commencing 14th July 1997.
We wish to confirm our understanding of issues discussed with you in regard to the crane hire:
1. Van Seumeren as the crane's owner will provide an unconditional guarantee of the crane's availability for the stated hire period. This guarantee is to take the form of a letter to both National Engineering and Multiplex Constructions guaranteeing that the crane will meet all required commitments. When freight arrangements for the delivery of the crane have been finalised, Van Seumeren will provide regular updates of the progress of the delivery to ensure that the delivery date will be met.
2. Van Seumeren as the crane's owner would be prepared allow Multiplex Constructions to take over the crane hire under the crane conditions in the event of National Engineering being unable to complete its contractual responsibilities.
3. The crane would be supplied with 66 m main boom, 90 m luffing fly, 200 tonne superlift counterweight, all lifting blocks and hooks necessary to complete a 320 tonne lift, and basic lifting tackle and chains suitable for general erection work up to 20 tonne lifts.
4. Trojan and/or Van Seumeren will satisfy all requirements of Multiplex Project Manager with regard to personnel on site. Such requirements will include but not be limited to EBA's and other site related issues.

5. Included in the hire cost are the following:

- Insurance of the crane itself
- Public liability insurance
- 60 hours maximum operation per week.
- Crane driver, support labour and technical supervisor. The crane driver is to be employed under certified EBA signed by the CFMEU.
- All freight to and from the site.
- All assembly and disassembly cranage and rigging labour.
- 6 months operating time taken from completion of mobilisation to commencement of demobilisation.
- All maintenance costs for the crane. Any substantial breakdown of the crane would be compensated by an equivalent lengthening of the
hire period.
- All WorkCover approvals for the operation of the crane.
6. With reasonable notice National Engineering would have the right to extend the hire period for the crane.
Upon confirmation of these issues we will proceed to enter into a formal contract.
Please allocate the crane for the period state based on this letter of intent.

We look forward to a successful involvement of your company in this project.

Yours faithfully

Peter Burns
General Manager

12    On 3 February, Bradbury wrote to Van Seumeren in Singapore referring to the last quote from that company and stating

Enclosed is a copy of the quotation from Trojan to National Engineering and on acceptance of the above National Engineering and Trojan will enter into a formal contract and Trojan will formalise its contract with Van Seumeren as per our discussions.
P.S. Please note the crane model and/or its equivalent.

13    On 5 February Bradbury wrote to Burns at National Engineering saying:

I would like to confirm that Trojan - Van Seumeren have satisfied all party [sic] involved that your letter of intent and Trojan quotation for us to supply the heavy lift crane is acceptable.
Please issue Trojan with a National Engineering order number which will keep all parties comfortable with the arrangement …

14    On 5 February National Engineering issued a purchase order to Trojan Contracting for the "supply of Demag CC4800 crane or equivalent for 6 months hire as per letter of intent dated 3/2/97." On 5 February Mr Bakker of Van Seumeren wrote to Bradbury stating that any order or letter of intent issued to Van Seumeren should contain certain details, and commented on the letter of 3 February and on the requirements in the National Engineering letter of intent. On 7 February 1997 Van Seumeren Australia Pty Limited sent a fax message to its solicitors asking them to prepare a draft agreement between Van Seumeren Australia and Trojan for the supply of the crane in accordance with the terms agreed. There followed inquiries by Bradbury about the cost of bringing the CC4800 crane, which was at Port Hedland to Sydney.

15    In the middle of February various discussions took place and there was correspondence received by Chilco from Burns about construction details and layout of the Homebush site, and there were also continuing attempts by Bradbury to get Mr Owens moving on the required enterprise bargaining agreement. Bradbury had paid $3,000 to Mr Owens to obtain this, but it seemed that the co-operation of Mr Childs in the relevant union office was required. During this time also a schedule of payments for the order was agreed and the first payment referred to as the deposit was paid on 21 February.

16    At the beginning of March Bradbury was contacting various crane operators around the world, seeking details of cranes that might be available to do the job. This has little relevance other than it does not reflect particularly well on Bradbury because it is clear that if there was a contract in existence it was to provide a Van Seumeren crane.

17    On about 10 March Mr Bakker and Mr Maddison came to Sydney again and were involved in some direct discussions on the Homebush site with National Engineering. It seems that during those discussions Mr Bakker said that the CC4800 crane would not be available and discussions took place about the availability of another crane. There were also discussions between Bradbury and Burns about the availability of the EBA. At this time also a suggestion was made to Bradbury by Mr Maddison that he should accept the deposit which had been paid and "walk away from the job". Subsequently a further meeting was held when there was a further suggestion that Bradbury take $278,000 and give up the job.

