Rotorcare Pty Ltd v The Helicopter Services (Agencies) Australia Pty Ltd

Do Not Send for Reporting
IN THE SUPREME COURT OF VICTORIA		Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 6733 of 2003

ROTORCARE PTY LTD (ACN 007 269 114)	Plaintiff
v
THE HELICOPTER SERVICES AUSTRALIA PTY LTD (ACN 006 078 922)	First Defendant
and
THE HELICOPTER SERVICES (AGENCIES) AUSTRALIA PTY LTD (ACN 098 309 758)	Second Defendant

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JUDGE:	FORREST J
WHERE HELD:	Melbourne
DATE OF HEARING:	3 – 5, 8 - 12, 15 - 16 October 2007
DATE OF JUDGMENT:	28 November 2007
CASE MAY BE CITED AS:	Rotorcare Pty Ltd v The Helicopter Services Aust Pty Ltd & Anor
MEDIUM NEUTRAL CITATION:	[2007] VSC 481

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CONTRACT – Terms – Identity of contracting parties – Interest payable under agreement - Construction of terms of contract – Construction of the term “fitness for proposed purpose” Breach of term of fitness for proposed purpose – Sufficiency of evidence as to loss and damage – Assessment of damages caused by breach.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr C. Gunst QC and Mr J. Smith	John X. Smith
For the Defendants	Mr J. D’Abaco	MMR Legal

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Background

The claim by Rotorcare

The counterclaim by HSA

The Agreements between Rotorcare and Helicopter Services Australia................................. 6

Assessment of the witnesses

The claim by Rotorcare

The identity of the contracting parties

Interest
Conclusion as to the quantum of the claim by Rotorcare

Counterclaim by HSA: The supply and installation of tail rotor gearbox

Facts

Counterclaim by HSA: Cargo hook refit

Facts40

Breach of the terms of the agreement
Was there any loss and damage occasioned by reason of the breach

Orders

HIS HONOUR:

Introduction

Rotorcare Pty Ltd (“Rotorcare”) provided maintenance services to helicopters and fixed wing aircraft owned and operated by Helicopter Service Australia Pty Ltd (“HSA”). In July 2003 following increasing tension between the two companies, HSA terminated Rotorcare’s services.

Shortly after its termination Rotorcare, by this proceeding, sued HSA for approximately $230,000 outstanding since July 2003. HSA refused to pay any of the amount, alleging overcharging and mistaken identity.

HSA counterclaimed for damages against Rotorcare in respect to two separate events involving repairs or maintenance to one of its helicopters. The first related to the installation to a helicopter of a tail rotor gearbox (“the gearbox”) and its subsequent failure. The second related to the installation of a cargo hook (“the cargo hook”) to the same helicopter.

Background

Rotorcare incorporated in 1989 and has, for many years, engaged in aircraft maintenance. It specialises in helicopter repairs and maintenance; from time to time it deals with fixed wing aircraft. Its alter ego is Mr Allan James Coyle (“Coyle”), an aircraft engineer.

Coyle is and was the managing director of Rotorcare, which has at all relevant times operated from Hangar 103 (“the hangar”), in Lionel Street at Essendon Airport. He has some 47 years of aviation engineering experience[1] and has been a licensed aircraft maintenance engineer (“LAME”) for 41 years.
[1]Exhibit P3.

Mr John Eacott (“Eacott”) is a highly experienced fixed wing and helicopter pilot. He spent some eight years as a pilot in the Royal Navy and has worked continuously as a helicopter pilot in private industry since 1975. In 1984 he incorporated a company known as Relief Crew Pty Ltd, which subsequently became HSA. Initially, this company was a labour hire organisation specialising in contracting out pilots. In 1994 the company purchased its first helicopter and in 1997 changed its name to HSA. It employed pilots and engaged in charter work.

HSA expanded its number of aircraft and its client base during the late 90s. By July 2002, HSA operated two helicopters and three fixed wing aircraft from the hangar, as well as out of a Brisbane base.

Coyle met Eacott in the early 1980s. At that time, Eacott was a contract helicopter pilot and Coyle was working for the Ansett helicopter division. From approximately 1994 up until 3 July 2003, Coyle and Eacott, through their respective companies, had a close working relationship which, on Eacott’s figures, meant HSA had paid Rotorcare over $2 million for work performed on HSA aircraft and rental.

Up until February 2003, the relationship, both at a business and personal level, was relatively harmonious. Rotorcare not only serviced and maintained HSA’s aircraft, but also provided it with hangar space and office space at the hangar. As far as I can tell, the two businesses worked well together. Certainly, in relation to work carried out or the provision of facilities, accounts were rendered by Rotorcare regularly to HSA and paid promptly.

On a generally yearly basis Rotorcare would enter into written agreements with “Helicopter Services Australia” in respect of its various services. In July 2002 the agreements which were executed by Coyle and Eacott related to the following:

(a) The maintenance and servicing of a BK117 helicopter registered number VH‑JGO (“the BK117”).[2]
[2]Exhibit P11.

(b) The maintenance and servicing of a Bell Jet Ranger registered number VH-JGE (“the Jet Ranger”). [3]
[3]Exhibit P10.

(c) The maintenance and servicing of a Cessna fixed wing aircraft.[4] On several occasions during 2003 alternative Cessna aircraft were substituted for the aircraft that was the subject of the agreement. (The aircraft are collectively referred to as “the Cessnas”).

(d) The rental of hangar and office space at Hangar 103 (“the rental agreement”).[5]

(e) The installation and provision of two exchange engines for the BK117 (“the engine agreement”).[6]

[4]Exhibit P12.

[5]Exhibits P13 and P14.

[6]Exhibit P15

During the bushfire season of late 2002 and early 2003, HSA deployed some of its aircraft (including the BK117) in New South Wales pursuant to an arrangement with the New South Wales Rural Fire Service (“Rural Fire Service”). Rotorcare continued to provide service to the HSA aircraft both in the hangar and on field trips.

From February to July 2003, the working relationship between Rotorcare and HSA appears to have soured. Invoices were rendered late by Rotorcare and HSA complained about items within the invoices. Rotorcare’s responses to the complaints were generally tardy, although it continued to work on HSA aircraft.

On 8 July 2003, HSA terminated its relationship with Rotorcare, stating that it “no longer requires the services of Rotorcare Pty Ltd to carry out maintenance on its aircraft, with immediate effect”.[7]
[7]Exhibit P20.

At the time of the termination of its services, Rotorcare asserted that the outstanding invoices totalled $240,365.94.[8] HSA denied any liability to pay the outstanding sum and no payment was ever made by it in respect of these invoices.
[8]Exhibit P21.

On 29 August 2003, HSA, via its solicitors, wrote to the solicitor for Rotorcare advising him that the correct defendant to the writ issued on behalf of Rotorcare on 15 August 2003 was the Helicopter Service Australia (Agencies) Pty Ltd (“HS (Agencies) A”), not HSA, asserting that it was the responsible contracting party. Subsequently, by reason of HSA’s allegations in its letter of 29 August 2003, HS (Agencies) A was joined as the second defendant.[9]
[9]Exhibit P21.

The claim by Rotorcare

By the time Rotorcare’s case reached trial, it was formulated as follows: Originally, approximately $240,000 was outstanding in respect of the services and rental provided to HSA. After taking into account several credits which it acknowledged were outstanding to HSA, it was asserted that $230,498.91 remained unpaid.

HSA’s defence to Rotorcare’s claim was premised at two levels:

(a) That HSA did not contract with Rotorcare, rather it was HS (Agencies) A which did so. Therefore, any outstanding amount owed to Rotorcare was owed by that company. It is appropriate at this point to say that this defence was totally unmeritorious and reflected poorly upon the credit of Eacott, who maintained this defence until the end of the trial.[10]

(b) That upon a close analysis of the invoices provided by Rotorcare, for a variety of reasons an amount of about $60,000 should be deducted from the $230,000 claimed.

[10]e.g. T765-T766.

On 9 October – the fifth day of the trial - HSA's claim based on invoices was resolved between the parties for a sum of $190,498 but not including any allowance for interest nor resolving the question of the identity of the contracting parties.[11]
[11]T519 – 520.

The counterclaim by HSA

HSA relied upon two discrete matters in relation to the counterclaim:-

(a) A claim based upon the supply and fitting of the gearbox to the BK117 completed by Rotorcare in approximately March 2002 which then failed in November 2002. Its tail had been severely damaged in an accident on 29 October 2001 which resulted in repairs of just over $1 million. HSA asserted breach of an express warranty of fitness for purpose contained in an agreement between Rotorcare and HSA. It alleged that, as a result of the failure, there was a nett revenue loss of $150,914.20 by reason of the grounding of the BK117 whilst a replacement gearbox was fitted.[12]

(b) The faulty fitting of a cargo hook and accompanying apparatus (“the hook”) to the BK117 in November 2001 which resulted in the loss of use of that helicopter for half a day with an alleged resultant loss of $11,204.

[12]7^th amended defence and counterclaim.

Rotorcare disputed both claims.

In respect of the gearbox claim, Rotorcare initially asserted that HSA was not the contracting party, rather that the proper contracting party was the insurer who had authorised the repairs to the gearbox. Subsequently, in the course of the trial, it amended its pleading to accept that there was an implied agreement between Rotorcare and HSA but the terms were limited and did not include any warranty as to fitness for purpose.[13] It also contended that in the event there was such a warranty, the failure of the gearbox was due to an internal fault which was solely the responsibility of the manufacturer of the gearbox, a German company known as “ZF Luftfahrttechnik GmbH“ (“ZF”) and the warranty had no application. This, it argued, relieved it of any liability for breach of contractual warranty, given the circumstances that surrounded its procurement.
[13]Rotorcare’s defence dated 15 October 2007.

