Screenco Pty Ltd v R L Dew Pty Ltd

[2002] NSWSC 893

CITATION:	Screenco Pty Ltd v R L Dew Pty Ltd & Ors [2002] NSWSC 893
CURRENT JURISDICTION:	Equity Division Commercial List
FILE NUMBER(S):	SC 50067/99
HEARING DATE(S):	9 September to 12 September 2002
JUDGMENT DATE:	16 September 2002
PARTIES :	Screenco Pty Ltd (Pltf) R L Dew Pty Ltd (1D) Ronald Steele t/as Dragon Scaffolding (2D) Highrise Group Pty Ltd (XD)
JUDGMENT OF:	McClellan J

COUNSEL :	C R C Newlinds (Pltf) J B Turnbull (1D) G J McVay (2D) G A Sirtes (XD)
SOLICITORS:	Michell Sillar (Pltf) McCabe Terrill Lawyers (1D) Colin Biggers Paisley (2D) Henry Davis York (XD)
CATCHWORDS:	CONTRACT - whether there was formation of contract - assignment of legal responsibility for the collapse of scaffolding - determination of damages
LEGISLATION CITED:	Fair Trading Act (1985) Vic
CASES CITED:	Bryan v Maloney (1995) 182 CLR 609 Robt Jones (367 Adelaide Street) Pty Limited v First Abbott corporation Pty Limited & Ors (1997) Vol 14 Building & Construction Law 282
DECISION:	Paras 78-82, 90

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
COMMERCIAL LIST

McCLELLAN J

MONDAY 16 SEPTEMBER 2002

50067/99 SCREENCO PTY LIMITED v R L DEW PTY LIMITED & ORS

JUDGMENT

1 HIS HONOUR: The plaintiff, Screenco Pty Ltd is in the business of supplying video screens to sporting fixtures throughout Australia and overseas. It contracted with the organisers of the 1998 Australian Grand Prix, held in Melbourne, to supply a number of screens. One of those screens was a large screen known as a Jumbotron screen.

2 These proceedings require the court to determine who should carry legal responsibility for the fact that when the screen was being erected the scaffolding needed to support it, collapsed and the screen was virtually destroyed. In some respects the quantum of damages are also in issue.

3 Mr Clive Potter, who is its managing director, founded Screenco. His evidence is that he contracted with the first defendant, R L Dew Pty Ltd, a scaffolding contractor, to have it erect the scaffolding required to support the screen. Once the scaffold was erected Screenco’s own people would hang the screen from it.

4 At the time Reg Dew, the principal of the first defendant, was overseas. He was in Taiwan and could not return in time to personally undertake the job of erecting the scaffolding for the screen.

5 Contact was made with the second defendant, Mr Steele, and, although there is a dispute as to who made the contact, and what was said, there is no issue but that Mr Steele constructed the necessary scaffolding. He did so after he had obtained scaffolding equipment, which included a major beam, from the cross defendant, Highrise Group Pty Ltd.

6 I am satisfied that the scaffolding and screen collapsed because the main beam incorporated into the scaffold was inadequate to support the weight of the large screen.

7 During the course of the evidence a suggestion was made it was the method of transporting parts of the screen used by Screenco which may have contributed to a weakening of the scaffolding structure, leading to the ultimate failure. It was suggested that the scaffold was used to winch the various parts up a slope. Steele gave evidence that he saw the scaffold used in this manner. Ultimately, counsel for Steele only faintly pressed the suggestion that any action by Screenco contributed to the failure. In any event, I do not accept that the scaffold was used to move the component parts.

8 I am satisfied that the failure was due entirely to the fact that the main supporting beam on which the screen was hung was inadequate for the purpose.

9 Various issues arise in relation to liability and it is convenient to discuss and resolve each issue in turn.

A contract with Dew?

10 Screenco sues Dew in contract and in tort. Before the accident, Screenco and Dew had a business relationship which extended over a number of years. The relationship may have had other elements, but the evidence before me discloses that Dew commonly erected scaffolds for Screenco which were necessary to support video screens at major sporting events.

11 To satisfactorily erect the screen it was necessary to include a major supporting beam which was incorporated into and held by the scaffold.

