Searle v Commonwealth of Australia (No.9) - [2023] NSWSC 215

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Searle v Commonwealth of Australia (No.9) [2023] NSWSC 215
Hearing dates: 28 February 2022;
01-04 March 2022;
07-10 March 2022;
14-18 March 2022;
21-25 March 2022
Date of orders: 16 June 2023
Decision date: 16 June 2023
Jurisdiction: Common Law
Before: Garling J
Decision:
See [490]

Catchwords:
CONTRACTS — Remedies — Damages — Loss of chance — Chance to gain employment having obtained a qualification — Chance lost as a consequence of the defendant’s failure to provide training in accordance with their contracted obligations — Determination as to time that chance was lost — Determination that nature of breach did not affect assessment of damages — Determination that valuation of part performance did not depend on a proposition that the group members ought to have undertaken further training in the absence of a defence of failure to reasonably mitigate
CONTRACTS — Remedies — Damages — Assessment — Assessment of claims by nine group members — Consideration of personal circumstances and evidence particular to those group members — Valuation of the lost chance based on likelihood of realising hypothetical lost earnings greater than actual earnings — Chance of realising hypothetical lost earnings affected by the group member’s aspirations and plans and other personal decisions such as those regarding place of residence and whether to adopt parenting obligations — Valuation discounted to account for the possibility that the chance would not be realised
CIVIL PROCEDURE — Representative proceedings — Remedies — Damages — Assessment — Assessment of individual claims by group members who appeared with leave pursuant to ss 168 and 169 of the Civil Procedure Act 2005

Legislation Cited:
Civil Procedure Act 2005 (NSW) Pt 10
Income Tax Assessment Act 1997
Education and Training Reform Act 2006 (Vic)
Trade Practices Act 1974 (Cth)

Cases Cited:
Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54
Government Insurance Office (NSW) v Johnson [1981] 2 NSWLR 617
Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 642-643; [1990] HCA 20,
McCartney v Orica Investments Pty Ltd [2011] NSWCA 337
McCrohon v Harith [2010] NSWCA 67
Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10
Robinson v Harman (1848) 1 Ex 850 at 855; 154 ER 363
Searle v Commonwealth of Australia (No.2) [2018] NSWSC 1017
Searle v Commonwealth of Australia [2018] NSWSC 105
Searle v Commonwealth of Australia (No.5) [2022] NSWSC 119
Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127
Searle v Commonwealth of Australia (No.3) [2019] NSWSC 14
Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4
State of New South Wales v Moss (2000) 54 NSWLR 536; [2000] NSWCA 133
Wenham v Ella (1972) 127 CLR 454

Texts Cited:
Not applicable

Category: Principal judgment
Parties: Clayton William Searle (P)
Commonwealth of Australia (D)
Representation:
Counsel:
N Kidd SC / D Meyerowitz-Katz (P)
K Andronos SC / S Keizer (D)
Solicitors:
Levitt Robinson Solicitors (P)
McCullough Robertson Lawyers (D)

File Number(s): 2016/45027
Publication restriction: Not applicable

Judgment

These are representative proceedings commenced by Mr Clayton Searle, the plaintiff, pursuant to Pt 10 of the Civil Procedure Act 2005 (NSW). They began on 11 February 2016 when the plaintiff filed a Statement of Claim, by which he claimed damages and related remedies for breach of contract by the Commonwealth of Australia, the defendant. (The plaintiff also claimed for negligent misrepresentation and deceit, although those claims were later abandoned and are not relevant to this judgment.)
As set out in a Second Further Amended Statement of Claim filed on 10 August 2016, Mr Searle and each other group member was enlisted in the Royal Australian Navy as part of the Marine Technician cohort known as MT2010. The Navy was (and remains) a part of the Australian Defence Forces and an emanation of the defendant (“the Navy”). Each of them entered into a “Training Contract” with the defendant between September 2010 and October 2012.
It will be necessary at a later stage of this judgment to consider in some detail the terms of the Training Contracts. However, at this stage, it is sufficient to note that the defendant was obliged by the Training Contract to provide the group members with training which would enable them to attain a Certificate IV in Engineering with National Qualification Code MEM40105 (“Certificate IV”).
The defendant breached the Training Contracts by failing to provide the necessary training. As a result the group members claim to have suffered loss and damage which, in broad terms, is the value of the lost opportunity to seek employment outside the Navy having attained a Certificate IV.
In this judgment, I consider the individual claims made by nine group members and assess the damages to which they are entitled from the defendant.

History of Proceedings

The matter proceeded to an initial hearing on liability before Fagan J in February and March 2018. His Honour dismissed the plaintiff’s claim on two bases, namely because the plaintiff’s contract with the defendant was void as a fetter on the Commonwealth’s executive power of command over the Navy, and also because the Training Contract was unsupported by consideration from the plaintiff: see Searle v Commonwealth of Australia (No.2) [2018] NSWSC 1017 (“the Trial Judgment”).
The Court of Appeal overturned his Honour’s decision in Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127 (“the Appeal Judgment”). Bell P (as the Chief Justice then was) wrote the leading judgment, with which Bathurst CJ and Basten JA agreed, and also added their own observations. In summary, their Honours held that in the circumstances of this case the Training Contracts were not void as a consequence of the “fettering doctrine”, which is the doctrine that a government or public authority may not fetter the future exercise of discretionary powers reposed in the executive or a public authority. Their Honours also held that, because the plaintiff was bound by the Training Contract to serve in the Navy for a longer period than he had initially enlisted for, the Training Contract was supported by consideration.
Fagan J had recorded his contingent findings with respect to damages against the event that his decision was overturned: the Trial Judgment at [138]-[156]. His Honour heard evidence of:

the hypothetical income the plaintiff could have earned if the Training Contract had been performed and the plaintiff had left the Navy in December 2015 with a Certificate IV; and

the income the plaintiff had in fact earned, without having attained a Certificate IV.

The plaintiff relied on expert remuneration and human resources evidence to establish the employment opportunities that would have been available had the plaintiff attained a Certificate IV. The expert’s evidence involved relying on an analysis of job advertisements posted to one website, narrowed initially by keyword searches and later examined in detail. Those advertisements were not geographically confined to the region in which the plaintiff had said he had planned to live.
The expert used the results of his analysis of the job advertisements to create a “generic job description” to which he ascribed points based on the knowledge and skills required, the level of complexity involved in execution of the job and the outcome or accountability of the job. He then attributed a pay range which corresponded to the points he had ascribed to the generic job description, and which was based on his experience derived from working in the field for 30 years and reviewing the descriptions of thousands of jobs and collecting data on the rates of pay those jobs attract.
The result was an estimation of the annual gross salary (plus superannuation contribution) for a job of the generic description which he considered the plaintiff would be eligible to take up if he held a Certificate IV. That estimation commenced in 2016 at around $90,000, rose by 2.5% each year to around $98,000 in 2020 and then was increased significantly to around $123,000 in 2021 as a consequence of an assumption that the plaintiff would have been promoted to a job in a higher generic category at around that time. The expert estimated that after 2021, the plaintiff’s salary would increase annually at a rate of 2.5%.
The plaintiff had in fact earned less than those estimates.
Fagan J found at [140] that:

“the evidence [did] not establish that a Certificate IV … is so generally and readily accepted amongst employers in any defined field that an employee holding the qualification would command employment in that field at a salary within a reasonably ascertainable range.”

His Honour went on to find that, on the balance of probabilities, the plaintiff would not have found a job in the region in which he planned to live if he had discharged from the Navy with a Certificate IV in December 2015, from which he could have earned salaries at the rates hypothesised by the expert witness. His Honour was not convinced that a job of the description propounded by the expert was available in the region at the relevant time; nor was his Honour convinced that the holding of a Certificate IV, combined with the plaintiff’s experience and other attributes, would have secured him the job if it existed: the Trial Judgment at [151].
His Honour was satisfied, however, that the plaintiff’s earning capacity had been reduced as a result of the defendant’s breach of the Training Contract, but “by [no] more than about $15,000 per annum”: the Trial Judgment at [154]. His Honour also recognised that any shortfall in earning capacity is not fixed and perpetual, as a consequence of a finding that the plaintiff’s “accumulated experience will progressively compensate for the absence of the formal qualification”. His Honour ultimately assessed damages “on the basis that holding the Certificate IV… would have accorded some marketability or potential to secure a higher paying job for which the plaintiff has been ineligible without it”. His Honour, acknowledging that such an assessment was “amenable to only the crudest numerical estimation”, awarded the plaintiff a nominal lump sum of $60,000: the Trial Judgment at [156].
The Court of Appeal, having overturned his Honour’s decision with respect to liability, did not disturb Fagan J’s assessment of damages. In reaching that conclusion, which involved dismissing a Notice of Contention that had been raised by the defendant on the appeal, Bell P set out some of the authorities regarding the principles of law relating to the loss of a chance, to which it will be necessary to return later in this judgment. At this stage, it is sufficient to note that the Court of Appeal recognised the difficulties in the assessment of damages for loss of opportunity that the High Court and the Court of Appeal have referred to many times over the years, which may involve the need for “estimation, if not guesswork”: citing Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10 at [38] (Hayne J). No part of the trial Judge’s reasoning which I have set out above was criticised by the Court of Appeal: see the Appeal Judgment at [209]-[211].

Common Questions and Answers

In Searle v Commonwealth of Australia (No.3) [2019] NSWSC 14 (“the Common Questions Judgment”), a separate judgment which followed the Trial Judgment, Fagan J answered a series of questions common to the claims of the group members in the following way (“the Common Questions”):

“Q7 Did the defendant fail to provide to the plaintiff and to the Group Members a Training Plan as referred to in the training contracts?

Yes.

Q18 Did the defendant arrange for a Training Plan as referred to in the Training Contract and the Group Member contracts to be signed by the defendant and each of the plaintiff and Group Members?

No.

Q8 Did the defendant fail to take steps to provide the training that would be required to enable the plaintiff and Group Members to obtain the Certificate IV in Engineering (national qualification code MEM40105)?

Yes.

Q20 Did the defendant evince an intention in June 2014 not to be bound by the Training Contract or Group Member contracts by announcing that the plaintiff and the Group Members would not be, and could not be, obtaining the Certificate IV in Engineering (national qualification code MEM40105) at the end of the contract?

Yes.”

As a consequence of the Appeal Judgment, another Common Question was answered as follows:

“Q2 Whether the Training Contract between the plaintiff and the defendant and the Group Member Contracts (being training contracts between the Group Members and the defendant) were a nullity or invalid or otherwise unenforceable?

No.”

Additionally, I note that the pleadings in this matter have not been amended since the trial of the plaintiff’s claim and no other group member’s individual claim was separately or differently pleaded. Accordingly, the group members’ individual claims are to be determined with reference to the Second Further Amended Statement of Claim filed on 10 August 2016 and the Defence to the Second Further Amended Statement of Claim filed on 22 August 2016, and by reference to the answers to the Common Questions.