In respect of the cargo hook claim, it contended, with little enthusiasm, that the faulty fitting of the hook did not occur as a result of poor workmanship. Its substantive response was to contend that such fault did not occasion any loss to HSA.

The Agreements between Rotorcare and Helicopter Services Australia

Given the resolution of the invoice claim by Rotorcare, it is only necessary to recite part of one of the maintenance agreements. It is convenient to look at the BK117 maintenance agreement.[14]
[14]Exhibit P11.

On 17 July 2002, Eacott, on behalf of “Helicopter Service Australia”, accepted “the terms and conditions of this provision of maintenance and additional support and service” dated 28 June 2002 and apparently prepared by Rotorcare. It provided for fixed prices for labour and fixed prices for administrative work carried out by Rotorcare. The relevant terms concerning the remaining aspects of the claim were as follows:

13. WARRANTY:
Rotorcare guarantees all workmanship. Any agreed faulty workmanship shall be rectified at no cost to the operator.
15. SPARE PARTS:
Rotorcare carry a limited stock of general engine and airframe parts for BK117 Helicopters in our own store. The parts that Rotorcare order and process through our account, will be at EIP/Kawasaki list price plus 15% up to first $1000 and 5% over and above, plus freight costs.
STANDARD HARDWARE:
‘O’ rings, bolts, nuts, rivets, seals, gaskets, filters etc. shall be invoices to the operator at supplier list prices less discounts ranging from plus 15% to minus 20% as may be applicable to that item, which would be called Rotorcare Discount Code 6.
17. TRADING TERMS AND CONDITIONS:
Rotorcare shall endeavour to submit invoices monthly for all work preformed (sic.) against individual job numbers.
Terms of payments are strictly nett 14 days from date of invoice.
INTEREST IS PAYABLE FROM THE DATE OF INVOICE AT THE RATE OF 2% PER MONTH, BUT IF PAYMENT IS MADE WITHIN 21 DAYS OF THE DATE OF THE INVOICE, NO INTEREST WILL BE CHARGED.
RETENTION OF TITLE:
Ownership of exchange items and/or new components (parts) supplied, or fitted during overhaul and repair will not pass to the customer until final payment of both the initial invoice, plus any supplementary charges, is made; the customer being liable for loss or damage, in transit, or during period of use.
In the event of failure to pay by due date, ROTORCARE will be entitled to repossess the said parts, the customer being further liable for any additional costs incurred in removing and recovering the parts.

Each of the maintenance agreements relating to the Cessnas and the Jet Ranger contained identical provisions to those reproduced above. There were no similar provisions in the rental agreement.

Assessment of the witnesses

The primary witness called by the plaintiff was Mr Allan Coyle, the managing director of Rotorcare. He gave evidence over four days and I formed the view that he was generally an honest witness who endeavoured to provide an accurate account of his dealings with Eacott and HSA. Although I was troubled, to some extent, by what appeared to be some fairly significant overcharging of HSA by Rotorcare inconsistent with the terms of the various maintenance agreements, I nevertheless took the view that on the whole he was a credible witness, particularly when his version of events conflicted with those of Eacott. He had carefully collated a large number of documents relevant to the contest between the parties. I will refer to a number of those documents in the course of this judgment.

Coyle’s chief protagonist was Mr John Eacott, the managing director of HSA and HS (Agencies) A at the relevant time. He gave evidence over three days. On first impression he was also a seemingly careful witness.

Mr Gunst, who appeared with Mr J Smith, for Rotorcare launched a blistering attack on Eacott’s credit in his final address. He asserted that Eacott was evasive, selective and devoid of candour. He put the simple proposition that Eacott’s evidence should not be accepted on any issue.[15]
[15]T1205-1207.

Whilst, as I have set out below, I regarded parts of his evidence as unsatisfactory, I did not form the view that he was completely discredited, nor did I think that the attacks made upon him on the basis that he had acted fraudulently on certain occasions[16] were made out.
[16]e.g. that the invoices rendered to the Rural Fire Service were fraudulent- T864-869.

However, I have taken the view that, at the very least, in two aspects of his evidence his testimony was coloured by the fact that such evidence suited his purposes in the case. The first related to his evidence concerning the contracting parties. Given the asset structure of HSA and an agreement by him to personally indemnify HSA in respect of any judgment that might be entered into (as opposed to HS (Agencies) A), it was patently in his interest to argue that the contracting party was HS (Agencies) A. He did this most unconvincingly. He maintained throughout that HS (Agencies) A was the contracting party when everything pointed to the opposite conclusion. I also have considerable reservations about Eacott’s evidence associated with the costs of the operation of the BK117 in circumstances where he or his solicitors failed to produce on behalf of HSA any documentary material from HSA other than incomplete and largely incomprehensible tax returns in support of the claim until day 8 of the trial when in the course of re-examination[17] of Eacott it was sought to produce the financial statements[18] of both HSA and HS (Agencies) A for the 2002-2003 financial year – which should have been discovered and produced at the outset of the litigation.[19] (These financial statements, and particularly the profit and loss statements, disclosed the running expenses of HSA’s operations in the financial year it claimed loss as a result of the defective gearbox). This was an extraordinary course of conduct. I can only conclude that it was undertaken to try to convince me to accept a higher estimate of HSA’s loss.
[17]T939-961.
[18]Exhibit D9 – It was relatively clear that when providing the copies of the tax returns in discovery for some bizarre reason the financial statements were excised by HSA or its solicitors.
[19]There were, apparently, eight separate discovery applications .

On the other hand, I find that his evidence about the operation of HSA’s helicopters in the Nowra region of New South Wales in late 2002 was inherently reliable and withstood a rigorous cross-examination. In summary, I think he is a witness who can be accepted on a few matters and rejected on a number of others.

It is convenient now to turn to the two issues left for determination in respect of Rotorcare’s claim after the resolution of the quantum of the claim in respect of the work performed by it for HSA.

The claim by Rotorcare
The identity of the contracting parties

It was common ground that up until September 2001 Rotorcare contracted with HSA. The defendants’ contention that HS (Agencies) A was the true contracting party was founded on two propositions. First, that at that time Eacott had told Coyle about the change of identity and that the new contracting party was HS (Agencies) A. Second, that all payments made to Rotorcare pursuant to the agreement were made by or on behalf of HS (Agencies) A.

Eacott gave evidence that in September 2001 he was advised by his accountant to set up a service company.[20] He incorporated a company separate to HSA which was, itself, renamed “THSA Pty Ltd”. The new company, bearing ACN 098 309 758, was called “The Helicopter Service Australia Pty Ltd”. Subsequently, after advice from another accountant, on 20 May 2002 HSA reverted to its old name of “The Helicopter Service Australia Pty Ltd” and the new company became HS (Agencies) A. The two companies continued under these names up until 2007. The subsequent changes are immaterial to this case.
[20]T658.

Eacott also said that in mid 2002, HSA and HS (Agencies) A entered into an “aircraft agency agreement”.[21] Eacott gave evidence that although the document was drawn up in “middle of 2002”,[22] it was backdated to 29 September 2001, i.e. before the incorporation of HS (Agencies) A. He said that he did so on the advice of his solicitor.[23]
[21]D4.
[22]T768
[23]T840.

The discussion between Eacott and Coyle was pivotal to the defence concerning the change of identity of the contracting party. It was put to Coyle in cross-examination that Eacott, in September 2001, had a conversation at the hangar with Coyle in which he told Coyle that he was incorporating a new company and that the new company would pay all invoices received by Rotorcare for both maintenance and rental. According to Eacott, he told Coyle this arrangement was for asset protection. This version, it was contended, formed the basis for asserting that there was an agreement to vary the terms of the agreements to substitute HS (Agencies) A for HSA.

However Eacott’s own evidence established no such agreement. He gave evidence that after receiving the advice of his accountant, he had a discussion with Coyle in the following terms:

Since I’d had advice from my accountant to set up the second company for asset protection, I’m afraid I cannot remember the exact date in September, and I don’t allocate it to any particular day. I was having a chat with Jim, he was in his office at his desk, I was leaning on the door, I can remember it quite distinctly, and I told him what I was doing. The whole reason I told him was that I was passing on advice to him whether or not it may be of value to him.
What did you actually tell him as best you can recall what you were doing?
---That I had had advice from my accountant to set up a second company as a service company, and that I’d be carrying out that advice, and that the reason for doing so was for asset protection.
Did Mr Coyle respond in any way to what you say you told him?---He just said he didn’t think it would be of any value to him.[24]

[24]T667–668.

Accepting Eacott’s evidence (as opposed to what was put to Coyle in cross-examination), it is impossible to conclude that there was ever a true meeting of the minds between Coyle on behalf of Rotorcare and Eacott on behalf of HSA and HS (Agencies) A in respect of the change of contracting parties. At best it seems to have been a discussion about the best way to protect assets, rather than a true variation of the contractual arrangements that had existed up until that point of time. On that basis alone I would not be satisfied that there was ever a contractual relationship between Rotorcare and HS (Agencies) A.

