Niche Logistics Pty Ltd (ACN 112 953 833) v Bluestar Global Logistics (Aust) Pty Ltd (ACN 130 179 300) (No 2)

[2018] VCC 704

IN THE COUNTY COURT OF VICTORIA

AT MELBOURNE

COMMERCIAL DIVISION

Revised
Not Restricted
Suitable for Publication

GENERAL LIST

Case No. CI-16-04578

NICHE LOGISTICS PTY LTD (ACN 112 953 833)

v

BLUESTAR GLOBAL LOGISTICS (AUST) PTY LTD (ACN 130 179 300)

JUDGE:	HIS HONOUR JUDGE MACNAMARA
WHERE HELD:	Melbourne
DATE OF HEARING:	1, 23 May 2018
DATE OF JUDGMENT:	31 May 2018
CASE MAY BE CITED AS:	Niche Logistics Pty Ltd (ACN 112 953 833) v Bluestar Global Logistics (Aust) Pty Ltd (ACN 130 179 300) (No 2)
MEDIUM NEUTRAL CITATION:	[2018] VCC 704

REASONS FOR JUDGMENT

Subject:                   Assessment of Damages

Catchwords:             Assessment of Damages for misleading or deceptive conduct; applicable measure of damages; calculation of damages referable to reliance loss rather than expectation or loss of bargain

Legislation Cited:     Australian Consumer Law; Competition and Consumer Act (Cth) 2010; Trade Practices Act 1974; Retail Tenancies Reform Act 1998; Supreme Court Act 1986; County Court Act 1958; Penalty Interest Rates Act 1983

Cases Cited:            Gould v Vaggelas (1985) 157 CLR 215; Henville v Walker (2001) 206 CLR 459; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388; Niche Logistics Pty Ltd (ACN 112 953 833) v Bluestar Global Logistics (Aust) Pty Ltd (ACN 130 179 300) [2018] VCC 491; Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2006] VSCA 6; Spotlight Pty Ltd v NCON Australia Limited [2012] 46 VR 1

Judgment:                1. Within 14 days the parties must bring in short minutes to give effect to these reasons 2. Costs reserved.

APPEARANCES:		Counsel		Solicitors
For the Plaintiff		Mr S. Hay		Lander & Rogers
For the Defendant		Mr S Hopper		Evans Ellis Lawyers

HIS HONOUR:

Background

1 On 23 April 2018, I published reasons determining liability issues between plaintiff and defendant [2018] VCC 491. I determined that the plaintiff was entitled to a judgment for damages under s236 of the Australian Consumer Law to be assessed.  These reasons are that assessment.

2       I incorporate by reference the factual findings made in my first set of reasons.

3       When this matter returned to Court following the publication of the liability judgment to consider submissions as to the quantum of damages to be awarded to the plaintiff pursuant to the Australian Consumer Law, Mr Hay on behalf of the plaintiff, provided supplementary particulars of loss and damage advancing both a primary and secondary case.  He contended in the circumstances that the plaintiff was entitled to damages representing the loss which it suffered by relying on the defendant’s misleading or deceptive conduct in entering into the lease for the premises. 

4       According to the primary case relied on by the plaintiff, these damages, excluding interest and Goods and Services Tax, were calculated at $1,175,150.88.  The premise for this assessment was that, but for Bluestar’s misleading or deceptive conduct, Niche would have entered into a lease of premises at 22 Ballantyne Road, Kewdale, Western Australia for an annual rent of approximately $270,000 plus GST and outgoings in lieu of the obligations which it undertook under the Miles Road lease.  Alternatively, accordingly to Mr Hay, should the Court not find that this was the most probable counterfactual as to what Niche would have done absent Bluestar’s misleading or deceptive conduct, then it should be found that in such circumstances Niche would have entered into an alternative leasing arrangement for premises in Western Australia at a rate averaged over some six possible alternate premises, creating a total lease liability of $1,726,230.07 in lieu of the liabilities incurred at Miles Road.  Allowing for amounts recovered in mitigation, this would yield a damages award exclusive of GST and interest of $947,188.06.  Mr Hay’s calculations in the form of amended particulars of loss and damage are attached.

5       In contrast, Mr Hopper on behalf of Niche, submitted that the proper measure of damages was constituted by “loss of bargain damages”, being the damages which would be awarded as a matter of contractual principle for the loss by Niche of rights as a sub-lessor as against Bluestar as sub-lessee for 50 per cent of the Miles Road premises.  He said that these could be regarded as the direct losses flowing from Niche’s failure to obtain those contractual entitlements.  These damages would be calculated, in contrast to what was claimed by the plaintiff, as expectation damages.  The damages so calculated, exclusive of interest and GST, would be $392,441.13.  Mr Hopper’s calculations shown as a reworking of Mr Hay’s particulars are also attached.

Measure of damages

6 Section 236 of the Australian Consumer Law provides as follows:

“236Actions for damages

(1)If:

(a)      a person (the claimant) suffers loss or damage because of the conduct of another person; and

(b)      the conduct contravened a provision of Chapter 2 or 3;

the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.

(2)An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.”

