Peerless Holdings Pty Ltd v Environmental Systems Pty Ltd
[2006] VSC 194
•2 June 2006
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 8153 of 2001
| PEERLESS HOLDINGS PTY LTD | Plaintiff |
| v | |
| ENVIRONMENTAL SYSTEMS PTY LTD | Defendant |
---
JUDGE: | Hansen J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 25-29 October, 1, 3-5, 8-12 and 15 November 2004, and 2 February 2005 | |
DATE OF JUDGMENT: | 2 June 2006 | |
CASE MAY BE CITED AS: | Peerless Holdings Pty Ltd v Environmental Systems Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2006] VSC 194 | |
---
Contract – Design, supply and install a REECO Regenerative Thermal Oxidiser (‘RTO’) to treat odour emission at plaintiff’s animal rendering plant – RTO to replace existing afterburner – Condition 5 of plaintiff’s EPA licence prohibited discharge of odours which might reasonably be expected to be offensive to the senses of human beings in a residential area – Conditions 1 and 2 of EPA licence permitted limited discharge of odour units - Terms of contract – Whether implied term of fitness for purpose – Nature of process stream to be treated by RTO – Defendant aware that process stream contained fat - Contract required plaintiff to install knock-out device to remove “bulk of condensables” – Interpretation of contract - Meaning of “condensables” – Performance and emission guarantees – Meaning of VOCs - Whether plaintiff required to remove fats and oils from process stream – Plaintiff not required to ensure that process stream essentially free from fat – Fat accumulated and polymerised on internal surfaces of RTO - Bake-out function designed to clean RTO – Whether bake-out function worked – Whether plaintiff’s efforts to clean process stream were effective - Insufficient reduction in odour emission – RTO shut down – Whether breach of contract terms - Causation – Whether RTO failed to perform because of plaintiff’s default – Whether plaintiff acted reasonably in shutting down RTO.
Contract – Damages to which plaintiff entitled - Whether plaintiff failed to mitigate loss by not using biofilters to treat odour emission - Damages subject to exclusion and limitation clauses – Contract stated that defendant did not accept liquidated damages or consequential loss – Meaning of liquidated damages – Meaning of consequential loss – Recovery only of loss of additional gas costs – Whether plaintiff likely to incur additional future gas costs – Plaintiff entitled to recover additional gas costs without allowing for costs of acquiring and installing the RTO.
Trade practices – Pre-contractual representations made by defendant as to performance of the RTO – Failure to qualify representations by disclosing risk fats and oils posed to functionality of RTO - Whether misleading and deceptive conduct induced plaintiff to enter into sale agreement – Damages – Whether cause of action accrued within time prescribed – Trade Practices Act 1974 (Cth), s 52, s 82.
---
APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr P D Santamaria SC and Mr S R Horgan | Clayton Utz |
| For the Defendant | Mr A G Uren QC and Mr C J Blanden | Monahan + Rowell |
TABLE OF CONTENTS
Introduction......................................................................................................................................... 1
The parties........................................................................................................................................... 2
The trial................................................................................................................................................ 3
Evidence............................................................................................................................................... 7
Plaintiff’s witnesses.................................................................................................................. 20
Defendant’s witnesses............................................................................................................... 23
The rendering business conducted at the Merino Street plant............................................... 27
The rendering process............................................................................................................... 27
The Merino Street plant........................................................................................................... 30
Environmental controls............................................................................................................ 32
Odour reduction strategies....................................................................................................... 33
The RTO............................................................................................................................................ 34
Issues.................................................................................................................................................. 36
Further amended statement of claim (“statement of claim”)..................................................... 37
(a) Contract....................................................................................................................... 42
(b) Collateral warranties.................................................................................................... 44
(c) Trade Practices Act/Fair Trading Act......................................................................... 45
Third Further Amended Defence (“Defence”).......................................................................... 47
Further Amended Reply (“Reply”).......................................................................................... 54
Fats and oils – a difference?............................................................................................................ 54
The reports of Cockshott and Newton...................................................................................... 55
A joint report is ordered............................................................................................................ 57
The position following the joint report...................................................................................... 58
The joint report......................................................................................................................... 59
Polymerization of fats and oils in the RTO............................................................................... 67
What were the oils in the process stream?................................................................................ 72
Facts..................................................................................................................................................... 75
The decision to replace the afterburner..................................................................................... 75
The plaintiff begins negotiations with the defendant................................................................. 76
Meeting at site.......................................................................................................................... 80
First proposal............................................................................................................................ 83
Revised proposal....................................................................................................................... 87
Second meeting at site.............................................................................................................. 88
Final proposal......................................................................................................................... 122
Decision to purchase............................................................................................................... 133
Design and Installation.......................................................................................................... 134
The knock-out pot................................................................................................................... 139
EPA approval for works......................................................................................................... 140
Commissioning the RTO........................................................................................................ 144
Truman is engaged................................................................................................................. 161
The RTO is shut down........................................................................................................... 168
Since shut down - overview................................................................................................... 169
Truman’s work and findings on related issues........................................................................ 170
Chronology............................................................................................................................. 171
The pre-treatment works......................................................................................................... 175
The pre-treatment works are complete.................................................................................... 184
The effect of the pre-treatment works...................................................................................... 185
The RTO is shut down for inspection.................................................................................... 188
The internal inspection........................................................................................................... 190
The rotary valve is repaired.................................................................................................... 196
The efficacy of the plaintiff’s clean up efforts........................................................................... 198
Do knock-out devices remove fats from a process stream?...................................................... 200
The cyclone procured by Wood.............................................................................................. 202
Evidence critical of the cyclone............................................................................................... 204
Conclusions on the cyclone.................................................................................................... 210
The alleged errors of Truman.................................................................................................. 212
Cockshott’s alternative knock-out pot design.......................................................................... 229
The EML test results.............................................................................................................. 243
The case in contract........................................................................................................................ 253
The pleadings (at trial and as later amended) and common assumptions............................... 253
The problem – a summary...................................................................................................... 258
Sale agreement - observations................................................................................................. 260
Defendant’s submission.......................................................................................................... 268
Decision on interpretation and breach.................................................................................... 273
Implied terms.......................................................................................................................... 299
Causation............................................................................................................................... 312
Damages................................................................................................................................. 316
The claim for $1,275,520........................................................................................................ 318
Labour costs............................................................................................................................ 320
The cost of dismantling and removing the RTO..................................................................... 323
Additional energy costs.......................................................................................................... 324
Mitigation of loss.................................................................................................................... 327
Schulz’s evidence.................................................................................................................... 332
Conclusions on mitigation of loss........................................................................................... 336
The amount of the plaintiff’s additional energy costs.............................................................. 340
Difference in gas costs as between existing afterburner and RTO.......................................... 342
Setting off RTO purchase price and applying a discount rate................................................ 342
Conclusion on damages – thus far.......................................................................................... 347
Damages – exclusion and limitation....................................................................................... 347
Conclusion on damages.......................................................................................................... 351
Collateral warranties and negligent statement......................................................................... 351
Trade Practices Act/Fair Trading Act.......................................................................................... 351
Damages under the Trade Practices Act................................................................................ 355
Limitation defence................................................................................................................... 359
Conclusion....................................................................................................................................... 367
HIS HONOUR:
Introduction
The question in this case is whether the plaintiff is entitled to damages as a result of the failure of a REECO Regenerative Thermal Oxidiser (“RTO”) provided by the defendant to remove or sufficiently reduce odour emissions at the plaintiff’s animal rendering plant at Merino Street, Laverton North. The plant is close to a residential neighbourhood. The rendering business was conducted under a licence granted to the plaintiff by the Environment Protection Authority (“EPA”). The licence required odour emissions to be dealt with, the plaintiff using an afterburner for this purpose. In 1996, the plaintiff decided to replace the existing afterburner which was reaching the end of its serviceable life, was unable to cope with the volume of air to be treated and was an inefficient user of energy. In 1997, the plaintiff discussed with several parties including the defendant the supply of a replacement afterburner. In July to October 1997 the plaintiff had negotiations with the defendant which ultimately resulted in the defendant giving the plaintiff a written proposal dated 17 October 1997 to replace the existing afterburner with an RTO “sized to cope with the increased air volume requirements” for a price of $698,500. The lead time to supply, install and commission the RTO was 24-26 weeks. The plaintiff accepted the proposal by a purchase order dated 24 October 1997 at a reduced price of $675,000. Following installation of the RTO, and with the approval of the EPA, commissioning of the unit commenced in October 1998. The plaintiff’s case is that the RTO was never able to be made functional as intended, indeed that it was not suitable for the purpose for which it was acquired, and in late July or August 2001, with continuing odour problems at the site, the plaintiff shut down the RTO. It remains at the site unused.
The plaintiff sues on the following causes of action: breach of the sale agreement; breach of collateral warranty; contravention of s 52 and s 53 of the Trade Practices Act (Cth) (“TPA”) and s 9 and s 12 of the Fair Trading Act (Vic) (“FTA”), and negligent statements.
The damages claimed are:
(a) (i) costs incurred in purchasing, installing and commissioning the RTO
(ii) costs incurred in installing additional equipment and modifying the plant in an attempt to make the RTO functional
(iii) costs of repairing the existing afterburner
$1,275,520
(b) Costs of the plaintiff’s employees involved in attempting to make the RTO functional
$223,560[1]
(c) Costs of dismantling and disposing of the RTO, plus GST
$34,000
(d) Additional energy costs incurred as a consequence of the RTO not being functional from 1 January 1999 to –
(i) 31 December 2013
$1,448,881
or
(ii) 31 December 2018
$1,712,419
[1]The amount claimed is $224,000 but that figure has been arrived at by rounding out to the nearest $1,000.