In any event, Coyle denied any such conversation.[25] He gave evidence that he had never heard of HS (Agencies) A until legal proceedings were commenced.[26] All his dealings had been with “Helicopter Services Australia” and he had never heard of any company with the word “agencies” within its title. He stated that it was his belief that he was always dealing with HSA.
[25]T328, 329.
[26]T165.

As I have said, if there was any conversation about asset protection it clearly did not convey to Coyle a variation in the identity of the contracting parties. On this issue I accept Coyle’s evidence unreservedly. Coyle’s version is supported by a wealth of documentary evidence which indicates that, contrary to HSA’s contention, it was the relevant contracting party up until Rotorcare’s services were terminated.

That documentary evidence included the following:-

(a) The agreements,[27] entered into subsequent to September 2001, all of which refer to “the Helicopter Service Australia” with no reference to any organisation bearing the word “agencies”. Each of the agreements refers to HSA’s ACN 006 078 922 – not that of HS (Agencies) A.
[27]Exhibits P10-P15.

(b) Voluminous amounts of correspondence from HSA to Rotorcare during 2002 and 2003 identifying the company as “the Helicopter Service Australia Pty Ltd: ACN 006 078 922” – the ACN of HSA, not HS (Agencies) A.[28]
[28]Exhibit P18, P20.

(c) The GST questionnaire completed in 2000 by Eacott on behalf of HSA identifying the ACN as HSA’s ACN 006 078 922[29] - not altered after September 2001 to identify HS (Agencies) A.
[29]Exhibit P19, T155.

(d) The letter of termination of the services of Rotorcare by HSA and accompanying correspondence from its solicitors all identifying HSA as the contracting client with Rotorcare[30] - not HS (Agencies) A. In particular a facsimile of 8 July which used the following terminology “HSA no longer requires the services of Rotorcare”.
[30]Exhibits P20, P21.

(e) The various complaints concerning Rotorcare’s invoiced amounts were sent on HSA letterhead with HSA’s ACN number – not HS (Agencies) A.[31]
[31]Exhibit P18.

(f) Accounts rendered to the Rural Fire Service by HSA were paid into HSA’s Westpac account.[32]

(g) All air operator certificates during 2002 and 2003 were held by HSA.[33]

(h) Contrary to HSA’s submission and Eacott’s evidence that all payments were made by HS (Agencies) A, many if not all cheques paid to Rotorcare during 2002 and 2003 were paid by HSA not HS (Agencies) A.[34] Other electronic payments were made by HS (Agencies) A, but without any attribution to that company.

[32]Exhibits P22, P23, T169.

[33]Exhibit P8.

[34]Exhibit P40, T836-839; T965

In addition the following matters are relevant:

(a) Eacott accepted that the first written suggestion to Rotorcare that HS (Agencies) A had any involvement in the arrangements with Rotorcare was on 29 August 2003 – after proceedings had been issued.[35]
[35]T829-831.

(b) Despite paying large sums of money to Rotorcare, no correspondence emanated from Eacott or HSA or HS (Agencies) A advising Rotorcare of any change of contractual agreements during the course of their relationship.[36]
[36]T809.

(c) There was no “follow-up” by Eacott after his asserted discussion with Coyle to request that the invoices and, more importantly, the agreements signed in July 2002 correctly identify (or be varied to identify) HS (Agencies) A as the contracting party.[37]
[37]T809-810.

(d) The patently incorrect assertion in two defences filed by HSA is that HS (Agencies) A was responsible for “the operations of both the said helicopters”. This was clearly wrong (cf the air operator’s certificate)[38] and is consistent with HSA’s attempts to rewrite history in terms of the contractual arrangements. In addition, Eacott swore answers to interrogatories on 11 May 2004 asserting that the helicopters were operated by HS (Agencies) A pursuant to an agreement made on 1 October 2001. Eacott conceded that the date was false and the reference to HS (Agencies) A as being the operator of the helicopters was incorrect.[39]

(e) There was a clear motive on the part of HSA to shift contractual responsibility to HS (Agencies) A Pty Ltd. HS (Agencies) A Pty Ltd was a $2 company[40] with no assets whilst HSA had considerable assets and had agreed to indemnify the new owners of HSA.[41]

(f) The evidence of Eacott in relation to the aircraft agency agreement was inconsistent.[42] This agreement was the documentary touchstone of HSA’s denial that it was the contracting party. Eacott’s original version was that in September 2001 he had been advised as an asset protection measure to set up a service company which ultimately became HS (Agencies) A. He swore that the aircraft agency agreement[43] was drawn up in the middle of 2002 and on the advice of his solicitor,[44] the agreement was backdated to 29 September 2001. This sat conformably with his account of the timing of his discussions with Coyle. However, when HSA’s solicitor’s file was produced, it became apparent that the aircraft agency agreement was, in fact, forwarded to Eacott in September 2002[45] – after the various maintenance agreements had been entered into, i.e. the agreements upon which Rotorcare’s proceeding was founded.

[38]Exhibit P8.

[39]T802-804.

[40]T827.

[41]The shares in HSA had been sold on 30 June 2007, T663, T931.

[42]Exhibit D4.

[43]T661.

[44]T662.

[45]T1039.

In summary, the assertion that the contracting party was HS (Agencies) A is without merit. It is clear beyond doubt that the contracting parties at all relevant times were Rotorcare and HSA.

Interest

Rotorcare had, by its original Statement of Claim, sought interest on the following basis:

Interest on the said sum of $230,498.91 from the date of each of the invoices set out in paragraph 18 above at the rate of 2% per month until payment.

This claim was premised upon the unequivocal terms of maintenance agreements (e.g. Clause 17 of the BK117 agreement);[46] moreover, each of the invoices delivered to HSA, in bold type, repeated the rate of interest as part of the terms of payment.[47]
[46]See paragraph 24 of these reasons.
[47]Exhibit P7.

In the original defence to the Statement of Claim, the only issue raised in relation to the contents of the agreement was that it had been executed by Eacott on behalf of HS (Agencies) Pty Ltd and not HSA. In particular, no issue was raised about the trading terms and conditions, and particularly the conditions relating to interest.

However, when Mr D’Abaco, who appeared for HSA, opened the case on behalf of the defendants, he espoused three points:-

(a) That there should be no allowance for interest given that the plaintiff’s claim had been reduced from $230,000 to an agreed sum of $190,498. This was not persisted with in the final address; however it was argued that there was an implied term that interest should be calculated from the date of termination of Rotorcare’s services.

(b) Rotorcare’s entitlement to interest should only be taken into account after determining the amount of the counterclaim and, inferentially, subtracting the value of the counterclaim order (if any) from the amount ordered in favour of Rotorcare. This was also said to be an implied term.

(c) That interest at the rate of 24% per annum (as the agreement provided for) constituted a penalty and therefore was unenforceable. This was abandoned prior to final addresses.

Subsequently, the defence and counterclaim was amended to plead the existence of the two asserted implied terms.

In my view, the implied terms contended for by HSA must be rejected.

The principles governing the implication of a term within a contract are well established.[48] The proposed term:

(1)must be reasonable and equitable;
(2)must be necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it
(3)must be so obvious that it goes without saying
(4)must be capable of clear expression; and
(5)must not contradict any express term of the contract.

[48]BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 52 ALJR 20 at p.26, Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.

I accept Mr Gunst’s submission that the suggestion of an implied term that interest should be calculated from the date of termination of Rotorcare’s services is patently contrary to the express term within the maintenance agreements (i.e. interest payable from the date of invoice at the rate of 2% per month)[49] and therefore cannot conceivably be the subject of implication.
[49]e.g. Exhibit P11 – Clause 17.

I also accept his contention that the other alleged term that interest would be applied after deducting any amount payable to HSA (pursuant to the claim for damages in the counterclaim) cannot be implied. It does not give business efficacy to the contract. It is not so obvious as to go without saying. Moreover, it flies in the face of the traditional manner by which interest on a claim and counterclaim are determined, i.e. separate calculations of interest dependent on the nature of the particular claims and the statutory regime governing the awarding of interest in these circumstances.[50] There is no basis upon which this asserted term can be implied.
[50]e.g. Supreme Court Act s 58 and s 60.

In summary, I reject the argument of HSA that there were implied terms that inhibited Rotorcare’s clear entitlement to interest from the date of the invoices.

Rotorcare is entitled to judgment in the sum of $190,498 plus interest calculated on this sum at a rate of 2% per month from the date of the invoice.

Conclusion as to the quantum of the claim by Rotorcare

I accept the calculations of interest made by Rotorcare contained in its written Outline of Submissions and in the schedule attached to the written Outline.[51] As at 7 October, the interest component is $194,307.
[51]Paras 12-17 of the plaintiff’s written submissions.

Accordingly, Rotorcare is entitled to judgment in the following sums:

(a) Amount owing pursuant to the invoices: $190,498.00

(b) Amount of interest outstanding between 15 May 2003 and 7 July 2003: $ 2,793.00

(c) Amount of interest outstanding between 7 July 2003 to 7 October 2007: $194,307.00

(d) Amount of interest outstanding 7 October 2007 to date of judgment (Calculated at a rate of $3,810 for one month – and $127 per day for 21 days): $ 6,477.00

Total: $394,075.00

Accordingly, there will be judgment for Rotorcare on the claim in the sum of $394,075.

Counterclaim by HSA: The supply and installation of tail rotor gearbox

The primary part of HSA’s counterclaim related to the supply and provision of the gearbox by Rotorcare to the BK117, completed in March 2002, which then failed in November 2002. It was asserted by HSA that the work done by Rotorcare breached both express and implied warranties contained in the agreements between HSA and Rotorcare.