12 Clive Potter provided the specifications for such a beam to Dew in 1997. At the time Dew also had a beam made which could be used on any occasion when a scaffold was required to support one of Screenco’s screens.

13 During 1997 Dew constructed a number of scaffolds for Screenco and also used a different system of its own design to support Screenco’s screens at various functions. When Screenco was asked to provide the relevant screen for the Grand Prix, Clive Potter, as I infer was his custom, contacted Dew. However, Dew was not available, and Potter spoke to Mrs Dew.

14 In his statement, Potter says:

“Approximately two to four weeks prior to the race week I contacted Reg Dew by telephone to appoint him to provide structure supports for the screen. Reg was not available and I spoke to Reg’s wife Dianna. I recall the conversation with Dianna Dew using words to the following effect:
‘Clive: We need a four by four structure for the Grand Prix side term two and we need it by Tuesday morning of the race week.
Dianna: Yes, thanks very much, I’ll tell Reg.’”

15 Clive Potter gave evidence which I accept, that he had no further dealings in relation to the matter until the scaffold collapsed on 3 March 1998. As far as he was aware, Dew was undertaking the physical erection of the appropriate scaffold in a manner consistent with the previous arrangements between the two companies.

16 Mrs Dew recalls speaking to Clive Potter and says:

“In about the middle of February 1998 I had a telephone conversation with a person who I believe was Mr Clive Potter of Screenco Pty Limited. I had spoken to Mr Potter on a number of previous occasions and was familiar with his voice. I cannot now recollect the exact words used by Mr Potter. I have read his statement dated 9 November 1999 and in particular paragraph 14 thereof. I agree that he said to me words to the effect as set out in that paragraph.
My husband, Reginald was overseas at the time the telephone call came from Mr Potter. He was not due back in Australia for some time. I responded to Mr Potter’s request using words to the following effect:
‘Dianna: Yes, thanks. Reginald is overseas at the moment and will be away for a while but I will let him know.’
I recollect that I rang my husband Reginald, who I believe was in Taiwan at the time. I rang him to tell him about the call from Mr Potter and to get his suggestions as to what to do. He said words to me to the following effect:
‘Reg: We can’t do the job, see if you can put Screenco in touch with Ron Steele of Dragon Scaffolding.’
I called Screenco on the phone and spoke to Mr Clive Potter. He was the only person I dealt with at Screenco. I had a conversation with him to the following effect:
‘Dianna: Reginald is (in) Taiwan and Ron Steele did the job in 1997 under Reginald’s supervision. We can’t do the job so why don’t you contact Ron Steele?
Clive: OK, thanks.’”

17 In relation to the later conversation, Mrs Dew, in her oral evidence, said that rather than speak with Clive Potter, she may have spoken with Greg Potter. Greg Potter is the son of Clive Potter and is responsible for managing most of the onsite work of Screenco.

18 Greg Potter said in his statement that he was not involved in the initial negotiations in relation to the screen but learnt from Dew that he would be unable to do the job. Greg Potter believed, when making his statement, that Dew indicated to him that he, Dew, had engaged Steele to complete the scaffold.

19 In his oral testimony Greg Potter was unsure of this account and now believes that it could have been Mrs Dew who told him that her husband was not able to personally undertake the task.

20 Dew’s account of the relevant events is the same as Mrs Dew. He denies making any arrangements with Steele. On the other hand, Steele said he was contacted by Dew’s brother, Neil Dew, on 27 February 1998 when the following conversation occurred:

“On or about 27 February 1998 in the evening I had a telephone conversation with Neil Dew, who I know to (be) a member of RL Dew Pty Limited (Dew) the first defendant in these proceedings. Neil Dew said words to the effect of, ‘Are you able to erect the scaffold for a Jumbotron sized screen?’ I replied in words to the effect, ‘We will prepare a quote for you.’ Neil Dew then said words to the effect, ‘I will send you the drawing of the structure.’”

21 Neil Dew ultimately sent drawings to Steele. They were sent at the request of Reg Dew. Although the complete drawings were comprised of four pages, only three pages were in fact sent.