There is no counterclaim or set off.
The parties
The plaintiff is a privately owned Australian company. Since 1980, it has expanded and diversified its activities by purchasing rendering businesses from Pridhams, Hortico and Murray Valley Protein. The plaintiff operates three manufacturing sites in Victoria and has offices in each State. It is involved in organic recycling, production of technical fats and the processing and marketing of edible oils and margarines. Its products are sold in Australia and internationally.
The defendant specialises in the supply of vapour emission control systems and engineering services to the oil, gas and petrochemical industries. It is a wholly-owned subsidiary of a publicly listed company, The Environmental Group Ltd, which has operated in the air pollution control industry for over 20 years.
The trial
The proceeding was originally fixed for trial on 5 May 2003 with the usual orders for a Court Book and witness statements. At the request of the plaintiff that fixture was vacated and the hearing was refixed for 10 November 2003 with revised dates for the Court Book and witness statements. The orders included the usual order that subject to any contrary order of the trial judge, no party except in cross-examination may adduce from any witness at the trial any evidence other than evidence contained in a witness statement served pursuant to the order. Pursuant to the order a Court Book was filed and the parties filed and served their witness statements. Unfortunately, due to other commitments, the Court was not able to accommodate the trial and the proceeding was refixed for hearing on 11 October 2004 on an estimate of duration of 12-15 days. As it turned out the trial commenced before me on 25 October 2004 and ran over 15 sitting days. For the first two and a half days counsel opened their respective cases, the plaintiff for two days and the defendant for half a day. Then, in the remaining time I heard 19 witnesses. The evidence ranged between the factual and scientific in the area of chemical and mechanical engineering. There was also a Court Book of several thousand pages. The hearing time of 15 days was achieved as a result of counsel adhering to an agreed timetable for the conduct of the trial. There was one further day of hearing in February 2005 when I heard final addresses. The final addresses too were compressed; counsel spoke relatively briefly to extensive written submissions. Counsel also handed me six lever arch files of authorities referred to in their written submissions, without elaboration or discussion of the authorities.
Shortly before the trial commenced I heard counsel on preliminary matters.
On 18 October 2004 I made directions which resulted in counsel agreeing to the timetable for the hearing. Among other things, counsel provided me with an agreed description of the RTO, which is included in the judgment.
On 21 October 2004 I heard an application by the defendant to amend its defence to allege that the plaintiff had failed to mitigate its loss in relation to the phasing out of the old afterburner. The plaintiff opposed the application, contending that it came too late and also being fearful that if the amendment were allowed the trial date might be lost. The plaintiff was anxious that the trial proceed, and pointed out that on 2 August 2004 the parties had told the Listing Master the case was ready for trial. Since then the defendant had served a lengthy additional witness statement by its expert John Edward Cockshott, an expert witness statement by a resident of Denmark Vagn Skyggebjerg concerning an animal rendering plant in Denmark, a witness statement of Douglas Robert Buchanan a former officer of the EPA, an expert witness statement of John Terrence Schulz, and now it wanted to amend the defence. The defendant, it was said, wanted to bring about a situation where the Court saw no alternative but to vacate the trial date.
I gave the defendant leave to amend its defence in the terms sought, the amendment to be filed and served on 22 October. I also directed that as soon as practicable the plaintiff’s expert Michael Clevin Newton and the defendant’s expert Cockshott confer and provide a joint report specifying matters agreed and matters not agreed and the reasons for not agreeing. I made these orders on the basis that the trial would proceed on 25 October and that I would hear the plaintiff at any time on the matter of prejudice as a result of the trial proceeding notwithstanding the amendment and the late advised additional evidence.
The experts Newton and Cockshott duly met and provided a report dated 27 October 2004. The report was filed and is Exhibit B.
As it turned out, the only matter to which the plaintiff objected on the ground of prejudice which it could not overcome was the proposed evidence of Skyggebjerg. On 11 November 2004, the day before he was to be called, counsel for the plaintiff advised that he had received a new version of Skyggebjerg’s witness statement at lunchtime, and objected to the evidence essentially on the ground that the late advice of Skyggebjerg as a witness and his evidence deprived the plaintiff of the opportunity to visit the Danish plant and consider how it compared to the plaintiff’s plant and the relevance of Skyggebjerg’s evidence.
Counsel for the defendant said that there were two reasons for Skyggebjerg’s evidence. First, it related to Newton’s evidence, express or inferred, that a process stream for a rendering plant cannot be properly cleaned up so as to allow an RTO to operate on it. Secondly, to deal with assertions in the plaintiff’s opening and in cross-examination that an RTO is not appropriate for a rendering plant. The evidence would be of a rendering plant in Denmark in which an RTO was used satisfactorily, and that would meet the objection that an RTO was not suitable for a rendering plant. It had been said in evidence that the plaintiff had emissions typical of a rendering plant, so the evidence showed that such emissions could be dealt with. Skyggebjerg would give evidence of his experience at the Danish plant. Counsel added that the purpose of the evidence was not to compare the Danish plant precisely with the plaintiff’s plant, but to show that an RTO can work appropriately in a rendering plant which renders animal parts as the plaintiff does, and which is able to clean up its stream by simple methods which are there described. Hence, the evidence was relevant.
The difficulty with Skyggebjerg’s evidence was that regardless of how it was put by counsel for the defendant, ultimately the evidence came back to a comparison of the two plants, and that was something the plaintiff could not deal with as a result of the late introduction of the evidence by the defendant. Moreover the RTO used in the Danish plant is not the same model installed at the plaintiff’s Merino Street plant. Although the design principle upon which an RTO works would seemingly be the same, the capacity and conditions of use might differ. In the circumstances I ruled that I would receive the evidence on the abstract point that an RTO may work in a rendering plant application, but not to establish that the Danish plant is a true and complete comparator to the Merino Street plant. Hence the evidence went in on a point of abstraction, of being an apparent instance of a successful application of an RTO in a rendering plant. I say apparent because it was an abstract instance which the plaintiff could not test. Skyggebjerg was then called, his witness statement was tendered, and his evidence was completed in a matter of minutes without any cross-examination. Counsel for the plaintiff stated several reasons why he did not cross-examine.[2]
[2]See transcript 1303-1304.
I turn then to some matters that arose in closing addresses. These fall into three categories. First, amendments to the pleadings. Secondly, the provision of certain agreed facts to me for the purpose of the judgment. Thirdly, the provision of submissions on the credit of witnesses.
The matter of amendment was raised in the plaintiff’s written submission. Leave was sought to amend the terms of the sale agreement alleged in para 16 and to make corresponding changes to the allegation of breach in para 17 of the amended statement of claim. As a result of the related discussion in the plaintiff’s final address, counsel for the plaintiff sought more time in which to consider the proposed and other amendments. The matter was left on the basis that the plaintiff would consider and provide to the defendant the amendments it desired, the defendant would consider them and advise its attitude including the terms of any amendments to the second further amended defence. Of course, if it became necessary I would rule on any difference that arose.
In the result, on 4 February 2005 the plaintiff provided a proposed further amended statement of claim which amended paras 9, 11, 12, 16 and 17. On 15 February 2005 the defendant advised that it did not oppose the plaintiff having leave to amend, and provided a proposed third further amended defence. The plaintiff not having indicated any opposition to the latter, on 1 March 2005 I ordered that the plaintiff have leave to file and serve a further amended statement of claim in the terms of the draft by 4.00 pm on 3 March 2005, that the defendant have leave to file and serve a third further amended defence within two days of service of the further amended statement of claim, and that the plaintiff file and serve any amended reply within a further two days. The parties duly filed and served their amended statements of claim and defence. None of the amendments raised a point not dealt with by the evidence or the submissions. The plaintiff did not file an amended reply, clearly being content to rely on its existing reply.
The second matter was the provision of agreed information. Subsequent to the conclusion of final addresses I was to be provided with an agreed description of the plaintiff’s rendering business conducted at the Merino Street plant. This information was not, or should not have been, contentious having regard to the real issues in the case. The plaintiff provided a description but the defendant disagreed with it in certain respects. Notwithstanding correspondence the parties remained in disagreement on a number of matters. Having considered the differences, I have incorporated the description in the judgment with changes that I consider appropriate.
The third matter, concerning the credit of witnesses, arose because the written submissions seemed to me not to have dealt adequately with the matter of the acceptance or otherwise of the evidence of the witnesses, in particular the findings that were appropriate in relation to their credit and the reliability of their evidence. As a result of my raising the matter, later in February the plaintiff provided a written submission on credit and the defendant provided a written submission in response.
Evidence
By the end of the trial 19 witnesses had given evidence, nine for the plaintiff and 10 for the defendant. All but one witness, Michael Kim-Yee Cheung, provided a witness statement. The witness statements were extensive and the Court Book was substantial running to several thousand pages although it was culled somewhat for the final tender.
I now turn to the witnesses, and briefly indicate their role and involvement.
The plaintiff called the following witnesses:
(a)Michael Cheung, a mechanical engineer employed by Cardinal Bros, a firm which performs work for the plaintiff from time to time. On 2 December 2002 he quoted the plaintiff $34,000 plus GST as the cost of removing the RTO and associated plant from the plaintiff’s site. An allowance would be made for the salvage value of the materials when removed and sold.