Facts

Much, if not all of the evidence concerning the provision of the gearbox and its malfunction was not in issue.

Late in the evening on 29 October 2001, the BK117, whilst piloted by Eacott, was involved in a significant collision with gum trees at the Bankstown Airport.[52] As a result, the helicopter was unserviceable.[53] There was considerable damage to the tail rotor blades, the tail driveshaft, several of the gearboxes and the tail boom.[54] At the time HSA carried insurance with Australian Aviation Underwriting Pool Pty Ltd (“AAUP”) [55] – now part of QBE Aviation.
[52]T673–674.
[53]T174.
[54]T176–178; T676.
[55]T674; Exhibit P34 – The schedule to the policy – The policy was not produced.

On 1 November 2001, Phillip Stacy (“Stacy”), the Claims and Survey Manager Victoria of AAUP, wrote to both HSA and Rotorcare. The relevant parts of the Rotorcare letter read as follows:

If the helicopter is 100% company ‘owned’ then your company will be required to pay the GST on all repair parts and labour as per attached endorsement. You will also need to pay contribution on all lifed items as per section 3A para 7(b) of the policy, together with outstanding premiums as set out in the attached endorsement.[56]

The letter also requested that HSA “obtain quotes in relation to the repair of the damage to the helicopter and submit the originals to us as soon as possible”.

[56]Exhibit P34.

Pausing at that point, this letter made it clear that HSA was responsible for –

(a) the GST – subsequently priced at $103,849.66;

(b) the lifed items, that being the difference between the value of the new replacement part and the old used part for which the policy provided HSA was liable - $95,937.27; and

(c) the excess – which was $90,000.

In all, HSA paid $289,786.93 to Rotorcare as required by the terms of the policy as set out in Stacy’s letter.[57]
[57]T675-676.

Stacy also wrote on that day to Rotorcare asking for a written scope of work for the repairs, estimates of labour to repair/replace these items sufficient to return the helicopter to an airworthy state. The letter also inquired into the manner in which Rotorcare made up its accounts.[58]
[58]Exhibit P34.

Coyle, who had been contacted by Eacott, received permission from AAUP to retrieve the helicopter from Bankstown to Rotorcare’s workshop at Essendon.[59] Coyle assessed the damage and, after discussion with Stacy, forwarded a letter under his hand on 22 November 2001 (“the warranty letter”) dealing with the estimated cost of repairs to the helicopter.[60] The relevant parts of the letter are as follows:
[59]T180.
[60]Exhibit P25.

8. TRADING TERMS AND CONDITIONS
Rotorcare shall submit invoices progressively for all parts, labour, and other services, performed against individual job numbers.
Payment terms are STRICTLY NETT 14 DAYS from the date of the invoice. Interest is payable from the due date of invoice at the rate of 2% per month.
RETENTION OF TITLE
Ownership of exchange items and/or new components (parts) supplied, or fitted, during overhaul and repair will not pass to the customer until final payment of both the initial, and subsequent invoices, is made. In the event of failure to pay by the due date, Rotorcare will be entitled to repossess said parts, the customer being liable for loss or damage during the period of use, and further liable for any additional costs incurred in removing and recovering the parts.
9. GOODS AND SERVICES TAX (GST)
The parties acknowledge that the Australian Government has introduced a GST, which commenced on 1^st July 2000. This is an additional charge on the rates listed for labour, parts, freight, etc., in this document.
10. WARRANTY AND INDEMNITY
Rotorcare represents and warrants in favour of the Owner and the Operator that any maintenance, service, repair, or other engineering services (“Maintenance”):
a)will be performed in a proper, competent, and professional manner
b)with care, skill, and diligence
c)in a timely and expeditious way
d)that any goods supplied in connection with the Maintenance will be new/overhauled, of the highest quality, and fit for their proposed purpose, and title to such goods will pass to the owner after payment, and
e)will be performed in compliance with applicable statutes, ordinances, regulation, by-laws, codes, and standards. (Emphasis added.)

The letter was addressed to Stacy. A copy was forwarded to “John Eacott, Helicopter Service Australia” and received by him.

On 23 November, Stacy again wrote to HSA. The relevant parts of his letter were as follows:

We received an acceptable quote for the repair for the damage to the above aircraft from Rotorcare P/L of Essendon Airport. Could you please instruct them to proceed with the repairs to the aircraft as per their quote letters of the 12-10-01.
We enclose an Authority to Repair for your signature. Could you please pass this on to Rotorcare P/L as soon as possible and send a copy to us for our files.
We take this opportunity to remind you that the work undertaken by the above company to repair and restore the aircraft to its former state being the subject of this claim is performed in accordance with the terms and the conditions of the policy and our interest is limited to the cost of the accident repairs as quoted in accordance with your entitlement under the policy.
You will be required to pay the excess of $90,000, contribution towards the used portion of overhaul or replacement cost of any lifed items and the repair or maintenance of any non accident related damage or the repair of any fair wear and tear items discovered in the course of these repairs or any other work to bring the aircraft to an airworthy condition including 100% of GST on those repairs to Rotorcare P/L on completion of the repairs.[61]

[61]Exhibit P34.

On the same day on AAUP letterhead, Eacott signed the following authority to repair:

I John Eacott for and on behalf of The Helicopter Service hereby authorise Rotor Care P/L and their sub-contractors to proceed with repairs to the Kawasaki BK117 helicopter
Registration VH-BKL
All other costs including all the GST payment and lifed items contributions and non-accident related repairs will be borne by The Helicopter Service.[62]

He gave evidence that he, as per AAUP’s request, provided the authority to Rotorcare[63] and instructed Rotorcare to proceed with the repairs.[64]

[62]Exhibit P26.

[63]T675.

[64]T728.

Repairs commenced on the helicopter in late November of 2001 and concluded in late March of 2002. The helicopter was returned to service in April 2002.

It was common ground that it was a requirement of the regulator, the Civil Aviation Safety Authority (“CASA”) that not only was it mandatory that the gearbox conform with the manufacturer’s requirement as to the particular part number, but also that the part could not be fitted unless it was accompanied by an authorised release certificate from the manufacturer.[65]
[65]T774-776.

The Kawasaki manufacturer’s manual[66] stipulated that a ZF Luftfahrttechnik GmbH (“ZF”) gearbox part number 4639003007 be installed, as it was.[67] In February 2002, the gearbox – which was new - was supplied to Rotorcare by Eurocopter International Pacific[68]. It in turn had obtained the gearbox from ZF, the sole manufacturer of tail rotor gearboxes for BK117 helicopters.
[66]Exhibit P7.
[67]Exhibit P28.
[68]Exhibit P27.

When the gearbox was received by Rotorcare, it came with an identification label identifying the part number and the authorised release certificate. This certificate, issued by ZF on 12 October 2001, certified:

“that the part … was manufactured/inspected in accordance with the applicable design data and with the airworthiness regulations of the stated country”.[69]

[69]The identification label and JAA Form 1 authorised release form part of Exhibit P28.

The gearbox cost approximately $67,000 and weighed about 12 to 14 kilos.[70] Rotorcare’s chief engineer, Mr Thomas Spiliopoulos (“Spiliopoulos”), coordinated the repairs to the helicopter. He described it in the following terms:

It was a brand new unit that came from ZF in Germany. It came with an identification label stating it was a new item, it came with a JAA Form 1 Authorised Release Note Certificate stating that it was manufactured new, and – yes basically it came as a sealed unit from Germany.[71]

[70]T185–186, T190.

[71]T547. Coyle gave similar evidence. T190.

Spiliopoulos also gave evidence, corroborated by Coyle, that it was mandatory that this type of gearbox be fitted in the BK117.[72] As to the manner in which the repairs were carried out, he said as follows:

Any defect at all that you could see in the plaintiff Rotorcare’s workmanship in the repair of that helicopter?---Absolutely not, it was done in accordance with the maintenance manual requirements. Every part was procured from an OEM, original equipment manufacturer, every part was installed with serviceable labels, release notes, all items were – had the proper certification and everything was done in accordance with the maintenance manual.[73]

[72]T549.

[73]T549-550.

In January and March, invoices were forwarded by Rotorcare to HSA in relation to work carried out on the tail by Rotorcare. Copies were sent to AAUP.[74] The invoices are somewhat difficult to understand and no evidence was given of their interpretation. In any event it was not in issue that the invoices were paid by HSA. Nor would it seem to be in issue that at least part of the moneys paid by HSA must have related to the gearbox, whether by way of a proportion of payment of the GST component or, alternatively, as the “lifed” part of the price of the gearbox.
[74]Exhibit D12.

The final chapter in relation to the insurance claim was the signing of the form of release on 12 June 2002 by Eacott on behalf of HSA releasing AAUP from any further claims by reason of its payment of $877,170.93.[75]
[75]Exhibit P34.

An extract from the maintenance manual of the BK117 was tendered which indicated that the expected time before any overhaul of a tail rotor transmission was to be performed was 3600 hours.[76] The ZF manufacturer’s warranty for the gearbox was 800 hours/10 months.
[76]Exhibit D5, T678.