7       The Australian Consumer Law is Schedule 2 to the Competition and Consumer Act (Cth) 2010. This provision constitutes a re-enactment of the now repealed s82 of the Trade Practices Act 1974. Section 82 gave an entitlement to a claimant to recover loss and damage suffered by the claimant “by” the conduct of the contravening party. Section 236 substitutes for this word the phrase “because of”. It was common ground that this change in terminology has no effect upon the substantial meaning and that for present purposes s236 of the Australian Consumer Law can be regarded as being to the same effect as the repealed s82 of the Trade Practices Act.  In Gould v Vaggelas (1985) 157 CLR 215, the High Court considered the measure of damages to be awarded to a plaintiff the victim of a fraudulent misrepresentation. Gibbs CJ said:

“the general principle is that the plaintiff is to be put, so far as possible, in the position he would have been in if he had not acted on the fraudulent inducement.” (1985) 157 CLR 215, 220-1

8 This case for a number of years was regarded as establishing the proposition that the victim of misleading or deceptive conduct contrary to s52 of the Trade Practices Act was entitled to recover reliance damages; that is, damages which would put him or her in the same position as he or she would have been had he or she not acted on the misleading or deceptive conduct.  This “reliance” measure of damage was regarded as being the appropriate measure for award to plaintiffs in tort cases.  The statutory cause of action for misleading or deceptive conduct was seen as giving a statutory tort entitlement and therefore as being compensable upon the same basis.  Subsequent authorities have repudiated this view as at best an over-simplification.

9       In the present case, the alternative cases advanced on behalf of Niche by Mr Hay entailed computing damages according to the “reliance” model adopted in Gould v Vaggelas. In contrast, Mr Hopper on behalf of Bluestar, submitted that since s82 of the Trade Practices Act and now s236 of the Australian Consumer Law did not directly mandate the adoption of a particular common law quantum of damage, it was open in each particular case to adopt a measure of damage which most appropriately represented the loss computed in accordance with the principles of the section.  He relied on the following statement from Gleeson CJ in Henville v Walker (2001) 206 CLR 459 at [18] where his Honour said:

“S82 of the Act is the statutory source of the appellants' entitlement to damages.  The only express guidance given as to the measure of those damages is to be found in the concept of causation in the word ‘by’.  The task is to select a measure of damages which conforms to the remedial purpose of the statute and to the justice and equity of the case.  The purpose of the statute, so far as presently relevant, is to establish a standard of behaviour in business by proscribing misleading and deceptive conduct, whether or not the misleading or deception is deliberate, and by providing a remedy in damages.  The principles of common law, relevant to assessing damages in contract or tort, are not directly in point.  But they may provide useful guidance, for the reason that they have had to respond to problems of the same nature as the problems which arise in the application of the Act.  They are not controlling, but they represent an accumulation of valuable insight and experience which may well be useful in applying the Act.”

10      As previously noted, no one contended that the substitution of the phrase “because of” for the word “by” when the damages entitlement for victims of misleading or deceptive conduct was re-enacted in the Australian Consumer Law, effected any substantive change to such a plaintiff’s entitlement.  His Honour’s statement is one of many to similar effect in various High Court authorities.

11      More typically, expectation losses as recoverable for breach of contract leading to a loss of bargain yield larger awards than awards of damages on the reliance basis.  A plaintiff entitled to expectation loss can recover not only the cost of entering into the contract but also be compensated for the lost profit which he or she would have expected to make upon performance of the contract the benefit of which has been lost.  The pattern of authorities since Gould v Vaggelas is that a successful plaintiff seeking damages for misleading or deceptive conduct entailing entry into a contract is entitled to recover at least his or her reliance loss and possibly more by way of expectation loss.  So, in Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388, the High Court specifically repudiated the analogy between damages recoverable for misleading or deceptive conduct and damages recoverable for fraudulent misrepresentation in the tort of deceit. The Murphys had entered into a lease for a unit in a retirement village. The Court said it was wrong for the Full Federal Court to have proceeded on the basis that the only damages recoverable by the plaintiff, the Murphys, was the difference between the price of a unit in a retirement village and its true value. The Court held at [66] that the loss suffered by the Murphys arose:

“because the continuing financial obligations they undertook when they took the lease proved to be larger than they had been led to believe. The question then became: how much larger was that burden?” (2004) 216 CLR 388 [66]

12      The Court remitted the matter for reassessment by the trial judge.  Mr Hopper submitted that, against the background of these authoritative statements, there was no reason why a court could not conclude that the proper measure of damages for misleading or deceptive conduct differed from the amount of the reliance loss by being smaller than that amount rather than larger, as the Court had determined in Murphy’s case.  He conceded that he could point to no reported case in which a successful plaintiff misled or deceived into a contract received damages assessed in an amount less than reliance damages would have been assessed at.

13      In the present case, Mr Hopper noted that the plaintiff’s statement of claim, both in its original form as filed in 2016 and the amended version filed by leave in October 2017, commenced with an allegation that a “sub-lease agreement” existed between the plaintiff and the defendant (paragraph 3, Court Book (“CB”) pages 6 and 43.02).  According to Mr Hopper, the plaintiff brought its claim based on misleading or deceptive conduct, equitable or conventional estoppel because one or more Statute of Frauds provisions of Western Australia law had not been complied with and accordingly there was no contractual covenant to pay rent enforceable against Bluestar.  Further, said Mr Hopper, since any oral agreement to lease had been terminated before this proceeding was commenced, it was impossible for the plaintiff to rely upon the equitable doctrine of part performance.  The oral agreement, if any, had been terminated and therefore it could not be the subject of a decree of specific performance.  Equity could not “deem to be done that which ought to be done” to treat the parties as in an equitable relationship of sub-lessor and sub-lessee.  Mr Hay for the plaintiff did not deny these propositions. 

14 The plaintiff’s proceeding, therefore, said Mr Hopper was a process indirectly to enforce what otherwise might have been enforced under the law of contract. This was amongst the reasons why it would be appropriate to judge the plaintiff’s loss and damage through a contractual lens. The terms of s236, as interpreted and in accordance with the dictum of Gleeson CJ from Henville v Walker upon which he relied, empowered the court to assess damages in a manner analogous to the damages which might have been awarded for a breach of a sub-lease agreement had one been in existence and enforceable at law or in equity.