(b)Peter Charles Johnson, who has been employed by the plaintiff at the Merino Street plant for 24 years and is presently Manager, Engineering Services. I refer to this witness as Peter Johnson. He is an engineer, having obtained a Diploma of Chemical Engineering from Royal Melbourne Institute of Technology. In his current position, he is responsible for project engineering, engineering and technical support. He was formerly the site manager and, at relevant times, was responsible for running the Merino Street site. Under the directors, he was primarily responsible for sourcing and negotiating the supply and purchase of the RTO. He signed the purchase order. He gave evidence of the reasons for replacing the existing afterburner. He described the negotiations leading to the purchase of the RTO, the design/installation process, problems experienced during the commissioning process and the later work of the consultant Anthony Harry Truman. He described the decision to shut down the RTO in 2001 and how, subsequently, the plaintiff has dealt with the process streams. His supplementary witness statement provided detail of the losses claimed, method of calculation and figures forming the basis for evidence of Alexander Colin Hutton.
(c)Julius Rath, a director of the plaintiff since 1982 and presently one of two executive directors. He is not a qualified engineer. He attended fortnightly project meetings where his technical staff would keep him abreast of engineering developments. He gave evidence about the business and operations at the Merino Street plant and the factors which informed his decision to acquire the RTO, in particular the potential for significant gas savings. He described the substance of a meeting at which the defendant’s representatives gave a presentation about the RTO. Following the purchase, he delegated to Peter Johnson responsibility for overseeing the installation of the equipment. The defendant made no submission adverse to his credibility.
(d)John Andrew Wood, who was employed by the plaintiff as a Project Engineer from 1990 to August 2000 and now conducts his own mechanical engineering consultancy business, although retained by the plaintiff as a consultant. He obtained a Bachelor of Mechanical Engineering from Monash University. While employed by the plaintiff, he was responsible for projects assigned by the Plant Manager or directors, and the preliminary investigation and identification of problems and offering technical solutions. He performed several repairs and modifications during the commissioning of the RTO. Although he had a limited role in the negotiations to find a replacement afterburner, on 7 August 1997 he attended a meeting with the defendant’s Michael Papas and gave him a tour of the plant. He gave evidence of meetings with the defendant’s representatives on 2 September and 14 October 1997, a telephone call about the plaintiff’s knock-out pot on 15 October 1997 and a meeting concerning the knock-out pot on 14 November 1997. He referred to the plaintiff’s decision to build its own knock-out pot and the unsuccessful attempts to commission the RTO, which included his making a video recording of an internal inspection of the RTO.
(e)Jason Paul Thomas, who was employed by the plaintiff as a process/projects engineer at the Merino Street plant from July 1997 to November 1999 and now works as a project engineer in New South Wales. He is a qualified chemical engineer, having obtained a Bachelor of Engineering from the University of Melbourne. While employed by the plaintiff, he was responsible for supporting process operations and developing and implementing new processes. He gave evidence about the connection of process streams to the RTO in October 1998, the subsequent problems, particularly overheating, and the attempts to rectify them.
(f)Frederick Wuthrich, who was employed for 37 years at the plaintiff’s rendering plants in Merino Street and Braybrook, where he is currently employed as Works Manager. Although having no formal engineering qualifications, he was the person primarily responsible for the original development of the Merino Street site as a rendering plant and, in 1971, helped design and construct the existing afterburner. His evidence concerned the nature of the rendering process and its by-products, the incineration function of the existing afterburner and why it was to be replaced by the RTO. He described his attendance at a project meeting in August 1997 and at meetings with the defendant’s representatives in September and October 1997. Although not involved in attempts to commission the RTO, he was aware of the problems and recalled discussing filters with Peter Johnson.
(g)Michael Clevin Newton, an expert witness and Managing Director of Symex Holdings Ltd, a listed company which processes tallow and coconut oil to make products including fatty acids, glycerine and soap. His expertise is chemistry, having obtained a Bachelor of Applied Science (Chemistry) from Royal Melbourne Institute of Technology, and he has some thirty years’ experience in the tallow industry. As a result of Symex having regularly purchased tallow from the plaintiff, Newton has known the directors since 1990 and has visited both of the plaintiff’s rendering plants. He also visited the Merino Street site for the purpose of preparing his report.
In his witness statement he referred to the fatty and odorous nature of a rendering plant process stream and the reasons for his opinion that detailed testing of the stream was required in order to determine its suitability to be handled by the RTO. He defined and explained the properties of fats and oils, including their ability to polymerize. He said that it was not possible to completely remove fat and oil droplets from a process stream at a rendering plant, that the RTO could only operate on a process stream not containing liquid fat and oil droplets, and concluded that the RTO was unsuitable to treat the process stream. In his witness statement he took issue with, or qualified, some statements of the defendant’s expert John Edward Cockshott. These differences were essentially resolved at their conference. I refer to their agreements below, including the oral evidence of Newton and Cockshott which explained the position agreed, and the evidence of Newton that he limited his evidence to matters within his expertise of chemistry as distinct from the mechanics of the RTO or the velocities or size of droplets.
(h)Anthony Harry Truman, a director and shareholder of A&A Process Engineering Pty Ltd, a consultancy firm dealing mainly with process and environmental engineering and water and waste management issues. He is a chemical engineer, having obtained a Diploma of Chemical Engineering from Royal Melbourne Institute of Technology. In September 1999, Truman was retained to provide technical assistance to the plaintiff and its legal and financial advisers in relation to the RTO and its performance. The parties agreed that he keep them informed of his investigations and recommendations. He described the measures he took to clean up the process stream, including the conversion of the cyclone separator to a conventional knock-out pot, and the approval thereof by the defendant’s representatives. He described the problems experienced after inlet modifications were complete in November 2000, and the subsequent internal inspection of the RTO which led to his concluding that the problem appeared to be a warped rotary valve causing odour leakage. He described his communications with Durr/REECO (the US manufacturer of the RTO) and their joint efforts to resolve the rotary valve issue. He also referred to further tests run on the RTO during which a strong odour was present.
(i)Alexander Colin Hutton, an accountant and loss adjuster, employed by Crawford & Company (Australia) Pty Ltd. He provided a statement of expert evidence, which attached a report setting out the categories and quantum of loss suffered by the plaintiff and the underlying assumptions and accounting methodology. He provided a second witness statement, containing a recalculation of the figures relating to additional gas usage.
The defendant called the following witnesses:
(a)Leonard Thomas Daly, who was employed by the defendant as National Business Development Manager and is presently the Managing Director of Vopak Terminals Australia. He is a qualified engineer, having obtained a Bachelor of Engineering (Chemical) from the University of Sydney. He oversaw Papas’ work on new business matters and he and Papas gave the initial presentation in relation to the RTO at the Merino Street plant. He discussed the plaintiff’s requirements with Peter Johnson and contacted REECO to clarify certain questions, and decided that Alistair John Johnson should handle the project.
(b)Michael Papas, who was employed by the defendant between 1995 and January 1999 as a Business Development Engineer manager and is presently employed by Petrenee Pty Ltd as an engineering manager. He holds the degrees of Bachelor of Engineering (Chemistry) and Master of Applied Science in Environmental Engineering. He handled the plaintiff’s initial inquiry about afterburners, received a facsimile from the plaintiff about the air stream to be treated, communicated with REECO and the plaintiff, and gave the plaintiff a preliminary proposal to supply an RTO. He visited the site on two occasions and, after speaking to Alistair Johnson, provided a revised proposal. He ultimately handed the project over to Alistair Johnson after which he had minimal involvement.
(c)Alistair John Johnson (“Alistair Johnson”), who was employed by the defendant between 1993 and July 1999 as an Applications Engineer and then as Business Development Manager. He refers to himself as Senior Proposals Engineer in correspondence made at times relevant to this case. He is currently employed as a Business Development Manager with Koch Knight, a division of Koch Australia Pty Ltd, and is a qualified engineer, having obtained a Certificate of Mechanical Engineering from North Sydney TAFE. His role at the defendant entailed dealing with clients, assessing their requirements and the suitability of particular technology to those requirements. He gave evidence that upon his supervisor Daly handing him the RTO inquiry, he communicated with Peter Johnson about numerous matters, including the novelty of an RTO in a rendering plant, the need to provide more details about the composition of the process stream and the need for pre-filtration of the vapour stream entering the RTO. He made two visits to the plaintiff’s plant, including the directors’ presentation. He sent the final proposal to Peter Johnson and accepted the purchase order from him. He had limited involvement in the project once the sale agreement was concluded.
(d)Anthony Theodoor Marie Vandewalle, who was employed by the defendant between 1996 and 2000, initially as Projects Manager and then General Manager from 1997 to 2000. He obtained a Diploma of Engineering in Holland and is presently the director of a home maintenance services company. His involvement in the RTO project began with the directors’ meeting at the plaintiff’s site, which principally dealt with commercial rather than technical issues. He was responsible for the wording of the final proposal sent to the plaintiff. He had minimal involvement in the project between the signing of the purchase order and the installation, however he became involved again after commissioning began, having ongoing communications with the plaintiff and its solicitors until leaving in March 2000.