This Hearing

On 8 May 2020, the Court granted leave to the plaintiff, pursuant to ss 168 and 169 of the Civil Procedure Act, to permit ten group members to appear in the proceedings for the purpose of having their individual claims determined. Ultimately, nine group members so appeared. As they had the same legal representation, and the plaintiff remains on the record, it is convenient to continue to regard the plaintiff as the party preparing the claim although he has already recovered a judgment.
The parties did not dispute that the defendant had breached the Training Contract. Nor did they dispute that the opportunity which was lost by the group members as a result of the breach, namely the opportunity to seek employment having attained a Certificate IV, was of some value and that therefore the breach was compensable by an award of damages. What was in serious dispute was the value of the lost opportunity.
By the time of the hearing, which commenced on 28 February 2022 and concluded on 25 March 2022, there remained some matters of fact which were significantly in dispute, and which are relevant to a determination of the value of the opportunity which each group member lost. In summary, they are:

What was the term of the Training Contracts and by when could the group members have expected to attain the Certificate IV?

What were the contractual promises made by the defendant when it entered into the Training Contracts and what was it obliged to perform?

What was the nature and extent of the breach of the Training Contracts by the defendant?

To what extent did the defendant partly perform their obligations under the Training Contracts?

To what extent was there a difference in value between the training the defendant was obliged to provide, towards attaining a Certificate IV, and the training it did provide, towards attaining a Certificate III (a lesser qualification)?

In addition to those matters of fact, the parties disputed some of the principles to be applied in this case in order to quantify the value of the lost opportunity, especially with respect to the proposed method of calculation which the plaintiff adopted at this hearing, through an expert witness called to give evidence about, among other things, hypothetical earnings.
Also, as a matter of principle and with reference to those matters of fact described at [22(3)]-[22(5)] above, the Court was called upon to decide whether and to what extent the group members ought to have been expected to undertake alternative training, or obtain training in furtherance of their partly‑finished courses, once it was clear that the defendant had failed to provide training in accordance with the Training Contracts.

Outline of the Plaintiff’s Case

As to the matters of fact which I outlined at [22] above, the plaintiff says that the Training Contracts were for a term of four years, that the Court of Appeal has determined that fact (at [18] and [159] of the Appeal Judgment), and that it is not now open to the defendant to contend for a different finding.
By reference to the answers to the Common Questions, the plaintiff submits that the defendant breached the Training Contracts by:

failing to take steps to provide the training that would be required to enable the group members to obtain the Certificate IV (Common Question 8);

failing to provide the group members with Training Plans (Common Question 7) and failing to arrange for Training Plans to be signed (Common Question 18); and

evincing an intention in June 2015 not to be bound by the Training Contracts by announcing that the group members would not be, and could not be, obtaining the Certificate IV at the end of the contract (Common Question 20).

The plaintiff also seeks to articulate a series of other breaches which are referable to the obligations contained in the Training Contracts and the legislation which the Training Contracts were governed by (see [51]ff below). He submits that the defendant breached its obligations by:

failing to negotiate and sign Training Plans, contrary to the undertaking by the employer in the “Training Contract Declaration”;

failing to employ and train the group members as agreed in Training Plans, contrary to par (a) of the employer’s “Training Contract Obligations”;

failing to provide the appropriate facilities and experienced people to facilitate the training and supervise the group members while at work, in accordance with Training Plans, contrary to par (b) of the employer’s Training Contract Obligations;

failing to make sure the group members received on-the-job training and assessment in accordance with Training Plans, contrary to par (c) of the employer’s Training Contract Obligations;

failing to provide work that was relevant and appropriate to the achievement of the Certificate IV, contrary to par (d) of the employer’s Training Contract Obligations;

failing to ensure the group members were trained in accordance with the “approved training scheme” (as that term is defined in the Education and Training Reform Act 2006 (Vic) (“ETRA”), relevantly the scheme relating to the Certificate IV), contrary to subs 5.5.8(1)(a) of ETRA;

failing to allow the group members to comply with the approved training scheme without hindrance, contrary to subs 5.5.8(1)(b) of ETRA;

failing to arrange for the group members to be enrolled in a vocational education and training course provided by a Registered Training Organisation, as required by the approved training scheme, within three months after the date of commencement of the Training Contracts, contrary to subs 5.5.13(a) of ETRA;

failing during the duration of the Training Contracts to provide a level of supervision that was in accordance with the Training Contracts and the approved training scheme, contrary to Sch 4 sub-cl 4(1) of ETRA; and

failing to provide training directed at enabling the group members to obtain the standards of skill and knowledge required by the approved training scheme to be attained by the group members, contrary to Sch 4 sub-cl 4(2) of ETRA.

The plaintiff argues that it is not necessary for him to prove that there was a particular available job having left the Navy for which a Certificate IV was a requisite qualification, nor that there was a particular job for which the group member would likely have successfully applied if he had held the Certificate IV, before he was entitled to an award of damages by way of a lost opportunity to obtain employment with the benefit of a Certificate IV.

The plaintiff contends that the value of the lost opportunity may be assessed even if the possibility of the opportunity being realised is less than 50% or less than more probably than not, so long as it is not “so low as to be regarded as speculative”: McCrohon v Harith [2010] NSWCA 67 at [97]-[98]. Furthermore, the plaintiff argues that it would be appropriate to take into account a range of possible outcomes even though the likelihood of any particular outcome being achieved may be no more than a real possibility: State of New South Wales v Moss (2000) 54 NSWLR 536; [2000] NSWCA 133 at [87].
The plaintiff relies on evidence given by Mr Mathew Hunter, an expert in recruitment and organisational capability development for the naval shipbuilding industry and the wider defence industry with over 27 years of experience. Mr Hunter prepared reports relating to each group member that appeared at this hearing and ultimately gave evidence about one or more counterfactual scenarios in which each group member had attained his Certificate IV. At a high level, those counterfactual scenarios depend on the evidence of each group member, including as to their aspirations, and involve some combination of the following:

the group member obtaining employment in a skilled role in the region in which they had planned to live; and, as well,

the group member remaining in the Navy and being promoted as a consequence of them having attained the Certificate IV.

Mr Hunter’s method of designing and assessing the counterfactual scenarios differs from the approach taken by the expert witness relied on by the plaintiff at the first hearing before Fagan J. Whereas the witness who gave evidence before Fagan J created his own “generic job” to which he attributed a pay range, as I described at [9]-[11] above, Mr Hunter focussed on jobs actually offered by large organisations in the region in which the group member planned to reside. However, in connection with that submission which I described at [28] above, the plaintiff argues that the roles which Mr Hunter examined constitute evidence of what the group members could have earned on the hypothesis that they had obtained a Certificate IV qualification pursuant to the Training Contract, and also evidence of their hypothetical capacity to earn.
The Navy’s failure to provide “Training Plans” in accordance with the Training Contracts means that the hypothetical pathway that would have been followed by the group members, if the defendant had performed its obligations under the Training Contracts, is less clear than it would have been otherwise. The plaintiff submits that that uncertainty ought be resolved generously and in favour of the group members: McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 at [157]-[162]. Relevantly, Mr Hunter’s evidence is based on the assumption that the group members would have pursued employment in a particular specialised engineering field, in which the group member expressed an interest.
Finally, in respect of the dispute about pursuing further or alternative training, the plaintiff points out that the defendant has not pleaded any defence which alleged a failure to mitigate on the part of any individual group member. The defendant had attempted to amend its pleading to allege a failure to mitigate, but that was refused by this Court in 2018, prior to the trial of the plaintiff’s claim: Searle v Commonwealth of Australia [2018] NSWSC 105. The plaintiff rejects the defendant’s proposition that the value of the opportunity which has been lost may be valued by reference to the time in which a group member might have been able to complete the training required to attain a particular formal qualification.

Outline of the Defendant’s Case

The defendant submits that the term of the Training Contracts was always longer than four years, because it was not possible for it to provide the training required to attain a Certificate IV within four years. It says that:

“as a matter of construction there is nothing in the language of the Training Contracts which obliges the employer to provide all of the training necessary to enable an apprentice to achieve the [Certificate IV] within the nominal term of 48 months”.

The defendant points to the training which it in fact provided the group members. It advances the proposition that the Certificate IV would only have provided the group members with “generic Navy capability” and would not have usefully improved their earning capacity, especially in a civilian context. It says the alternative training towards attaining a Certificate III, which it provided to some degree after it breached the Training Contracts and abandoned plans to train the group members towards attaining the Certificate IV, was “more beneficial” than the training which it was obliged to provide. It highlights what it says are greater degrees of specialisation offered at the Certificate III level.
The defendant complains that the plaintiff’s articulation of “Common Breaches”, which I set out at [26]-[27] above, “does not appear to pay adequate attention to the claims actually pleaded and determined by way of the Common Questions”. It refers to the answers to the Common Questions and submits that the only breach actually determined by Fagan J and upheld on appeal was the failure to provide a Training Plan. It points out that no breaches of statute are pleaded against the defendant and that the plaintiff is improperly calling on this Court to determine a further question common to all group members, namely whether certain statutory obligations were imported into the Training Contracts and then breached. The defendant submits that ss 168 and 169 of the Civil Procedure Act limit the power of this Court to determine questions arising in this hearing which relate only to the individual group members that have appeared with leave. It submits that this Court has no power to determine any further common question.
Furthermore, it argues that its specific obligations were defined by reference to the Training Plan. Because no Training Plan was ever provided, the defendant says “it cannot be sued for damages for failing to make available… or provide training towards [a particular] stream, pathway or specialisation” within the Certificate IV. It argues that it was under no such obligation to provide such training and says no obligation was ever pleaded. Instead, the Certificate IV program was so flexible that it was permissible for the defendant to train the group members towards a varied skillset without specialisation in any particular trade.
The defendant says the plaintiff’s submission described at [32] above is misconceived for four reasons. First, it says it was under no obligation to structure the Certificate IV in accordance with any particular specialist pathway. Secondly, it says there is no evidence that the defendant ever offered to train any group member in accordance with any particular pathway or trade stream. Thirdly, it submitted that three out of the four pathways identified by the plaintiff are “non-approved pathways” within the Certificate IV qualification, which would have required the defendant to design a bespoke course of training. The defendant was under no obligation to do so, and there is no evidence that it did so. Finally, the defendant submits that it in fact “intended the Certificate IV… to be structured around a different occupation pathway, namely a ‘Fitter (General)’ pathway”. No witness was called to support this contention.
Rather, as to this submission, the defendant points to evidence that each group member signed an “Australian Apprenticeship Sign-up Form” (“AAS Form”) at the same time they signed their Training Contract. Some fields of that Form were pre-filled by the defendant before the form was given to each group member to complete and sign, including a field which described the “qualification being undertaken” as a “Certificate 4 in Engineering” and the “occupation being worked towards” as a “Fitter (General)”. The defendant argues this further supports its argument that it was required only to provide training in furtherance of a broad skillset “with the particular needs of the Navy in mind, rather than a set of skills needed to work in a specific trade in the civilian world”. It points to other internal Navy documents created in mid-2014 which asserted that proposition.
The defendant did not call any evidence to contest the hypothetical scenarios advanced by the plaintiff’s expert, Mr Hunter. Instead, the defendant chose to cross-examine Mr Hunter and criticise his methodology and the assumptions made by him. Those assumptions which the defendant attacked included that the group members would have attained a Certificate IV and specialised in a particular pathway.
The defendant submits that Mr Hunter’s methodology of quantifying loss was wrong in that it compared the particular group member’s hypothetical earning capacity, had they attained the Certificate IV, with that group member’s actual earnings, rather than actual earning capacity. It sought to characterise earning capacity as “a capital asset consisting of the personal capacity to earn money from the use of personal skills” (citing Government Insurance Office (NSW) v Johnson [1981] 2 NSWLR 617 at 627) and put that it is therefore relevant to consider how close each group member was to completing a course of training at the end of which they would attain a formal qualification.
In contrast to the plaintiff’s submissions regarding alternative training (see [33] above), the defendant contends that the group members’ true earning capacity was affected by how much training they had received, and further argues that that capacity was neither static nor permanent. The defendant seeks to distance themselves from the characterisation of this submission as one which would ordinarily rely on a pleaded defence of mitigation.
The defendant further attacks Mr Hunter’s methodology on the basis that it fails to account for the personal decisions of the group members. Those decisions could wildly affect the person’s actual earnings but, in the defendant’s submission, could not affect the person’s earning capacity.
Although it concedes that it is liable to pay damages for its breach of the Training Contracts, the defendant maintains that the Navy’s “power of military command” is a “fundamental principle” which is necessary to bear in mind when examining the factual background to the plaintiff’s claim and “the actual contractual promises made in the Training Contracts”, and, accordingly, the sum of damages that the Group Members were entitled to.

