Sneaths Freightlines v Pertsinidis - [2007] SADC 84

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SNEATHS FREIGHTLINES v PERTSINIDIS
[2007] SADC 84
Judgment of His Honour Judge Nicholson
17 August 2007
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - OFFER AND ACCEPTANCE - MATTERS NOT GIVING RISE TO BINDING CONTRACT
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
DAMAGES - MEASURE AND REMOTENESS OF DAMAGES IN ACTIONS FOR BREACH OF CONTRACT - GENERAL
Plaintiff interstate haulage contractor engaged the defendant subcontractor to transport freight, by road train, on various routes throughout eastern Australia and from Adelaide to Perth over a 27 month period - a dispute arose over the state of the parties' running account at the end of the relationship - held, plaintiff's claim allowed in part, defendant's counterclaim, in this respect, allowed in part - defendant counterclaimed asserting a contractual entitlement to carry a weekly load to Perth for five years - held, no contract, counterclaim, in this respect, dismissed - damages for breach of contract assessed in the alternative.
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363 at 376; Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424; Hadley v Baxendale (1854) 9 Ex 341 at 354; 156 ER 145 at 151; Carter and Harland "Contract Law in Australia" 4th ed at [1805]-[1807], referred to.

SNEATHS FREIGHTLINES v PERTSINIDIS
[2007] SADC 84
Introduction

At all relevant times the plaintiff, Sneaths Freightlines Pty Ltd (“Sneaths”) conducted a freight haulage business. It did so, in part, by subcontracting its requirements for haulage services to independent owner drivers. The defendant, Theo Pertsinidis (“Mr Pertsinidis”) carried on business in his own name as an owner driver. In or about November 1995, Mr Pertsinidis commenced a relationship with Sneaths pursuant to which he, based in Adelaide, would use his own prime-mover to cart interstate freight loads on behalf of Sneaths. The parties’ arrangements and dealings with each other pursuant thereto came to an end in or about February 1998.
There is no dispute that during that period Mr Pertsinidis carted loads on behalf of Sneaths as and when required to by Sneaths. He made regular trips using his Mercedes Benz prime-mover and usually towing a Sneaths’ trailer (but sometimes his own) on what was described in evidence as the eastern corridor or loop, that is, various return journeys within the Adelaide, Mount Gambier, Sydney (sometimes Melbourne) and return to Adelaide triangle. Between August 1996 and September 1997 Mr Pertsinidis also performed a weekly trip from Adelaide to Perth for Sneaths; on these occasions, towing his own refrigerated trailers.
The parties are in broad agreement as to the contractual terms that applied with respect to the remuneration payable to Mr Pertsinidis and the basis upon which certain expenses incurred by him were to be accounted for. However, the parties are not in entire agreement in this respect.
After the parties arrangement came to an end, in or about February 1998, they each undertook their own Accounting Exercise.
As a result of its Accounting Exercise, Sneaths calculated as outstanding and due to it the amount of $17,521.51. It made a written demand for payment of this amount on 20 May 1998.[1] Sneaths commenced proceedings claiming this amount in the Mount Gambier Magistrates Court in December 1998. Mr Pertsinidis defended the claim and filed a counterclaim. In due course the matter was transferred to this Court.
[1] Exhibit D8, tab 19, page 19.13.
As a result of Mr Pertsinidis’ Accounting Exercise, he initially counterclaimed that the amount of $170,000 was due and owing to him.
At the time of the close of pleadings (30 March 2000) Sneaths had reduced its claim to $17,101 said to be due and owing to it and Mr Pertsinidis had reduced his claim to $149,971.59 said to be due and owing to him.