(e)Glenn Jelich, who was employed by the defendant since 1988 and is presently employed by Environmental Group (Operations) Pty Ltd (as the defendant is now known) as a Senior Project Manager. After the plaintiff placed its order, Vandewalle made him project manager of the RTO project, which meant overseeing the fabrication, supply, installation and commissioning of the RTO. He described these processes and his communications with REECO and the plaintiff about certain technical issues prior to installation. He discussed the issue of the process stream and provision of a knock-out device upstream of the RTO with Wood. He was not involved in the commissioning, as Philip Evans took on that role, and he had little further involvement in the project.
(f)Philip Curthoys Evans, who was employed by the defendant for approximately 22 years and is presently employed by Environmental Group (Operations) Pty Ltd as an Engineering Manager. At all relevant times, he held this position. He is an engineer, having obtained a Bachelor of Mechanical Engineering with Honours from the NSW Institute of Technology (now known as University of Technology Sydney). His involvement with the RTO project commenced shortly prior to the purchase order being received, as he was to assist in determining the technical details of the final proposal. He described his visit to the Merino Street plant and his role in the installation and commissioning of the RTO, including his assisting Peter Johnson in relation to the EPA works application. He detailed the problems experienced during the commissioning process and the related communications he had with the plaintiff, REECO and others.
(g)John Edward Cockshott, an expert witness and principal of Cockshott Consulting Engineers Pty Ltd. He obtained a BSC in Chemical Engineering from Imperial College, London University. He attended at the Merino Street plant on 22 October 2002 and provided a statement of expert evidence and a supplementary statement of expert evidence, each statement annexing a report. The first report was to the effect that the RTO failed to function because the process stream actually delivered to the RTO contained fats, inconsistent with the process stream specified in the design parameters nominated by the plaintiff. Further, the plaintiff’s attempts to clean the process stream were inadequate.
The supplementary report provided additional opinions in relation to the cyclone separator and separation devices in general, RTO odour destruction efficiency, and the nature and behaviour of fats and oils.
(h)Terrence John Schulz, an expert witness who is Managing Director and principal of The Odour Unit Pty Ltd, a specialist odour testing company. He is a chemical engineer with expertise in biofilters, having graduated from the University of Sydney in 1975. His evidence was based partly on his knowledge of the plaintiff’s odour collection and control systems derived from a previous site visit unrelated to this litigation. He concluded that the plaintiff’s northern biofilter could successfully treat the feather process stream, subject to certain refurbishments being undertaken.
(i)Vagn Skyggebjerg, the expert witness mentioned earlier who is maintenance manager of a rendering plant at Daka, Denmark, which uses an RTO to incinerate non-condensing gases and treat odours. He qualified as a mechanical engineer from Aahus Engineers School in 1973. He provided a statement of expert evidence, which was admitted on the limited basis referred to at [15] above. He described the nature of the Danish rendering business, the process streams treated, the pre-treatment cleaning methods and the RTO itself, which is not the same model as that purchased by the plaintiff and the subject of this litigation. He stated that the RTO efficiently removes odour, is easily serviced and presents few day to day problems.
(j)Douglas Robert Buchanan, who was employed by the EPA from 1977 until his retirement in 2004. He is a qualified scientist, having obtained a Bachelor of Science, majoring in chemistry, from Monash University. At relevant times he was Project Leader and, being in a senior advisory role for the whole of the rendering industry in Victoria, he had frequent involvement with the plaintiff’s rendering plants. He gave evidence about the obligations attaching to the plaintiff’s EPA licence, the history of complaints received about odour from the plant and the plaintiff’s environmental improvement strategy of which the RTO was a part. He described the decision to grant works approval to install the RTO, and referred to his visits to the plant in 2001 at about the time the RTO was shut down.
It is necessary that I make some observations about the witnesses and now is a convenient time to do so. I do not now go into detailed matters of evidence as that comes later and in the course of which I will conclude as to evidence I prefer and make findings of fact. The observations following are made in light of the particular evidence of the witness concerned and other relevant evidence and the submissions of the parties. As mentioned at [20] counsel supplemented their written submissions, to which they addressed oral submissions, with further written submissions on credit.
It is pertinent to note how the parties dealt with this matter of credit. In their initial written submission counsel for the defendant focussed on the case through the pleadings and in such a manner that while it referred to matters of fact it did not deal overall with conflicts in the evidence and how I should regard the witnesses in terms of the accuracy and reliability of their evidence. There were some exceptions on particular aspects, for instance at para 37 it was said that Peter Johnson’s evidence as to the mention of fats and oils at the meeting on 2 September 1997 was not “a model of reliability” and he was “not convincing on the aspect of the filter”, and at paras 38-40 it was suggested that in his evidence concerning the meeting on 14 October 1997 Wood “got what was said wrong to some degree”. On the aspect of damages that concerned the plaintiff’s claim that it would use the existing afterburner for a further 15-20 years, the cynicism in the defendant’s suggestion that it may not be too long after conclusion of the litigation that the plaintiff would find itself able to deal with the feather stream by an appropriate biofilter, carried an adverse reflection on the integrity of the plaintiff’s case and those that advanced it.
The defendant’s written submission concluded with the following points[3]. An unsatisfactory feature of the plaintiff’s case was that it had not called an independent expert to give evidence in its favour. Neither Newton nor Truman was such an expert. Newton’s company was a customer of the plaintiff, and he had known the directors since 1990. Truman was involved pursuant to the plaintiff’s retainer. It was not, however, correct for the defendant to submit, as it did, that Newton, Hutton and Cheung had been intimately involved in the events giving rise to the claim and had a position to defend. Perhaps counsel meant by this to refer to Truman and those who had been employed by the plaintiff at relevant times.
[3]Paragraph 76.
Conversely, the defendant submitted, the defendant’s expert witnesses, Cockshott, Schulz and Skyggebjerg were independent and possessed impeccable qualifications in their field. It was suggested that Cockshott had been cross-examined on essentially peripheral issues and had not been substantially attacked on the bulk of his report, both as to results and reasons. His reports and evidence were to the effect that the clean up operations conducted by the plaintiff were done for a long time on a false basis, namely:
(a)Wood’s cyclone was not appropriate, one reason being the variable nature of the flow into it.
(b) Truman’s altered knock-out pot was designed on a false basis.
(c) An incorrect assumption that fatty acids and not fats were to be dealt with.
(d)The incorrect state of knowledge of Peter Johnson, Truman and Wood was stated in Cockshott’s evidence at transcript 1190-1212. While anyone can make a mistake, their mistakes “seem fairly fundamental”. Accordingly, where their evidence clashed with that of Cockshott it should not be accepted. The submission was non-specific as to the place in the Court transcript or Court Book, and in relation to which matter, the impugned evidence was.
I can say at once that I reject the submission that Cockshott was cross-examined on essentially peripheral issues and that he was not attacked on the bulk of his report. I deal later with Truman’s work and related issues.
The written submission of the plaintiff provided in response took a different approach, which counsel for the defendant described as a stream of evidence approach. Having summarised the issues, the submission set out a narrative of events in the course of which comments were made upon the witnesses and the case. That was followed by an analysis of the expert evidence. In the course of this substantial criticism was made of Cockshott’s evidence.
The defendant then provided a written submission in reply which perforce included responses on matters of evidence and the witnesses.
In his oral submissions counsel for the defendant observed that ultimately there was not a large amount of dispute of a relevant nature between the parties with respect to a very large number of things. It is apparent that this helped to explain the absence of reference to matters of evidence and resolution of conflicts in counsel’s initial written submission. Counsel then proceeded to describe the fundamental issue for determination and, as to it, the differing approach of the parties. A little further on I commented to counsel that he did not make a submission about the credibility of witnesses, and the evidence I should accept on this or that issue. Counsel replied that in some respects they did and in that respect referred to the submission that Peter Johnson should not be accepted on the early mention of fats. He stated, however, that he did not did say that Peter Johnson ought to be regarded as a dishonest person. Indeed, he did not “think anybody is dishonest in the case”[4]. He then said that Wood’s evidence of a particular conversation was too detailed to be accurate; this, as with the above reference to Peter Johnson, was a reference to the matter specified in the initial written submission and referred to above. Then, their complaints concerning Truman were very largely about whether he was scientifically or technically correct on certain points and whether Cockshott’s expertise was not so much greater that he should be accepted in that regard[5]. Then, Peter Johnson’s assertion that he intended that the RTO deal with the entire process stream was not accepted, and there were other matters on the way. There was also suspicion about the plaintiff’s intention with respect to the future use of the old afterburner. But, although in some respects the bow may have been stretched a bit, counsel said that “we are not making a wholesale attack on anybody’s credibility”[6].
[4]Transcript 1402.
[5]Transcript 1403.
[6]Transcript 1403.
In their oral address counsel for the plaintiff made a number of submissions in the area of the credit and reliability of witnesses. In the course of the submission counsel observed that the case was not “a real credit case, [but] there are credit issues”[7]. He would provide written comments on the credit of witnesses subsequent to the final addresses.
[7]Transcript 1428.
It was in that context that counsel provided written submissions on credit, first by the plaintiff and then by the defendant in response. The plaintiff’s submission runs to 15 pages and rather than being in point form confined to matters that reflected on credit, went further into matters of evidence to the point, as the defendant said in response, of restating the case on the facts. The defendant’s submission runs to 11 pages. The submissions are too extensive to set out. I take into account all that is said in them. I also agree with the defendant’s contention that the plaintiff’s submission appears somewhat unrealistic in its approach that all of its witnesses were persons of honesty and accuracy whereas all of the defendant’s witnesses gave evidence that for various reasons was unsatisfactory.
