Nexus Minerals NL v Brutus Constructions Pty Ltd - [1997] FCA 926

FEDERAL COURT OF AUSTRALIA

CORPORATIONS LAW - Loss or damage an essential component of damages claim under s 232(8) of the Corporations Law for breach of director's duties.

CONTRACTS - Loss of chance - Whether sale of disputed interest compensable for loss of chance - whether a loss of "some value" occasioned.

Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 (Followed)
Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd (1938) 61 CLR 285 (Followed)

COSTS - discretion to award - award of nominal damages not a basis for costs as of course.

Hughes v Western Australian Cricket Association (Inc) (1986) ATPR 40-748 (Followed)
Alltrans Express Ltd v CVA Holdings Ltd [1984] 1 WLR 394 (Followed)
Anglo-Cyprian Trade Agencies Ltd v Paphos Wine Industries Ltd [1951] 1 All ER 873
(Followed)
Beaumont v Greathead (1846) 2 CB 494
Australian Conservation Foundation v Forestry Commission (1988) 81 ALR 166 (Followed)
Henderson v Amadio Pty Ltd, unreported FCA 22 March 1996, Heerey J (Followed)

NEXUS MINERALS NL v BRUTUS CONSTRUCTIONS PTY LTD and BOLESLAW WILLIAM KOZYRSKI
WAG 137 of 1995

SPENDER, R D NICHOLSON, FINN JJ
PERTH
10 SEPTEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA )

)

WESTERN AUSTRALIAN ) WAG 137 of 1995

)

DISTRICT REGISTRY )

)

GENERAL DIVISION )

On appeal from a single Judge of the Federal Court of Australia

BETWEEN:
NEXUS MINERALS NL
Appellant

AND:
BRUTUS CONSTRUCTIONS PTY LTD
First Respondent

BOLESLAW WILLIAM KOZYRSKI
Second Respondent

CORAM: SPENDER, R D NICHOLSON, FINN JJ

PLACE: PERTH

DATED: 10 SEPTEMBER 1997

MINUTES OF ORDER

THE COURT ORDERS THAT:

The appeal be dismissed with costs.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA )

)

WESTERN AUSTRALIAN ) WAG 137 of 1995

)

DISTRICT REGISTRY )

)

GENERAL DIVISION )

On appeal from a single Judge of the Federal Court of Australia

BETWEEN:
NEXUS MINERALS NL
Appellant

AND:
BRUTUS CONSTRUCTIONS PTY LTD
First Respondent

BOLESLAW WILLIAM KOZYRSKI
Second Respondent

CORAM: SPENDER, R D NICHOLSON, FINN JJ

PLACE: PERTH

DATED: 10 SEPTEMBER 1997

REASONS FOR JUDGMENT

This is an appeal from a decision of a single judge of this Court (Carr J), dismissing an application by Nexus Minerals NL (‘Nexus’) against the respondents, on the basis that Nexus had not proved any loss or damage.

At all material times the appellant, Nexus, was known as Dry Creek Mining NL. Consistently with the trial judge’s reasons it will be referred to here as “Dry Creek”. The company was the minority party in a gold-mining joint venture agreement with Samantha Gold NL (“Samantha”). The first respondent Brutus Constructions Pty Ltd (“Brutus”), entered into a management agreement with Dry Creek in January 1991 under which it agreed to provide management and consulting services to Dry Creek as well as the personal services of Mr Kozyrski, the second respondent, who was to be and was appointed managing director of Dry Creek.

The claims made by Dry Creek…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1997] FCA 926
Decision Date: 10 SEPTEMBER 1997

CaseChat Overview and Summary

In the case of Nexus Minerals NL v Brutus Constructions Pty Ltd, the appellant, Nexus Minerals NL, sought damages for a loss allegedly sustained when it sold its interest in a gold-mining joint venture to Samantha Gold NL. The sale was in settlement of proceedings initiated by Nexus against Samantha in the Supreme Court of Western Australia in consequence of action taken by Samantha under the joint venture agreement to dilute Nexus’s proportional interest in the venture. The first respondent, Brutus Constructions Pty Ltd, had entered into a management agreement with Nexus under which it agreed to provide management and consulting services to Nexus as well as the personal services of Mr Kozyrski, the second respondent, who was to be and was appointed managing director of Nexus. The appeal to the Federal Court of Australia was dismissed, and the Court held that Nexus had not proved any loss or damage. The Court found that although Mr Kozyrski contravened s232(4) of the Corporations Law and caused Brutus to be in breach of the management agreement, Nexus had not established that it suffered any loss when it sold its interest to Samantha or that it lost a chance that was compensable within the principles outlined in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332. The Court also held that the trial judge did not err in refusing to make declarations of breach of contract and/or awarding nominal damages therefor. The Court further held that there was no error in the trial judge’s exercise of discretion in the matter of costs and that the appellant was not to be regarded as successful in the claims it brought. The appeal was dismissed with costs.

Orders