15 In reply, Mr Hay submitted that to approach the assessment of damages as advocated by Mr Hopper would be to perpetrate the very heresy which Gleeson CJ and other High Court Justices had denounced. It would entail approaching the assessment of damages, not by reference to the particular facts of the case or by reference to the text of s236, but by imposing an analogy from another area of the law which, by definition, was not directly applicable.

Approach to damages assessment – conclusions

16 I have already set out the terms of s236 above. The next step in determining the proper approach to the damages assessment is to consider precisely the finding which I made in my liability determination. At [2018] VCC 491 [124], having found the defendant had engaged in misleading or deceptive conduct by creating the impression that it intended to commit to a 50 per cent occupation of the Miles Road premises for a five year term, meeting 50 per cent of the occupancy costs, I found that it was on the basis of this “that Niche proceeded to commit to the five year lease [of the Miles Road premises]”. This finding was the step by which I concluded that Niche’s exposure to liability under the five year lease, without 50 per cent of that liability’s being met by Bluestar, could be treated as a loss occurring “because of” Bluestar’s misleading or deceptive conduct. The determination on liability was made based upon the view that but for the misleading or deceptive conduct, Niche would not have signed up for years of liability on premises which were in effect twice as large as it required for its own use. There was no finding, for instance, that failure of Niche to obtain an enforceable sub-lease from Bluestar was the result of misleading or deceptive conduct. The approach to damages assessment advocated by Mr Hay is congruent with the finding as to liability in a manner that the approach advocated by Mr Hopper is not.

17      The fact that Niche plainly would have proceeded in a different manner and in reliance upon a different cause of action upon Bluestar’s vacating the premises had it obtained an enforceable sub-lease agreement with Bluestar, should not be controlling of its entitlements under a different cause of action.  In Ovidio Carrideo Nominees Pty Ltd v Dog Depot Pty Ltd [2006] VSCA 6 the Court of Appeal considered an appeal brought ultimately from a determination of the Victorian Civil & Administrative Tribunal awarding a large sum of money to a tenant of retail premises by way of restitution of moneys mistakenly paid by it to the landlord. The Tribunal had found that since no disclosure statement in accordance with the Retail Tenancies Reform Act 1998 had been provided by the landlord, the covenant to pay rent under the lease was void and unenforceable. Insofar as the tenant had made rental payments under the belief it was legally obliged to do so, it had a restitutionary entitlement to recover those payments. The court considered that the statutory suspension of a landlord’s entitlement to recover rent from the tenant where no disclosure statement had been provided, did not preclude the landlord’s having a restitutionary or quasi contractual entitlement to recover a reasonable sum of money for the “use and occupation” of the premises. The court held that the landlord could rely on this entitlement to resist a tenant’s claim for repayment. At [50] Nettle JA, as he then was, said:

“Since the only evidence of the amount of a reasonable satisfaction for the use and occupation of the demised premises is the lease itself, I see no reasons why the amount to be allowed for use and occupation should not be equal to the rent.  It has not been suggested that it is more than a reasonable amount.  It follows in my judgment that the tenant’s claim to recover the rent it paid should have been held to fail.”

18      According to his Honour’s analysis just quoted, had the evidence allowed a finding that the reasonable charge for the use and occupation of the subject premises was materially less than the amount which the tenant had paid, the tenant’s claim for repayment would have succeeded to the extent of the excess.  That is, what could have been recovered by the landlord under the restitutionary entitlement for a reasonable sum for the use and occupation of his premises was not absolutely controlled by the amount that would have been paid by way of contractual rent had that covenant to pay rent not been suspended and rendered void by the Retail Tenancies Reform Act.  Likewise here, what is to be awarded by way of damages for misleading or deceptive conduct is not to be controlled by the damages which might have been awarded had there been an enforceable sub-lease agreement between the parties.

19      The calculations made by Mr Hay by reference to reliance loss should be adopted to the exclusion of those advanced by Mr Hopper based upon a deemed contractual measure of damages.

Reliance loss – calculation

20      It will be recalled that, depending upon which hypothetical counterfactual scenario was adopted for the calculation of damages by way of reliance loss, materially different results would be reached.  Mr Hay’s preferred scenario entailed a calculation based upon Niche’s taking out a lease of premises at 22 Ballantyne Road, Kewdale in lieu of the Miles Road premises.  An alternative scenario involved calculating damages on the basis that Niche would have taken up a tenancy at one of a range of alternative locations, the average of whose occupancy costs was $1,726,230.07 for the relevant period after it vacated its former premises.  Mr Hopper, however, contended that in light of the evidence of expert property consultants, the only available option for Niche in lieu of Miles Road was a tenancy at 505 Abernethy Road, Kewdale.  Making all appropriate allowances for mitigation costs the damages which would be assessed on this basis, exclusive of interest and GST, would have been $947,188.06.

21      According to both counsel, the proper findings as to these matters depended crucially upon the evidence-in-chief and cross-examination of Niche’s witness, Mr Dickson.  Mr Dickson is a director of Niche and was the person principally involved in negotiation on Niche’s behalf as to the matters the subject of this proceeding.  In evidence-in-chief Mr Dickson said that the most suitable alternative premises for Niche in the event that it had not believed it was going to “joint venture” a tenancy at Miles Road with Bluestar would have been 22 Ballantyne Road, Kewdale.  (Transcript (“T”) 118, L13-15)  Speaking of Niche’s requirements in Perth at the relevant time, he said:

“… the key thing is going [to be able] to get a container in and out of the site relatively easily, you know, on a Monday we might have 15 containers to unload so we want to be able to get them in and out as efficiently as possible.”  (T119, L13-17)

22      Mr Dickson said that the Ballantyne Road property met this objective.  (T119, L12-19)  Mr Dickson said the Ballantyne Road property met this requirement comfortably and was superior to Niche’s former premises at Fargo Way even although being of similar size.  (Ibid, L20-26)  He conceded that it was a less than ideal site lacking a canopy which the Miles Road premises did have.  (T119, L27 – T120, L3).