Furthermore, I also take account of the present or prior involvement of witnesses with the party who called them. That involvement is at its strongest in the case of those who remained in the employ of that party, but as to former employees there is, and was, the natural desire or inclination to self-justify and support the interest of the former employer. It is not to be overlooked that with professional people in particular, one’s personal reputation in their profession and related business circles is most important. I also take account of the effect on memory of the elapse of time. All of the witnesses impressed me as busy people.
While there were matters on which there were differences in the evidence, as to facts and scientific analysis, and which I have had to resolve by making findings, I do not consider that witnesses were just straight out dishonest. At the same time, I consider that the defendant’s proffering of the proposal while keeping silent as to its knowledge of the risk to functionality of the RTO presented by fats in the airstream bespoke a regrettable lack of candour and straight dealing which the plaintiff, relying on the expertise of the defendant, did not have reason to expect. Where I prefer evidence to other evidence on a point it is because of my assessment of the subject witnesses regarding their demeanour and their evidence in context.
With these observations I comment as follows on the witnesses.
Plaintiff’s witnesses
(a) Cheung
His evidence was not challenged and I accept it.
(b) Peter Johnson
I was impressed by his evident experience in the rendering plant business, his concentration on the questions asked and directness in answering which I considered reasonable in manner and attempt, and responsive as he understood the matter. As an example his evidence as to whether he referred to “fatty mists” at the meeting on 2 September 1997, and to not being prepared to swear that he did, revealed that he was not prepared to swear to a matter helpful to the plaintiff’s case if he could not honestly do so. Indeed, that fat was mentioned was consistent with Daly’s understanding that it was a component. At various times below in dealing with the facts I refer to the evidence given by Peter Johnson and make findings as to it. It will be seen that I generally accept his evidence and at times in preference to evidence of the witness or witnesses for the defendant.
In arriving at this assessment of Peter Johnson I have taken account of the defendant’s submission that his evidence that the process stream was to be connected directly to the RTO was not believable. I find that his evidence reflected what had been his understanding reasonably held by him in the circumstances. As it turned out, in the progression of things that was not done as a knock-out device was incorporated, but that is a different matter. I have regard to all that was said on the point by the defendant but, having done so, reject the submission.
(c) Rath
Noting that neither party addressed a specific submission concerning him, and on the basis of my own view, I find that he was an honest witness who gave evidence from his best recollection.
(d) Wood
It will be recalled that the defendant submitted that his evidence of a particular conversation was too detailed to be accurate. This was a reference to his account of the meeting on 14 October 1997 in particular of the discussion concerning fats. I deal with this issue below where I accept the evidence of the discussion given by Peter Johnson and Wood. In other words, taking account of the matters urged by the defendant on this issue, including the evidence of Vandewalle and Alistair Johnson, I accept Wood’s evidence. I was impressed by Wood as a witness and his evident desire to answer questions from his best recollection. I consider also that the matters raised as to fats were in the area of matters likely to be raised.
I do not accept that Wood engaged in reconstruction. As to his ability to recall, his evidence as to Papas’ tour of the plant was detailed and accurate, as was his evidence in other areas. I have not overlooked that his recollection of the size of the capillaries in the ceramic block was wrong, nor do I overlook that his cyclone could not clean the process stream sufficiently so as to prevent the RTO prefilter becoming contaminated with fat and water. Nevertheless, taking account of all that the defendant submitted I found Wood an honest and responsive witness who overall gave accurate evidence from his best recollection.
(e) Thomas
To the plaintiff’s submission that his evidence was not contentious and was corroborated by the contemporaneous documents referred to in his witness statement, the defendant said nothing in response. He impressed me as an honest witness. I accept his evidence.
(f) Wuthrich
Neither counsel mentioned him in their written submissions on credit. I found him an honest witness and accept his evidence. That includes his evidence that at the meeting on 2 September 1997 Papas and Daly said that the RTO would handle what was going into the plaintiff’s afterburner. I refer to this below in dealing with the facts.
(g) Newton
I refer at length to Newton’s evidence when dealing with the scientific issues and the joint report of himself and Cockshott. In that discussion I take account of all that was submitted by the parties concerning Newton. It is sufficient to record here that in giving his evidence Newton impressed me as an intelligent, responsible and articulate person, who had the benefit of many years experience in the processing of tallow. Initially, in his witness statement, he expressed opinions that were outside his area of expertise of chemistry, as I refer elsewhere in this judgment. That is not an uncommon experience with experts. However, sensibly and properly he recognised that error and at the conference with Cockshott and subsequently confined himself to his proper area of expertise, and was both careful and explicit in doing so when he gave evidence. I have regard to the defendant’s point as to Newton’s company having commercial dealings with the plaintiff but consider that his evidence was not influenced or affected by that factor. He was an honest and reliable witness who conscientiously sought to assist the Court with reasonable and appropriate evidence.
(h) Truman
As with Newton, and Cockshott, I deal below with his actions and evidence in dealing with the scientific issues. It is noteworthy that in performing his work from his engagement in 1999 through to 2001 when the RTO was finally shut down, he did what he did on notice to and involving the defendant and REECO. Of course he was engaged by the plaintiff and I take that into account just as I take into account a natural interest to present or describe what he did in a favourable light to himself in terms of his professional judgment. He was presented with a difficult situation and attempted by trial and error to bring to fruition that which had been commenced by others. There was in a sense a marked contrast between himself and Cockshott, Truman being the practical person on the spot seeking to resolve a problem and Cockshott who theorised as to events which had occurred with the benefit of hindsight. Both in the giving of his evidence, and regarding the evidence generally concerning his actions, I was impressed by Truman as a genuine and intelligent person who brought his best endeavours to the task for which he was engaged. He also impressed me as an honest and reliable witness who sought both to answer questions from his best recollection and to assist the Court.
(i) Hutton
He impressed me in having brought his independent judgment to bear on the formulation and preparation of the plaintiff’s claim. That he did not proceed exactly as instructed was to his credit in my view. His readiness to make concessions in cross-examination impressed me, demonstrating, as it did, commonsense and a reasonable, non-argumentative, approach. The relevant issues were clearly enough exposed. He was an honest witness.
Defendant’s witnesses
It is convenient to commence this section with an explanation of how counsel for the defendant structured their written submission on credit concerning the defendant’s witnesses. Whereas the plaintiff’s written submission had dealt with each witness in turn save for Buchanan (as to whom neither party made any point and as to which it accordingly seems unnecessary for me to do so), the defendant commenced with a blanket submission then dealt specifically with the expert witnesses Cockshott, Skyggebjerg and Schulz.
In the blanket submission it was said that the defendant’s witnesses displayed no more than the usual behaviour patterns of non-professional witnesses. Without fully summarising the submission, it was said that the view of the defendant’s witnesses was that the plaintiff had described the airstream to be treated and that they proceeded on that basis. The plaintiff’s questions to the witnesses concentrated on the process stream as a whole, but that is not what the witnesses understood the RTO was to deal with. This was a telling consideration as to the plaintiff’s case as a whole and as to credit in particular.
Having said that, the defendant’s submission turned to Vandewalle. As however, Daly, Papas and Alistair Johnson gave evidence before he did, I say something about them first.
(a) Daly
The plaintiff criticised Daly as an unsatisfactory witness who did not answer questions directly, was non-responsive, evasive and argumentative. What was seen, I considered, was a strong inclination to self-justify a rationalised situation and a tendency to be argumentative. It will be seen later in dealing with the facts that I have preferred evidence of witnesses for the plaintiff to evidence of Daly where there was conflict. It is not that I disregard his evidence as though given by a dishonest witness, rather that in certain respects his evidence was affected in the way mentioned and I prefer other evidence to that given by Daly.
(b) Papas
I consider that Papas was basically an honest witness. It was however noticeable to me that as his cross-examination progressed he firmed up his evidence on the defendant’s case theme concerning the process stream. Counsel for the plaintiff politely described it as his recollection of events improving by cross-examination. Further, as discussed below in dealing with the facts, I do not accept certain evidence of Papas.
(c) Alistair Johnson
The plaintiff expressly accepted that Alistair Johnson was an honest witness but pointed out the many instances where, and at times contrary to his witness statement, he had no recollection of the discussion. A particular instance of a lack of recollection, and of a contemporaneous record, concerns his conference call with REECO on 15 October 1997, which lack of recollection I found remarkable in the circumstances. I refer to and deal with his evidence below in dealing with the facts.
(d) Vandewalle
He is an intelligent man of strong character and firm disposition. He was responsible for the terms of the final proposal accepted by the plaintiff. While I considered him to be a generally honest witness it was perhaps not surprising having regard to these matters that he tended to the argumentative to support the defendant’s case. I should note that I thought it remarkable that he had no recall on the matter of the conference call on 15 October 1997, to which I refer below in dealing with the facts.
(e) Jelich
He impressed me as an intelligent and alert person who gave evidence to his best ability on his recollection. The plaintiff’s criticism as to certain parts of his evidence being in the nature of commentary based on what he had read was correct, strictly speaking, but that was due to the terms of the cross-examination.
(f) Evans
He was older than, and senior to, Jelich who was the project manager. He impressed me as a basically honest person and an evidently capable engineer who foresaw the potential for a problem with the RTO from the outset. He sought to give evidence from his best recollection. However, he exhibited a lack of frankness in not informing the plaintiff of his concern or view that the rotor or stator may have been damaged in the overheat incident I refer to below in dealing with the facts. Nor, surprisingly, did he have recall on the matter of the conference call on 15 October 1997.