Principles of Law Relating to the Loss of a Chance

It is convenient at the outset to identify the principles of law relating to an award of damages for loss of a chance.
In Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 642-643; [1990] HCA 20, Deane, Gaudron and McHugh JJ said:

“When liability has been established and a common law court has to assess damages, its approach to events that allegedly would have occurred, but cannot now occur, or that allegedly might occur, is different from its approach to events which allegedly have occurred. A common law court determines on the balance of probabilities whether an event has occurred. If the probability of the event having occurred is greater than it not having occurred, the occurrence of the event is treated as certain; if the probability of it having occurred is less than it not having occurred, it is treated as not having occurred. Hence, in respect of events which have or have not occurred, damages are assessed on an all or nothing approach.”

Their Honours went on to explain that the approach is different in cases concerning past or future hypothetical events:

“But in the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured. But questions as to the future or of hypothetical effect of physical injury or degeneration are not commonly susceptible or scientific demonstration or proof. If the law is to take account of future or hypothetical events in assessing damages, it can only do so in terms of the degree of probability of those events occurring. … [U]nless the chance is so low as to be regarded as speculative… or so high as to be practically certain… the court will take that chance into account in assessing the damages. … Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability.”

Malec was a claim in negligence for damages for economic loss. In the following year, the High Court decided Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54, a case in which the respondent company had sued the Commonwealth for breach of contract. At page 80, Mason CJ and Dawson J set out general principles relating to an award of damages for breach of contract, including that the general rule at common law is “that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed”: Robinson v Harman (1848) 1 Ex 850 at 855; 154 ER 363 at 365; Wenham v Ella (1972) 127 CLR 454 at 471; [1972] HCA 43. Their Honours continued:

“The award of damages for breach of contract protects a plaintiff’s expectation of receiving the defendant’s performance. That expectation arises out of or is created by the contract. Hence, damages for breach of contract are often described as ‘expectation damages’. The onus of proving damages sustained lies on a plaintiff and the amount of damages awarded will be commensurate with the plaintiff’s expectation, objectively determined, rather than subjectively ascertained. That is to say, a plaintiff must prove, on the balance of probabilities, that his or her expectation of a certain outcome, as a result of performance of the contract, had a likelihood of attainment rather than being mere expectation.”

In Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 at 350; [1994] HCA 4, a suit brought under the Trade Practices Act 1974 (Cth), Mason CJ, Dawson, Toohey and Gaudron JJ cited with approval the passage from Malec extracted above and wrote that:

“… damages for deprivation of a commercial opportunity, whether the deprivation occurred by reason of breach of contract, tort or contravention of s. 52(1) [of the Trade Practices Act], should be ascertained by reference to the court’s assessment of the prospects of success of that opportunity had it been pursued.”

At [16] above, I noted that Bell P (as his Honour then was) discussed the authorities regarding the assessment of damages for loss of opportunity on the appeal in this matter: see the Appeal Judgment at [202]ff. It is useful to extract parts of his Honour’s reasons given their direct relevance to the current issues:

There are peculiar difficulties associated with the assessment of damages for loss of opportunity and the proof and evaluation of future possibilities and past hypothetical fact situations, as contrasted with proof of historical facts: Sellars at 355. These difficulties are in part accommodated by the approach to the assessment of damages that only requires there to be established on the balance of probabilities that there was loss of an opportunity of some value but does not require it to be shown that the likelihood of that opportunity being realised was greater than 50%: Sellars at 355. Sellars drew on Malec … where Deane, Gaudron and McHugh JJ said (at 643) that ‘[t]he future may be predicted and the hypothetical may be conjectured’.
In [Amann] …, Mason CJ and Dawson J said:

‘The settled rule, both here and in England, is that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can. Indeed, in Jones v Schiffmann Menzies J. went so far as to say that the “assessment of damages … does sometimes, of necessity involve what is guess work rather than estimation”. Where precise evidence is not available the court must do the best it can. And uncertainty as to the profits to be derived from a business by reason of contingencies is not a reason for a court refusing to assess damages.’ (Footnotes omitted)

Menzies J’s famous observation in Jones v Schiffmann (1971) 124 CLR 303; [1971] HCA 52 was also referred to by Toohey J in Amann at 138. Toohey J also made reference to the observation of Sir Garfield Barwick in Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625 at 636; [1981] HCA 3 that ‘in many cases’ damages are ‘no more than an approximation lacking in mathematical or economic accuracy or sufficiency’.
…
It is not essential for a trial judge assessing damages for loss of a chance to nominate a particular percentage of probability to be attributed to the prospect of the chance being realised, and to insist on this would be prone to artificiality. A global approach not requiring the specification of particular percentages or degrees of probability or possibility was endorsed as acceptable by this court in Fightvision Pty Ltd v Onisforou (1999) 47 NSWLR 473; [1999] NSWCA 323 at [147]. In Malec at 640, Brennan and Dawson JJ said:

‘… we think it undesirable for damages to be assessed on the footing of an evaluation expressed as a percentage. Damages need not be assessed by first determining an award on the footing that the hypothetical situation would have occurred and then discounting the award by a selected percentage. Damages founded on hypothetical evaluations defy precise calculation.’

The Training Contract

Terms

As I briefly explained at the commencement of this judgment, each group member in these proceedings entered into a Training Contract with the defendant. The defendant entered into those contracts as the “Department of Defence” trading as the Navy, specifically in its capacity as the “employer” of the group members, who were all enlisted sailors in the Navy. Each Training Contract was, except for information personal to the group member, in identical terms.
The Training Contracts regulated the relationship between the Navy, as employer, and the group members, as employees. It required the parties to do things with reference to a Registered Training Organisation (“RTO”) which, in this case, was also the Navy but in a separate capacity.
The Training Contracts were all signed in Victoria and were regulated by Victorian law, particularly ETRA. The statutory training authority at all relevant times was the Victorian Skills Commission, with whom the defendant lodged the Training Contracts after they were signed. (The Commission has since been replaced by the Victorian Registration and Qualifications Authority.)
The Training Contracts were in standard form, as required by s 5.5.10 of ETRA. They imposed obligations on the Navy including to:

“negotiate and sign a Training Plan with the chosen RTO as required by the [Victorian Training Authority]”;

“employ and train the [group member] as agreed in [the] Training Plan and ensure the [group member] understands the choices that he/she has regarding the training”;

“provide the appropriate facilities and experienced people to facilitate the training and supervise the [group member] while at work, in accordance with the Training Plan”;

“make sure the [group member] receives on-the-job training and assessment in accordance with [the] Training Plan”;

“provide work that is relevant and appropriate to the vocation and also to the achievement of the qualification referred to in [the Training] Contract”;

“release the [group member] from work and pay the appropriate wages to attend any training and assessment specified in [the] Training Plan”;

“work with [the] RTO and the [group member] to make sure [the Navy] follow[s] [the] Training Plan, keep training records up-to-date, and monitor and support the [group member]’s progress”; and

“let the [Victorian Training Authority] and the RTO know within five working days (or when the [Victorian] legislation requires, if this is different) if [the] Training Contract has become jeopardised”.

The Training Contracts signed by the group members who appeared at this hearing were prepared electronically so that certain fields of the standard form contract were already filled when they were presented to the group members to complete and sign. Importantly, those completed fields included the following:

“Apprenticeship/Traineeship Details

Title and level of qualification

Certificate 4 in Engineering

National Qualification Code

MEM40105

…

Nominal term of Training Contract

… (months) 48

“Nominal Term”

In order to determine the point in time at which the group members could have expected to attain a Certificate IV, it is necessary to fix the term of the Training Contracts. The plaintiff said that the term was four years and argued that the Court of Appeal had so found when Bell P wrote, at [18] of the Appeal Judgement that “the ‘[n]ominal term’ of the Training Contract was stated to be 48 months. This was in substance a four-year apprenticeship”. His Honour repeated at [159] that “the Training Contract was for a four-year period”.
Prior to the commencement of this hearing, for reasons which I gave in Searle v Commonwealth of Australia (No.5) [2022] NSWSC 119, I rejected evidence which the defendant had proposed to lead from witnesses about statements made to individuals before they signed their Training Contract, which were at odds with the Training Contract terms, and which were relied upon to suggest that the group members would not attain a Certificate IV within the 48-month term.
I adhere to the view I articulated in those reasons that the contractual wording identifying the 48-month term of the Training Contract gives rise to no ambiguity whatsoever. At [67] I said:

“The 48-month period is the term nominated by the parties to the contract, which was approved by the relevant Training Authority. The fact that the contract may, at some time in the future, by agreement between the parties, be extended and that extension approved… would depend on future facts. In this case, it was not contended that those future facts arose. On the contrary, the finding of breach suggests that the breach occurred well before the Nominal Term had been reached and, as senior counsel [for the defendant] accepts, without any request for an extension of the term of the contract being made.”

I have concluded that terms of the Training Contract are unambiguous and plain. They mean that the group members could have expected to attain a Certificate IV within 48 months from the date their Training Contract commenced. The opportunity which they lost as a result of the defendant’s breach was the opportunity to seek employment, having attained a Certificate IV, four years after their Training Contract commenced.
This conclusion is also consistent with the findings in the Appeal Judgment at [18] and [159].
As will become clear, in some cases as a result of matters outside the control of either party such as those relating to injuries sustained by group members which prevented them from completing training or seeking employment, the opportunity may not have been realised within the four-year period. In those circumstances, any likely delay will need to be taken into account in determining when the loss of chance occurred, and the value of that lost chance.
It will also be necessary to take into account when assessing the value of any opportunity lost by the group members, such other ordinary vicissitudes of life which may have precluded each group member from realising the opportunity which was lost to them.