18    By this time National Engineering had commenced putting pressure on Bradbury as to identification of the appropriate crane and the availability of the EBA. On 13 March Burns wrote about these matters and further stated that the commencement date for pre-assembly of arch units had been postponed because the required lifting positions were not available. The identity of the crane type was relevant to the pouring of foundations for sub-assembly framework because different cranes would have lifted the arches from different positions. The letter also required information about the EBA and the identity of employees and their competency to be provided within fourteen days of the date of the letter. Bradbury sent a copy of this fax to Mr Bakker saying that he had a copy of the EBA and an early meeting to have it signed. The former statement at least was not correct. Multiplex wrote to National Engineering on 17 March setting out certain of its requirements which included an unconditional guarantee from Van Seumeren in favour of Multiplex confirming that the CC4800 crane would be available, and that the hire agreement would be novated to Multiplex in the event of National Engineering not completing its contractual obligations with Multiplex and the requirement for the EBA from Chilco, and the site layout for the pre-assembly work. Multiplex asked for that documentation by 24 March. A copy of that letter was sent by Burns to Bradbury on 18 March requiring response from Van Seumeren of a guarantee of the availability of the 4800 crawler crane or equivalent for the stated hire period, and a requirement that if that crane or its equivalent could not be guaranteed they needed to have that advised to them immediately by Van Seumeren. They also required confirmation as to whether there was any contract between Chilco and Van Seumeren for the supply of any crane. Once again they required an EBA and employee information. Bradbury replied on 19 March stating he believed he would have the EBA signed off by the union that day. He pointed out that even the fourteen days allowed by the letter of 13 March had not expired, and said that between Chilco and Van Seumeren a "mostly written and also verbal contract exists". On 20 March Van Seumeren sent a fax message to National Engineering stating that it could not provide an unconditional guarantee “that our Demag CC4800 will be available on site on 14.07.1997 at Homebush, Australia”, and also stating that there was no written contract, but there was a verbal contract for an MDC 3500 800 tonne truck mounted lattice boom crane. At the same time Van Seumeren sent a quotation to Bradbury for the supply of a Demag CC2600 crawler crane, but whatever the relevance of that, the offer was not accepted. On 21 March, National Engineering through Burns by facsimile to Chilco stated that Van Seumeren had advised it could not supply the Demag CC4800 crane or equivalent and that Van Seumeren had stated that the MDC 3500 crane was inadequate, that the Demag CC2600 crane might be available and could lift all arch lifts and carry out eighteen out of twenty-two of the roof infill lifts. National Engineering however, did offer to take the Demag crane under certain conditions, which were not acceptable to Bradbury, who made a counter proposal on 24 March. (The underlining is my emphasis).

19    On 25 March National Engineering by facsimile to Bradbury at Chilco wrote as follows:

It is the opinion of our company that Trojan Contracting is unable to meet its contractual obligations.
Accordingly we hereby terminate our agreement with Trojan Contracting effective immediately …

There followed a demand for repayment of the deposit of $144,000. Also on 25 March Burns rejected an offer from Chilco in respect of the CC2600. On 27 March Van Seumeren wrote to Bradbury by fax stating that as National Engineering had terminated its contract with Chilco "any agreement between Van Seumeren and Chilco for supply of the crane must also be regarded as terminated". The message went on to say that National Engineering had approached Van Seumeren direct and they considered themselves free to contract the supply with the required crane, which was the CC2600, which in fact was never supplied, or used on the site. By response of 27 March to National Engineering Bradbury rejected the claim that Chilco could not meet its contractual obligations and confirmed it could supply an 800 tonne crane as contracted, and stated that if National Engineering wished to terminate the contract, then Chilco would be entitled to damages well in excess of the deposit. Whether or not that amounted to an acceptance of the termination as an improper repudiation may not be quite clear but there can be no doubt that became the position upon the filing of the cross-claim.

Pleadings

20    The matter commenced by summons under which National Engineering sought a declaration that it was entitled to the whole of the deposit, some amount by that time having been taken from the account. Unfortunately, due to the way the matter progressed, the court did not require the plaintiff's claim to be pleaded, although the cross-claim of Chilco was properly pleaded. Nevertheless as argued the claim of the plaintiff was as follows:

1. That there was no binding contract between National Engineering and Chilco and therefore the amount of the deposit with interest was repayable.