(g) Cockshott
It was plain enough that he possessed expertise to qualify him to give opinion evidence. It was however regrettable that his initial and supplementary reports attached to his witness statements took the form that they did which was in consequence of the failure of the defendant’s solicitor to request his opinion on questions or points stated and on the basis of identified documents and facts otherwise stated or assumed. Rather, he was provided with the pleadings, some witness statements and the Court Book which he reviewed and then wrote a report on matters which he considered arose. In doing so he expressed his opinion on the interpretation of the sale agreement and descended into commentary, perhaps not surprising given the open ended nature of the task he undertook. Counsel for the plaintiff took well founded objections to the admissibility of certain parts of the reports. In the ordinary course the tender could have been rejected whether as to the whole or parts of the reports. In view, however, of the lack of time before the trial was to commence, and the desire of both parties that the trial be had, the realistic course was to proceed with the reports as they were but noting the plaintiff’s objections and not determining the case on inadmissible material. In view of this there is no need to rule on the objections or discuss the authorities referred to by counsel for the plaintiff. The fact that the matter was dealt with thus in this case should not be taken as a green light for expert evidence to be presented in the way Cockshott’s was.
Furthermore, there was a risk in this manner of proceeding of Cockshott becoming wedded to the issues and arguments which he had identified and set out. In other words, the risk of sliding into the role of the all too common partisan expert.
As I have said, Cockshott was qualified to give opinion evidence in the subject area. I would add to that he was a witness of evident intelligence and relevant knowledge and was an honest witness. But he was certainly there to press the case he had formulated, and he did so.
I deal below with the scientific issues and thus do not venture into that area here.
(h) Skyggebjerg
I referred to this witness, and the limited point on which I received his evidence, at [13]-[15]. Notwithstanding that, the plaintiff submitted that the evidence should be rejected on two grounds. First, the prejudice to the plaintiff not being able to deal with the evidence. Secondly, because whether an RTO (of different make and model) works on a different rendering plant in Denmark says nothing about the working of the RTO at the plaintiff’s plant. This objection is not concerned with the “credit” of Skyggebjerg but with the relevance of the evidence and the weight to be afforded to it. As to that, the evidence stands for no more than the abstract point to which it was admitted as stated at [15].
(i) Schulz
I considered that Schulz was an honest witness. The plaintiff’s submissions concerning him went not to credit but to matters to be considered in the overall assessment of his evidence regarded in all of the circumstances.
The rendering business conducted at the Merino Street plant
The rendering process
In general terms, the business of rendering involves the processing of inedible animal wastes sourced from abattoirs to produce fat and meal, which is then supplied to the stockfeed, soap and chemical industries. Typically, these organic wastes are turned into tallow, grease[8] and protein meals. Rendering plants also typically produce blood meal and feather meal, with protein content. Some abattoirs and poultry processors have rendering plants integrated into their operations on-site so that there is no need to transport the animal waste and the waste is processed without delay. The plaintiff’s plant at Merino Street, however, collects animal wastes from a variety of sources – abattoirs, butchers, supermarkets, poultry producers and the like. The wastes collected by the plaintiff include blood in liquid form and poultry feathers.
[8]The word “grease” was included in the description provided by the plaintiff. Notwithstanding that this description is of that which is generally or typically produced in the business of rendering, and was stated to be such in the description provided by the plaintiff, the defendant objected to the statement that grease was a product of the organic waste, on the basis that there was no evidence that it was or, more particularly, that it was in the case of the plaintiff’s business. This objection was one of those taken by the defendant to the description of the plaintiff’s rendering business provided by the plaintiff. The objection may be understandable in that the plaintiff’s evidence did not seek affirmatively to establish that grease was a product of the rendering process. On that basis the objection is correct. However, it should be noted that in the article “Rendering Plants” which Papas located in the defendant’s library (see at [206] below), it is stated that grease, along with tallow and protein meals, are products of the rendering process. And it should not be overlooked that in the processing of the organic wastes, there is the uncontradicted evidence of Wood of his observation at the inspection with Papas on 7 August 1997 of “rancid thick grey-black grease” on surfaces of ducts emanating from the higher temperature parts of the plant; see para 12(5) of Exhibit J.
The main rendering processes used by the plaintiff at its Merino Street plant are High Temperature Rendering, Wet Rendering, Milling and Screening, Blood Meal, Poultry Feather, a Recovered Meal Process, the Wool Plant, the Evaporator, the Waste Cooking Oil Recycling Process and the Recovered Fat Process[9].
[9]Court Book 1932-1933.
More specifically, animal by-products from slaughter operations are received at the plant. They are processed by being dumped into receiving hoppers from where the by-products are conveyed to the pre-breakers and the fine grinders for mincing. The minced material is then pumped to the continuous cookers where water is evaporated from the material and condensed in a shell and tube condenser. Most of the materials received are made up of fat, water and solids. The process is to remove the water from the fat and solids and then to separate and refine the fat and solids into usable products. At the Merino Street site there are two processes for rendering the animal by-products. One is a wet rendering process and the other is a dry rendering process or high temperature process. The high temperature process uses heat energy to drive off the water. There is then a mechanical separation of the fat and the solids, and a refining process where the remaining fat is squeezed down to about 12 per cent out of the solids. There are separators and decanters (which are large centrifuges) to remove the remaining solids and water out of the fat to refine the fat to a usable product. The wet rendering process uses mostly mechanical energy to dewater the material. The material is pre-heated, put through a press and then the solids are dried in a large dryer. The fat and water which come from the press are put through the centrifuges to separate the bulk of the water out of the material. The remaining fat and a small amount of water goes to another larger type of centrifuge. This process separates out the tallow. The solids that are dried in the dryer and pressed out of the presses are combined from both the high temperature and the wet rendering processes. The resulting condensate is discharged to the effluent treatment plant and the non-condensable gases are treated by other means. The cooked material is then conveyed to the presses where solids, such as meal and bone, are separated from the tallow. They are milled and screened and converted to meat and bone meal. Tallow is used in the olio chemical industry, the soap industry and the stock feed industry. Meal and bone is basically used in the stock feed industry as a supplement to feed stock. This process by its very nature generates vapours containing steam, fats, oils and fine solids[10]. These vapours are, in terms of odour, very strong.
[10]I deal later in the judgment with issues concerning the composition of the process stream and in particular what constitutes an oil and whether “oils” were present in the process stream.
The plaintiff’s plant also processes animal blood which consists of water and solids. The blood is collected from abattoirs and processed by coagulating the protein with direct steam injection. The coagulated protein is separated from the liquid by centrifuge and then dried and milled. The end product is a high protein meal used as a feedstock for aquaculture and general animal feed.
Another process at the Merino Street plant is the feather process which processes poultry feathers. Feathers in their raw state are indigestible; they are useless as a feedstock to animals. Once the feathers are broken down into amino acids, which is protein, the material is more digestible to the animal so that it can be used as a stock feed.
The plant is capable of handling over 1,000 tonnes of material per day. Peter Johnson described the plant as being “very large” on a world basis.
The Merino Street plant
Rendering operations at the Merino Street site began in the early 1960s. In the 1960s it was an isolated area, zoned for offensive industries and serviced by dirt roads. The site was not sewered, hence effluent was pumped directly into the main outfall sewer, a situation that was only changed during the late 1980s. The plant was built as a service rendering facility, that is, a rendering plant not attached to an abattoir but one servicing many abattoirs. In October 1985, the plaintiff purchased the rendering business and thereafter conducted it at the Merino Street site under the name “Pridham”.
As a means of controlling and eliminating odour emission, in 1971 an afterburner[11] was incorporated into the processing operation. There was also a scrubber and, later, biofilters for this purpose; I refer to these below.
[11]I refer to this throughout the judgment as the “existing afterburner”, as the “old afterburner” or as a “conventional afterburner”.
At that time, the afterburner was required to service 2 cookers and 5 pressers. The afterburner was designed to incinerate vapours from the pressers and process equipment as well as non-condensable gases from the condensers. The design specification was to incinerate 34 m3 (1200 ft3) of process vapours per minute at 7600C with a retention time of 0.4 of a second, at a velocity of 9 metres per second. The afterburner could handle about 6000m3 per hour of process vapours.
The afterburner had no heat recovery, meaning that the energy required to heat the afterburner was lost. In around 1995, the plaintiff incorporated a gas vortex meter in the gas feed line to the afterburner. The meter enabled the plaintiff to measure the volume of gas consumed in cubic metres per hour in the operation of the afterburner. The afterburner used approximately 290m3 per hour of gas on average, as measured by the gas vortex meter. The cost in 1997 figures of the gas consumption for the afterburner was about $250,000 per annum.
The afterburner operated in tandem with what is known as a “knock-out pot”, often called a KO Pot, which was to remove droplets of water, fats or solids from the process stream prior to its entry into the afterburner.
The afterburner and the ducting leading to it comprised:
· ducting which collects and carries the process stream from the rendering processes to the knock-out pot;
· fans which force the process stream through the ducting;
· a gas burner which controls the combustion chamber temperature and generates the heat required to oxidise [i.e. incinerate] the organic material;
· a combustion chamber in which the process stream was immediately subjected to temperatures in excess of 7600 C at which temperature all the organic material (whether it be fat, oil, organic particulate, solid contaminants, aerosols and the like) is oxidised to basic components (i.e. nitrous oxides, sulphur oxides, water vapour etc); and
· a stack to vent to the atmosphere the treated process stream.