Breach

I repeated the Common Questions and the answers which have been given by this Court at [17]-[18] above. The answers to Common Questions 7 and 18 make clear that this Court has decided that the defendant did in fact fail to provide Training Plans, and arrange to have them signed, contrary to the obligation described in [54(1)] above. This clearly constituted a breach of the Training Contract.
The answer to Common Question 8 reflects Fagan J’s finding that the defendant failed to take steps to provide training towards attaining a Certificate IV. In a passage from the Trial Judgment partly quoted by Bell P in the Appeal Judgment (at [20]), Fagan J made the following assessment of the defendant’s conduct:

… [D]uring the three years after the Training Contract was signed not only had the Navy failed to propose, negotiate or agree a Training Plan [something required by the Training Contract] to enable [Mr Searle] to attain a Certificate IV in Engineering but it had proceeded to train him to its own requirements without attempting to satisfy those of the Certificate IV. If any of his attainments under the MT2010 Log happened to coincide with units of competency in the specification for the Certificate IV in Engineering, they could be counted towards that qualification. … [S]uch progress towards a Certificate IV would be purely incidental. … Certainly there was no supervision or direction of him towards systematically working through the Certificate IV competencies.”
1. Whilst it is true that Fagan J declined to answer other questions proposed by the plaintiff as common about further detailed aspects of the breaches allegedly committed by the defendant, that does not mean that Fagan J was convinced that the defendant had not so breached the Training Contracts. In fact, Fagan J thought those other questions to be repetitive of Common Question 8 and therefore considered it was not necessary or useful to answer them: the Common Questions Judgment at [14]. In coming to that view, Fagan J recognised the following at [12]:

“Although such evidence of breach as was adduced in the hearing was directed to the case for the plaintiff there was ample evidence that the defendant breached the training contracts with other Group Members in the same respects as it breached the Training Contract with the plaintiff. Most breaches flowed from the defendant’s failure to create Training Plans for the Marine Technicians (“MTs”). The defendant admitted that failure on the first day of the hearing. Reports and letters generated during the Navy’s review of the MT2010 program in 2013-2014 (see [the Trial Judgment] at [48]-[58]) contain admissions of a general nature that the defendant did not train the Group Members towards attainment of the Certificate IV as required under the training contracts.” (emphasis added)

And, clearly, the defendant breached the Training Contracts by repudiating them, as acknowledged by the answer to Common Question 20 and as explained by Fagan J in the Trial Judgment at [48]-[58].
In my view, it is not now necessary to determine whether and to what extent the defendant breached the Training Contracts in any way other than by failing to provide and sign Training Plans, by failing to take steps to provide training towards attaining a Certificate IV, and by repudiating the Training Contracts. The simple fact is that Fagan J found the breaches, that finding was not disturbed on appeal, and it is now the role of this Court to determine the damages payable caused by the breaches of the Training Contracts with respect to nine individual group members. It does not matter for the purpose of the assessment of damages whether the defendant breached the Training Contracts in each of the additional ways particularised by the plaintiff at [26]‑[27] above. Accordingly, it is unnecessary to further consider those matters in the context of identified breaches of contract.
The nature of the defendant’s breach which has been established, however, does affect the assessment of damages. The plaintiff is right to point out that the Navy’s failure to provide Training Plans means that the hypothetical training pathway that would have been followed is less clear than it would otherwise have been. But, in my view, the likelihood that each group member would have been trained in a particular trade pathway is not so low as to be regarded as speculative.
I reject the proposition put by the defendant that it was only ever going to train the group members in “general Navy capabilities” and that it cannot be sued for not providing training in a particular pathway. In my view, the evidence clearly supports a conclusion that the Navy was intending to and did seek to train the members of the MT2010 cohort in one of four identified specialised pathways: electrical fitting; diesel fitting; refrigeration and air conditioning; and fabrication. The Navy’s own documents indicate that it “developed, approved and implemented” training courses in these pathways specifically “to meet [its] maintenance capability requirements”. The fact that the “Australian Apprenticeship Sign-up Forms” which I described at [39] above, which referred to the “occupation being worked towards” as a “Fitter (General)”, were signed at the same time as the Training Contracts does not alter this conclusion. Nor does the plain reference to a “Certificate IV in Engineering” in the Training Contract, within the field for the “title and level of qualification”, mean that specialised training pathways were not going to be provided.
The evidence of Mr Heritier, who was called by the defendant, established that these more specific trade streams were used by the Navy for qualification for a Certificate III in Engineering. They were Electrical Fitting, Diesel Fitting, Refrigeration and Air-Conditioning and Fabrication and Welding. Since the Certificate IV in Engineering qualification was superior to that of a Certificate III, then I do not doubt that the training which would have been made available in the Certificate IV would have mirrored, but at a superior level, the trade streams followed in the Certificate III qualification. It would make no sense for the Navy to introduce at the Certificate IV level a completely different trade for an individual. This approach was not available to be proved in evidence because, in breach of the Training Contract, the Navy did not even complete a Training Plan which would have laid out the trade pathways which would have been made available in the Certificate IV training. As well, the four trade pathways determined by the Navy for qualification for a Certificate III represented the skill capability required by the Navy.
Mr Andrew Black, a witness called by the defendant, said in cross-examination that a flow chart which showed the proposed MT2010 cohort’s training included trade streams considered by the Marine Technician team to be appropriate to the Navy trade requirements and were to be taught as a part of the Certificate IV training. I accept his evidence which was, in substance and effect, contrary to the defendant’s submissions, and which satisfies me that the group members would have obtained their Certificate IV with a specialised trade stream.
I accept that, as a matter of principle, evidence of roles in a particular industry may be relevant to consider in valuing the opportunity which has been lost by the group members. The degree to which it is likely that a group member may have obtained a role in a particular industry depends on that group member’s individual circumstances. For example, evidence which suggests that a group member was interested in training and working in a particular field or had received more training in one field or another, may relevantly tend to increase the chance that that group member would have sought employment in that field. And, in accordance with the principles articulated in McCartney v Orica Investments Pty Ltd at [157], that chance may be assessed generously to avoid the defendant obtaining too great a benefit of the doubt arising from any uncertainty which its breach has caused. Had there been provided for each group member a Training Plan, this issue would never have been in doubt. But the Navy did not do what the contract required and ought not now benefit from any uncertainty about specialised training paths.

Part Performance

Although it is not necessary to determine all of the ways in which the defendant breached the Training Contracts, it remains relevant to consider the extent to which the defendant partly performed its obligations. That is because the value to each group member of the lost opportunity to seek employment, having attained a Certificate IV, partly depends on what they were able to earn without having obtained a Certificate IV, which in turn may have been affected by the training which the Navy did provide.
The Court heard detailed evidence of the competencies which each group member was assessed to have achieved. Those assessed competencies were recorded in an “[Australian Defence Organisation] Service Record” which was kept for each group member. In addition, the group members kept a “Competency Journal” in which they recorded the competencies they had attained.
In my view, the training which the Navy did provide may have affected the actual earning capacity of group members once they were discharged. The extent to which that training increased a group member’s earning capacity is most easily observable in the context of claims by group members who remained enlisted in the Navy. As they were trained by the Navy, they were promoted and received increased earnings. However, it may be the case that the training which a group member received may have also had some effect upon their earnings in a civilian role.
It may have been possible to establish by evidence that the training which was provided, and which led to the group member having a particular competency, may have actually increased a group member’s earning capacity. But no such evidence was led by the defendant. Nor did the defendant lead any evidence which convinced me of the submission referred to at [42] above, namely that a partly completed course of training towards either a Certificate III or Certificate IV beneficially affected the earning capacity of any group member, in any discretely identified sum, or quantifiable amount.
I reject the proposition advanced by the defendant that the value of the training actually provided may be determined by reference to the units which remained to be completed in order to attain a Certificate IV. It is not the case that the earning capacity of each group member was only impaired by the degree to which the defendant failed to train them in accordance with the Training Contracts. Rather, as I have said, the group members have lost an opportunity to seek employment having attained a Certificate IV. The defendant is liable as a consequence of its breach to compensate the group members for the value of that lost opportunity, not for some degree of impairment in the quality of their earning capacity.
Furthermore, as the plaintiff pointed out, the defendant did not plead that the plaintiff had failed to mitigate his loss. The consequence of that failure to plead, in my view, is that the defendant cannot now argue that it owes a lesser amount in damages because a group member was “closer” to completing a course of training which would enable them to attain a formal qualification, because the underlying proposition is that the group member should have undertaken further or alternative training to obtain that qualification and acted unreasonably in failing so to do.

Certificate IV in Engineering

The value of the opportunity lost by the group members in this case depends on the value of having a Certificate IV. It is therefore necessary to understand and identify the content of a Certificate IV and consider the likely impact it may have on a person’s earning capacity.
A Certificate IV was described in this way as a:

“qualification [which] has been specifically developed to be delivered to people who are existing engineering tradespersons or delivered to apprentices in an Engineering Trade who at the outset choose to study at a higher level as part of their apprenticeship”.

To attain a Certificate IV qualification, a trainee is generally required to complete four years of study, which involves a combination of “on the job” and classroom learning. They must complete a mix of core units, specialisation elective units and other elective units, to a total of 132 units. Because there are over 300 units available to study, any one person who has attained a Certificate IV may end up with a very different set of skills compared to any other person with a Certificate IV.
A person with a Certificate IV may attach a qualification “descriptor” to identify the particular skills they obtained while completing their study. Such descriptions would, I am satisfied, include the four identified trade streams which I earlier described.
The rules which govern the use of such descriptors are flexible and as such descriptors may not by themselves adequately reflect the particular skill set possessed by the person.
The expert evidence established that many roles, including those identified by Mr Hunter, required applicants to have certain qualifications. In some cases, an applicant may have been able to secure a similar role with either a Certificate III or a Certificate IV, although the fact that one applicant has a Certificate IV may decisively secure them the job in favour of another person who only has a Certificate III.
The evidence also suggested that for some employers the mere qualification of a Certificate IV was less important than the actual skills which an applicant held.
As I have said, the parties agree that the lost opportunity to seek employment with a Certificate IV is of some value. In my view, the evidence establishes that it is of significant value. A Certificate IV is a qualification obtained after four years of training and learning which enables a person to seek employment in a much wider range of roles, many of which are highly skilled and well‑remunerated. Furthermore, for the reasons I gave at [72] above, the likelihood that each group member’s Certificate IV would involve specialist training in one or another pathway, and would have attached a pathway descriptor, depends on their personal circumstances, which I will come to. I accept that that specialisation will in turn affect the range of jobs which may have been available to group members, had they attained their Certificate IV in accordance with their Training Contract.

Approach to Assessing Damages in this Case

I set out the principles which are to be applied in cases such as these at [46]‑[50] above. It is necessary now, having considered the general factual circumstances of the group members’ claims, to set out the general approach I will take in assessing the individual claims. This involves some repetition of earlier material.
In this case, the opportunity which was lost by the group members was the opportunity to seek employment and earn income having attained a Certificate IV pursuant to the Training Contract. The opportunity was lost by each group member at the time of the defendant’s breach, so it is to be valued as at that date. However, the value of the opportunity is derived from earnings which the group member could have expected to earn in the future, i.e., at a time after the date of breach, and on the basis that the defendant would have fulfilled its contractual promise.
In most cases, those future earnings could have been expected to begin flowing 48 months after the relevant Training Contract commenced. However, there will be occasions where a group member’s injury or some other circumstance would have delayed the realisation of the opportunity. And, in any event, I will need to take into account the ordinary vicissitudes of life which may have prevented the group member from attaining a Certificate IV or seeking employment, either at all or else in a timely fashion.