For various reasons, unnecessary to recount, the matter did not come on for trial until almost seven years later in January 2007. Sneaths maintained its claim for the sum of $17,101 but Mr Pertsinidis had further reduced his claim to the sum of $35,164. That latter reduction is not reflected in the pleadings but is the amount arrived at following an accounting exercise undertaken on behalf of Mr Pertsinidis by Mr Paul Jorgensen, a forensic accountant.[2] This then is the first dispute between the parties, which I refer to in this judgment as the “Accounting Exercise”. It embraces all of the work done for Sneaths, both eastern corridor work and Perth work.
[2] See paragraph 3.1 of his reports dated 2 November 2004 (exhibit D16) and 11 January 2007 ( exhibit D17).
In a second part of his counterclaim, Mr Pertsinidis also has alleged that, in addition to or as part of the arrangement briefly outlined above for the eastern corridor work, he entered into a fixed term contract with Sneaths with respect to Perth work, in or about August 1996 and restated on other occasions in late 1996. It is alleged that the parties agreed that, for a period of five years, Mr Pertsinidis would be provided with (and would be obliged to accept) a weekly road trip from Adelaide to Perth for which he would be paid $8,200 per week. In other words, as far as the Perth work was concerned (and unlike the eastern corridor work) Mr Pertsinidis was contractually entitled, apparently unconditionally,[3] to a weekly trip for a term of five years.
[3] Save, it would seem, for the obligations to have the appropriate rig available and to be ready, willing and able to perform each week and for any terms that might be implied, in fact, in accordance with the requirements stated by Lord Simon in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 16 ALR 363 at 376 and consistently affirmed by subsequent High Court of Australia authorities.
It is further alleged that Sneaths, in or about September 1997, repudiated this contract by ceasing to provide Mr Pertsinidis with the weekly trip to Perth. Mr Pertsinidis claims substantial damages based on the loss of the income he would have received had the Perth work continued for the balance of the alleged five year contractual term.
At the time the pleadings closed, in March 2000, Mr Pertsinidis’ counterclaim under this head stood at $2,319,700. At the time the matter came to trial his claim had been refined and reduced to the amount of $606,926. Again, this figure is not reflected in the pleadings but was the conclusion reached by Mr Jorgensen in his initial expert report.[4] Following leave granted by me during the trial, Mr Pertsinidis produced, and ultimately tendered an “updated” report by Mr Jorgensen[5] which provided a further calculation of Mr Pertsinidis’ loss in this respect, in the amount of $1,019,412. Apart from one relatively small adjustment, of no ultimate significance, this amount, based on the analysis and calculations of Mr Jorgensen which gave rise to it, comprised Mr Pertsinidis’ counterclaim under this head during the trial.
[4] Dated 2 November 2004, exhibit D16.
[5] Exhibit D17.
Sneaths denies that any binding agreement with respect to the Perth trips was entered into and has put in issue the amount of Mr Pertsinidis’ loss said to have been suffered as a result of the alleged breach of any such contract.
This then is the second issue between the parties that I must resolve. I will refer to it as the “Perth Contractual Issue”.
The initial contractual arrangements
Mr Pertsinidis started hauling on behalf of Sneaths in or about November 1995. The arrangement agreed to and essentially complied with by the parties, was, in broad terms:
(i)Mr Pertsinidis would use his truck (and sometimes his trailer but mostly a Sneaths’ trailer) to carry loads for Sneaths on the eastern corridor;[6]
(ii)with respect to each load Sneaths would provide Mr Pertsinidis with a subcontractor’s payment advice document (“SPA”) which contained, inter alia, the amount to be paid to him with respect to the trip;
(iii)in addition to paying Mr Pertsinidis for each load Sneaths would also allow him to use Sneaths’ facilities available for refuelling, truck repairs and the purchasing of tyres at designated service stations and other approved outlets;
(iv)these expenses would be debited to Sneaths’ account with the relevant service station or other approved outlet;
(v)these purchases, referred to by the parties as “deductions” would be debited from time to time to Mr Pertsinidis’ running account held with and maintained by Sneaths;
(vi)Mr Pertsinidis was to receive a monthly remittance for the nett amount due to him with respect to each monthly accounting period having regard to the credits for load payments and debits for deductions posted to the running account during the relevant accounting period;
(vii)if Mr Pertsinidis’ deductions exceeded payments due for loads for a particular accounting period then he would receive a statement detailing the amount owing to Sneaths. This amount could either be paid by Mr Pertsinidis or carried forward to the next payment period and be offset against payments for future loads.