23      In cross-examination, Mr Hopper noted that Niche’s original statement of claim indicated that absent misleading or deceptive conduct on Bluestar’s part, Niche would have relocated to premises having an area of 3,000 to 4,000 square metres.  Miles Road was approximately 4,000 square metres.  Ballantyne Road had an area, according to Mr Dickson, of “just over 2,000 square metres”.  (T119, L24-25)  Mr Hopper put to Mr Dickson that this pleading was modified only after Niche had the opportunity to read the expert reports from the property consultants who gave evidence at trial.  He suggested to Mr Dickson:

“… you have actually changed your instructions to your lawyers to fit the case that is put together, haven’t you?”  (T183, L24-26)

24      Mr Dickson’s reply was: 

“Well, in a sense.  It’s a little bit like buying a house, there’s a lot of things you want, if they are not available you have to make do with what you have to.  The previous depots that we have worked out of with our agents were well under 2000 square metres, one was less than a 1000 square metres.  So while my staff probably wouldn’t have been happy, they would have made it work.”  (T183, L26 – T184, L2)

25      Further pressed, Mr Dickson denied that Niche would actually have selected a property of 3,000 to 4,000 square metres.  He said:

“No, the truth is we would have initially – our look would have started with a wish list that would have been between 3,000 and 4,000 square metres.  If such properties hadn’t been available or more economical ones that were a smaller size appeared, we would have considered those as well.”  (T184, L7-12)

26      Making findings as to preferences and choices is intrinsically difficult particularly where it has to be done on a hypothetical basis as I am required to do here.  With some hesitation on the basis of the history of the pleadings and Mr Dickson’s concessions that Niche would have commenced its search for new premises at the end of its lease at the Fargo Way complex looking for premises between 3,000 and 4,000 square metres, I conclude that Niche’s present preferred case is tinged with hindsight.  The more realistic scenario is the one advocated by Mr Hopper where the alternative premises would be Abernethy Road.  It follows that the calculation of reliance loss should be made as advocated by Mr Hopper based on alternative premises being occupied in Abernethy Road.

Interest

27 Mr Hay handed up detailed interest calculations based upon his primary and alternative case, neither of which I have adopted. Nevertheless, there was no criticism of his methodology in calculation of interest or the contention that in the circumstances Niche is entitled to interest under s60 of the Supreme Court Act 1986 as rendered applicable to this Court by s33 and s50 of the County Court Act 1958. That interest is calculated from the commencement of the proceeding and at the rate provided for in the Penalty Interest Rates Act 1983. The losses were incurred progressively and, by obtaining an alternative sub-tenant, progressively mitigated. Mr Hay’s calculations reflect these matters and were not the subject of any criticism as to the methodology in this respect either. There should be a further calculation of interest according to this method but by reference to the assessment of reliance damages based on a tenancy for Niche at Abernethy Road as advocated by Mr Hopper.

Costs

28      The parties deferred any argument as to costs pending my publication of reasons as to the quantum of damages.  Accordingly, the question of costs is reserved.

Disposition

29      I will direct the parties within 14 days to bring in short minutes to give effect to these reasons.

Postscript

30      With the above reasons completed, I requested my associate to arrange for them to be published.  On the late morning of 22 May 2018, she emailed the parties advising that my reasons would be handed down on 23 May 2018 at 10.00am. 

31      The solicitor for the plaintiff replied (copied to the defendant and other interested persons):

“With apologies for the lateness of this email, I wish to give notice that, before judgment is pronounced tomorrow morning, the plaintiff will seek leave to draw the court’s attention to a particular matter in the evidence which (it will contend) is relevant to the court’s consideration of the counterfactual scenario/loss calculation propounded by the defendant at the last hearing.

Once again, I apologise for the late notice.”

32      When the matter was called on, Mr Hay, counsel for the plaintiff, rose to explain this matter.  As appears above, Mr Hopper, on behalf of the defendant, submitted that were I to agree with the plaintiff’s contention that its damages should be assessed on the basis of “expectation loss”, the loss should be calculated by reference to a scenario in which, without the defendant’s misleading or deceptive conduct, the plaintiff would have taken up a tenancy at 505 Abernethy Road, Kewdale.

33      Mr Hay said the evidence established that this scenario was not, in truth, open. He took me to an extract from the evidence of the plaintiff’s property expert’s report which was admitted into evidence without objection or cross-examination, in which it is recorded at CB 1373, that the Abernethy Road property was leased to a different tenant for a term of three years with a “commencement date” of “July 2013”.  Mr Hay submitted this logically excluded any possibility of his client having taken up a tenancy at that property from September 2013.

34      Mr Hopper, on behalf of the defendant, submitted first that I should decline to consider this new submission but rather determine the matter based upon the evidence and submissions which had already been made.  It was wrong, he contended, to “reopen” the matter at this stage.  In any event, said Mr Hopper, the evidence did not clearly establish the proposition that the suggested scenario was impossible.

35      He took me to the evidence-in-chief of plaintiff’s witness, Mr Dickson (T120, L21 – T121, L8), and his cross-examination of Mr Dickson (T188-9).  He also referred to a passage from the supplementary report of defendant’s witness, Mr Garmony, which, as with the plaintiff’s expert valuation evidence, was omitted without objection or cross-examination.  At CB 1409, Mr Garmony recorded the Abernethy Road property as having been advertised for rent as late as 10 July 2013.  Mr Hopper said that it would have been quite possible, and indeed quite logical, that Niche might have negotiated and committed to a lease commencing in September as at July 2013, and, therefore, the suggested scenario was not impossible. 