Over a period of years, operations at the Merino Street site expanded. By 1996, the afterburner was taking process vapours from 4 cookers and 9 pressers; whereas initially, it was required to service (only) 2 cookers and 5 pressers. Its workload had approximately doubled. As a result by 1996 the afterburner could not handle the volume of process streams that were ducted into it. It was operating at over capacity and it was difficult to maintain the incineration temperature required as a condition of the licence issued by the EPA. Consequently, the plaintiff was required to increase gas usage to attempt to maintain the incineration temperature of the afterburner. Further, there were structural concerns about the afterburner. It was approximately 25 years old and its brickwork was starting to crumble. It should be added that over the years the EPA was concerned with odour emission from the site; whether or not the odour could be identified as coming from the afterburner or the plant as a whole.
Accordingly, in 1996 the plaintiff decided to replace the afterburner with an afterburner that would be more cost effective in terms of gas usage and more efficient in its capacity than the existing afterburner.
Environmental controls
Operations at a rendering plant are regulated by the EPA. Unless the rendering processes are regulated by imposition of controls, the residential amenity of surrounding neighbourhoods would be affected by offensive odours.
In the case of the Merino Street site, the plaintiff has since 17 April 1986 held a licence under s.20 of the Environment Protection Act 1970 to discharge or emit waste to the atmosphere from the site[12]. Although condition 5 of the General Conditions of that licence prohibited the discharge of odours “which might reasonably be expected to be offensive to the senses of human beings in a residential area”, conditions 1 and 2 of the General Conditions allowed the discharge of odours to specified degrees from the various discharge points at the site[13]. The relevant schedule provided that, from the RTO discharge point, an odour concentration of up to 500 odour units was permitted, which was stated to be a mass rate of 50,000 odour unit volumes per minute. Although counsel did not address me on the issue, it seems likely that the EPA took the view that emission of odour at or below the concentrations specified in the relevant schedule would ensure that the odours would not “reasonably be expected to be offensive to the senses of human beings in a residential area” within the meaning of the licence.
[12]The plaintiff had taken a transfer of the licence issued to W. Pridham (Aust) Pty Ltd on 18 February 1974.
[13]Schedule C, Table 1 at Court Book 127 and 129.
Limitation defence
Having dealt with damages I now deal with the defendant’s contention that no damages are recoverable by reason of the proceeding having been commenced after the expiration of the prescribed period of three years.
The period of three years was stipulated in s 82 of the Trade Practices Act as follows:
“82(1)A person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part IV or V 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 sub-section (1) may be commenced at any time within 3 years after the date on which the cause of action accrued.”
Sections 52 and 53 are contained in Part IV of the TPA.
Save for one immaterial difference, s 37(2) of the Fair Trading Act 1985 (Vic) was in the same terms as s 82. However, the FTA 1985 was repealed by the Fair Trading Act 1999 (Vic) which came into operation on 1 September 1999. In the FTA 1999 the provision for actions for damages became s 159(1) and the limitation provision became s 159(3). In the latter provision the period of three years was made six years after the date on which the cause of action accrued. In para 34 of the defence it was alleged that the FTA 1985 and not the FTA 1999 applied in this case. In its reply the plaintiff did not specifically plead to that contention but concluded with the usual statement that save for admissions and otherwise as stated in the reply the plaintiff joined issue on the defence. In order to clarify the plaintiff’s position on the applicability of the FTA 1999 I sought and have obtained a submission on the point. In its submission the plaintiff concedes that the FTA 1985 is the applicable legislation. Accordingly, I do not consider the FTA 1999.
Section 82 of the TPA was in its above form when the parties entered into the sale agreement. Section 82(2) was however amended with effect from 26 July 2001 by the Trade Practices Amendment Act (No. 1)2001 (Cth), s 20. The amendment omitted all words after “within”, substituting for them “6 years after the day on which the cause of action that relates to the conduct accrued”. The following section, s 21, provided for the transitional position. Sub-section (1) provided that the amendment applied in relation to conduct engaged in on or after the commencement of the amendment. Sub-section (2) provided that the amendment also applied in relation to conduct engaged in before the commencement, but only if the period that related to the conduct, and applied under s 82(2) before the commencement, had not ended when the amendment commenced.
Some relevant dates may immediately be noted. The parties entered into the sale agreement on 24 October 1997. The initial attempt to commission the RTO commenced on 16 October 1998. The plaintiff decided to finally shut down and no longer use the RTO at or near the end of July 2001. The plaintiff commenced this proceeding on 31 October 2001.
Counsel for the defendant submitted that for the purpose of s 82 of the TPA and s 37 of the FTA the plaintiff’s cause of action accrued on the date on which the plaintiff suffered loss and damage by reason of the defendant’s contravening conduct. That was 24 October 1997 when the parties entered into the sale agreement. By that agreement the plaintiff undertook to purchase the RTO which, on its case, was valueless to it in that the RTO would not operate successfully on the inlet stream, and the requirements it was obliged to undertake to clean up the process stream could never be successful. No contingency affected those obligations. They were then and there things required to be done. On this case the plaintiff could have sued for damages immediately after entering into the contract. On that basis the plaintiff’s loss occurred, and its cause of action accrued, before it commenced the proceeding; see HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd[689]; Scarcella v Lettice[690] and Wardley Australia Ltd v Western Australia[691]. It had also paid the bulk of the monies due under the sale agreement.
[689](2004) 211 ALR 79 at 88-89, [27]-[33].
[690](2000) 51 NSWLR 302 at p 305-309, [11]-[32].
[691](1992) 175 CLR 514.
Counsel for the plaintiff responded as follows. Section 82 had two elements, contravention of a provision of the Act and the resultant suffering of loss and damage. Accordingly, a cause of action under s 82 does not accrue on contravention but when loss and damage is suffered in consequence; see Arcadi v Colonial Mutual Life Assurance Society Ltd[692]. In the present case the RTO was not, by reason of an inherent defect, worth less than the price paid. Nor was it the case that the plaintiff was obliged to pay money without gaining any corresponding benefit. If either situation had been otherwise the loss would have been suffered immediately upon entry into the agreement.
[692](1984) ATPR 40-473 at 45,450.
Further, in essence the plaintiff’s claim was for economic loss arising from purchase of the RTO which had failed to perform in accordance with the defendant’s representations.
In such a case no loss was suffered until there had been a balancing of benefits and burdens leading to the conclusion that loss had been suffered, relying as to that on statements in Wardley to which I return below.
In the present case, whether or not the RTO performed in accordance with the representations made by the defendant could only be ascertained at the earliest on commencement of the initial commissioning on 16 October 1998 or when it was obvious the RTO would never perform in accordance with the representations which was July 2001, notwithstanding the plaintiff’s endeavours to have it perform. It was submitted that in these circumstances the cause of action did not accrue until the earliest on 16 October 1998 when the RTO first received the process stream or before July 2001 when it was finally switched off. Accordingly the cause of action under s 82 was not barred when the period under s 82(2) was extended to six years.
In reply the defendant submitted that even allowing for a cut-off date of 26 July 1998, the plaintiff had by then suffered loss for which it could have sued, for the reasons already submitted. Accordingly, the cause of action accrued before 26 July 1998. If the RTO was unsuitable as the plaintiff claimed, then as at entry into the sale agreement it was not going to get the gas savings and it had purchased an asset that was worthless, and which increasingly became more so. Further, it was paying for the RTO by instalments. All of this happened before 26 July 1998. Consequently the suffering of loss was not delayed until a “balancing” exercise was able to be done.
I now deal with the submissions and decide the issue raised by counsel.
It is long established that the cause of action under s 82(1) does not accrue until loss or damage has been suffered as a result of conduct in contravention of the Act, in the present case s 52. It follows, as Toohey J observed in Arcadi[693], that loss or damage may not be suffered until some time after the contravention. Further, loss or damage in this context means actual loss or damage incurred, as distinct from potential or likely damage or prospective or contingent loss[694]; actual in this sense meaning loss or damage that is measurable and not negligible. Of prospective or contingent loss Mason CJ, Dawson, Gaudron and McHugh JJ in their joint judgment in Wardley[695] said that:
“ … in such a case, the plaintiff sustains no actual damage until the contingency is fulfilled and the loss becomes actual; until that happens the loss is prospective and may never be incurred.”
However, this does not mean that every aspect of the loss and damage as it may ultimately transpire to be sustained must be actually sustained before the cause of action is complete and accrues. In Wardley[696] Mason CJ, Dawson, Gaudron and McHugh JJ referred to “the need for actual, as distinct from prospective, damage before prospective damages can be included in the award”. See also Karedis Enterprises Pty Ltd v Antoniou[697] and HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd[698].
[693](1984) ATPR 40-473 at 45,454.
[694]Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 528, 530-532, referred to in Scarcella v Lettice (2000) 51 NSWLR 302 at 306.
[695](1992) 175 CLR 514 at 532.
[696]1992) 175 CLR 514 at 530.
[697](1995) 59 FCR 35.
[698](2004) 211 ALR 79 at 88-89, [27]-[33].