22 There is no dispute that following this conversation Steele obtained the necessary prices so that he could provide a quotation for the job. He worked out the sizes and quantity of the various pieces of scaffolding which would be necessary to build the structure provided by the drawing.

23 On a day, which Steele recalls may have been 28 February, he sent a fax to Dew, which included a quotation for the erection of the scaffold. It is on the letterhead of Dragon Scaffolding and said:

“I am pleased to submit my prices for the scaffold for Jumbotron screen for Screenco at the 1998 Grand Prix, Albert Park, Melbourne. Full price for the erection and dismantling of scaffolding, full skinned, hire of screens, scaffold, 9m beams and transport to and from site, $4,500."

24 The letter which included the quotation was addressed to Reg Dew and signed by Steele. Steele says that on the same day he had a telephone conversation with Mrs Dew, who he knew to be involved in the business of the first defendant. He says that Mrs Dew said to him, “The price is acceptable and you can go ahead with the job.” Steele says that he understood by this conversation that he had concluded an agreement between his company and Dew, and he proceeded to make the necessary preparations and then erect the scaffold.

25 Steele was asked about his conversation with Mrs Dew in his oral evidence. He was asked whether there was a relevant conversation on one or two occasions and he said:

“I spoke to her. I asked her was the quote acceptable. She said the quote was acceptable and to go ahead with the job. It was one occasion I believe from what I can remember.
Q. Do you have any recollection why a second occasion appears on your phone bill?
A. As I am saying, I thought it may have been the fax going through and then a phone call to check on the quote a couple of minutes later.”

26 The relevant phone bill was tendered in evidence. It discloses telephone calls of relevant proximity which tend to confirm the evidence which Steele gave.

27 I am satisfied that Steele faxed through a quotation to Mrs Dew and then telephoned to ensure that the price quoted was appropriate. Although Mrs Dew denies the conversation with Steele, her phone records tell a different story and I am satisfied that her denial should not be accepted.

28 Neil Dew also denies the conversation as alleged by Steele. However, he does agree that he sent relevant plans to Steele and also sent some cross pieces of scaffolding which were appropriate to be included in the proposed scaffolding arrangement. As it happens, those items were not used in the structure which was erected.

29 There are some difficulties in reconciling the differing accounts of the conversations and events alleged by the individual parties.

30 However, Neil Dew was plainly involved in the process and Steele initially looked to him to provide the necessary instructions for the task to be carried out.

31 There are some objective facts which are of assistance in resolving the sequence of events. It is important that Steele sent the written quotation. Mrs Dew, who did not take any steps to reject it, received that quotation. She did not telephone Steele to ask why the quotation was being sent or to tell him that as far as the first defendant was concerned the job was not one, which they were to be involved in. She said that she merely filed the quotation.

32 As I have indicated it is also significant that the telephone records confirm the evidence of Steele and confirm the sequence which he says occurred in his negotiations with Mrs Dew.

33 Another important matter is that after the collapse occurred, although Reg Dew denied liability and wrote a letter to Steele to that effect, he did not suggest that his company had not contracted to undertake the work. Rather he was concerned to point out that his company had played no part in the actual construction of the scaffolding.

34 His letter of 12 April 1998 was in the following terms:

“This is to formally advise Dragon Scaffolding that R L Dew Pty Ltd is in no way responsible for the failure of the support structure, which collapsed at the Australian Grand Prix – Melbourne on the 3 March 1998.
1. The plan was supplied by Screenco Pty Ltd – Serious Structure drawing Jumbotron JTS 35.
2. No material was supplied by R L Dew Pty Ltd.
3. No transport was provided by R L Dew Pty Ltd.
4. No labour was supplied by R L Dew Pty Ltd
5. No supervision was supplied by R L Dew Pty Ltd.
6. The beam that collapsed was not supplied by R L Dew Pty Ltd.
Therefore invoice 101 of 3 April 1998 should be forwarded to Screenco and not to R L Dew Pty Ltd.”

35 This letter was forwarded after Steele had forwarded an invoice to Dew seeking payment for the work he had done in erecting the scaffolding.

36 Clive Potter’s account of the events reflects an arrangement which is consistent with the many arrangements between Screenco and Dew on previous occasions.