The defendant admits that the lost opportunity has some value. I will come to determine the value of the opportunity which was lost by each of the individual group members who have appeared at this hearing. It will require me to hypothesise the various possible outcomes which may have been realised if the defendant had fulfilled its obligations under the Training Contracts. It does not require me to find that the group member was more likely than not to realise any of those opportunities, so long I am satisfied that the chance that they would have realised the opportunity is not so low as to be regarded as speculative.
Mr Hunter gave evidence of what the group members could have earned in one or more particular roles, if they had attained a Certificate IV pursuant to the Training Contract. He explained that in completing his research for the purpose of preparing each report, he reviewed six to eight enterprise agreements for organisations which suited the assumptions he was given about the group member’s likely Certificate IV pathway and also the group member’s preferred region of residence. He generally preferred large organisations on the basis that they were more likely to present actual opportunities for work. He also preferred to focus on what he described as “above average” opportunities because his opinion was that the group members, with a Certificate IV and Navy experience, would be competitive applicants for such roles.
I accept that his evidence can be used for the purpose of determining what each group member could have earned had they sought employment with a Certificate IV. Clearly, he did not give, and could not have given, evidence of what each group member would have earned if they had attained a Certificate IV. Nor could he, or did he, give evidence about the impact of income tax on the possible earnings which he considered. However, even if the group members had been able to take up the opportunity to seek employment having attained a Certificate IV, the hypothetical outcomes which may have eventuated are much broader and are many times more numerous. In my view they may include the following, depending on the individual group member’s circumstances:

the group member may have taken a civilian role substantially similar to that identified by Mr Hunter in his report;

the group member may have taken another civilian role which paid more or less than the particular role identified by Mr Hunter;

the group member may have remained in the Navy and been promoted essentially in accordance with the timeline identified by Mr Hunter in his report;

the group member may have remained in the Navy and been promoted according to a timeline which is different to that identified by Mr Hunter; or

the group member may not have secured employment having been discharged from the Navy, even with the Certificate IV.

The defendant tendered evidence of the rates of pay which are payable under the relevant Award for those with a Certificate IV in Engineering. It sought to rely on these as a “low point of possible wages” to be compared with the “high point” identified by Mr Hunter. However, there is no evidence that any employer was offering employment at the Award rate at around the time any of the group members would have been seeking employment. In final submissions, senior counsel for the defendant submitted that it would be appropriate if the Court regarded the Award as an appropriate guide, which would be increased by an uplift. This was seemingly to reflect the absence of any evidence that the Award was being used in the marketplace as the remuneration actually being offered by one or more employers.
In the absence of evidence being led by the defendant about what other civilian roles might have been taken by a group member, or what other timelines for promotion might have been followed, or evidence about average or median wages in any particular industry (or other similar such measures), the only evidence available to consider any hypothetical scenario is that of Mr Hunter. Otherwise, I would be engaging in speculation. Whether or not the role identified by Mr Hunter is the hypothetical “high point” will depend on the circumstances of each individual. The chance that the group member would have realised that outcome in accordance with the timeline identified by Mr Hunter, depending on those circumstances, is a factor properly to be taken into account in determining the value of the opportunity which was lost as a consequence of the defendant’s breach.
I accept that not all jobs on offer in the marketplace placed value on an application being in possession of a Certificate IV. A number of witnesses called by the defendant gave evidence to that effect. However, the existence of the Industrial Award, which recognises that an employee with a Certificate IV is entitled to a higher wage than one without, the fact that the Navy paid an increased salary to a sailor with a Certificate IV qualification, and the evidence of Mr Hunter about the range of salaries paid pursuant to the Industrial Agreements which he identified, all combine to persuade me that across the broad spectrum of industries described in the evidence, it is overwhelmingly more likely that there would be many more opportunities for work in employment which valued the group members having a Certificate IV than not having one. I do not regard the defendant’s evidence that the Certificate IV was not an advantage with some employers as being of any real assistance to me.
As I explained at [72] above, the personal circumstances of each individual group member may affect the likelihood of them realising a particular opportunity by securing a job in a particular organisation or industry. Their aspirations and life plans are relevant to take into account. In this regard, I consider that decisions made by group members later in time than the defendant’s breach are relevant to take into account because it may form the basis for an inference that the group member had particular aspirations or plans before, or at the time of, the defendant’s breach and as well at the time they would have expected to complete their Certificate IV. Such decisions may also provide a guide to the extent of the individual’s work capacity, and potential employment choices.
For the same reason, the personal decisions of particular group members not to seek employment, for example because they have moved to a particular region or because they have taken on parenting duties, may affect the likelihood that they would have realised the value of the opportunity which they lost. The plaintiff submits that these personal decisions have depressed actual earnings while masking true earning capacity. The plaintiff submits that, in some cases, the value of hypothetical earnings ought be discounted by the actual earnings which the group member would have earned, but for the personal decision, unconnected with the defendant’s breach, which has had the effect of depressing the person’s actual earnings.
I take a slightly different approach. It is true that, generally speaking, the evidence was that the personal decisions made by these group members were mostly unconnected with the defendant’s breach and were very likely to have been made in any event, regardless of the defendant’s conduct and breach. However, in other cases, it may be that the personal decisions, for example about parenting or about moving to a particular region, were affected by the defendant’s breach. Hypothetically, for example, a parent may have chosen to take on a greater share of home duties – and not seek to work – precisely because they had not been trained by the defendant, and because their partner was in fact earning relatively greater wages.
In my view, the correct way to account for these personal decisions is to adjust the group member’s hypothetical earnings by an amount which reflects the possibility that the same decision – not to seek to work – would have been made if the group member had received the benefit of the opportunity which they have lost. If the personal decision is totally separate from the defendant’s breach, the effect is substantially the same: the damages payable are reduced. However, the course which I have adopted is, in my view, a course which is less likely to lead to an erroneous calculation of the value of the lost opportunity.
In theory, the opportunity to seek employment having attained a Certificate IV may be of some value to the group members until they retire. Many of the group members are young and therefore the present value of that lost opportunity may be very great. With reference to the personal circumstances of each group member, their calculated hypothetical earnings and their actual earnings, the plaintiff submitted that future economic loss, beyond the date of hearing, ought be estimated and included in any calculation of damages. I accept that, as a matter of general principle, the value of the lost opportunity may be calculated with reference to hypothetical earnings into the future.
The plaintiff submits that damages reflecting lost earnings, which could have been expected to be earned after the date of hearing, may be calculated by multiplying the average difference between yearly hypothetical income and actual income by the number of years until the group member can expect to have fully caught up to expected earnings. I prefer a method by which I will estimate future earnings in the hypothetical scenarios where the group member has been working with the benefit of the Certificate IV, and future earnings which the group member presently expects to earn. I will base my assessment on the evidence available, including in relation to the trend of increases in earnings.
In any event, I accept the defendant’s submission that each group member’s earning capacity is neither static nor permanent. It will change over time, depending on an unknowable range of factors, including the training and experience they gain and the conditions of the labour market. It is therefore appropriate to recognise that, over time, the value of the lost opportunity referable to hypothetical earnings in any particular year will diminish. For the avoidance of doubt, however, I refer to what I said at [78] above and note that I have rejected the defendant’s submission that damages ought only be allowed which reflect a short period of reduced earning capacity, during which the group members may have sought additional or alternative training to complete their qualifications. That is not the appropriate approach to the assessment of the value of the lost opportunity.
It is to be noted that in each of the reports of Mr Hunter about individual group members, he recorded that the remuneration which he calculated did not include any monies earnt by way of overtime, shift allowances, tool allowances or annual leave loading. Mr Hunter made calculations of the value of these allowances based upon the particular workplace agreements and having made some assumptions about the extent of overtime and shift work likely to be undertaken.
I approach this exercise on the basis that whilst no precise monetary qualifications can be made, the fact that a particular job of the kind identified with the possible earnings calculated by Mr Hunter may in fact have provided the group member with a larger income, is a factor to be taken into account and weighed up when considering the value of the lost chance. It is also a relevant consideration when assessing whether, as the defendant submitted, the loss of earnings assessed by Mr Hunter was in fact at the top of the range of potential earnings. It goes without saying that I have not, in each group member’s case, simply increased the value of their lost chance by a percentage to reflect the possibility of additional remuneration for these possible extra allowances and earnings.
Mr Hunter’s calculated hypothetical earnings do not include any amount which would have been payable in accordance with the statutory superannuation guarantee. I accept that it is necessary to factor into the value of the lost opportunity the corresponding lost employer superannuation contributions which could be expected to be paid in connection with any lost earnings. The plaintiff proposes that an amount of 9.5% be added to the lump sum difference between expected earnings and actual earnings. It is appropriate, rather than allowing a precise percentage, to keep in mind that the earnings for those with a Certificate IV, either in the hypothetical circumstances valued by Mr Hunter, or in any available earnings under the Industrial Awards tendered by the defendant, do not include any uplift for obligatory employee superannuation contributions. It is appropriate to take that uplift into account as a factor in assessing the overall value of the lost opportunity.
Interest is payable on the damages to be assessed with respect to each group member from the date of the expected conclusion of each of the Training Contracts (because that date represents the first time that any breach of contract could give rise to the possible receipt of income earnt by reason of being qualified to hold a Certificate IV) until the date of judgment, in accordance with s 100 of the Civil Procedure Act.
In closing submissions, counsel for both parties raised the issue of the taxation treatment of awards of damages in these proceedings. If the plaintiff was taxed on receipt of any award, there was a question as to whether I might need to undertake an additional step or calculation to “gross-up” the awards of damages to take into account the taxation treatment. Following the hearing, I invited the parties to file supplementary written submissions on the subject.
In those submissions, the defendant, on the one hand, submitted that the Court does not need to undertake any such additional steps or calculations on the awards of damages. Its position is that any award of damages in the circumstances of this case referable to the loss of earning capacity will not be taxable, on the basis of an exemption to capital gains events. The defendant referred to s 118-37 of the Income Tax Assessment Act 1997 (Cth), and to a Taxation Ruling issued by the Australian Taxation Office which appeared to support its position, TR 95/35. The defendant submitted that the Court, in these reasons, should make various indications or determinations on various taxation issues, and that the parties should then be given a reasonable opportunity to consider, and if necessary be heard on, the taxation implications of the Court’s reasons. The plaintiff, on the other hand, submitted that it was appropriate to award damages by way of a grossed-up sum given the uncertainty of how or if the awards of damages will be taxed.
In the circumstances, the Court would benefit from further submissions on the impact of taxation on the awards of damages in these proceedings, and whether I might need to undertake an additional step or calculation to “gross‑up” the awards of damages to take into account any sum which may be payable by way of taxation. In making those submissions, the parties will now have the benefit of the whole of these reasons.

Individual Assessments

I have set out the general principles and approach that I will take to assess the damages which are payable to each of the group members who appeared. I now turn to their individual circumstances and will proceed to reach a conclusion with respect to each of them.