2. In the alternative, if there were a binding contract, then the contract was terminated by National Engineering for breach, the breach claimed being either (1) breach of conditions of the contract that (a) submission of the EBA and employee details, and (b) confirmation of the availability of an appropriate crane to be provided under the contract be available within a reasonable time, or (2) anticipatory breach being the inability of Chilco to perform the contract at the due date, namely 14 July 1997 or to comply with the conditions within a reasonable time to ensure start on the due date.

21 The claim of Chilco under the cross-claim is that it had a contract and that the purported termination for breach was improper and amounted to a repudiation, which was accepted by Chilco resulting in loss to Chilco. In addition, there is a claim by Chilco for unconscionable conduct under s51AA of the Trade Practices Act 1974 which relies as its basis upon a claim that National Engineering, having determined to keep Chilco off the site in accordance with the desire of Multiplex and being prepared to negotiate direct with Van Seumeren, engaged in unconscionable conduct. It was accepted the pleaded case under s51AB of the Trade Practices Act must fail. The final claim under the cross-claim is that National Engineering induced Van Seumeren to breach the contract between Chilco and Van Seumeren. The claims in paragraph 23 of the cross-claim so far they were for misleading and deceptive conduct under ss51A and 52 of the Trade Practices Act were abandoned. It is necessary to deal with these matters in turn.

Was there a contract?

22    I consider that there was and that its terms were contained in the letter of intent of 3 February 1997, the confirmation of 5 February 1997 and the purchase order of that same date. Thereafter the parties clearly conducted themselves upon the basis of there being a contract. This is evidenced by their actions including agreement on payment terms, the payment of the deposit, National Engineering seeking advice on construction layouts, National Engineering making demands for compliance with the terms as to the EBA and guarantee of availability, and by the references by National Engineering to “the continuation of this contract for crane hire is in serious doubt” “our original contract for the supply of a Demag CC4800 cannot proceed” the offer of alternative terms and conditions "to restructure the contract to suit the alternative crane", the "spirit in which the original contract was entered into;" and finally the terms of the letter of termination I have set out. Mr. Burns agreed there was a deal. It is clear both parties regarded themselves as bound even if it were intended to have a more formal document at a later stage. I find there was a contract.

Was the plaintiff entitled to terminate for breach?

23    The plaintiff says that what are described as issues in the letter of intent of 3 February 1997 were conditions of contract which had to be complied with within a reasonable time, that the reasonable time was the time when the footings for the pre-assembly work were to be poured, that being 13 March 1997, and that Bradbury knew of this important date. In other words, the plaintiff says that the period from 3 February 1997 to 13 March 1997 was a reasonable time for compliance with the two matters of substance relied upon for breach, namely failure to provide an unconditional guarantee of crane availability and the requirement to satisfy Multiplex as to the personnel to be engaged on the site and the availability of the required EBA.

24    The hire was to commence on 14 July 1997. I accept that Chilco was required to satisfy National Engineering as to its requirements within a reasonable time to give it certainty that the crane would be on site able to commence work by 14 July 1997. However, the idea that 13 March was the time by which those conditions were to be fulfilled was, as far as I can establish, first advanced by counsel for the plaintiff in final submissions. On any basis that date was not an agreed date nor an essential date, and if it were reasonable to set a time limit after that date, being the fourteen days specified in the letter of 13 March, then the notice of termination was given two days before the expiry of that fourteen days. Thus I do not consider that there was any basis on which to find satisfaction of the conditions by 13 March was a term of the contract, and, in the circumstances of a contract for hire commencing on 14 July 1997, I do not consider that fourteen days' notice to comply after 13 March, was a reasonable time, even if 13 March was a fixed date but not an essential date. In any event, as I have said, it does not matter because the plaintiff purported to terminate the contract prior to the expiration of that time.

25    I turn to anticipatory breach. The plaintiff seemed to embrace this rather late, which reinforces the desirability of pleadings in all but the most obvious cases. However, the letter of termination is based on inability to perform. At its most simple the question is whether at the date of purported termination Chilco was unable to comply with the contract. However, contrary to the submissions of counsel for Chilco, it is not a case of merely having to decide whether Chilco was unable to perform as at 14 July 1997. The plaintiff was entitled before that time to be assured the EBA was in place, and to have the provision of an appropriate crane guaranteed and the agreement to novate in place. Thus the question is whether the plaintiff has established that at termination, these conditions could not have been fulfilled within a reasonable time. I do not consider that the plaintiff has established that the requirements of Multiplex set out in its letter of 17 March were reasonable and justified.