[6] There was a dispute on the pleadings as to whether the loads to be carried were as agreed by the parties from time to time or as and when required by Sneaths. In the result nothing turns on this. There is no issue between the parties that, for example, Sneaths failed to provide trips on the eastern loop or Mr Pertsinidis failed to undertake trips on the eastern loop.
As I have said, the above broadly sets out the arrangement between the parties that continued during the period they did business with one another, at least insofar as the eastern corridor was concerned. So much is essentially admitted on the pleadings or was not seriously disputed by either party.
Mr Pertsinidis gave evidence as to the nature of the initial contractual arrangements for the eastern corridor work including the basis on which he was to be paid. Keith Sneath (“Mr Sneath”) was, at all material times, the managing director of Sneaths. His evidence on behalf of Sneaths with respect to this issue was quite limited. I will come back to both Mr Pertsinidis’ and Mr Sneath’s evidence, generally, later in this judgment.
On the topic of the initial contractual arrangements, much of Mr Pertsinidis’ evidence was in the form of conclusions drawn by way of his understanding of the arrangements reached between him and Keith Sneath.
In other words, Mr Pertsinidis, by and large, apart from a couple of instances, did not give evidence of actual words spoken by him and Mr Sneath with respect to this issue or of the circumstances in which any such conversations occurred. This is not surprising nor necessarily a cause for criticism given that Mr Pertsinidis was giving evidence about events which occurred in late 1995 and perhaps early 1996. The material aspects of Mr Pertsinidis’ evidence in this respect, notwithstanding its objectionable form, were not objected to. Furthermore, it was not challenged in cross-examination nor did Mr Sneath in his evidence contradict the essential aspects of this evidence of Mr Pertsinidis.
For these reasons, and notwithstanding that I do have a concern with respect to Mr Pertsinidis’ evidence generally and, in particular, insofar as it bears on the asserted Perth contract, I accept Mr Pertsinidis’ account of the initial contractual arrangements insofar as it bears on:
(i)the basis on which he was to be paid with respect to both eastern corridor and Perth trips;
(ii)the basis upon which he was to be charged for deductions debited from time to time to his running account;
On these topics Mr Pertsinidis’ evidence was to the following effect. He quickly became a regular company contractor performing up to three trips a fortnight on the eastern corridor. He was paid a haulage rate which was set by Sneaths and was the same for all company contractors depending upon which route he travelled on a given trip. As far as Perth trips were concerned Mr Pertsinidis had negotiated a specific rate which was not departed from whilst he continued to make those trips.
Mr Pertsinidis said that for each trip, whether it be to Perth or on the eastern corridor, he or his driver[7] received a document called a Subcontractor Payment Advice (“SPA”) which consisted of a series of essentially identical carbonised pages.[8] Mr Pertsinidis was examined and cross-examined at some length as to the circumstances in which he received various versions of an SPA relevant to a particular trip. Mr Pertsinidis said that the SPAs were generated at the Sneaths’ depots, predominantly the one in Mount Gambier, and, as far as all of the eastern corridor work was concerned, were sent out to him together with a payment advice, several weeks after he had completed the relevant loads or trips (T109). It was only at this time that he received a written record or notification of the amount said to be payable to him with respect to a trip and of the amounts of any deductions said to have been incurred during that trip or since the date of the last accounting. As far as the Perth work was concerned Mr Pertsinidis or his driver usually received a copy of the SPA at the time the road train left Adelaide with the Perth freight. However, that copy of the SPA did not include any details of the amounts payable to him with respect to that trip. These, together with any deductions incurred, were only advised to him some weeks later. After he returned the paperwork to Sneaths upon the completion of the trip, those details were inserted at the depot and another copy of the SPA, with that information inserted was provided to him.