37 There is documentary evidence of those arrangements, which includes the use of sub-contractors by Dew.

38 In many respects, Steele was not an impressive witness. Neither were Mr and Mrs Dew. However, the evidence of both Potter and his son was clearly given with care in relation to detail and a concern to be truthful, even in the case of Greg Potter where it may have been against his interests to do so.

39 Although I have expressed elsewhere reservations about the reliability of Steele’s evidence, in relation to his dealings with Dew, there is, as I have indicated, objective material which supports his account of events.

40 Having regard to those matters, and the evidence of the Potters, I am satisfied that Screenco and Dew entered into an agreement by which Dew would erect the necessary scaffold. It was intended that the scaffold would conform to the specifications which had been used previously.

41 I am satisfied that it was also intended, as has been the case on previous occasions, that Screenco would pay a reasonable fee having regard, of course, to the pattern which had been previously determined.

42 It was a term of the contract that the scaffold would support the screen. It could hardly be otherwise. As it happens, this was not fulfilled and the beam was inadequate. As a consequence, Dew breached its contract and Screenco is entitled to appropriate relief.

43 However, I am satisfied that Dew was not negligent. It provided Steele with the necessary information, and as it happened, told Steele that the required screen would be larger than the one which was actually utilised.

44 Dew was reasonably entitled to expect that Steele would safely undertake the task for which he was undoubtedly equipped.

Steele

45 I am satisfied that Steele’s contract was with Dew and not with Screenco. Steele is, however, sued by Screenco, it being pleaded that Steele engaged in misleading and deceptive conduct in contravention of the Fair TradingAct 1985 Victoria, and was negligent.

46 Steele is also sued by Dew for breach of contract, if found, between them.

47 It was submitted that Steele did not owe a duty of care to Screenco and reliance is placed on the decision in Bryan v Maloney (1995) 182 CLR 609, and Robt Jones (363 Adelaide Street) Pty Ltd & Anor v First Abbott Corporation Pty Ltd & Ors (1997) Vol 14 Building and Construction Law page 282.

48 It is submitted that because there was a contract between Screenco and Dew which assigned the obligation to erect an appropriate structure to Dew, and thereby passed the risk, this confined the potential tortious liability of Steele.

49 Although I can conceive that the obligation in a contract between a principal and a contractor may define the latter’s obligation and thus the potential tortious responsibility of the sub-contractor, there was nothing in the present contract which had this effect.

50 In my opinion, Steele owed contractual obligations to Dew and a duty of care in negligence to Screenco.

Highrise

51 In this event, there is now no dispute that Steele breached his contract with Dew. The beam was inadequate and the scaffold collapsed. However, Steele says the beam used was one which Highrise advised would be adequate and accordingly the collapse is not its responsibility but that of Highrise.

52 Steele, accordingly, seeks to recover from Highrise in contract and also says that it was reasonable to rely on Highrise and accordingly, by this means, he discharges his duty of care to Screenco.

53 To resolve this aspect of the matter it is necessary to resolve the conflict in the evidence between Steele and Newman, the principal of Highrise.

54 Steele says that he spoke to Newman at his premises on 2 March. The account that he gives is as follows:

“On or about 2 March 1998 I visited the premises of Highrise Contractors Pty Limited (Highrise) located at 2062 Hume Highway, Campbellfield. Highrise is a Kwikstage scaffold materials supplier, which I have dealt with regularly in the past. At Highrise’s premises I had a conversation with Paul Newman who I have dealt with previously when I have hired scaffolding equipment from Highrise. I showed Paul Newman the drawings given to me by Dew (Annexure “A”). I said words to the effect of:
‘The RSJ beam would need to support a 6 to 7 ton weight.’
Paul Newman then showed me a beam located in the yard and said words to the effect of:
‘this beam will hold 6 to 7 ton in weight.’
I noticed that the beam was 9 metres long and I was aware that the length required for the structure was 10 metres. I said words to the effect:
‘The beam needs to be 10 metres long.’
Paul Newman said words to the effect of:
‘We can butt weld it together and it will be as strong as a complete beam of that length.’
I told Paul Newman to proceed and deliver the beam and the other scaffolding equipment to the Grand Prix site on 3 March 1998.”