The time at which it is to be said that actual loss or damage has been suffered is a question of fact to be decided in light of the relevant circumstances. So much was made clear by the High Court in Wardley where it was held that a person who gave an indemnity did not suffer loss until the obligation to indemnify was called up. In their judgment in Wardley[699] Mason CJ, Dawson, Gaudron and McHugh JJ said of the concept of loss or damage in the context of misrepresentation:
“When a plaintiff is induced by a misrepresentation to enter into an agreement which is, or proves to be, to his or her disadvantage, the plaintiff sustains a detriment in a general sense on entry into the agreement. That is because the agreement subjects the plaintiff to obligations and liabilities which exceed the value or worth of the rights and benefits which it confers upon the plaintiff. But, as will appear shortly, detriment in this general sense has not universally been equated with the legal concept of ‘loss or damage’. And that is just as well. In many instances the disadvantageous character or effect of the agreement cannot be ascertained until some future date when its impact upon events as they unfold becomes known or apparent and, by then, the relevant limitation period may have expired. To compel a plaintiff to institute proceedings before the existence of his or her loss is ascertained or ascertainable would be unjust. Moreover, it would increase the possibility that the courts would be forced to estimate damages on the basis of likelihood or probability instead of assessing damages by reference to established events. In such a situation, there would be an ever-present risk of undercompensation or overcompensation, the risk of the former being the greater.”
[699]At 527. See to Brennan J at 536-537.
It is important to note the distinction in this passage between detriment and the actual sustaining of damage, and to the unfolding of events in which the disadvantageous effect of the agreement becomes apparent. Hence while in a simple case of an agreement for the purchase of an asset on the faith of a misrepresentation, where the asset is worth less than represented, the loss or damage is generally held to have been suffered at the time the contract was entered into or perhaps when the price was paid, there will be other cases where it is not until a later date that the disadvantageous character or effect of an agreement is, or should have been, ascertained. This was referred to by Burchett and Hill JJ in Karedis[700] in which case the other member of the Full Court, Sackville J, added[701] that the above passage in Wardley suggested that where the applicant has been induced by misleading and deceptive conduct to enter into a lease, as in that case, no loss is ascertained or ascertainable unless and until the existence of the loss is ascertained or ascertainable by the applicant (emphasis in the judgment).
[700]Karedis Enterprises Pty Ltd v Antoniou (1995) 59 FCR 36 at 40.
[701]At 47-48.
In the present case it was not a defect in the RTO that resulted in it not providing the plaintiff with adequate odour emission control. The problem was that notwithstanding the removal of the bulk of the condensables the RTO was unable to handle the airstream with the quantity of fats contained within it. It was unfit for the purpose under its conditions for use stated in the terms of the agreement prepared and proffered by the defendant. This was a consequence not known by the plaintiff when it accepted the proposal or when commissioning commenced in October 1998. The circumstances of this application of the RTO, unique in Australia, were such that the plaintiff could not, on or shortly after the initial commissioning, have appreciated the ultimate position that the RTO would so fail that it would be shut down in July 2001, let alone that loss or damage would be suffered. As I said earlier in this judgment, in a technological application of the magnitude involved in this case a degree of running in and fine tuning was to be expected, at the least. It was implicit that that process would be at some effort and cost to the plaintiff but it is another thing altogether to have considered these matters as arising on breach or by reason of the RTO being unfit for its purpose, or as constituting actionable loss or damage. Furthermore, they were to be seen in the overall context of achieving the long term savings in gas and efficiency resulting from the use of the RTO. It was understandable that with patience and endeavour, and with expectation of succeeding, the plaintiff sought to have the RTO function as intended. As Peter Johnson said, the plaintiff was interested in getting the RTO on line and working, not in pointing fingers[702].
[702]Transcript 342-343.
It is important that the defendant was informed of these attempts, and encouraged and supported the plaintiff in its efforts to bring about a successful application. That contributed to the plaintiff continuing the attempt to have the RTO properly perform its function.
The plaintiff submitted that the fact that between the attempted commissioning in October 1998 and the final abandonment in July 2001 it spent a great deal of time and money endeavouring to overcome the problems with the RTO, reflected that it was not clear to the plaintiff that the RTO could never perform in accordance with the defendant’s representations. If it had been clear, the plaintiff would not have wasted the time and money. It was submitted that it was not until July 2001 that it became plain that an “adverse balance” had been struck.
In my view the present is not one of those cases in which actual loss was suffered on purchase of the subject asset. There was no way at that time that it could have been supposed that the RTO was not fit for its intended purpose of controlling odour emission. For one thing, as I have said, the RTO was not defective. For another thing, the unsuitability of the RTO was not apparent until after installation at the plaintiff’s plant and a period of use in which attempts were made to bring it to a properly functioning state. Ultimately however, in light of the failure of the RTO to control odour emission notwithstanding all the effort and expense devoted to that effect, the plaintiff decided to shut down the RTO. That decision was open to it and was reasonably made in my view.
In the circumstances I reject the defendant’s submission that the plaintiff suffered loss and the cause of action under s 82 accrued either on entry into the sale agreement or before 26 July 1998.
Further, I find that the present is a case in which for the reasons given, loss was not suffered or was appreciated to be suffered, or ought reasonably to have been appreciated as having been suffered, prior to the initial commissioning in October 1998. The more difficult question is at what time thereafter it is to be held that loss was suffered.
I do not accept the plaintiff’s submission that the loss was not suffered before July 2001 when the RTO was finally shut down. The submission proceeded on the basis that it was not until then that an adverse balance was struck which established an actual loss had been suffered by the plaintiff. In my view, that is unrealistic. It disregards that as long before as September 1999 the plaintiff had retained solicitors and Truman, and the subsequent history. By the time the solicitors and Truman were engaged there was sufficient information before the plaintiff for it to appreciate that the time, effort and cost to then applied to the RTO, but certainly subsequently, would constitute a financial disadvantage unless recouped from the defendant.
I do not consider, in the circumstances of this case, that the ascertainment of the suffering of loss should properly be regarded as postponed until such time as there had been or could be an actual balancing of benefits and burdens leading to a conclusion that loss had been incurred. Each case must depend on its own facts and circumstances. In my view, the effort and cost expended by the plaintiff together with the continued failure of the RTO to fulfil its intended purpose of odour emission control, was sufficient for the plaintiff to appreciate that it was bearing loss prior to the decision to finally shut down the RTO in July 2001. It is a question of fact to be determined in light of the relevant circumstances when that appreciation arose or ought be taken as having arisen.
The very earliest time when it could have been appreciated was 21 January 1999 when Rath wrote to Evans; see at [380]. I consider, however, that to so hold would not be realistic. The attempt to have the RTO properly function was at an early stage. The unfortunate subsequent events were not and could not have been foreseen by the plaintiff. Hence, regarding the matter at 21 January 1999 the plaintiff was concerned but still expected performance and, given performance before long, no question of actionable loss would have arisen in my view. Certainly at that time it could not be said that the plaintiff had actually suffered loss.
Regarding the matter overall I find that it was when it engaged solicitors and Truman that the plaintiff appreciated that it had suffered actionable loss in attempting to have the RTO properly function and that it was likely to continue to suffer such loss in the future in making further efforts to that end. This was actual loss unless recouped from the defendant and thus, unsurprisingly, the plaintiff required expert advice to guide it forward. I would conclude that the time by which the plaintiff is to be taken as having this appreciation was the beginning of September 1999.
For these reasons I find that the plaintiff’s cause of action accrued on 1 September 1999. This means that the claim was not barred when the proceeding was commenced on 31 October 2001 and that the plaintiff is entitled to damages as I have assessed them.
Conclusion
I summarise my conclusions as follows.
The plaintiff has succeeded on the claims based on breach of the sale agreement and contravention of s 52 of the TPA. In these circumstances it has not been necessary to consider the claims based on collateral warranties and negligent statements.
In the claim based on breach of the sale agreement I have concluded as follows, stating the steps in the judgment as it dealt with the issues. There was a breach of certain of the written terms pleaded and of an implied term of fitness for purpose, in consequence of which the plaintiff suffered loss and damage. I have rejected the defendant’s contention that the loss and damage was caused by failures of the plaintiff. I found that the damages to which the plaintiff would be entitled are the claimed amounts of $1,275,520 and $223,560, and the net amount of the additional gas costs. The amounts to be brought to account to calculate that net amount of the additional gas cost appear inevitably to be more than the purchase price of the RTO of $675,000 and the cost of the cyclone of $8,149, and to include a component of the wages cost. The evidence did not enable me to conclude on the amount of the allowance and I would have heard counsel on that issue. The plaintiff is not entitled to the cost of dismantling and removing the RTO.
However clause 8.9 of the proposal operates to preclude recovery of the plaintiff’s loss and damage other than the additional gas costs. That being so, none of the above amounts should be allowed as against the additional gas costs as the reason for making such an allowance is to avoid double recovery. I heard no submission from counsel on this but it seems to me that in principle this must be the position. This means that the plaintiff is entitled to $1,127,536.
A different result obtains on the claim under s 52. I have held that the limitation period of three years had not expired when the proceeding was commenced. The plaintiff is entitled to recover its costs of $1,275,520, the cost of its employees of $223,560, and the cost of dismantling and removing the RTO of $34,000, a total of $1,533,080. Although GST of $3,4000 on the amount of $34,000 the total becomes $1,536,480. In addition the plaintiff is entitled to the amount which represents the lost benefit it could have derived if it had purchased a two stage recuperative afterburner rather than the RTO. I am unable to find what that amount was. I will hear counsel on that matter.
I will stand the matter over to a convenient date when I will hear counsel as to the orders to be made and otherwise as they may be advised.
1
5
0