26    To establish anticipatory breach National Engineering must show that at the time of termination Chilco was disabled from performing the contract: Universal Cargo Carrier Corporation v Citati [1957] 2 QB 401; Sunbird Plaza Pty Ltd v Maloney (1988) 166 CLR 245 at 267 and 280. That requires proof of disablement to comply with the relevant conditions 1 to 4 of the letter of intent within a sufficiently reasonable time to ensure that hire could commence on 14 July 1997. It has not been established 13 March was a reasonable time or what was a reasonable time. I do not consider I need determine it. It is certain it has not been shown Chilco was disabled from obtaining the EBA within a reasonable time. The provision of the crane is more difficult. The Van Seumeren fax of 20 March says nothing about an equivalent crane. There was certainly a possibility that at the date of purported termination Bradbury would have been able to prevail upon Van Seumeren to provide an equivalent crane and to give a guarantee to do so within a reasonable time.

27    I should add that I do not accept the argument of Chilco that it could have provided an appropriate crane through another provider as an answer. The contract with National Engineering was subject to an implied, if not express, term that the crane would come through Van Seumeren.

28    The result of this is that National Engineering has not established breach entitling it to terminate so that its purported termination amounted to a repudiation which the cross-claimant was entitled to accept, which it did. This leads of course to a consideration of the cross-claim for breach of contract.

Cross claim for damages on acceptance of repudiation

29    In view of my previous finding, Chilco is entitled to succeed on its claim for breach of contract and is entitled to some damages for breach, even if nominal. This was accepted and although I have been sidetracked for a time in considering the detailed judgment in Foran v Wight (1989) 168 CLR 385 on the question of anticipatory breach and the requirement for the terminating party to be "ready, willing and able" to perform before breach as opposed to damages can be found that position does not arise here and was not argued.

30    While it is not part of the present hearing to determine the quantum of damages, it is desirable to make some reference to this in the hope that the matter may be concluded with as little cost as possible. The claim of Chilco to any substantial damages under the cross-claim depends upon a finding that it would have been able to perform the contract. On the particulars furnished its claim extends not only to damages for loss of the profit it would have made on that contract, but for loss of other moneys it claims it would have received had it performed the particular contract through some flow on benefits. There is a positive onus on Chilco, if it is to succeed on a claim for loss of profits and more, to show on the balance of probabilities that it would have been able to perform the contract and to fulfil the conditions to which it was subject prior to the commencement. The loss must flow from the breach through repudiation. It is not a case of loss of chance. Thus Chilco would be required to show on the balance of probabilities that it would have been able to provide through Van Seumeren a Demag CC4800 crane or its equivalent and obtain a guarantee of this in reasonable time. The words "or equivalent" are not an industry term of art, but I accept the evidence of Burns that the words relate to "capacity, mobility and efficiency or speed of lifting operations". Evidence is that the MDC 3500 crane, the type that Van Seumeren had stated to Chilco it would provide, is not an equivalent crane. A wheel mounted, as opposed to a crawler crane, is not an equivalent crane for the required job. The evidence established that the Demag CC2600 crane, while it could possibly carry out all the lifting requirements, was not an equivalent crane. It was difficult for Bradbury to say it was as it was a 500 tonne crane, and he had insisted on an 800 tonne requirement. It would require position change to do the job if in fact it could do it at all. In any event the terms on which it was offered were rejected by Chilco and there is no basis on which it would be possible to determine that even if it were an equivalent crane, it would have been available to Chilco through Van Seumeren on terms which would have given a profit to Chilco and been accepted by that company. It is not necessary to go further at this stage. I have gone this far to explain the difficulties which confront Chilco in its claim for special as opposed to nominal damages.

31    It follows from this that as the claim of the plaintiff for refund of the deposit was based, in the event of my finding there was a contract, upon breach of the contract by Chilco, that claim must be dismissed, there being no such finding and no total failure of consideration. On the cross-claim there should be a finding that National Engineering repudiated the contract and that the cross-claimant is entitled to damages for such repudiation having accepted it. Such damages can probably best be determined by me, rather than a Master and if it is necessary I will fix a date for that after the parties have considered these reasons. As I have said a question will arise as to whether the cross-claimant is entitled to anything above nominal damages.