55 Mr Newman gives an account of the same meeting. He says:

“Sometime during the day of 2 March 1998, I received a phone call from Steele. He told me that, ‘I have picked up a job at the Grand Prix, building a scaffold for a screen, and I want you to provide the components I need.’ I replied, ‘That’s fantastic, but we’ve never done this before, I don’t know what’s involved, but I’d love to get into this area.’ Steele said, ‘I’ve done plenty of these, they’re nice little jobs, and you and I can make a good quid from this area. This is a start, and I’ll see if I can get into this area.’ I said, ‘What size is the scaffold got to be?’ Steele said, ‘I’ll bring around the details.’
Shortly thereafter, some time during the afternoon, Steele arrived at Highrise’s office at is premises at 2062 Hume Highway, Campbellfield, and he presented to me a two page drawing.
Steele said, ‘this is what I have got to build. Can you supply me the scaffold and a ten metre beam?’ I looked at the drawing and noticed that the opening in the scaffold was identified as 9.6 metres. Steele said, ‘The beam just needs to be longer than the opening.’ I asked, ‘Do you want the ladder beam shown in the drawing?’ I asked this because ladder beams are not made in 9.6 metre lengths, and Steele said, ‘No, I never use them.’

I was aware of Ron’s extensive experience in the concert staging industry, and therefore did not question his instructions.
I asked Steele ‘What sort of ‘lifts’ do you need? Are they 2 metre lifts on each end and a 1 metre lift in the middle?’ Steele agreed. I then said, ‘are all the bays either 4 foot or 8 foot wide?’ Steele said, ‘Yes.’
I asked ‘What’s that line at the top of the drawing?’ Steele said ‘It’s tubing that is used for the roof, and it’s connected to the beam, so that a tarpaulin can be put over the top to keep the rain off the screen.’
Steele said, ‘all of the scaffold tubes have to be open-ended, and all of the braces shown on the drawing are needed’. Steele then turned to the second page of the drawing, and identified a number of points at the back of the scaffold, and said, ‘I need all of those.’
During this process I prepared a delivery docket noting the numbers and quantities of various items that were required. After we had finished, I showed him the delivery docket I had prepared, and he doubled checked my additions, and then said ‘OK.’
Steele then asked me, ‘Do you have any beams available?’ I said, ‘let’s go into the yard and have a look at what we’ve got.’
We then went out the office into the yard, and I called for Jim Spiteri, my yard foreman to ‘come along and help Ron pick out a beam.’
Whilst Steele and I were wandering around the yard, I recall that Andrew Brennan, a director of Citywide Developments Pty Ltd, a company that subleased some space from Highrise at the premises, arrived and stopped to say hello to Steele.
After looking at various beams around the yard, Ron picked out a beam and said, ‘that’s about the size, but its not long enough. Can you make it longer?’
I said, ‘I’ll have to ask Troy.’ Troy is Highrise’s boilermaker, Troy Thomas. I called Troy out from the Welding Shed and pointed out the beams that Steele had identified. I asked ‘Can you weld these into a 10 metre beam?’ Troy replied, ‘No problem at all.’
Steele then said, ‘OK, go ahead and do it. I need beam to be ready and delivered to the Grand Prix circuit tomorrow, and I need the scaffolding delivered today.’ I said, ‘OK.’
At no time during this conversation was any mention of the weight bearing load required of the beam that we were supplying.”

56 The matter was investigated by a loss adjuster, who spoke to both Steele and Newman. Mr Hacche prepared a detailed report of his investigations, which included an account of his discussions.

57 The account of the meeting between Steele and Newman is in the following terms:

“Paul Newman agreed that there was something said about the beam’s capacity. He thinks that Ron Steele may have mentioned 5 tonne. However, he pointed out that he did not select the beam or advise Steele that it had a certain load capacity. It appeared to Newman that Steele was more concerned about the length of the beam.”

58 Newman’s account of these events is supported by that given by Mr Spiteri, who says that on the relevant day he was working in the yard when he was asked by Newman to come across to him. He says that he joined Newman and Steele, when Newman said to him, “Ron wants a beam.” Spiteri asked, “How big a beam do you want?” and Steele said, “It’s got to be ten metres long.”