36      Both in examination and cross-examination, Mr Dickson, giving evidence for the plaintiff, accepted that Abernethy Road was an available option for his company.  Mr Hopper pointed out that the Abernethy Road property was included amongst the list of possible alternative properties which the plaintiff might have taken up but for the defendant’s conduct, presented as the plaintiff’s secondary or alternative case.

37      Neither party contended that the case should be reopened in the sense of adducing further evidence.  In my view, the parties were correct in refraining from advocating any such course.  This proceeding has already been unduly protracted with lengthy evidence already having been admitted following a reopening.  It would be wrong to protract the proceeding further.   Nevertheless, since all that was being advocated by Mr Hay at this point was consideration of matters which were already in evidence, with no new evidence being adduced, it does not seem to me that the considerations which weighed with the Court of Appeal in Spotlight Pty Ltd v NCON Australia Limited [2012] 46 VR 1, pointing away from the propriety of reopening, arise here.

38      I refrained from publishing my reasons, announcing that I would consider the matters raised by counsel.  Having considered them, I am not persuaded that, in the circumstances, the scenario advocated as a fall-back position by Mr Hopper, which my draft judgment accepted, has been shown to be impossible.  In Victoria, commercial leases are generally not registered under the Transfer of Land Act 1958. There is no “official” source from which one might, as a non-party, determine the commencement date of a particular commercial lease. The situation in the other States is different. A tenant’s interest will only achieve full protection if the relevant lease is registered and, accordingly, they typically are.

39      Since neither of the valuation experts gave evidence, and the present issue was not adverted to during the trial, there is no indication as to the basis on which, or the source from which, the plaintiff’s expert determined the commencement date of the three year lease of the Abernethy Road property.  It might or might not be reliable.  On the other hand, the defendant’s expert, Mr Garmony, has recorded that this property was offered for lease as late as 13 July 2013. 

40      I accept Mr Hopper’s submission that, on the state of the evidence, the suggested scenario is open and one that ought to be considered. 

41      I will therefore publish my reasons in their original form with this postscript.

IN THE COUNTY COURT OF VICTORIA
AT MELBOURNE  No. CI-16-04578
COMMERCIAL DIVISION
EXPEDITED CASES LIST   

BETWEEN

NICHE LOGISTICS PTY LTD (ACN 122 953 833)

Plaintiff

and

BLUESTAR GLOBAL LOGISTICS (AUST) PTY LTD (ACN 130 179 350)

Defendant

PLAINTIFF'S SECOND FURTHER AMENDED ADDITIONAL PARTICULARS OF LOSS AND DAMAGE

Date:  27 September9 May 2018

Filed on behalf of the Plaintiff

Prepared by:

Lander & Rogers
Lawyers
Level 12, 600 Bourke Street

Melbourne  VIC  3000

Code:  211

DX:     370, Melbourne
Tel:     [phone]
Fax:     [phone]
Ref:     GJM:2052413

Attn:    Greg McKenzie

Email:  [email protected]

The Plaintiff provides the following particulars of its loss and damage pursuant to paragraph 17 of the Statement of Claim dated 13 October 2016 (Statement of Claim):

Particulars

PRIMARY CASE

Rent payable for the Former Premises

(a)The rent payable by Niche Logistics for the Former Premises was $297,300.00 per annum plus GST, being $24,775.00 per month plus GST. Had it not vacated the Former Premises based on the Representations, Niche Logistics would have paid $49,550.00 plus GST in rent for the Former Premises for the period of 1 August 2013 (being the date Niche Logistics ceased paying rent in respect of the Former Premises) to 30 September 2013 (being the expiry date of the lease of the Former Premises) such figure being the sum of $24,775.00 multiplied by the 2 months between the dates just stated.

Rent payable for Appropriate Alternative Premises

(b)Niche Logistics says that had it not vacated the Former Premises based on the Representations, it would have entered into a lease of 22 Ballantyne Road, Kewdale, from around 1 October 2013.

(c)The rent payable per annum for 22 Ballantyne Road, Kewdale, would have been approximately $270,000.00 plus GST plus outgoings of approximately $15 per square metre per annum, a total of approximately $25,416.25 per month calculated as follows:

(A)$22,500 per month for rental; plus

(B)$2,916.25 per month for outgoings (based on $15 per square metre per annum, multiplied by 2,333 square metres (being the size of the 22 Ballantyne Road premises), divided by 12);

(d)For 22 Ballantyne Road, Kewdale, for the period of 1 October 2013 (being the date on which Niche Logistics would have vacated the Former Premises) to 30 June 2018 (being the date of the expiry of the Lease of the Premises), Niche Logistics estimates that it would have had to pay $1,448,726.25 plus GST in rent and outgoings, which figure is the sum of $25,416.25 multiplied by the 57 months between the dates just stated.

Amount paid by Niche Logistics for the Premises

(e)For the period of 1 July 2013 to 30 June 2016, Niche Logistics incurred the amount of $1,254,781.20 excluding GST in respect of the Lease, calculated as follows:

(A)the amount that Niche Logistics paid to the landlord in respect of rent and outgoings under the Lease, being $2,509,562.40 excluding GST; less

(B)the amount received from Bluestar Global in respect of rent and outgoings under the Lease, being $1,254,781.20 excluding GST.