Clayton Searle

I described the procedural history of the damages assessment which was made with respect to the plaintiff by Fagan J, and then left undisturbed on appeal, at [8]-[16] above. It is worth noting here again that Fagan J assessed the damages incurred by the plaintiff to be $60,000. Judgment has been entered in favour of Mr Searle. No further assessment of his damages is required.

Patrick Burnett

Personal Circumstances

Patrick Burnett enlisted in the Navy and commenced Recruit School on 17 January 2011, shortly before his 18^th birthday. He completed Recruit School on 19 June 2011 and commenced Category School the following day.
Mr Burnett signed a Training Contract on 15 September 2011 which was agreed to have commenced on 20 June 2011. Its term was 48 months, such that the completion date for the apprenticeship was to be 19 June 2015.
Following the completion of Category School, on 13 February 2012, Mr Burnett was posted to the Fleet Support Unit at HMAS Kuttabul (“FSU Kuttabul”). He was then posted to HMAS Waterhen between March and May 2012, after which time he returned to FSU Kuttabul.
At the FSU, he was initially tasked with painting gangways. He disliked the work and accordingly requested to work in the electrical department. As a result, from May 2012, he spent three months changing capacitors. His evidence is that there was not a great deal of electrical work to be done, and he notes that he was not given any substantial training. He says he was not able to complete any competencies within his Competency Journal. He describes spending his days at the FSU playing cards and reading newspapers with other sailors in his cohort.
During his short-term deployment to HMAS Waterhen, Mr Burnett was put in the earth fault finding and remediation team and performed day to day tasks which included assisting with electrical maintenance and repairs on ships. He describes being dissatisfied with Navy life because he was being tasked with unskilled work and because he was unable to work towards completing his Competency Journal.
In March 2012, as a consequence of his disappointment with respect to the lack of training he was receiving, he made enquiries about a potential application to join the Royal Australia Air Force (“RAAF”). He eventually made such an application, although it was refused in September 2013.
On 30 August 2012, Mr Burnett suffered a knee injury and was classified as medically unfit to be posted to any seagoing vessel, also known as a “J31” classification. He was unable to attend to any duties for a period and, after he received surgery to his knee, he was required to wear a knee brace and walk on crutches. However, on 29 October 2012, he was posted to the Personnel Support Unit (“PSU”), where he performed mostly administrative tasks. He was not given much substantive work and he could not progress any competencies. In cross-examination, he said that despite his medical classification, he could not understand why he did not receive training during this period. He was medically cleared for full duties on 13 June 2013.
On 11 November 2013, he was posted to HMAS Benalla in Cairns as a “joy rider”, which means that he was an “extra hand” for any ship with a spare bunk. During this posting, he received relevant training and experience towards achieving his Marine Services Technician (“MST”) qualification and his Engineering Harbour Watchkeeping Certificate 1 (“EHWC1”). His work involved maintaining engines, electrical systems and sewage systems.
In mid-2014 he received the news that the defendant would no longer be providing him with training to attain a Certificate IV in Engineering. He took up the alternative opportunity which was then presented to him, and enrolled in a course to attain a Certificate III in Electrical Fitting, for which he received training at HMAS Cerberus and TAFE Ultimo. He also received training provided by the Navy Technical Training Unit East at HMAS Kuttabul.
On 3 March 2015, Mr Burnett was posted to HMAS Adelaide, a ship which at that time was still under construction. Until it was commissioned in December 2015, he spent time training in a simulator built for the new ship. He completed the competencies required for his MST qualification, which he obtained on 9 September 2015.
In October 2015, Mr Burnett learned that his wife was expecting their first child. He considered discharging from the Navy for a number of reasons, including that he wanted to avoid being posted to ships or locations away from his family, and also that he was dissatisfied with the training and experience which he had received. He applied to discharge on 17 November 2015, about five months after his Training Contract would have expired.

Having completed Category School, Mr Widz was posted to FSU Kuttabul. He received little training there. There were few jobs to do, and he found his time unenjoyable. About three weeks into his posting he enquired about a posting to sea and was told he would be notified when something was available.
About a week later, he was offered a position on board HMAS Success, which was an auxiliary tanker the principal purpose of which was to refuel other vessels at sea.
He took up his posting on 31 August 2012 with the title of Outside Mechanical Maintainer. Mr Widz’ duties generally involved maintenance and operation of auxiliary machinery and equipment, conducting inspections of the ship and equipment and participating in the ship’s damage control operations.
About a year after being posted to HMAS Success, Mr Widz was promoted to Able Seaman. He was then posted to “Auxiliary Maintenance”. That did not involve any change in his duties. During 2013, the HMAS Success underwent an extensive refit during which time Mr Widz was not at sea.
Eventually, Mr Widz received his Marine Systems Technician Certificate on 14 March 2014.
Mr Widz learned of the cancellation of his Certificate IV in Engineering in late 2014 at a time when HMAS Success was located at Fleet Base East in Sydney. At a meeting with several other MT2010 sailors, in a conference room, he was informed that the Certificate IV would no longer be provided and that there would instead be a Certificate III being provided which included different trade streams. He was informed that he would need to sign a variation of his Training Contract and he would need to engage for a further two years by way of a service obligation.
At that time, Mr Widz was about a year away from the date upon which he anticipated receiving a Certificate IV in Engineering. He felt very disappointed by the change to the course and the fact that he would not be achieving what he had expected. In particular, he was frustrated because he had expected that qualifying for a Certificate IV in Engineering would assist him to obtain employment outside the Navy and now he found that he had to spend additional time in the Navy to receive a lower qualification.
He remained on HMAS Success until the end of 2015, when he was then posted to HMAS Cerberus to do his Certificate III Electrical Fitting course.
His performance assessment report covering his time on HMAS Success was completed in September 2015 and recorded very favourable comments. It included the following:

“Able Seaman Widz has performed extremely well during this reporting period and has shown to be a well mannered pleasant sailor whom (sic) is respected amongst peers and superiors alike for his technical abilities and knowledge of HMAS Success’ outside mechanical system.

…

He is an energetic self starter who acts promptly and performs particularly well, independent of supervision and direction with mildly complex tasks and has shown a willingness to tackle more complex tasks. Able Seaman Widz produces the required work outcomes with excellent economy and effort. …

Able Seaman Widz is a strong team player whose contribution is well regarded. He has also provided time out of his own schedule to assist fellow members of the Engineering Department in their progression of competencies logs and AMOC’s … Able Seaman Widz has a good ability to learn and understand, and then put that information to good use …

Able Seaman Widz shows a strong regard for Navy values and his appearance and bearing is of a high standard and reflects well upon himself and the Engineering branch aboard HMAS Success. … Able Seaman Widz fosters teamwork and his contribution is highly regarded.

… Given that he has already proven himself a trusted and steadfast worker, I believe that he has the ability to fulfil his role as a Marine Technician competently and safely and will have a bright and promising career.”

On 23 February 2016, Mr Widz’ apprenticeship for the purpose of obtaining a Certificate III in Electrical Fitting was established. The term of that apprenticeship was three years. That term was fixed on the basis that he obtained an agreed credit for one year of previous training.
The training for his Certificate III in Electrical Engineering consisted of a nine‑month course of study being three months at HMAS Cerberus and then three months in Sydney which was made up of training at TAFE and HMAS Kuttabul. He returned to HMAS Cerberus for the final three months of the Course. He sat his final examination in late 2018 and received his Certificate III in Electrical Engineering on 14 March 2019.
In September 2016, Mr Widz was posted to HMAS Canberra – which is a landing helicopter dock ship – in the role of a high power and high voltage maintainer. In that role he was responsible for electrical maintenance of distribution boards and lighting, in addition to the ship/shore power which, once connected, would lead to a shutdown of the generators on board the ship. It was difficult for him to complete his competencies because of the lack of appropriate equipment on board.
In March 2018, Mr Widz attended a meeting about training concerns and the lack of progress in training. He was informed by a representative of the Navy who attended, that there was a training course available which would allow him to get a Certificate IV. He informed the representative that that was what he wanted to do. He made subsequent requests but achieved no success prior to March 2019.
On 4 March 2019, he commenced training for a Certificate IV in Electrical Equipment and Systems. Of the three different course options, he elected to do that which was described as “Control Monitoring and Instrumentation”. That course ran for 13 weeks. He completed it through the Ultimo TAFE whilst posted to HMAS Kuttabul in Sydney. In June 2019, he received his Certificate IV in Electrical Equipment and Systems. Having qualified for the Certificate IV, he moved into the area of work involving pressure testing – which involved working with release valves and dealing with ship’s hoses and anything that required or operated under pressure.
In November 2019, he was promoted to Leading Seaman.
Following that promotion, he worked in a workshop at HMAS Kuttabul as a “Condition Monitoring Analyst”. This involved working with thermal imaging cameras and vibration analysis equipment to look into machinery and detect abnormal vibrations and identify the faults. Whilst he enjoyed running the Condition Monitoring Workshop, he decided it was time – around July 2020 – to apply for a discharge the following year and to finish his Naval career in September 2021.
He gave this evidence, which I accept, about his intention at the time of enlisting:

“When I enlisted in the Navy, it was my intention to work and train in the Navy for a period of about four years to obtain a Certificate IV and afterwards begin searching for work outside the Navy using that qualification. I would have been 21 years old at that time and would have been wiling to move anywhere in Australia for well-paid work.”

He also noted that had he stayed in the Navy and received his Certificate IV by the end of 2015, he would have received a promotion to Leading Seaman about four years earlier than he did.
By the time Mr Widz came to give evidence, he had been officially discharged from the Navy with effect from 16 February 2022. He had been on leave from 22 September 2021 and had taken all of his accrued and long service leave.
By the time he gave evidence, he had married his long-term partner and they had a child together. They had bought land in the Hunter Valley upon which they were building their new home and planned to move to the Hunter Valley once the house was finished. There he planned to look for full-time work in the condition monitoring area. He had done a good deal of research and had identified a number of roles suitable for him with companies that had contracts with the mining industry in the Singleton area.
In cross-examination Mr Widz was asked whether by March 2019, when he obtained his qualification and could be regarded as an electrical fitter, he considered leaving the Navy. He said that he had, but that he chose not to because at that time in his life – which was four years into the relationship with his future wife – he wanted to stay around Sydney and save money so that in due course he would be ready to establish a stable family environment. He also noted that at that point he was keeping a close eye on his entitlement to long service leave which, in the Navy, arose at the expiry of 10 years of service.
Mr Widz also agreed in cross-examination that although it had been his intention to leave the Navy at the end of his Certificate IV in Engineering Training. However, by the end of 2015, by which time his training had not been undertaken nor provided, he was not then intending to leave the Navy and go and look for work in the civilian world. He said that in part that change of mind related to his personal life and relationship with his partner, although he had in mind that it was always possible to leave the Sydney area if a good opportunity became available and his relationship, which was in 2015 at an early stage, did not mature.
His evidence was that by about 2018 onwards he had developed a preference to stay in the Navy.
His evidence did confirm the fact, which I accept, that had he obtained his Certificate IV in Engineering (which would, I am satisfied, have been in the Electrical trade stream) by the end of 2015, he would not necessarily have remained in the Navy, but may well have sought other jobs and seen what the qualification would have got him. Because he was not qualified by that stage, he did not bother looking at that time for outside work. He lost that opportunity so to do.

