Robb Evans of Robb Evans & Associates v European Bank Ltd

Robb Evans of Robb Evans & Associates (the plaintiff) appealed to the Court of Appeal of New South Wales against a judgment of the Equity Division concerning an undertaking as to damages given by the plaintiff in support of interlocutory relief. The dispute centred on the plaintiff's liability to compensate the eighth defendant for losses allegedly suffered as a result of an interlocutory injunction.

The primary legal issues before the Court of Appeal were whether the plaintiff's undertaking as to damages extended to compensating the eighth defendant for the loss of use of money, specifically in circumstances where the eighth defendant claimed to have lost the opportunity for favourable currency exchange rate fluctuations. The court was required to determine the scope and enforceability of the "usual undertaking as to damages" and whether the claimed loss was foreseeable and not too remote to be recoverable.

The Court of Appeal reasoned that the "usual undertaking as to damages" is a mechanism to protect a party from loss occasioned by an interlocutory injunction that is later discharged. It distinguished between "intrinsic loss," which is the direct loss of the benefit of the injunction being in place, and "extrinsic or coincidental loss," which arises from circumstances external to the injunction itself. The court held that the plaintiff's undertaking did not extend to compensating the eighth defendant for the loss of opportunity due to currency fluctuations, as this was an extrinsic loss that was not foreseeable by the plaintiff at the time the undertaking was given. The court noted that while the loss of use of money could be compensated, it was limited to interest accrued, not speculative opportunities.

The Court of Appeal allowed the appeal, setting aside the previous judgment. In its place, the court ordered that the plaintiff pay the eighth defendant the Australian dollar equivalent, as at 18 March 2005, of US$3,077.71, and that the eighth defendant pay the plaintiff's costs of the trial.