(f)From the date Bluestar Global ceased paying rent to Niche Logistics (1 July 2016) to the end of the Lease (30 June 2018), Niche Logistics was (and will be) required to pay a total of $1,808,572.53 excluding GST in respect of the Lease. The basis of the calculation of this amount is as set out in the Particulars of Loss and Damage filed on 2 October 2017.

(g)Thus, Niche Logistics was (and will be) required to pay a total of $3,063,353.73 plus GST calculated as being the sum of $1,254,781.20 + $1,808,572.53.

Mitigation costs

(h)As set out in the Particulars of Loss and Damage filed on 9 May 2018, Niche Logistics has incurred $24,443.40 (excluding GST) in seeking a sub tenant at the Premises.

Amounts received by way of mitigation

(i)Sands has paid Niche Logistics $271,020.21380,772.03 plus GST for occupation up to 15 May 2018. Niche and Sands have now entered into a sublease; and

(j)Sands will pay a total of $414,370.00 plus GST to Niche Logistics during the currency of the Lease.

(k)By way of reliance-based damages, Niche claims the following loss:

Amount paid (and to be paid) for the Premises to 30 June 2018	$3,063,353.73
Less rent payable for Former Premises to 30 September 2013	-$49,550.00
Less rent payable (including outgoings) for Appropriate Alternative Premises from 1 October 2013 to 30 June 2018	-$1,448,726.25
Plus mitigation expenses incurred	$24,443.40
Less amounts received (and to be received) from Sands (being 18.5 months' rent at $22,398.37 per month)	-$414,370.00
Total (excluding GST):	$1,175,150.88

SECONDARY CASE

Rent payable for the Former Premises

(a)The rent payable by Niche Logistics for the Former Premises was $297,300.00 per annum plus GST, being $24,775.00 per month plus GST.  Had it not vacated the Former Premises based on the Representations, Niche Logistics would have either:

(i)paid $49,550.00 plus GST in rent for the Former Premises for the period of 1 August 2013 (being the date Niche Logistics ceased paying rent in respect of the Former Premises) to 30 September 2013 (being the expiry date of the lease of the Former Premises); or

(ii)paid $173,425.00 plus GST in rent for the Former Premises for the period of 1 August 2013 (being the date Niche Logistics ceased paying rent in respect of the Former Premises) to 28 February 2014 (being the expiry date of the option period of the lease of the Former Premises).

Rent payable for Appropriate Alternative Premises

(b)In the event that Niche Logistics was unable to enter into a lease of 22 Ballantyne Road, Kewdale for any reason, had it not vacated the Former Premises based on the Representations it would have entered into a lease in respect of one of the following properties, in respect of which the estimated rent and outgoings are set out below:

Property	Rent / annum	Outgoings / annum (based on $15 per square metre)	Occupation from 1 October 2013 or 1 March 2014	Total to 30 June 2018
505 Abernethy Rd	$400,000.00	$69,780.00	1 October 2013	$2,231,454.99
254 Welshpool Rd	$190,000.00	$22,500.00	1 March 2014	$920,833.33
2 Fargo Way	$185,000.00	$44,925.00	1 March 2014	$996,341.67
25 - 31 Kew Street	$365,000.00	$82,125.00	1 March 2014	$1,937,541.67
16 Hodgson Way	$342,525.00	$40,140.00	1 October 2013	$1,817,658.75
77 Kurnall Rd	$328,500.00	$54,750.00	1 March 2014	$1,660,750.00

Average amounts payable

(c)Accordingly, in the event that Niche Logistics was unable to enter into a lease of 22 Ballantyne Road, Kewdale for any reason, had it not vacated the Former Premises based on the Representations and entered into a lease in respect of one of the above properties, it would have paid the following in:

(i)Rent and outgoings for the Former Premises; and

(ii)Rent and outgoings for the Alternative Premises.

Property	Occupation from 1 October 2013 or 1 March 2014	Amounts payable for Former Premises prior to occupation	Rent and outgoings for Alternative Premises to June 2018	Total
505 Abernethy Rd	1 October 2013	$49,550.00	$2,231,454.99	$2,281,004.99
254 Welshpool Rd	1 March 2014	$173,425.00	$920,833.33	$1,094,258.33
2 Fargo Way	1 March 2014	$173,425.00	$996,341.67	$1,169,766.67
25 - 31 Kew Street	1 March 2014	$173,425.00	$1,937,541.67	$2,110,966.67
16 Hodgson Way	1 October 2013	$49,550.00	$1,817,658.75	$1,867,208.75
77 Kurnall Rd	1 March 2014	$173,425.00	$1,660,750.00	$1,834,175.00

(d)The average of the above amounts is $1,726,230.07 being the sum of the 6 totals in the right hand column divided by 6.

Amount paid by Niche Logistics for the Premises

(e)For the period of 1 July 2013 to 30 June 2016, Niche Logistics incurred the amount of $1,254,781.20 excluding GST in respect of the Lease, calculated as follows:

(A)the amount that Niche Logistics paid to the landlord in respect of rent and outgoings under the Lease, being $2,509,562.40 excluding GST; and

(B)less the amount received from Bluestar Global in respect of rent and outgoings under the Lease, being $1,254,781.20 excluding GST.

(f)From the date Bluestar Global ceased paying rent to Niche Logistics (1 July 2016) to the end of the Lease (30 June 2018), Niche Logistics was (and will be) required to pay a total of $1,808,572.53 excluding GST in respect of the Lease. The basis of the calculation of this amount is as set out in the Particulars of Loss and Damage filed on 2 October 2017.

(g)Thus, Niche Logistics was (and will be) required to pay a total of $3,063,353.73 plus GST calculated as being the sum of $1,254,781.20 + $1,808,572.53.