Mr Hunter’s Evidence

Mr Hunter undertook a calculation as to what the difference was between the income received by Mr Widz from the Navy and what he would have been paid had he attained a Certificate IV in a timely way, namely, within the four-year period agreed upon.
Having regard to Mr Widz’ progress, there is little if any doubt that he would have achieved his Certificate IV in the four-year period. In fact, he may have achieved it earlier.
Based upon that calculation, Mr Hunter has arrived at a loss of earnings of a little over $47,000. He notes that this does not include any allowance for lost superannuation entitlements.
With respect to work outside of the Navy, Mr Hunter examined possible earnings in a variety of locations around Australia. He reviewed five enterprise agreements from potential employers in Queensland, Victoria, Tasmania and two agreements in Western Australia.
Applying his usual method of calculation, Mr Hunter arrived at a loss of earnings, upon the assumption that Mr Widz had left the Navy in January 2015, of a little under $177,500.
The plaintiff submitted Mr Widz had lost earnings by 28 February 2022, which he would have earnt in the mining industry with a Certificate IV of about $205,000.
The defendant submitted that the evidence suggested that Mr Widz would, upon obtaining his Certificate IV as the Training Contract had provided, have remained in the Navy. It submitted that these assumptions made by Mr Hunter that Mr Widz would have worked in remote areas of Queensland were most unlikely to come to fruition in particular because Mr Widz had not explored employment in that area, and because he would still have been relatively young (about 20 years old) when his Training Contract was expected to finish. The defendant submitted that Mr Widz’ lost opportunity should not be valued at any more than $36,500.

Findings

Mr Widz continued in the Navy until 2022. He chose not to exercise his earning capacity upon leaving the Navy because he undertook parental duties on a full‑time basis while constructing a house in the Hunter Valley. Had he been offered and completed the training for a Certificate IV in Engineering, he would have had the opportunity of obtaining work in the industry outside the Navy.
Having regard to the change in his personal life by the end of 2015 when he would have completed his Certificate IV, it was by no means a certainty that Mr Widz would have taken up the opportunity to work remotely from his domestic base. He had recently formed a new relationship in Sydney. However, having regard to his demonstrated work history, and notwithstanding that new relationship, he may well have taken up the opportunity to work in a remote location. If did so, it would be likely to have been in a job of the kind that Mr Hunter has discussed. That is particularly so when he would still have been young and the lure of significantly increased income would have assisted in establishing a solid financial and domestic base for his future. But, as his personal relationship developed, that attraction would probably have waned.
Having regard to his success in the Navy, and his progress in the Navy, I regard his decision to stay in the Navy as demonstrating his adaptability to changing circumstances and the making of decisions which he thought were best for his financial security.
Although the assessment of the value of Mr Widz’ lost opportunity is not without its complexity, I would assess it at $75,000. Again, it will be necessary to make an allowance with respect to interest and the impost of taxation.

Mostyn Williams

Personal Circumstances

Mr Williams is in his early 30s. He completed his Higher School education in Victoria to the end of Year 12. Whilst at High School he undertook a business course for which he received a Certificate II in Business in 2004.
In the year after he left school, he completed a pre-vocational trade course and received a Certificate I in Engineering from TAFE. He undertook some labouring work for the balance of that year and then, early in 2006, changed employers so that he worked at a meatworks in Brisbane.
He enlisted in the Navy in late 2011. He came from a Defence Force background. Both of his parents were officers in the RAAF and encouraged him on a number of occasions to become an officer in the RAAF.
However, Mr Williams preferred the idea of working with his hands and wanted to learn a trade. He submitted an application to enlist as a Marine Technician in the Royal Australian Navy in or around March 2010. He continued in his various employment roles whilst that application was being considered. He attended an interview with a careers counsellor shortly after his application was submitted. Consequent upon being interviewed, he submitted an application to become an officer in the Army. Ultimately, that application was unsuccessful and around mid-2011 he heard from the Defence Force about his application to be a Marine Technician.
On or about 18 July 2011, he attended an interview during which he discussed his career path in the Navy. One of the interviewers told him he would obtain a Certificate IV in Engineering and become a skilled tradesman in that area. He was reassured by the interview and went ahead with his application. He was enlisted on 7 October 2011. Shortly thereafter he commenced Recruit School, which lasted for about 12 weeks or so.
On 1 February 2012, he signed a Training Contract to undertake an apprenticeship to obtain a Certificate IV in Engineering. The contract which he signed was in the usual form. It was his understanding that the contract meant that he would obtain a Certificate IV within four years. That understanding was correct. He understood that a Certificate IV was a higher qualification than a Certificate III, and that he was getting an advanced trade. He also understood that he would be offered an option to choose what area of trade specialisation he wished to engage in. He would have completed his Training Contract by 30 January 2016.
At the start of 2012 he commenced his Category training at HMAS Cerberus, which he completed in about July 2012. Like Mr Widz, Mr Williams was the Dux of his course. Having completed his recruit and initial technical training, Mr Williams was posted to FSU Kuttabul. There was no useful training or meaningful work to be done at the FSU. He was posted on loan to HMAS Waterhen where he did metal fabrication, mainly of pipes, and was able to complete a number of competencies in his Competency Log.
About a month after he was posted to HMAS Waterhen – at the invitation of one of his superiors – he volunteered to move to Darwin. He was posted to the Hull and Fabrication Workshop at the FSU in Darwin in October 2012.
After about six weeks or so at the FSU, Mr Williams was posted to join the “Aware Three Crew” which was established for Australian border protection purposes. He remained as part of that crew until June 2014.
The Aware Three Crew was one of three rotating crews who worked on one of two patrol boats responsible for border control and illegal fishing patrols. Generally, each crew was at sea for eight weeks at a time and then on-shore for four weeks. The Aware Three Crew was a crew of around 24 sailors in total.
Although he was posted as part of the Marine Technical Department in the crew, nearly all corrective maintenance on the boat was contracted out to external organisations by the Navy as the boat had very limited facilities in tooling.
Mr Williams said, and I accept, that he undertook no real trade training during that Aware Three posting except for a small amount of planned and preventative maintenance. Mr Williams trade skills did not improve during that posting. In about November 2013, Mr Williams received his Marine Systems Technician Competency.
In the first half of 2014, together with other MT2010 sailors, he attended a meeting in a conference room at FSU in Darwin. He was informed that changes had been made to the trade continuum and that a Certificate III course had been created for which he could apply in one of four chosen fields: refrigeration, diesel, fabrication or electrical. Mr Williams determined that he would do the Certificate III in Diesel Fitting.
As part of that course, he was out-placed to a company called Penske Power Systems. It supplied a particular brand of engine that was used by the Navy. In order to undertake this training, he was required to sign a two year Return of Service Obligation form, which he did on or about 11 June 2014. That required him serving in the Navy for an additional two years upon the completion of his one year out-placement posting.
Although he was required to undertake the out‑placement, in fact Mr Wilson was posted to HMAS Cerberus to the Engineering Faculty to commence his study and training. Upon completion of the six-month course at HMAS Cerberus, he was then posted to HMAS Kuttabul in Sydney to undertake practical trade training at the Ultimo TAFE in Sydney and learning about diesel engines.
Upon completion of that component of his course, in mid-2015 he was then posted back to Darwin and joined one of the other Aware crews being the Aware Two crew. He continued in that posting in the position of Platform System Technician 1, undertaking Australian border protection operations.
During the course of his posting as a member of the Aware Two crew, a number of performance appraisals were undertaken. During his time as a member of the Aware Two crew, because there was a gap in the available resources, Mr Williams volunteered to undertake the DC Yeoman course to fill that gap. He passed with an exceptionally high score and achieved first place in the course.
In his appraisal report of September 2015, he was described in this way:

“AB Williams is a highly motivated sailor which (sic)has exceptional capacity for learning and already displays a high level of technical competence. … This was where AB Williams really came of age in relation to displaying leadership, not only was he responsible for the day to day running of the engineering department’s planned maintenance, but also personnel management. …

…

AB Williams has been an exceptional professional sailor throughout this reporting period and holds the Naval values to the highest regard, always conduct himself in a highly professional manner and is one of the first members to hold members to account for their actions. AB Williams has been an asset to the engineering department and the entire ship’s company alike whilst being posted to Aware Two, and will continue to do so for future postings …”

The Executive Officer responsible for this performance appraisal expressed this view:

“… I can assert without hesitation that AB Williams has impressed. Williams’ technical skill and aptitude is at a pleasingly high level. This is perhaps best evidenced by the extremely short period of time Williams took to achieve his ACPB DC and technical endorsements despite having been away from sea for well over a year.

Williams is an enthusiastic and committed team player who holds high and laudable aspirations for his future career, as evidenced by his keen enthusiasm for industry out-placement experiences. AB Williams commits himself to his work with a quiet dignity and resilience which has won him the respect of command and peers alike.”

Prior to taking the out-placement with Penske, Mr Williams undertook a short notice posting as an MST qualified technical sailor on board ADV Cape Byron for a two-month period. The assessment of his performance in that role contained these remarks:

“AB Williams spent significant time working and maintaining the ship’s boats, including assisting the STO with the investigation into the catastrophic failure of the CO4 PME (fire damage). These boats have tested his tolerance and fortitude with a multitude of daily failures, from faulty bilge pump systems, intermittent start sequencing faults, flat batteries, fuel priming faults and general wear and tear defects.”

In March 2016, Mr Williams commenced his out-placement at Penske, which was situated in a suburb outside Darwin. The purpose of the out-placement was to give him 12 months of trade training to enable him to finish his competencies.
When Mr Williams arrived at Penske he was partnered to work with a second year apprentice, who was an employee at Penske. In working with this individual, Mr Williams observed that the second year apprentice had a far greater skill set than he did. At that stage, Mr Williams had been in the Navy for four years and realised that he had gained little or no trade experience notwithstanding both his contract for a Certificate IV in Engineering and his later engagement in seeking a Certificate III in Engineering.
In his first statement, in speaking of his observations whilst at Penske, Mr Williams said this, which I accept:

The second year apprentice and I were tasked to diagnose and rectify mechanical issues on various pieces of equipment such as cranes, trucks and trailers. Many times during our work together I would realise that I would not have the same level of diagnostic and mechanical ability as he did. …
I remember one instance where we were tasked to diagnose and repair an issue with the main engine on a patrol boat. He quickly diagnosed the problem with the aid of a computer and his accumulated knowledge. He then explained to the Captain and engineering team that he would need to replace the fuel pump, and proceeded to return to the Penske workshop to obtain the parts and return to fit it. During my time in the Navy we did not have any of the computer diagnostic laptops, software or tooling required to undertake this sort of work. Considering I had spent years at sea on the boats, I was disappointed that I could not perform any of the work he could after working in outside industry for only two years.”
1. Unsurprisingly, having observed this discrepancy in trade training skills, Mr Williams became quite disillusioned. He then made the decision to leave the Navy because he formed the view that he had not, and was not, receiving the training or qualifications that he had been promised and which he had expected.
2. Accordingly, on 31 March 2016, during the Penske placement, he submitted a resignation form. He left the out-placement and returned to the FSU at HMAS Coonawarra in Darwin. There, he was posted as a Diesel Supervisor Two and placed in the propulsion workshop where the diesel fitters worked.
3. In a minute prepared by Petty Officer Ridlinger, who was Mr Williams’ supervisor at the propulsion workshop, this was recorded:

“It has become evident to me that AB Williams is no longer interested in continuing his Naval career. He is disgruntled with the MT2010 trade training and believes the qualifications obtained if he continued with the Navy would not make him competitive in outside industry. This is why he wants to further his technical training with a civilian company where he will be able to obtain the qualifications he thought he would be receiving in the Navy.”