The helicopter returned to service in early April 2002. From that date until 27 November 2002, the helicopter flew 360 hours. On that day, Spiliopoulos attended Bankstown Airport to carry out a standard inspection of the BK117 which was engaged in fire fighting duties.[77] As part of routine maintenance, he inspected the gearbox. He removed a magnetic chip detector located at the bottom of the gearbox and observed the presence of massive amounts of metallic fuzz and the presence of magnetic chips. This was a real cause for concern as magnetic chips were an indication of either a gear wheel failure or a bearing failure in a gearbox which itself was an indication of potential failure of the gearbox. After carrying out further tests on the helicopter and the gearbox, Spiliopoulos concluded “There was an impending failure about to occur”.[78]
[77]T560.
[78]T567.

In a report concerning the failure of the gearbox, Spiliopoulos wrote as follows:

“All checks were carried out … the tail rotor gearbox was considered unserviceable and aircraft was not allowed to continue fire fighting operations.”[79]

Subsequently, in April 2003, Spiliopoulos on behalf of Rotorcare completed a defect report for CASA. It identified the part that was defective in the following terms:

“Metal contamination unserviceable”.[80]

[79]Exhibit P28.

[80]Exhibit P28.

The helicopter was flown by Eacott to the Eurocopter facility at Bankstown – a 20 minute flight – on 27 November 2002.[81] It remained out of service for six days and a new tail rotor gearbox was installed by 3 December and it was serviceable after lunch.[82]
[81]T569, T691.
[82]T570.

The helicopter returned to partial service on 4 December and was back in full service on 6 December.[83]
[83]T692, Exhibit P5

The gearbox was the subject of a warranty from the manufacturer, ZF.[84] Ultimately, after considerable debate, the cost of repairs to the gearbox was met by ZF.[85]
[84]The warranty claim procedures are set out in Exhibit P31.
[85]Exhibit P28.

The existence of an agreement between HSA and Rotorcare

Mr D’Abaco’s primary contention was that a tripartite contract existed between Rotorcare, HSA and AAUP. He asserted that the terms of the contract were the carrying out of repairs to the BK117 in accordance with the terms contained in the warranty letter. This obliged HSA to pay Rotorcare on a proportionate basis with HSA paying the GST component, the lifed components and the insurance policy excess. Critically, he asserted that Rotorcare had warranted to HSA “for the tail rotor gearbox supplied as part of the repairs would be new/overhauled, of the highest quality and fit for its proposed purpose” – a recitation of paragraph 10(d) of the letter of 22 November 2001. Alternatively, he contended that a two party contract between HSA and Rotorcare existed and that the contents of the letter of 22 November 2001 were incorporated as terms within that contract.

At the commencement of the trial Rotorcare denied the existence of any agreement with HSA. It amended its reply on the fifth day of the trial to concede that an implied contract existed between it and HSA but contended in submissions that it was of a limited nature. It asserted that, by its pleadings, it was confined to an implied contract between HSA and Rotorcare with limited implied terms.[86] It went no further than that. This proposition was based upon a line of English authorities and in particular decisions of the Court of Appeal in Charnock v Liverpool Corporation[87] and Brown & Davis Ltd v Galbraith[88]. In his final address Mr Gunst argued that its terms included only implied terms as to delivery within a reasonable time and the carrying out the work with reasonable care. Rotorcare denied the existence of any contractual obligation beyond that point, and particularly denied that the warranty and indemnity conditions contained in para 10(d) of the warranty letter formed part of its contractual obligations to HSA.
[86]Paragraph 13 of Rotorcare’s reply.
[87](1968) 1 WLR 1498.
[88](1972) 1 WLR 997.

In each of the English cases relied upon by Mr Gunst, a damaged motor vehicle had been left with a repairer to effect repairs. Each owner held a policy of insurance in respect of damage to the vehicle. In Charnock, Salmon LJ said:

I have no doubt at all, on the facts of the present case, that the judge’s finding that there was in fact two contracts is unassailable. In my view there was a clear contract to be inferred from the facts between the garage proprietor and the car owner that in consideration of the car owner leaving his car with the garage for repair the garage would carry out the repairs with reasonable expedition and care, and that they would be paid by the insurance company. No doubt on the documents here the garage proprietor took the precaution of entering into another contract with the insurers that the insurers would pay; and if they had not paid, the insurers could have been sued. But that does not relieve the garage proprietor from his obligations to the car owner.[89] (My emphasis).

[89]At 1505.

I do not accept the proposition that the subject contract in this proceeding is so limited in its terms. The facts in this case are entirely different to those in either Charnock or Brown & Davis. There is no question here of an implied contract. Rather, it is the relationship and conduct engaged in by Rotorcare, HSA and AAUP which make it clear that not only was there a contract but that it contained express terms. In Brown & Davis, Sachs LJ said:

“Any decision in this type of case must necessarily depend on the facts established in evidence. In general, however, in those everyday transactions – there must be thousands each week – when, upon a car owner bringing his damaged car to a repairer for repairs, which in practice will be paid for by the insurers, and the insurers are then brought into the negotiations, the resulting arrangements produce an agreement which in law is properly termed a tripartite agreement. I refer that term to ‘two separate agreements’ though in the present case, as indeed in most cases, it makes no difference which terminology is used.
That tripartite agreement is one to which there are three parties, the owner, the repairer and the insurers and each can acquire rights and each can come under obligations. As in practice there is on such occasion hardly any overall agreement in writing, it follows that the rights and obligations of each party have to be gathered from such documents as are put in evidence and from the implications to be drawn from the circumstances of the case as a whole. In the end one looks at the position as if the three parties were round a table and then applies the Reigate v Union Manufacturing Co. (Ramsbottom) Ltd. [1918] 1 KB 592 tests for any matter which does not appear from the documents before the Court.”[90] (My emphasis).

[90]Supra at 1007.

As I have already said, this is far from the standard insurer case. In my view, the warranty letter set out the terms of a tripartite contract between Rotorcare and HSA and AAUP. I say this for the following reasons.

First, the relationship between HSA and Rotorcare was quite unlike that between repairer and insured in the English cases. There was a pre-existing standing relationship in relation to mechanical repairs to aircraft including the BK117 which was the subject of a specific agreement between Rotorcare and HSA for its maintenance. This is quite unlike the case of a car being brought in to an unknown repairers at the direction of the insurer after the damage to the car was sustained.

Second, HSA requested AAUP to permit Rotorcare to carry out the work on the helicopter. This was perfectly understandable, given Rotorcare and HSA’s relationship at the time that the helicopter was damaged. Moreover, it made good sense for HSA to have engaged Rotorcare given its specialised knowledge of the helicopter.

Third is the correspondence between HSA, Rotorcare and AAUP prior to the warranty letter. Stacy’s letter of 1 November made it clear to both HSA and Rotorcare that AAUP and HSA would be responsible for making payments to Rotorcare in respect of specific items and that those payments would be made direct to Rotorcare. Again, this is quite unlike the English cases where no payment appears to have been made – the consideration merely being the promise to leave the car with the repairer. Moreover it demonstrates the tripartite nature of the relationship.

Fourth, and critically, are the contents of the warranty letter. Under the hand of Coyle, the letter is forwarded to AAUP and copied to Rotorcare. In my view, contrary to Mr Gunst’s suggestion, this was not a matter of courtesy. This is particularly so when the opening words of clause 10 are considered: “Rotorcare represents and warrants in favour of the owner and the operator”. HSA was both the owner and the operator of the helicopter. The insurer, AAUP, was not mentioned. It was argued by Mr Gunst that one should take into account Coyle’s belief that the owner of a damaged aircraft was the insurer. Putting to one side whether Coyle’s belief is a relevant consideration, the use of the term “operator” stymies any such suggestion. As part of Rotorcare’s case, as already noted, a significant feature was its identification of HSA as being the holder of the air operator’s certificate for the BK 177.[91] Indeed, Coyle gave evidence to this effect.[92] It is inconceivable, in my view, that Coyle on behalf of Rotorcare was not providing the warranty to HSA. There was no other owner or operator.
[91]Exhibit P8.
[92]T75.

Fifth is the acceptance of the quote by AAUP with an authority to repair provided to HSA. Not only did Eacott on behalf of HSA authorise Rotorcare to proceed with repairs, but he also accepted liability for other costs as per the terms of the policy. I reject the proposition that this was some form of standard authority to repair. It made it clear to Rotorcare, to whom the authority was then provided, that HSA had a contractual obligation separate to that of AAUP.

Sixth, given the way in which the payments were to be made, it is clear that the trading terms and conditions contained within clause 8 of the warranty letter were to be applied to invoices delivered to both HSA and Rotorcare. Similarly, the retention of title provisions within that clause would have inured to the benefit of Rotorcare against both HSA and AAUP. I also note that there is no reference within clause 8 to HSA or AAUP specifically, although its terms apply to both entities. This fortifies my view as to the purpose of clause 10 which is specifically directed in favour of the “owner and operator” known to Rotorcare to be HSA.

Finally, significant amounts were paid by HSA to Rotorcare pursuant to the invoices rendered to Rotorcare. Those invoices were rendered pursuant to the agreement. This was not the implied agreement contended for by Rotorcare. It was the agreement in which the express terms were contained in the Rotorcare warranty letter drafted by Rotorcare and forwarded to HSA.

I conclude, therefore, that this was a tripartite agreement of the type referred to by Sachs L in Brown v Davis. It was, however, far different to the implied agreement in that case. There was a considerable body of documentation from which one could conclude that there was an agreement between each of Rotorcare, AAUP and HSA. The terms of the agreement were not confined to a couple of implied terms related to the carrying out of repairs, rather it included the express terms directed by Rotorcare and contained in the warranty letter of which clause 10 was a fundamental part.