Mitigation costs

(h)As set out in the Particulars of Loss and Damage filed on 10 April 2017, Niche Logistics has incurred $24,443.40 (excluding GST) in seeking a sub tenant at the Premises.

Amounts received by way of mitigation

(i)Sands has paid Niche Logistics $380,772.03 271,020.21 plus GST for occupation up to 15 May 2018. Niche has entered into a sublease with Sands; and

(j)Sands will pay a total of $414,370.00 plus GST to Niche Logistics during the currency of the Lease.

(k)By way of reliance-based damages, Niche claims the following loss:

Amount paid (and to be paid) for the Premises to 30 June 2018	$3,063,353.73
Less average rent payable (including outgoings) for Former Premises and Appropriate Alternative Premises to 30 June 2018	-$1,726,239.07
Plus mitigation expenses incurred	$24,443.40
Less amounts received (and to be received) from Sands (being 18.5 months rent at $22,398.37 per month)	-$414,370.00
Total (excluding GST):	$947,188.06

Dated: 27 September 20179 May 2018

…………………………………..
Lander & Rogers
Solicitors for the Plaintiff

IN THE COUNTY COURT OF VICTORIA
AT MELBOURNE  No. CI-16-04578
COMMERCIAL DIVISION
EXPEDITED CASES LIST  F.   

BETWEEN

NICHE LOGISTICS PTY LTD (ACN 122 953 833)

Plaintiff

and

BLUESTAR GLOBAL LOGISTICS (AUST) PTY LTD (ACN 130 179 350)

Defendant

PLAINTIFF'S SECOND FURTHER AMENDED ADDITIONAL PARTICULARS OF LOSS AND DAMAGE WITH DEFENDANT’S ALTERNATIVE CALCULATION MARKED UP

Date:  27 September9 May 2018

Filed on behalf of the Plaintiff

Prepared by:

Lander & Rogers
Lawyers
Level 12, 600 Bourke Street

Melbourne  VIC  3000

Code:  211

DX:     370, Melbourne
Tel:     [phone]
Fax:     [phone]
Ref:     GJM:2052413

Attn:    Greg McKenzie

Email:  [email protected]

The Plaintiff provides the following particulars of its loss and damage pursuant to paragraph 17 of the Statement of Claim dated 13 October 2016 (Statement of Claim):

Particulars

PRIMARY CASE

Rent payable for the Former Premises

(l)The rent payable by Niche Logistics for the Former Premises was $297,300.00 per annum plus GST, being $24,775.00 per month plus GST. Had it not vacated the Former Premises based on the Representations, Niche Logistics would have paid $49,550.00 plus GST in rent for the Former Premises for the period of 1 August 2013 (being the date Niche Logistics ceased paying rent in respect of the Former Premises) to 30 September 2013 (being the expiry date of the lease of the Former Premises) such figure being the sum of $24,775.00 multiplied by the 2 months between the dates just stated.

Rent payable for Appropriate Alternative Premises

(m)Niche Logistics says that had it not vacated the Former Premises based on the Representations, it would have entered into a lease of 22 Ballantyne 505 Abernethy Road, Kewdale, from around 1 October 2013.

(n)The rent payable per annum for 22 Ballantyne 505 Abernethy Road, Kewdale, would have been approximately $270,000.00 $400,000.00 plus GST plus outgoings of approximately $15 per square metre per annum, a total of approximately $25,416.25 $39,148.00 per month calculated as follows:

(A)$22,500 $33,333 per month for rental; plus

(B)$2,916.25 $5,815.00 per month for outgoings (based on $15 per square metre per annum, multiplied by 2,333 square metres (being the size of the 22 Ballantyne Road premises), divided by 12);

(o)For 22 Ballantyne Road, Kewdale, for the period of 1 October 2013 (being the date on which Niche Logistics would have vacated the Former Premises) to 30 June 2018 (being the date of the expiry of the Lease of the Premises), Niche Logistics estimates that it would have had to pay $1,448,726.25 $2,231.436 plus GST in rent and outgoings, which figure is the sum of $25,416.25 multiplied by the 57 months between the dates just stated.

Amount paid by Niche Logistics for the Premises

(p)For the period of 1 July 2013 to 30 June 2016, Niche Logistics incurred the amount of $1,254,781.20 excluding GST in respect of the Lease, calculated as follows:

(A)the amount that Niche Logistics paid to the landlord in respect of rent and outgoings under the Lease, being $2,509,562.40 excluding GST; less

(B)the amount received from Bluestar Global in respect of rent and outgoings under the Lease, being $1,254,781.20 excluding GST.

(q)From the date Bluestar Global ceased paying rent to Niche Logistics (1 July 2016) to the end of the Lease (30 June 2018), Niche Logistics was (and will be) required to pay a total of $1,808,572.53 excluding GST in respect of the Lease. The basis of the calculation of this amount is as set out in the Particulars of Loss and Damage filed on 2 October 2017.

(r)Thus, Niche Logistics was (and will be) required to pay a total of $3,063,353.73 plus GST calculated as being the sum of $1,254,781.20 + $1,808,572.53.

Mitigation costs

(s)As set out in the Particulars of Loss and Damage filed on 9 May 2018, Niche Logistics has incurred $24,443.40 (excluding GST) in seeking a sub tenant at the Premises.

Amounts received by way of mitigation

(t)Sands has paid Niche Logistics $271,020.21380,772.03 plus GST for occupation up to 15 May 2018. Niche and Sands have now entered into a sublease; and

(u)Sands will pay a total of $414,370.00 plus GST to Niche Logistics during the currency of the Lease.