[7] His brother, Dino Pertsinidis, also drove trucks on behalf of Mr Pertsinidis. He tended to do the Perth work and Mr Pertsinidis the eastern corridor work.
[8] See the notation at the foot of P13.
I accept (and ultimately it was not seriously contested by Sneaths) that with respect to both Perth and eastern corridor trips Mr Pertsinidis was only put on notice of the haulage rate to be credited to him and of any deductions said to have been incurred by him, with respect to a trip, some weeks after the completion of that trip.
One of the Accounting Exercise issues between the parties is whether or not Sneaths was entitled to make a deduction with respect to load insurance premiums. Mr Pertsinidis agreed that by early 1996 he had received various SPAs. As at that time he also had become aware of the fact that Sneaths was making deductions from his account from time to time on account of insurance. He did not accept that he was aware of the insurance provision at the top of the rear page of the SPA at that time, but he did accept that he had access to copies of SPAs at the time he first became aware of the insurance deductions in early 1996 (T109-111). Mr Pertsinidis queried the matter with the Mount Gambier office soon after becoming aware of the deductions and was told that Sneaths deducted 2½% on account of insurance. He repeatedly asked for a copy of the insurance policy (T204, 207). He raised the matter directly with Mr Sneath and asked him for a copy of the insurance policy and the rates or fee schedule for the policy because, at the time, Mr Pertsinidis had been offered rates for this type of insurance elsewhere which he believed to be significantly below the amount that Sneaths was charging (T110). In all of the circumstances, as just outlined, I think it more likely than not and I find, that Mr Pertsinidis would have read and considered the provision dealing with insurance recorded on the back of the SPA at this early time in his relationship with Sneaths.
According to Mr Pertsinidis, Sneaths at no time provided him with a copy of a policy nor with details of the premium rates that it was paying for any such policy. This evidence was not challenged nor did Mr Sneath give evidence to the contrary.
The amounts deducted by Sneaths on account of fuel and other truck maintenance purchases by Mr Pertsinidis is another issue in dispute. As far as the purchase of fuel was concerned, Mr Pertsinidis’ evidence was to the effect that at all times he was entitled to purchase fuel either from the Sneaths’ bowser at its depots or on the road using a fuel card and by way of access to Sneaths’ account with Ampol/Caltex. In each case he was to pay the price that Sneaths paid for its purchase of the fuel. Evidence was given both by Mr Pertsinidis and Mr Sneath to the effect that Sneaths, because of its bulk purchasing capacity, was in a position to negotiate discounted prices on matters such as fuel, tyres and truck repairs. Owner drivers, such as Mr Pertsinidis, were encouraged to use these Sneaths’ facilities.
Throughout his relationship with Sneaths, Mr Pertsinidis purchased substantial quantities of fuel either directly from Sneaths at its depots or on the Sneaths’ account with Ampol/Caltex and incurred significant expenditure for tyres and truck repairs on the accounts of Sneaths held with other third party suppliers.
Mr Pertsinidis said that Mr Sneath told him at the beginning of the relationship that he would get a better rate and would not have to worry about cash flow issues if he were to purchase fuel through Sneaths (T114-115). At page 114 of the transcript the following exchange occurred (during examination-in-chief):
QSo from the time that you purchased fuel on the Sneaths’ account … what rate was to be charged for the fuel that you purchased …
ASneaths had a discount rate that was remitted to Mount Gambier once I made a purchase and then Sneaths would apply that purchase against the moneys that were owed against me. For example, if I fuelled at Penong, which is up near Ceduna in South Australia and the pump price was 74.9, the Caltex wholesale price or discounted price to Sneaths might have been 70.9 and that’s what would be charged to my account held with Sneaths to offset the revenue that I earned with them.