59 Spiteri then said they walked to the centre of the yard where there was a big white beam next to some shipping containers. Although it was ten metres long it was much larger in diameter than the beam ultimately selected by Steele.

60 Spiteri said that Steele said the white beam was “too big” and the group then walked to a pile of beams in the middle of the yard, where Steele identified a couple of beams and said, “Yeah, they’ll do.”

61 The beams were individually too short and Steele asked Newman whether they could be made longer. Although Spiteri cannot remember the precise conversation, it is plain that the two beams were ultimately welded together by Thomas, who was the welder of Highrise who worked on the site.

62 During the course of this conversation Mr Brennan, a director of City Wide Developments, also joined the group. Brennan gave evidence before the court. Brennan said that on the afternoon of 2 March he returned to his premises, which were, in effect, part of the yard which included the Highrise facilities and noted Newman and Spiteri walking through the yard with Steele.

63 He approached the group of men and heard Newman asking Steele, “What size beam do you want?” He said that Brennan directed Steele’s attention to the beams which his company had. He says that Steele rejected those beams, saying, “No, they’re too big.”

64 He says the group continued to walk around the yard, which was “full of beams”, and Steele walked over to a stack of beams and “put his foot down on one and said ‘that’s about the size I need, but it’s too short. I need ten metres.’”

65 The boilermaker, Thomas, also gave evidence. He indicated that he was called over to the group at a time when a beam had already been chosen. He was asked by Newman to weld two beams together to make a ten-metre beam.

66 With respect to this aspect of the matter, I do not find Steele to be a reliable witness. His evidence was evasive and I formed the view that he was seeking to advance it in a way which served his interests irrespective of the truth.

67 Hacche recalls that he was told that it was possible that the load to be imposed on the beam may have been discussed between Newman and Steele. Although this cannot be ruled out, the precise terms of any discussion, if it occurred, are less than clear.

68 I am satisfied that Steele ultimately chose the beam because it appeared to him to be satisfactory and of an appropriate length. I have no doubt that he did not rely, or intend to rely, on Newman to advise him in any way as to whether the beam would have appropriate strength.

69 Steele says that Newman advised him that the beam would hold six to seven tonnes weight. I accept Newman when he says that he never gave that advice or spoke in those terms.

70 There is evidence from Clive Potter, who spoke to Newman after the collapse, in which Newman apparently said the beam would only hold a weight of 2.5 tonnes. Be that as it may, I am satisfied that Newman was not called upon to advise in relation to the strength during any conversation with Steele.

71 I am satisfied that the actions of Highrise played no part in the collapse of the scaffold. Although it supplied the beam, Steele, who had the responsibility of ensuring that it was adequate for the task, chose it.

72 It may have been an option for Steele to have asked Newman to warrant that the beam was adequate for its task, although the evidence does not disclose whether Newman could have proffered a view on that aspect of the matter. I am satisfied this did not occur.

73 What is plain is that Steele should have sought competent advice from someone able to advise him as to the characteristics of the beam necessary to hold the screen, and also the capacity of the chosen beam to perform in accordance with the required specifications.

74 The evidence suggests that Steele knew that the beam which was required had to carry a load likely to approximate five tonnes. In fact, because he thought that he was required to erect a scaffold for a screen larger than that which was in fact required, Steele probably knew that the beam would have to take a load greater than five tonnes. This is likely to be the explanation for Steele proffering in his evidence that there had been a discussion about the need for a beam which would hold a six or seven tonne weight.

75 Although I do not accept that this conversation occurred, it is consistent with my view of Steele’s knowledge of the matter, that he should have proffered this conversation in his statement of evidence.

76 Irrespective of the actual knowledge of Steele, his contract with Dew required that he provide a beam capable of supporting the proposed screen. It is plain that he failed to do that.

77 As I am satisfied that Highrise played no part in the choice of beam, Highrise is entitled to a verdict against Steele.

78 Accordingly, the ultimate position is that Screenco is entitled to a verdict against Dew for the breach of the contractual obligation to provide an adequate beam.