(v)By way of reliance-based damages, Niche claims the following loss:

Amount paid (and to be paid) for the Premises to 30 June 2018

$3,063,353.73

Less rent payable for Former Premises to 30 September 2013

-$49,550.00

Less rent payable (including outgoings) for Appropriate Alternative Premises from 1 October 2013 to 30 June 2018

-$1,448,726.25 

-$2,231,436

Plus mitigation expenses incurred

$24,443.40

Less amounts received (and to be received) from Sands (being 18.5 months' rent at $22,398.37 per month)

-$414,370.00

Total (excluding GST):

$1,175,150.88

$392,441.13

SECONDARY CASE

Rent payable for the Former Premises

(w)The rent payable by Niche Logistics for the Former Premises was $297,300.00 per annum plus GST, being $24,775.00 per month plus GST.  Had it not vacated the Former Premises based on the Representations, Niche Logistics would have either:

(i)paid $49,550.00 plus GST in rent for the Former Premises for the period of 1 August 2013 (being the date Niche Logistics ceased paying rent in respect of the Former Premises) to 30 September 2013 (being the expiry date of the lease of the Former Premises); or

(ii)paid $173,425.00 plus GST in rent for the Former Premises for the period of 1 August 2013 (being the date Niche Logistics ceased paying rent in respect of the Former Premises) to 28 February 2014 (being the expiry date of the option period of the lease of the Former Premises).

Rent payable for Appropriate Alternative Premises

(x)In the event that Niche Logistics was unable to enter into a lease of 22 Ballantyne Road, Kewdale for any reason, had it not vacated the Former Premises based on the Representations it would have entered into a lease in respect of one of the following properties, in respect of which the estimated rent and outgoings are set out below:

Property	Rent / annum	Outgoings / annum (based on $15 per square metre)	Occupation from 1 October 2013 or 1 March 2014	Total to 30 June 2018
505 Abernethy Rd	$400,000.00	$69,780.00	1 October 2013	$2,231,454.99
254 Welshpool Rd	$190,000.00	$22,500.00	1 March 2014	$920,833.33
2 Fargo Way	$185,000.00	$44,925.00	1 March 2014	$996,341.67
25 - 31 Kew Street	$365,000.00	$82,125.00	1 March 2014	$1,937,541.67
16 Hodgson Way	$342,525.00	$40,140.00	1 October 2013	$1,817,658.75
77 Kurnall Rd	$328,500.00	$54,750.00	1 March 2014	$1,660,750.00

Average amounts payable

(y)Accordingly, in the event that Niche Logistics was unable to enter into a lease of 22 Ballantyne Road, Kewdale for any reason, had it not vacated the Former Premises based on the Representations and entered into a lease in respect of one of the above properties, it would have paid the following in:

(i)Rent and outgoings for the Former Premises; and

(ii)Rent and outgoings for the Alternative Premises.

Property	Occupation from 1 October 2013 or 1 March 2014	Amounts payable for Former Premises prior to occupation	Rent and outgoings for Alternative Premises to June 2018	Total
505 Abernethy Rd	1 October 2013	$49,550.00	$2,231,454.99	$2,281,004.99
254 Welshpool Rd	1 March 2014	$173,425.00	$920,833.33	$1,094,258.33
2 Fargo Way	1 March 2014	$173,425.00	$996,341.67	$1,169,766.67
25 - 31 Kew Street	1 March 2014	$173,425.00	$1,937,541.67	$2,110,966.67
16 Hodgson Way	1 October 2013	$49,550.00	$1,817,658.75	$1,867,208.75
77 Kurnall Rd	1 March 2014	$173,425.00	$1,660,750.00	$1,834,175.00

(z)The average of the above amounts is $1,726,230.07 being the sum of the 6 totals in the right hand column divided by 6.

Amount paid by Niche Logistics for the Premises

(aa)For the period of 1 July 2013 to 30 June 2016, Niche Logistics incurred the amount of $1,254,781.20 excluding GST in respect of the Lease, calculated as follows:

(A)the amount that Niche Logistics paid to the landlord in respect of rent and outgoings under the Lease, being $2,509,562.40 excluding GST; and

(B)less the amount received from Bluestar Global in respect of rent and outgoings under the Lease, being $1,254,781.20 excluding GST.

(bb)From the date Bluestar Global ceased paying rent to Niche Logistics (1 July 2016) to the end of the Lease (30 June 2018), Niche Logistics was (and will be) required to pay a total of $1,808,572.53 excluding GST in respect of the Lease. The basis of the calculation of this amount is as set out in the Particulars of Loss and Damage filed on 2 October 2017.

(cc)Thus, Niche Logistics was (and will be) required to pay a total of $3,063,353.73 plus GST calculated as being the sum of $1,254,781.20 + $1,808,572.53.

Mitigation costs

(dd)As set out in the Particulars of Loss and Damage filed on 10 April 2017, Niche Logistics has incurred $24,443.40 (excluding GST) in seeking a sub tenant at the Premises.

Amounts received by way of mitigation

(ee)Sands has paid Niche Logistics $380,772.03 271,020.21 plus GST for occupation up to 15 May 2018. Niche has entered into a sublease with Sands; and

(ff)Sands will pay a total of $414,370.00 plus GST to Niche Logistics during the currency of the Lease.

(gg)By way of reliance-based damages, Niche claims the following loss:

Amount paid (and to be paid) for the Premises to 30 June 2018	$3,063,353.73
Less average rent payable (including outgoings) for Former Premises and Appropriate Alternative Premises to 30 June 2018	-$1,726,239.07
Plus mitigation expenses incurred	$24,443.40
Less amounts received (and to be received) from Sands (being 18.5 months rent at $22,398.37 per month)	-$414,370.00
Total (excluding GST):	$947,188.06

Dated: 27 September 20179 May 2018

…………………………………..
Lander & Rogers
Solicitors for the Plaintiff