QWas there any additional charge to be included by Sneaths.
ANot that I was aware of, not that I was told of. It was what they got charged is what you got charged. When I say “they”, I mean Sneaths Freightlines.[9]
[9] See also T121.9 to 121.14.
At page 209 of the transcript the following exchange occurred (during cross-examination) on the topic of the arrangement for the purchase of tyres on the Sneaths’ account:
AYes, if a tyre blew, I would ring Mount Gambier and advise them that I needed to obtain tyres and then proceed to Beaurepairs. An internal arrangement would be made, I suspect, between Beaurepairs and Sneaths and I would obtain the tyres on the Sneaths’ account.
QI think your evidence was that you understood the arrangements to be a kind of pass through of the charges.
AThat’s what Keith had said to me. Whatever we get charged, you get charged.
Both with respect to fuel purchases and other purchases such as tyres Mr Pertsinidis said that it was not until very late in the relationship (that is, in late 1997) that he was made aware that Sneaths added a handling or administration fee with respect to charges incurred by Mr Pertsinidis on the Sneaths’ accounts with third party suppliers (T121, 209).
Having regard to the accounting processes that occurred between Sneaths and Mr Pertsinidis during the period of their relationship, I accept that it was very difficult, if not impossible at times, for him to ascertain whether or not deductions for fuel and third party purchases identified on an SPA truly represented a “pass through” price or included an additional amount charged by Sneaths by way of an administration or handling fee. I accept that for most of the relationship this matter was dealt with essentially as a matter of trust, at least insofar as Mr Pertsinidis was concerned (T116). The difficulties inherent in the accounting procedures that occurred between the parties included the following:
(i)Mr Pertsinidis rarely, if ever, received third party invoices. The copy of the SPA and any remittance advice which recorded the amount payable to him, after taking account of the relevant haulage or tow rate and various deductions, usually arrived some weeks after completing the relevant trip. This meant that Mr Pertsinidis was rarely, if ever, in a position to ascertain from the documentation provided to him whether, for example, an amount charged by Sneaths for a fuel purchase was based on a “pass through” price per litre or some other price per litre which included both the “pass through” price together with a margin which was to accrue to the benefit of Sneaths. In other words, all that Mr Pertsinidis knew, usually, was that he had been charged by Sneaths X cents per litre for fuel purchased, as recorded on the SPA, but he did not know whether Sneaths had paid X cents or some other rate per litre to its third party supplier.
(ii)This difficulty for Mr Pertsinidis was compounded by the fact that, whilst he kept his own trip records relating to fuel and other purchases,[10] at no time was he made aware of, for example, the price per litre of fuel or the price of tyres that Sneaths had negotiated with its third party suppliers. Whilst Mr Pertsinidis was able, when on the road, to record the date and location of a fuel purchase and the total number of litres purchased, he was only aware of the retail bowser price applicable at the time of purchase not the amount that would be charged back to Sneaths with respect to that purchase. Similarly, when he purchased fuel at the Sneaths’ depot he filled the truck himself from a commercial pump which showed only the number of litres taken on. Whilst from time to time he was able to ascertain the price that Sneaths charged him, he was never aware of the price Sneaths was paying for this fuel.
(iii)The fact that Mr Pertsinidis received, from time to time, a running balance said to be either owing to him or due by him and which related to trips undertaken some weeks earlier, together with the lack of primary documentation, meant that Mr Pertsinidis had no real choice but to trust Sneaths to charge him according to what he understood his contractual entitlements to be.
[10] Tabs 2, 8, 14 and 37 of exhibit D8 and exhibits P14 and P15.

From about April 1997 onwards, and in particular in relation to the trips to Perth, Mr Pertsinidis started to experience accounting and reconciliation difficulties (T124-125). Thereafter Mr Pertsinidis undertook several trips to Mount Gambier in an attempt to try and reconcile their respective versions of the accounts. He would make a trip for this purpose on average three times every two months (T126).
