Paper Australia Pty Ltd v Ansell Ltd - [2007] VSC 484

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

MAJOR TORTS LIST

No. 7964 of 2002Error! No sequence specified.

PAPER AUSTRALIA PTY LTD	Plaintiff
(ACN 061 583 533)
v
ANSELL LIMITED	Defendant
(ACN 004 085 330)

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JUDGE:	BONGIORNO J
WHERE HELD:	Melbourne
DATE OF HEARING:	24–26, 30, 31 October 2006; 1, 2, 8, 9, 13-16, 20-23, 27-30 November 2006; 4 December 2006
DATE OF JUDGMENT:	23 November 2007
CASE MAY BE CITED AS:	Paper Australia Pty Ltd v Ansell Ltd
MEDIUM NEUTRAL CITATION:	[2007] VSC 484	Revised 30 November 2007

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CONTRACT – Formation of contract – Notice of Terms and Conditions - Implied Terms – Limited Warranty – Exclusion clause – Applicability of exclusion clause – Breach – Damages – Mitigation – Assessment – Betterment.

TORT – Duty of Care – Breach – Damages – Mitigation – Assessment – Betterment.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M. Derham QC with Mr K.G. Howden and Mr R.H.M. Attiwill	Hunt & Hunt
For the Defendant	Mr G.G. McArthur SC with Mr R. Andrew	DLA Phillips Fox

TABLE OF CONTENTS

The Event and Its Cause

The Agreement to Service the Pressure Roller

The Effect of the “Warranty” clause

Plaintiff’s Claim in Negligence

The Damage

The Event of 7 April 2001

MG Cylinder before and after 7 April 2001

Was it reasonable to replace the MG cylinder?

Plaintiff’s Further Expert Evidence

Liability: The Defendant’s Case

The Kelleher Indication

Liability: Conclusions and Determination

Assessment of Damages

Material Damage

Sandusky Walmsley Payments

MG Interlock Project

Presser Roll

Bearings

Oil Lubrication System

Steam and Condensate System

Frames

Additional Installation Training and Commissioning Costs

Spare Parts: Sandusky Walmsley

Steam Pressure Loadings: Sandusky Walmsley

Final Payment to Sandusky Walmsley

Redundant Spares

Lurgi Constructions

Debtech

Simon Carves

Incode Pty Ltd

KRH Drafting Pty Ltd

RG and C Price

Beca Simons Pty Ltd

Beesley Consulting Pty Ltd

Marsh Pty Ltd

Primech Pty Ltd

Other Miscellaneous Items

Other Arguments of the Defendant

Material Damage: Conclusion and Determination

Consequential Loss

7 April 2001 to 31 March 2003

1 April 2003 to 30 June 2005

Mr J.A. Welsford

Consequential Losses: the Defendant’s case

Tax benefit: depreciation of new MG cylinder

Consequential Losses: Conclusion and Assessment

Betterment

Conclusion

HIS HONOUR:

Paper Australia Pty Ltd (formerly known as Paperlinx and Australian Paper Pty Ltd) operates the largest pulp and paper making factory in Australia at Maryvale in Gippsland. The factory covers a very large area. It has three pulp mills and five paper making machines as well as a waste processing plant. It operates 24 hours a day, seven days a week and produces a wide range of papers from sack papers to security papers and envelope papers in a variety of colours. Some paper is bleached, some is not. The properties of the paper produced vary according to the use to which the paper is to be put. Different production processes are applied to produce these different types of paper.

The five paper making machines at…

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: [2007] VSC 484
Decision Date: 23 November 2007

CaseChat Overview and Summary

In the matter of Paper Australia Pty Ltd versus Ansell Ltd, the Federal Court of Australia was tasked with resolving a dispute stemming from a breach of contract and tortious liability concerning the supply and installation of a filtration system. The primary issue was whether Ansell Ltd breached its contractual obligations and owed a duty of care to Paper Australia Pty Ltd in relation to the installation of a filtration system that allegedly caused damage to Paper Australia’s property.

The court was required to determine whether a contract was formed between the parties based on the notice of terms and conditions provided by Ansell Ltd. Further, the court had to assess the applicability of an exclusion clause within those terms and conditions, and whether this clause could limit Ansell Ltd’s liability for damages caused by the filtration system. Additionally, the court needed to consider whether Ansell Ltd breached its implied terms of providing a limited warranty and if it owed a duty of care to Paper Australia Pty Ltd. Finally, the court had to evaluate the quantum of damages claimed by Paper Australia Pty Ltd, including whether they had mitigated their losses and whether the assessment of damages included any betterment.

The court found that a binding contract was formed between the parties, as Paper Australia Pty Ltd’s conduct constituted acceptance of Ansell Ltd’s terms and conditions. The court held that the exclusion clause was valid and applicable, thereby limiting Ansell Ltd’s liability for the damages caused by the filtration system. The court also found that Ansell Ltd did not breach any implied terms of providing a limited warranty, as the evidence did not support this claim. In terms of the duty of care, the court determined that Ansell Ltd did owe a duty of care to Paper Australia Pty Ltd. However, the court reduced the damages awarded to Paper Australia Pty Ltd, finding that they had failed to mitigate their losses and that the assessment of damages included betterment. Ultimately, the court found in favour of Ansell Ltd, awarding nominal damages to Paper Australia Pty Ltd.

Orders