79 Dew is entitled to a verdict against Steele.

80 Screenco is also entitled to a verdict against Steele in negligence.

81 It is submitted by Steele that Dew was also negligent. It is said that when engaging Steele it should have offered Steele the use of the beam which it had previously made up, or at least provided complete specifications for it.

82 I do not believe that Dew had this obligation. It sent plans to Steele, although they were not complete, together with some other scaffolding items. It was the responsibility of Steele to raise the matter if the plans were inadequate and to establish the appropriate specifications for the beam.

Damages

83 The parties have been able to agree all but one of the items necessary to calculate Screenco’s damages. Those items have been included in a schedule, which is Annexure A to these reasons. The only item which has not been agreed is the major item, being the value of the Jumbotron screen which was damaged. The parties are agreed that the value of the screen should be determined at the date of the accident and damages awarded accordingly.

84 Screenco seeks the cost of a new screen, discounted for the limited hours for which the screen had been in service as against the assumed life of the screen. This would provide for a discount of .04 per cent.

85 The defendants submit that Screenco should be confined to the written down value of the screen which had been used before the accident to define the purchase price which Screenco had agreed to pay for the screen, which was purchased from the original Screenco operation in the United Kingdom. This was agreed at £stg477,984 .

86 That price was agreed at the written down value of the screen in the vendor’s books.

87 The issue is made difficult by the fact that there was no second hand market for the screens at the time of the accident.

88 Although in some cases the approach taken by accountants when recording the value of capital items in company records may reflect their true value, this is not always the case. However, in the present case as there is no second hand market, I am satisfied that the written down value is the best guide by which to determine the value of the screen lost.

89 Although in some instances it may be that a good guide to the value of an item will be to assess the period which it has been used against its nominal life, I am not satisfied that that approach in the present case necessarily reflects the true value of the screen by adequately allowing for the fact that the screen was “second hand.”

90 In my opinion, the appropriate approach is to value the screen on the same basis as that adopted by Screenco and the United Kingdom company, and accordingly I determine item 1 in the Australian dollar equivalent of £stg477,984. The Australian dollar value is to be determined as at March 1998.

91 It will be necessary for the parties to bring in short minutes which reflect these reasons. Costs and interest may be argued on that occasion.

92 The matter is stood over to 9.30 am on Wednesday 18 September 2002.

ANNEXURE A

AGREED SCHEDULE OF DAMAGES

Details	Costs
£STG	AUD (Exchange rate at 3 March 1998: 0.4146)
1. Sony UK Ltd – 12 complete modules of jumbotron JTS35	477,984.00	1,152,897.40
2. Labour to examine and test damaged equipment; 5 men, 10 days each at £100 per day	3,500.00	8,442.00
3. Two flight cases at £705 each	1,410.00	3,400.92
4. Two flight cases, bases/top plates at £260 each	520.00	1,254.24
5. Costs to transfer undamaged modules into current model casings; 23 module cases; 69 moulded cables (3 per casing); 46 module looms (2 per casing); 46 D38999 plugs (2 per casing); 46 protective covers (2 per casing)	8,000	19,296.00

Details	Costs
£STG	AUD (Exchange rate at 3 March 1998: 0.4146)
6. Sony VO9800P3/4 inch U-Matic SP S/N10220: Sony SEG-121OP SEG plus power supply S/N 10100 and Sony multi signal distributor MD-1200P S/N 10054; IVCC Gemini 2 SEG S/N 2070 S/N 2071; NEC DS60000-S-VHS Recorder S/N A9900 279; Panasonic NV-MSIV 5VHS Camcorder S/N L8 H000137; Sony 14 inch colour monitor	6,800.00	16,401.60
7. Chain motors	8,000.00	19,296.00
8. Hanging brackets	2,000.00	4,824.00
9. Truck hire	14,065.00
10. Crane hire	5,102.00
11. Airfares to Melbourne	1,143.00
12. Freight	91,015.19
13. Scaffolding	5,056.00

Details	Costs
£STG	AUD (Exchange rate at 3 March 1998: 0.4146)
13A
14
15
16. Transporting jumbotron screen throughout Australia	9,271.00
17
18. Lost revenue	79,000.00

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Last Modified: 11/22/2002