Mr Sneath gave the following evidence relevant to these issues. As far as Beaurepairs tyre expenses were concerned he thought an administration fee of $5 with respect to each invoice might have been charged. However, he had no recollection of ever telling Mr Pertsinidis about this.
Mr Sneath agreed that Sneaths got a better than bowser price for fuel purchased on its account with Ampol/Caltex (T636). His recollection was that Sneaths passed on that price together with an administration charge although he was not sure about that. He also said that there would have been a different price per litre passed on. Mr Sneath’s recollection was that “there might have been a cent variation in what we got and what we passed on to our subcontractors, I suggest, maybe it wasn’t”. He said that Sneaths had a two cents a litre mark-up over the price that Sneaths paid for fuel with respect to fuel that was purchased by subcontractor drivers from a Sneaths’ depot (T638).
Mr Sneath was not asked in examination-in-chief whether or not Mr Pertsinidis had been promised a “pass through” price with respect to expenses incurred by him on a Sneaths’ account. In cross-examination Mr Sneath said he was not certain whether Mr Pertsinidis had been advised of a management fee or other premium to be charged (T635-636). Notwithstanding the actual practice of Sneaths when it recorded deductions to Mr Pertsinidis’ account with it, I am satisfied that Mr Pertsinidis was led to expect, or “promised”, a “pass through” price. In other words, I am not persuaded that, when Sneaths told him that he could purchase on or utilise Sneaths’ accounts, it also told him that he would be charged something other than the price actually incurred by Sneaths by its third party suppliers. As far as the direct purchase of fuel from Sneaths at its depots is concerned, I am satisfied, in all the circumstances, that Mr Pertsinidis was led to believe that the same regime applied.
I make the following findings as to the contractual arrangements between the parties which bear on the issues of what Mr Pertsinidis was to be paid by way of haulage rates for eastern corridor work and how the deductions for which Sneaths was entitled to be reimbursed, were to be calculated. Except where I indicate otherwise, these findings apply to both the eastern corridor work and the Perth work.
(i)At least insofar as the eastern corridor work was concerned,[11] whilst Mr Pertsinidis and Sneaths had a clear understanding as to the haulage routes Mr Pertsinidis would operate on and the frequency of that work, each individual trip was the subject of a separate contract. In other words, there was no obligation on Sneaths to provide a particular type or quantity of work. This is not disputed by Mr Pertsinidis.[12]
(ii)Whilst, for reasons which will become clear below, I do not have to finally decide, I am prepared to accept that each such contract was partly written and partly oral and that the written terms included some of the printed provisions set out in the SPA relevant to the trip in question and, in particular, those referring to insurance set out on the rear of the SPA.[13] I need to clarify this.
I accept Mr Pertsinidis’ evidence (it being essentially unchallenged) that he only received an SPA, completed with the details of the haulage rate or remuneration and the amount of any deductions pertinent to the trip in question, some weeks after both agreeing to do and doing that trip. In general, insofar as the eastern corridor trips were concerned, Mr Pertsinidis would receive oral instructions by telephone as to what load to pick up and where to take it, prior to departing from Adelaide (T188, 190-191). In contrast, as far as the Perth trips were concerned, Mr Pertsinidis acknowledged that the driver usually had the SPA partially completed as to destination and related requirements at the time the truck left Adelaide. However, even with respect to the Perth trips, the details relating to remuneration and deductions were not included on the SPA by Sneaths and provided to Mr Pertsinidis until some weeks after completion of each trip.
I am not in doubt that Mr Pertsinidis was aware of the existence and purpose of the SPA and that he was on notice that it contained terms and conditions on its rear side, from a very early time in his relationship with Sneaths. It is for this reason that I would be inclined to find that with respect to all of the journeys undertaken by Mr Pertsinidis on behalf of Sneaths, but for perhaps the first one or two, the printed provision dealing with insurance[14] on the back of the SPA, formed part of each relevant contract.