If I am wrong about the existence of a tripartite agreement, I think that same conclusion is reached on the basis of a two-party agreement between Rotorcare and HSA, which incorporated the contents of the warranty letter.[93]
[93]See Wesfarmers Federation Insurance Ltd v Deputy Commissioner of Taxation (2003) FCA 119 at paras 20-22.

I turn now to the question of construction of clause 10 of the agreement.

Construction of clause 10 of the agreement: “fitness for proposed purpose”

Mr D’Abaco contended that the words were clear and unambiguous. They were words that were used day in, day out in commercial dealings and that fitness for purpose, colloquially, meant that the gearbox would operate satisfactorily for a reasonable period of time.

Mr Gunst submitted that the expression needed to be viewed in the context of the relationship between Rotorcare and HSA. He contended that the expression did not cover a warranty of serviceability but covered a warranty, only, to comply with all statutory provisions and the requirements of the regulator. He particularly pointed to the necessity to obtain the parts solely from the approved manufacturer and that it be accompanied by the authorised release certificate. He contended that once those obligations had been complied with, the warranty of fitness for proposed purpose extended no further.

In Maggbury Pty Ltd v Hafele Australia Pty Ltd[94] the High Court said:

“Interpretation of a written contract involves … the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.”

[94](2001) 210 CLR 181 at 188 para 11, see also Pacific Carriers Pty Ltd v BNP Paribas (2004) 218 CLR 451 at para 22.

Subsequently, in Toll (FGCT) Pty Ltd v AlphaPharm Pty Ltd & Ors[95], the High Court said:

This court, in Pacific Carriers Ltd v. BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words or conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.

[95](2004) 219 CLR 165 at para 40.

To construe the warranty as being merely a warranty that the part was fit to be installed or, alternatively, that it was fit to be installed on the basis that it complied with the regulator’s requirements flies in the face, in my view, of the clear words of the warranty. If Rotorcare had wanted to limit the warranty on the basis that it only extended to fitting approved parts, it could have said so. Similarly, if it wished to say that the warranty only extended to complying with the regulator’s requirements, it could have said so. It did not adopt these words. Rather, it used in a general sense words that are familiar and oft-used in commercial and consumer transactions and that convey a clear meaning not restricted as Rotorcare contends.

There is nothing in the course of conduct between the parties which indicates that the clause should be read down as contended for by Rotorcare. Merely because HSA, through Eacott, knew that the part was manufactured in Germany and there was no opportunity to inspect it or check it for reliability does not affect the clear wording of the warranty.[96] Nor does the fact that it came with an authorised release certificate and was installed in accordance with the manufacturer’s instructions with Eacott’s knowledge. None of these matters affect the giving of a warranty which provided HSA with a surety as to the fitness of the product regardless of fault. The clause is deliberately designed to enable the purchaser to seek a direct remedy without having to seek out the party who may be responsible for the fault. A remedy remains open to Rotorcare which could have or may still pursue the other party or parties in contract or alternatively pursue a claim in negligence against the manufacturer.
[96]T875-877.

Indeed, it is not surprising, particularly with the supply of a foreign manufactured item, that a supplier offers to a purchaser a warranty in the terms expressed by Rotorcare. Far from being inconsistent with an objective analysis of the contract and its surrounding circumstances I think that it is entirely consistent particularly given the relationship at the time between HSA and Rotorcare. HSA’s only dealings concerning the gearbox were with Rotorcare.[97]
[97]T970.

Moreover, if the construction argued for by HSA is to be accepted, it renders superfluous clause 10(e) of the agreement. Fundamental to Rotorcare’s argument is the proposition that all it needed to do was to comply with the regulatory provisions of the Civil Aviation Act. It contends that installing an appropriate manufacturer’s gearbox with the authorised release certificate satisfied the requirement of providing a gearbox that was fit for the proposed purpose. However, this compliance was covered by clause 10(e) of the warranty letter, which stipulated, as a separate requirement, that Rotorcare perform its repairs in compliance with “applicable statutes, ordinances, regulations, bylaws, codes and standards”. It is inevitable, in my view, particularly given clause 10(e), that the provision of a warranty of fitness for the proposed purpose was meant to extend beyond compliance with the regulator’s requirements and provide a warranty of serviceability for a reasonable time.

Rotorcare contends that interpreting the warranty as urged by HSA results in an unreasonable, absurd or capricious result. I disagree. In my view, contrary to Rotorcare’s submission, the only meaning that can be attributed to clause 10 is that of the express words chosen by Rotorcare – that the gearbox would be fit for its proposed purpose. There is no scope here to rewrite the warranty on the basis that it can be attributed more than one meaning.[98]
[98]Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337.

Clause 10 was drafted by Rotorcare. Rotorcare had been paid a significant amount of money by HSA to repair the tail of the helicopter. The gearbox was supplied in the course of the repair of the tail. The warranty was quite specific. The gearbox was to be fit for its proposed purpose. Consistent with the interpretation of an implied term of fitness for purpose, this meant that the gearbox would operate satisfactorily as a tail rotor gearbox within an operating helicopter for a reasonable period of time as long as it remained in the same apparent state as that in which it was delivered apart from normal wear and tear.[99]
[99]Lambert v Lewis [1982] AC 225.

The warranty has nothing to do with fault or knowledge of any fault on the part of Rotorcare. It was clearly not intended to.

Finally, I should mention Rotorcare’s reliance upon the decision of the High Court in Helicopter Sales (Australia) Pty Ltd v Rotorwork Pty Ltd.[100] This decision was relied upon in oral argument by Mr Gunst on this issue. In my view, it is not to the point in the context of this case. The High Court there was concerned whether it should imply into an agreement a warranty of quality where each of the parties knew of the significance of an authorised release note and the lack of opportunity for the repairer to carry out an inspection or test of the subject component. It can be readily accepted that such a warranty cannot be implied. But that situation is significantly different to the present situation where the repairer takes it upon itself to provide the purchaser with a written warranty stipulating the extent to which it will be responsible for work carried out by it.
[100](1974) 132 CLR 1.

The question that then arises is whether the failure of the gearbox constitutes a failure covered by the express warranty.

Implied warranty

HSA also, in its pleadings, relied upon the warranty implied by s 19 of the Goods Act. It is not necessary to deal in detail with this argument as, in the course of final addresses, it was abandoned by Mr D’Abaco. For the sake of completeness I should say that I accept Rotorcare’s argument that the conditions of s 19 were not satisfied.

Breach of the agreement

The gearbox was new and had no observable defect. It is quite unlike the type of case faced by courts dealing with second-hand goods or goods with an observable defect: Bartlett v Sidney Marcus Ltd[101], Atkinson v Hastings Deering (Queensland) Pty Ltd[102], Bethune v Qconn Pty Ltd[103].
[101](1965) 2 All ER 753.
[102](1987) 71 ALR 93 at 98.
[103][2002] FCA 1485 at paras 90-94.

Spiliopoulos specifically identified metal contamination leading to the gearbox being unserviceable. The gearbox had an internal defect involving either the gear wheel or a bearing.

As I have said, the warranty, in my view, effectively provided that the gearbox would operate satisfactorily for a reasonable period of time as long as it remained in the same apparent state in which it was delivered. It is not necessary, in the circumstances of this case, to determine what would constitute a reasonable time. The gearbox operated satisfactorily for six months. It flew 360 hours of its expected life of 3,600 hours until its first overhaul.[104]
[104]T678.

It is clear that it did not remain operative for a reasonable time. On no objective assessment could seven months or 10 per cent of its service life until its next overhaul be regarded as a reasonable time.

The acknowledged defect constituted a breach of the warranty provided by Rotorcare that the gearbox was fit for its proposed purpose. It is irrelevant that Rotorcare was not aware of the risk of failure.[105] It is, therefore, necessary to determine what loss and damage HSA has suffered as a result of the breach.
[105]See Vacwell Engineering Co Ltd v BDH Chemicals Ltd (1971) 1 QB 88 at 105.

Loss and damage occasioned by reason of the breach

It was not in issue that the helicopter was unable to be used by HSA for six days. Nor was it in issue, ultimately, that for the next two days, owing to the internal arrangements of the Rural Fire Service, it could not be utilised to its optimum.

HSA argued that it was deprived of the contract rate of $3,300 per hour over these periods. It contended that its loss was to be calculated on the basis of $3,300 per hour by 7.8 hours for the first six days and for 7.4 hours for the next two days: a total loss of $178,860. It argued that the operating costs should be calculated by reference solely to the manufacturer’s estimate of hourly direct operating costs. It contended that an appropriate allowance for such costs was approximately $500 per hour. Mr D’Abaco submitted on its behalf that the total loss was $150,000.

Rotorcare disputed any such allowance. First, it contended that HSA had not proved the amount of its loss and the claim should be dismissed. Second, and alternatively, it contended that the hourly rate was inflated, the allowance for potential hours flown was excessive and that the operating expenses were significantly understated.

I reject Rotorcare’s submission that HSA has not established that it has suffered a loss. Whilst there were many disputes concerning aspects of the evidence which I should accept and/or reject as to the quantification of loss, this is not a case involving inadequate proof of a loss to the point where the Court cannot make a properly informed estimate of the loss.