At the request of the Navy, Mr Williams underwent a psychological examination which was essentially scheduled because of the limitations on Mr Williams’ availability for service arising from his “total loss of motivation for service”.
The psychologist’s report included the following paragraph:

“AB Williams was firm in his opinion that he had no further time for the [Navy]. He feels the qualification promised was not delivered and this has undermined his whole purpose for joining the [Navy]. Given the depth and conviction he expressed in this matter, it would be very unlikely for him to resile from this position.”

In May 2016, Mr Williams took a period of six weeks’ leave. During that time, he looked for alternative employment. He obtained the position of a tradesman’s assistant with a large interstate transport company and commenced there on 1 June 2016. He did not return to the Navy when he was back from leave and, as a consequence, in November 2016 his position in the Navy was terminated.
In his role as a tradesman’s assistant, he was employed doing various tasks assisting tradesmen and conducting general workshop duties relating to the transport company which including servicing and repairing trucks, trailers and forklifts. His wage was marginally above that which he had been receiving at the meatworks where he had worked prior to joining the Navy.
Mr Williams says, and I accept, that in this new job he had initially hoped to utilise some of the skills he had obtained in the Navy and that he wanted to complete a Certificate III at TAFE. When he went to TAFE, he was advised that he did not have enough diesel fitting experience and it was initially suggested to him that he may be able to complete a Certificate II to become a heavy vehicle mechanic.
In around July 2018, Mr Williams received recognition of his prior learning which meant that he could go on and complete his Certificate III in heavy commercial vehicle mechanical technology – which he did in March 2019.
He was then promoted to the position of tradesman at the trucking company and was entitled to work completely unsupervised. In mid‑July, he changed his employment as a tradesman to work for an organisation known as Ventia, which was a sub-contractor providing mechanical maintenance work to the defence forces. He has remained in that position, including being promoted to the position of Team Leader where he is responsible for supervising up to 20 vehicle mechanics.
Mr Williams gave this evidence in his statement, which I accept:

It was my intention to discharge from the Navy after attaining my Certificate IV in Engineering which I could then utilise to obtain employment outside the Navy. After I discharged, I would have sought employment in my chosen trade stream (which was diesel fitting). I am not sure how long I would have remained enlisted after achieving my Certificate IV qualification. I would have stayed as long as it suited me. I do not think it likely that I would have remained more than a year or two. Spending most of my time at sea was not what I wanted to do and I could never have made a career out of it.”
1. Mr Williams would have completed his Certificate IV in Engineering at the start of 2016. He actually left the Navy and commenced his employment in April 2016. Accordingly, he had about two months in the Navy after the time at which he would have qualified.

Mr Hunter’s Evidence

Mr Hunter was asked to assume that after leaving the Navy, Mr Williams would have sought work as a diesel fitter in the Brisbane and south-east Queensland area. From his research, Mr Hunter established that there was a significant acceleration in demand for technicians and trades workers, particularly in the automotive and engineering occupations which experienced an 81% growth in vacancies in the Greater Brisbane area between June 2016 to November 2017. Mr Hunter examined a range of employers in that area and assumed that Mr Williams would have left the Navy at about June 2016 having obtained his Certificate IV in Engineering, and entered employment in the mining equipment, technology and services sector in the Greater Brisbane area. Mr Hunter’s assessment of loss compared with what Mr Williams in fact earned, was the sum of a little over $198,000. In a subsequent report, Mr Hunter adjusted his calculations leading to that loss so as to arrive at the sum of a little over $146,000.

Findings

The plaintiff submitted that Mr Williams would have obtained his Certificate IV in Engineering in the diesel fitting pathway within the four year contractual period. He submitted that, in accordance with his expressed intentions, and his undoubted capacity for learning, leadership and hard work, he would have obtained work of the kind that he ultimately did in the diesel fitting area, although at a much higher level, having regard to the fact that he would have been seeking employment with a Certificate IV.
The plaintiff submitted that, ultimately, a sum of about $240,000 was a realistic estimate of the value of Mr Williams lost opportunity.
The defendant submitted that Mr Williams would never have sought employment in the civilian world with a Certificate IV in Engineering qualification. It submitted that he had no confidence in any of the training provided by the Navy for him. The defendant also submitted Mr Williams would not have remained in the Navy, even if he had obtained his Certificate IV. The defendant submitted that the effect of these conclusions was that the maximum value of any lost earnings was in the order of $30,000.
Mr Williams was a very good sailor who, having had his Certificate IV training provided initially and then cancelled, was intending to cope with this disruption to his Naval training by completing a Certificate III in diesel fitting.
The truth of the inadequacy of his training in the Navy only became apparent to him when he undertook his outplacement training with Penske. It obviously came as a real shock. He realised that much of his training had not been appropriate to obtain a trade qualification – which is what he had intended upon entering the Navy – and, accordingly, he ceased to be enlisted in the Navy.
The circumstances leading to Mr Williams’ discharge from the Navy reflected his original intentions. I am satisfied that those intentions were, as he told the psychologist, to obtain his Certificate IV and then to use that qualification to obtain well paid employment outside the Navy. Once it became apparent to him that such training as he had been given was wholly inadequate when compared with the second year apprentice with whom he was partnered at the Penske workshop, he applied for a discharge.
Mr Williams obtained employment in an external industry easily and has risen through various leadership until he has become a Team Leader. His employment has been stable, and he has been a stable employee. This fact confirms in my mind that he was always likely to be a strong candidate for obtaining employment in the fields described by Mr Hunter and in the sort of role which he noted would have been available.
In my view, given that Mr Williams was always intending to obtain a qualification, there is a high degree of probability that he would have left the Navy with a Certificate IV in Engineering in about June 2016, and taken up employment in an outside industry.
In my view Mr Williams’ damages for his lost chance of obtaining employment outside the Navy once he had obtained a Certificate IV should be assessed at $100,000. Interest should be assessed on this sum, and it should be adjusted with respect to any taxation considerations.

Conclusion

I have found, by reference to each of the complainants, that they are entitled to damages in the amounts assessed for the value of the lost opportunity to obtain employment with a Certificate IV in Engineering.
It will be necessary for a calculation to be made for interest on the assessed amounts. The lost opportunity has been valued at the time each group member would have completed their Training Contract – generally at the end of four years – although, in some cases, that period was extended to take account of injury.
It will be necessary for the parties to agree on those calculations. Orders will be made to enable this to occur.

Costs

I see no reason why costs should not follow the event. The defendant should be ordered to pay the costs of this part of the proceedings – namely, from the delivery of the Court of Appeal judgment until now.
In light of the fact that this judgment does not determine the whole of the proceedings, such costs should be payable forthwith.

Orders

I make the following orders:

There will be a judgment in favour of each claimant in a sum to be determined.

Direct the parties to confer with a view to reaching agreement on the judgment sums (including interest).

Order that on or before 14 July 2023, the parties are to submit agreed Short Minutes of Order including with respect to any adjustment to the judgment sums with respect to taxation considerations. If no agreement is reached, I direct that each party is to submit the Short Minutes of Order for which they contend together with a written outline of submissions in support of their version by that date.

Stand the proceedings over to 17 July 2023 before Garling J.

Order the defendant to pay the plaintiffs’ costs of the proceedings after 31 May 2019, being the date of delivery of the Court of Appeal judgment. Such costs are payable forthwith.

Liberty to apply.

**********

Amendments

18 July 2023 - Correction of dates [156] and [247]

Decision last updated: 18 July 2023

Medium Neutral Citation:	Searle v Commonwealth of Australia (No.9) [2023] NSWSC 215
Hearing dates:	28 February 2022; 01-04 March 2022; 07-10 March 2022; 14-18 March 2022; 21-25 March 2022
Date of orders:	16 June 2023
Decision date:	16 June 2023
Jurisdiction:	Common Law
Before:	Garling J
Decision:	See [490]
Catchwords:	CONTRACTS — Remedies — Damages — Loss of chance — Chance to gain employment having obtained a qualification — Chance lost as a consequence of the defendant’s failure to provide training in accordance with their contracted obligations — Determination as to time that chance was lost — Determination that nature of breach did not affect assessment of damages — Determination that valuation of part performance did not depend on a proposition that the group members ought to have undertaken further training in the absence of a defence of failure to reasonably mitigate CONTRACTS — Remedies — Damages — Assessment — Assessment of claims by nine group members — Consideration of personal circumstances and evidence particular to those group members — Valuation of the lost chance based on likelihood of realising hypothetical lost earnings greater than actual earnings — Chance of realising hypothetical lost earnings affected by the group member’s aspirations and plans and other personal decisions such as those regarding place of residence and whether to adopt parenting obligations — Valuation discounted to account for the possibility that the chance would not be realised CIVIL PROCEDURE — Representative proceedings — Remedies — Damages — Assessment — Assessment of individual claims by group members who appeared with leave pursuant to ss 168 and 169 of the Civil Procedure Act 2005
Legislation Cited:	Civil Procedure Act 2005 (NSW) Pt 10 Income Tax Assessment Act 1997 Education and Training Reform Act 2006 (Vic) Trade Practices Act 1974 (Cth)
Cases Cited:	Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1991] HCA 54 Government Insurance Office (NSW) v Johnson [1981] 2 NSWLR 617 Malec v JC Hutton Pty Ltd (1990) 169 CLR 638 at 642-643; [1990] HCA 20, McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 McCrohon v Harith [2010] NSWCA 67 Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257; [2003] HCA 10 Robinson v Harman (1848) 1 Ex 850 at 855; 154 ER 363 Searle v Commonwealth of Australia (No.2) [2018] NSWSC 1017 Searle v Commonwealth of Australia [2018] NSWSC 105 Searle v Commonwealth of Australia (No.5) [2022] NSWSC 119 Searle v Commonwealth of Australia (2019) 100 NSWLR 55; [2019] NSWCA 127 Searle v Commonwealth of Australia (No.3) [2019] NSWSC 14 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332; [1994] HCA 4 State of New South Wales v Moss (2000) 54 NSWLR 536; [2000] NSWCA 133 Wenham v Ella (1972) 127 CLR 454
Texts Cited:	Not applicable
Category:	Principal judgment
Parties:	Clayton William Searle (P) Commonwealth of Australia (D)
Representation:	Counsel: N Kidd SC / D Meyerowitz-Katz (P) K Andronos SC / S Keizer (D) Solicitors: Levitt Robinson Solicitors (P) McCullough Robertson Lawyers (D)
File Number(s):	2016/45027
Publication restriction:	Not applicable