The same cannot be said with respect to the remuneration and deduction entries recorded on a further copy of the SPA and provided to Mr Pertsinidis some weeks after the contract to undertake a particular trip was agreed to and completed. That information can only comprise Sneaths’ assertion of what it says were the parties’ respective remuneration entitlements at a given point in time.
An argument might have been put on behalf of Sneaths that, whatever were Mr Pertsinidis’ true contractual entitlements in this respect, his acceptance of payments from time to time based on post completed SPAs, comprised some form of acknowledgement as to this being the true entitlements of the parties. However, the case was not presented on this basis by Sneaths. Furthermore, (and particularly given the accounting difficulties that confronted Mr Pertsinidis, discussed above) there is no suggestion on the evidence that Mr Pertsinidis was in some way agreeing to a variation to his contractual entitlements (such as they may have been) or compromising his entitlements or settling an honest claim by Sneaths, merely by accepting payment from time to time on the basis asserted by Sneaths.
(iii)It was an oral term of each contract of carriage that Mr Pertsinidis would be paid the going rate or standard rate paid by Sneaths from time to time to its subcontractors with respect to each route on the eastern corridor.
(iv)It was an oral term of each contract that Mr Pertsinidis would be entitled to purchase fuel, tyres and other repairs and parts on Sneaths’ accounts with third parties and in such cases would be charged by Sneaths a “pass through” price, being the price that Sneaths was charged by its third party supplier.
(v)It was an oral term that, if Mr Pertsinidis refuelled from the bowser at a Sneaths’ depot, the price charged by Sneaths, again, would be a “pass through” price, being that payable by Sneaths to its third party fuel supplier.
(vi)It was not a term of each such contract that Sneaths would be entitled to charge an administration or handling fee with respect to invoices processed by it.
[11] I deal with this issue in connection with the Perth work later in this judgment.
[12] It is unnecessary to decide whether or not Mr Pertsinidis was contractually obliged to carry loads as and when required by Sneaths.
[13] See the rear of exhibits P7 and P13.
[14] Most of the terms and conditions, if not all, appearing after the insurance provision appear to relate to Sneaths' relationship with its consignor rather than that with its driver/subcontractor.
The Accounting Exercise
Three lever arch folders of business records of Sneaths, said to support its claim to be owed $17,101, were tendered by consent as exhibits P1, P2, P3 together with some third party business records, P4. Also tendered by consent, as P5, was an extensive aide memoire or submission prepared on behalf of Sneaths which, in effect, summarised the records in P1-P4 and calculated the amount said to be due to Sneaths.
Mr Pertsinidis does not challenge the arithmetic in P5 nor that it is, by and large, drawn from P1 to P4 inclusive. In pressing his counterclaim, Mr Pertsinidis, in effect, has started with Sneaths’ claim of $17,101, as summarised at P5. However, Mr Pertsinidis maintains that there are four categories of payments which make up P5 and which are not properly dealt with by the Sneaths’ accounting.[15]
[15] See generally the defendant's opening at T29 to T32.
Mr Pertsinidis claims that he is owed, by way of income for the relevant period (November 1995 to February 1998) $20,365 more than the Sneaths’ accounting allows for. This additional amount arises, Mr Pertsinidis says, because Sneaths applied rates of carriage during the relevant period which were lower than those agreed to.
Mr Pertsinidis maintains that over the relevant period Sneaths wrongly debited his account with the sum of $9,000, on account of an entitlement, asserted by Sneaths, to be reimbursed for load insurance premiums.
Mr Pertsinidis further maintains that Sneaths has overcharged him the sum of $1,508 with respect to other claimed expenses charged to Sneaths’ accounts with third party suppliers.
Finally, Mr Pertsinidis says that Sneaths has charged him over the period, $21,392 more than it was entitled to charge for fuel purchased by Mr Pertsinidis either directly from Sneaths at its depot or on the Sneaths’ account with third party suppliers.