Claim under s51AA of the Trade Practices Act 1974

32 It is almost impossible to understand the pleaded claim for unconscionable conduct. Paragraph 23 of the amended cross-claim for the most part relates to a claim for misleading and deceptive conduct under ss 51A and 52 of the Trade Practices Act, which was abandoned. The particulars furnished for paragraph 23 might be appropriate to a claim for inducement of breach of contract, but it is difficult to see how they could give rise to some separate claim under s51AA.

33 The argument of counsel for the cross-claimant was that having entered into a contract with Chilco, National Engineering took steps to ensure that the contract could not be performed, so that it could in some way obtain some advantage for itself in dealing direct with Van Seumeren. This of course is more relevant to a claim for inducement of breach of contract. Chilco was a company newly formed for the purpose of attempting to obtain work on the Olympic site. It was controlled by Bradbury, who was a man who was well versed in the crane and construction business, albeit that he had had fallen into financial difficulties. It would be extraordinarily difficult in such circumstances to say that Chilco was under some special disability or disadvantage and that some generalised claim for damages under s82 or other relief under s87 of the Trade Practices Act could be brought based on some claim for unconscionable conduct. Among other things it ought to be borne in mind that Bradbury, after he entered into the contract with National Engineering for the provision of a crane through Van Seumeren, was busy making inquiries about cranes from other sources. For any claim for unconscionable conduct to succeed it is necessary to bring it within the principles enunciated in cases such as Blomley v Ryan (1956) 99 CLR 362; Commercial Bank of Australia Limited v Armadio (1983) 151 CLR 447; and recently reiterated in Bridgewater v Leahy (1998) 194 CLR 457. The claim is not made out. Such a claim cannot be used as some sort of substitute for damages for breach of contract.

Claim for inducing breach of contract

34    The allegation is that National Engineering induced Van Seumeren to breach its contract with Chilco for the supply of a crane. The first requirement to make good this claim is the existence of a binding contract between Chilco and Van Seumeren. It is unlikely there was any such binding contract and I would have come to that conclusion were it not for the letter from Van Seumeren to National Engineering admitting that there was in existence a verbal contract for the provision of the MDC 3500 800 tonne truck mounted crane. Whether the fax from Mr Bakker to National Engineering of 20 March 1997 would amount to an admission of a binding oral contract is not quite clear. However, in my view, that does not matter because the contract for an MDC 3500 crane would not have been of any benefit to Chilco because it would not have fulfilled the requirements of its contract with National Engineering. There was no binding contract for supply of a Demag CC4800 crane or equivalent. Thus even if it were established that National Engineering had procured the breach of the admitted contract no damage to Chilco would have flowed. On that basis the claim, being a claim in tort, would be dismissed in any event in the absence of damage. It is probably desirable to proceed a little bit further. The pleaded claim is that National Engineering commenced negotiating direct with Van Seumeren for the supply of a crane. There is no evidence that it did so before 25 March 1997, although it is clear there were meetings between the representatives of National Engineering and Van Seumeren to the exclusion of Chilco, and certainly Van Seumeren was made aware, either by National Engineering or directly by Multiplex employees, that there was a desire to keep Bradbury and persons associated with him away from the Olympic site. The reasons for this were never explained. Suspicion in these circumstances does not amount to proof. The unavailability of the Demag CC4800 crane operating at Port Hedland has not been shown to have occurred through any interference whatever by National Engineering. In fact it has not been established why that crane was not available. This claim must fail.

Conclusion

35    The plaintiff's summons claims declarations that the deposit of $144,000 was held in trust for it and that withdrawals from the account into which the deposit was placed were in breach of trust. No basis was put forward for such trust claim, unless there were no contract, other than that the amount was repayable upon termination of the contract for breach. That claim has failed. No other issue was raised about those moneys and the court should not invent one. Some amount has been expended by Chilco and approximately $72,000 is admitted to be remaining, held in an account upon which Bradbury is sole signatory. I should just dismiss the summons.

36    The orders that I would propose are as follows:

On the summons

1. Summons dismissed with costs.

On the cross-claim

1. Declare that the cross-claimant is entitled to damages against the cross-defendant for breach of contract as claimed and order that a date be fixed for the determination of such damages. Cross-claim otherwise dismissed.

2. Costs of cross-claim reserved until its final determination.

I will stand the matter over for a few days for the parties to consider these reasons and to bring in draft minutes of order and directions as to the balance of the proceedings.

Last Modified: 12/13/1999