In any event, the law is clear that mere difficulty in estimating damages does not relieve the Court from the responsibility of estimating them as best it can: The Commonwealth v Amann Aviation Pty Ltd[106]. The rule applies to claims both for breach of contract as much as it does for claim for personal injury.[107] Of course there may be cases in which the proofs are so vague that even where a loss is proved, an assessment of damages cannot be sustained.[108] This is not such a case. Indeed, there is an abundance of evidence surrounding the various aspects of the quantum of this claim – the real conundrum is determining which parts of the evidence to accept or reject.
[106](1991) 174 CLR 64 at 82-83.
[107]New South Wales v Moss (2000) 54 NSWLR 536 at para 87 in particular.
[108]J.L.W. (Vic) Pty Ltd v Tsiloglou (1994) 1 VR 237 at 241.

Putting to one side Rotorcare’s argument about the insufficiency of the evidence, it was accepted by the parties that the appropriate manner of assessment was to determine the hypothetical gross earnings of the helicopter and then deduct the relevant operating expenses.

I now turn to each component of the calculations, as argued by the parties.

First is the average daily hours which the helicopter would have flown whilst out of service.[109] The helicopter had been tasked to the Shoalhaven “campaign” fire from 21 to 27 November. It flew an average of 7.8 hours per day, the most hours flown per week for the whole fire season. Prior to this, in the period from 7 November to 13 November (the previous block of 7 days), it flew an average of 6 hours per day. These calculations are based upon the flight operations return of the Rural Fire Service, signed by Eacott with “Agency Flight Verification” signed by a Rural Fire Service agent. The invoices[110] were calculated on the basis of these returns and paid by the Rural Fire Service. I reject Rotorcare’s suggestion that these calculations should have been based on actual time in the air as disclosed by the maintenance release. It is clear that the accounts were rendered and paid on the basis of “start up” time to “turning off” the engine after the flight.[111]
[109]Exhibit P5 and a schedule provided to me by Rotorcare.
[110]Exhibit P22.
[111]T1090-1091.

There was no evidence that the helicopter would not have been able to operate during this period in the Shoalhaven areas or that the actual flight hours would have been reduced. The fire remained a campaign fire.[112]
[112]T681-684.

I also reject Rotorcare’s contention that I should use the hours flown by a competitor, “Life Flight” helicopter working on the same fire during the period in question. This is like comparing apples with pears.[113]
[113]T690; T887-889.

Whilst I do not accept that the “tag team” arrangement of HSA made any real difference, there is no good reason, in my view, to depart from the proven ability of this helicopter to engage in between 6 hours and 7.8 hours in the two full weeks prior to the breakdown. Similarly, I do not think that it is relevant to look solely at the average hours per day flown by the helicopter throughout the 2002 fire season (5.3 hours).

In my view, the best estimate of the likely hours flown is that which it was able to complete in the two full weeks prior to it being rendered unserviceable. It is no different, in this regard, to a calculation of the plaintiff’s putative losses of wages in a personal injury claim. The best indicator is the actual income which the particular plaintiff was earning immediately prior to being injured.

I allow, therefore, 6.9 hours (being the average of 6 hours and 7.8 hours) per day for the first six days, a total of 41.4 hours, and 4.7 hours for the next three days (the difference between 20.7 hours – 3 days x 6.9 hours - and 16 hours[114] – the actual time flown), a total of 46.1 hours – which I round out at 46 hours.
[114]T882.

Second is the estimate of the appropriate rate at which to calculate the loss. HSA rendered accounts to Rural Fire Service based upon an amount of $3,300 per hour.[115] Eacott gave evidence that the invoices had been paid and there was such an entry on some of the invoices.[116] Although the hourly amount for 2003/2004 and 2005/2006 was less, I have no reason to think that the invoices are manufactured or that Eacott is not to be believed on this issue. I do not accept Rotorcare’s submission that evidence should have been called from the Rural Fire Service to corroborate the documentary material and Eacott’s material. Indeed, if there was any real suggestion that the amount was incorrect, it was Rotorcare, rather than HSA, who should have been adducing such evidence.
[115]Exhibit P22.
[116]T694; T885; T969.

Accordingly, I propose to calculate the damages on the basis of a figure of $3,300 per hour in determining the putative “gross profit” to HSA from use of the BK117 at this time.

Third, and the most contentious, was the allowance for operating expenses of the aircraft. It is necessary to say something about the approach HSA adopted to this calculation. It was, at the very least, disingenuous. Rather than leading any evidence based upon an analysis of the service records and costs of maintaining the helicopter so that a true assessment of its operating costs could be ascertained, it engaged in a ploy to minimise the operating costs of the helicopter. It did not provide discovery during the proceeding, despite requests from Rotorcare, of its profit and loss accounts for the relevant financial year.[117] It only provided the accounts in re-examination of Eacott on the ninth day of the hearing. It blithely relied upon a manufacturer’s theoretical estimate of what the operating costs for a generic BK117 helicopter might be.[118] This approach was totally unsatisfactory and, in my view, designed solely to maximise the claim brought by HSA, rather than make a true estimate of the helicopter’s actual operating costs. Accordingly, I treat anything put before me on behalf of HSA on this issue with extreme caution, as it deserves.
[117]T786-798.
[118]Exhibit P29.

The naiveté of this approach can be demonstrated by reference to the two relevant figures. On the manufacturer’s theoretical operating costs, assessed to be $499[119] per hour, such costs amount to about 15 per cent of the gross profit. On the other hand, by reference to the profit and loss statement of HSA and HS (Agencies) A for the relevant financial year, the maintenance costs alone of all the aircraft operated by the business were just under 50 per cent of the gross profit.[120]
[119]Seventh amended defence and counterclaim.
[120]Exhibit D9, T1054-1056.

During the course of the hearing, HSA contended from time to time that their claim was for loss of revenue. It was never articulated in any convincing way what this actually meant. To some extent it is irrelevant, as the question is, what is the actual loss sustained by HSA as a result of the inability to operate the helicopter. This cannot be any sum other than that of the putative nett profit: i.e. the likely gross profit earned by the helicopter reduced by all relevant operating expenses which would have been incurred during the time that the helicopter would have been flown.

In contradistinction to HSA, Rotorcare provided, through Coyle, a credible and logical estimate of the operating costs of the helicopter which conformed generally with the material contained in the profit and loss statements.

Coyle provided, in Exhibit P29, an estimate of expenses which he based upon an analysis of the maintenance history and charges associated with this particular BK117, as well as material obtained by him from Conklin and de Decker, aviation consultants, in relation to the methodology of costing such expenses.[121] His estimate of those expenses came to $1379.68 per hour on a dry (i.e. less fuel) basis:
[121]T310 and ff.

1. Fuel used $ 195.82

2. Lubricants 6.92

3. Maintenance 230.00

4. Parts 241.25

5. Engine 257.66

6. Airframe 228.59

7. Fees 15.26

8. Hull insured value 250.00

9. Pilot costs 50.00

10. Remote field

support costs 100.00

_______

Total $1,575.50

less fuel[122] 195.82
[122]Fuel was paid by the Rural Fire Service T707, T1046.

_______

TOTAL $1,379.68 – rounded out

to $1380

With one exception which I will deal with shortly, I accept Coyle’s estimates.

I reject HSA’s estimate of operating costs. In addition to my general view as to the reliability of HSA’s assessment of its operating costs, I note the following matters.

HSA’s reliance upon a theoretical later model BK117 (a B2) in its first life using a manufacturer’s estimate is necessarily skewed and unreliable. As was said by one witness, a Mr Rankin from Lifeflight, the best way to ascertain what an aircraft actually costs to operate is to look at its actual cost in the past.[123] This was the exercise which Coyle said he performed. I should add that I did not think that Mr Rankin’s evidence as to the budgeting by his company as to maintenance costs of similar helicopters was of any real assistance.
[123]T1100-1101.

No evidence was led by HSA to dispute Coyle’s evidence apart from producing the manufacturer’s estimates and endeavouring to adduce evidence from Eacott.[124] In particular, a Mr Robert Haddad, a forensic accountant, had apparently not only examined the documentary material for the purpose of assessing the veracity of Rotorcare’s claim for payments, but also investigated the quantum of the counterclaim by HSA.[125] He was not called. Eacott is a pilot by occupation and not qualified, in my view, to give evidence concerning operating costs. In any event, his criticisms were coloured by self-interest.
[124]T702.
[125]T1065.

The estimates provided by Coyle sit far more comfortably with the profit and loss statements of HSA and HS (Agencies) A in relation to the operating costs of the business. I have already pointed to the fact that maintenance costs alone for aircraft operated by the business appear to amount to just below 50 per cent of the gross profit, which is well beyond the estimate of the total operating expenses urged by HSA.

In the course of final submissions Mr D’Abaco endeavoured to test Coyle’s estimates by reference to a bundle of invoices rendered by Rotorcare to HSA in respect of the helicopter prior to it being grounded.[126] This manner of assessment of the operating costs was not the subject of cross-examination of Coyle and is consistent, in my view, with the way in which HSA determined it would run its case in respect of its operating expenses – by obfuscation and ambush. I reject HSA’s criticism of Coyle’s estimates on this basis.
[126]Exhibit P16 invoice 4931.

In summary and subject to what immediately follows, I am satisfied that Coyle’s estimates set out below and contained within exhibit P29 are accurate. Component 8 is described as “Hull-insured value”. It seems to be calculated on a figure of $1 million per annum divided by 400 hours. The viva voce evidence did not disclose the manner in which this was relevant to operating costs – it seems to me to be more an assessment of the depreciation of the helicopter (e.g. at a rate of $250 per hour calculated on a value of $1 million) than anything else. I do not see how this could be an insurance cost given its description and method of calculation. Mr Gunst did not press that it be taken into account in assessing operating costs and accordingly I disregard it.

The appropriate figure is, therefore, $1,130 (i.e. $1380 - $250) to be deducted as the direct operating cost per hour. I should add that I do not think it appropriate, as suggested by HSA, to exclude pilot expenses[127] or hangarage from an assessment of the operating costs. I think each is an expense directly associated with the operation of the helicopter, notwithstanding that there may be some fixed arrangement for engagement of the pilot or the hangar space.
[127]T900-901.

In summary, I have reached the following assessment:

Loss of income on a per hour basis: $3,300

Less operating expenses: $1,130

Nett Loss: $2,170 per hour x 46 hours = $99,820

Rotorcare argued that HSA had not mitigated its loss. It based this assertion on the failure by HSA to press into service another one of its helicopters, the JetRanger, in place of the BK117. Rotorcare bore the onus on this issue. I reject this argument.

On this issue I accept Eacott’s evidence,[128] corroborated by Rankin, that the JetRanger was not an appropriate helicopter to be used in fire bombing as the BK117 was. The evidence disclosed that although the JetRanger or this type of Bell helicopter had been used in the past in fire bombing, the larger and more robust BK117 was the type now preferred by the Rural Fire Service. The use of the JetRanger was inappropriate and could not properly replace the BK117.[129] In any event, in my view, it was reasonable for HSA to retain the JetRanger in Melbourne to service its other clients,[130] rather than rush it to a fire area where the Rural Fire Service may well have declared it to be unsatisfactory to the task to be carried out.
[128]T742-744.
[129]T972-973.
[130]T724-726.

In my view there should be judgment for HSA in the sum of $99,820 on this part of its counterclaim.

Counterclaim by HSA: Cargo hook refit
Facts

As the BK117 was often used for fire fighting work, a cargo hook was vital as it held a Bambi bucket which carried approximately 900 kilograms of water.[131]
[131]T730, T575.

Although there was not complete agreement between Eacott and Coyle, it seems relatively clear that in the weeks preceding Sunday 3 November there had been discussions between Eacott and Coyle about replacing an old Breeze Eastern brand hook which had been fitted to the BK117.[132]
[132]T707-714.

The original hook was classified as an “after market” hook, meaning that it is not supplied by the manufacturer but is nevertheless acceptable to the regulator to be used as a cargo hook.

Eacott stated that over the weekend the Breeze Eastern hook engaged in another uncommanded release, i.e. the hook released the bucket which was then detached from the harness holding it and fell to the ground. Clearly, this was unacceptable and on Sunday 3 December, Eacott contacted Coyle requesting urgent assistance in replacing the old hook.

Eacott had already obtained a new “Talon” hook which was also an after market accessory approved for use with the BK117. Heath Sandow (“Sandow”), a LAME maintenance engineer employed by Rotorcare, was despatched on Sunday evening with a number of parts and the “Talon” hook.

In the early morning of 4 December he went to Bankstown Airport and commenced work on fitting the new hook to the BK117.[133]
[133]T592.

It is necessary now to say something about the manner in which the hook was fitted, operated and replaced. It was not just a case of changing one hook over for the other. The whole hook system had to be changed by reason of the use of the alternative after market Talon hook. This hook can be operated both mechanically and electrically from the helicopter cabin. There are two separate cables that facilitate each of these functions. In addition, there are suspension cables which hold the hook and any attachments in place.

Sandow described the work in the following terms:

We had – having fit – having to fit another aftermarket non standard hook that – with a lot of differences to the existing installation we had to manufacture a new stowage link. We had to manufacture a new manual release cable. We had to install new suspension cables. We had to source a whole swag of attaching hardware, install another locally manufactured bumper ring, manufacture a new wiring loom for the electrical release of the cable – sorry of the cargo hook. That from memory is about it.[134]

[134]T592.

Sandow commenced work on the new assembly and at about midday connected the electric wiring for the electrical release. After connecting it, he tested it and the hook did not electrically release as it should have.[135] He then carried out an inspection of the hook accompanied by a variety of tests and determined that a diode had blown.
[135]T598; T992.

Sandow agreed, in cross-examination, that it was likely that the hook had attached to it a small warning label indicating “Polarity sensitive. Damage will result if wired incorrectly” and then instructions as to the appropriate pin and the particular function.[136] Mitch Vernon (“Vernon”), a pilot employed by HS (Agencies) A who was present during the testing, said such a label was fitted.[137] I accept that it was.
[136]Exhibit D3.
[137]T991.

Sandow also accepted that if he had used a multimeter, it would have told him, prior to connecting the electrical device, which of the connectors was positive and which was negative.[138] He gave this answer:

Might I put to you, what I’m suggesting to you is that the reason the diode blew was because it was polarity sensitive, as this brown tag indicated, and that for whatever reason and I don’t mean any criticism by this, you got it wrong?---Like I said before, that could be the case.[139]

[138]T618.

[139]T618 – 619.

Coyle gave evidence in cross-examination that if Sandow had checked the polarity of the pins, the problem would not have occurred.[140] In particular he gave this evidence:

So do you accept Mr Coyle that the blowing of the diode was a mistake on the part of Mr Sandow, your company’s employee, which had the multimeter been used it wouldn’t have occurred?---In that particular case, yes, Your Honour.[141]

[140]T394.

[141]T395.

Coyle also gave evidence that the time to repair the diode, after it had been determined that it had blown, would be an hour to an hour and a half’s delay.[142] This was amplified by Sandow’s evidence – he being the man responsible for repairing the diode. Sandow was asked specifically:

“Did that time period cause any delay in the ultimate commissioning of the hook system?---In my opinion, no”.[143]
[142]T241.
[143]T600.

Breach of the terms of the agreement

Although it was suggested by Rotorcare that this was a mistake and did not amount to a breach of the implied term to carry out the task with reasonable care, I do not think it can be characterised this way.

In my view, Sandow, an experienced LAME, should have ensured that the polarity was correct prior to testing the cable. Both his experience and the wording of the label affixed to the hook should have alerted him to the need for using a multimeter prior to testing the connection.

Sandow did not do so and, in failing to do so, Rotorcare is vicariously liable for the breach of the implied term that it would carry out the fitting of the cargo hook with reasonable care.

Was there any loss and damage occasioned by reason of the breach

I am unable to conclude that there was any such loss or damage suffered as a result of the breach.

I regarded Sandow as credible. I do not accept that Sandow’s evidence that the helicopter flew off at some point of time during the afternoon when in fact it did not – an engine was started but the helicopter was stood down[144] - should result in any revision of my initial impression that he was an honest and reliable witness.
[144]T996.

Sandow described the course of events on the day and particularly after the diode blew. Replacing the diode took, on his account, a fairly short time, during which time other necessary repairs, unrelated to the diode, were being carried out or parts obtained.

Vernon estimated that it took a “couple of hours” to obtain the new diode and an “hour or so” to reassemble the hook. He thought that the whole job ended at about 6.00 p.m.[145]
[145]T996.

Sandow gave evidence, which I accept, that in his opinion there was no delay caused by the replacement of the blown diode, as he was still waiting for other parts to be manufactured.

I do not regard the difference, if there was any, between Sandow and Vernon as to the finishing time of the job as relevant (i.e. late afternoon as opposed to 6.00 p.m.). What is important is whether any delay was caused to the overall completion of the job. I accept Sandow’s evidence that by the time he had repaired the problem caused by the diode, he was still waiting for other parts.[146] In particular, he told me that during the time he was waiting for the new diode he was also waiting for a new manual release cable to be manufactured and returned.[147] He described any delay caused by the faulty installation as insignificant and said that he was still waiting for other parts when the problem with the diode was rectified.[148]
[146]T602.
[147]T601.
[148]T602, T617, T620.

Sandow was not, as I perceived the cross-examination, challenged to any significant extent on this issue. In particular, as I have said, I do not regard his estimates as to particular times as being inconsistent with Vernon’s evidence.

I am not satisfied that there was any delay occasioned to the flight operations of the helicopter caused by the blowing of the diode.

I dismiss this part of HSA’s counterclaim.

Orders

I will make the following orders.

(1) Judgment for the plaintiff on the claim in the sum of $394,075.00.

(2) Judgment for the defendant HSA on the counterclaim in the sum of $99,820 together with any interest as agreed or ordered by the Court.

I will determine the question of costs on application by the parties.

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Citations

Rotorcare Pty Ltd v The Helicopter Services (Agencies) Australia Pty Ltd [2007] VSC 481

Most Recent Citation

Anon 2 v XYZ [2008] VSC 466

Cases Citing This Decision

1

Anon 2 v XYZ [2008] VSC 466

Cases Cited

7

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Wesfarmers Federation Insurance Ltd v Deputy Commissioner of Taxation [2003] FCA 119

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24

(a)	Amount owing pursuant to the invoices:	$190,498.00
(b)	Amount of interest outstanding between 15 May 2003 and 7 July 2003:	$ 2,793.00
(c)	Amount of interest outstanding between 7 July 2003 to 7 October 2007:	$194,307.00
(d)	Amount of interest outstanding 7 October 2007 to date of judgment (Calculated at a rate of $3,810 for one month – and $127 per day for 21 days):	$ 6,477.00
Total:	$394,075.00

[2007] VSC 481

28 November 2007