The total of these four amounts, said to be in favour of Mr Pertsinidis, is $52,265. As far as the Accounting Exercise is concerned, Mr Pertsinidis challenges the Sneaths’ calculation in P5 on the basis of these four wrongly or overcharged items. His claim, in this respect, is that when the amount of $52,265 wrongly charged to him is reversed and offset against Sneaths’ claim to $17,101, Sneaths, in fact, owe him $35,164.[16]
[16] Being the amount claimed, as calculated by Mr Jorgensen with respect to the Accounting Exercise, in his reports, being exhibits D16 and D17.
The exercise before me, therefore, is to determine to what extent, if at all, Mr Pertsinidis is entitled to be credited with the four amounts totalling $52,265 identified above.
Underpayment of income
Mr Pertsinidis claims an additional $20,365 by way of income on the basis that Sneaths applied rates of carriage during the relevant period which were lower than those agreed to. I have made a finding that Mr Pertsinidis was to be paid the standard rate payable by Sneaths from time to time to its subcontractors with respect to the particular route traversed on the eastern corridor.[17] In P1-P3 (and as summarised in P5) Sneaths has purported to apply what it says was the relevant rate from time to time with respect to each journey on the eastern corridor undertaken by Mr Pertsinidis.
[17] The parties are in agreement as to the rate payable for the actual carriage of the freight and paid with respect to the Perth work - see below.
However, Mr Pertsinidis asserted in his evidence, that the rates to be applied throughout the whole of the relationship were those as set out in appendix 9 in exhibit D6. Mr Jorgensen started with the summary, prepared by Sneaths, of the income it claims was derived by Mr Pertsinidis over the period 15 November 1995 to 15 January 1998, as set out in what is described in his reports as the Sneaths’ Schedule.[18] Mr Jorgensen reworked the Sneaths’ Schedule by applying to it the rates taken from appendix 9 in exhibit D6.
[18] Appendix 4 in exhibit D6. The Sneaths' Schedule, as expanded by the addition of columns setting out evidence references, became the Sneaths' submission at exhibit P5.
In other words, Mr Pertsinidis, and Mr Jorgensen on his behalf, accepted the accuracy of the Sneaths’ Schedule[19] insofar as it purported to record trips undertaken by Mr Pertsinidis on the eastern corridor. By reference to the second column of that document headed “Ref No” Mr Jorgensen was able to identify the relevant SPA for each particular trip in question. Having located the relevant SPA with respect to each entry on the Sneaths’ Schedule, Mr Jorgensen was able to ascertain relevant details of the particular trip undertaken, including the departure and arrival points. Mr Jorgensen could then compare the rate of remuneration allowed by Sneaths for that trip, as indicated in the third column of the Sneaths’ Schedule, with the corresponding rate of remuneration set out in appendix 9 of D6. It was on this basis that Mr Jorgensen was able to calculate that Mr Pertsinidis had been underpaid the amount of $20,365.[20]
[19] And, therefore, exhibit P5.
[20] See generally D17 at paragraph 3.1. The sum of $20,365 is the difference between Mr Jorgensen's figure of $667,338 in his income reconciliation column and the figure of $646,973 in the income Sneaths' column. See also, the examination of Mr Jorgensen at T243-246 and paragraph 30 of the defendant's written final submissions.
It follows that the challenge to the Sneaths’ calculation with respect to the proper amount of income payable to Mr Pertsinidis will stand or fall according to whether or not the rates set out in appendix 9 in D6 were in fact the rates applicable during the whole of the parties’ relationship.
I have already set out Mr Pertsinidis’ evidence on this topic. In addition to that, Mr Pertsinidis identified the document at appendix 9 of exhibit D6 as setting out Sneaths’ “tow” rates for the eastern corridor relevant to the whole of the period during which he worked for Sneaths. He said that he had not heard of those rates changing over the period he was with Sneaths and he had not been advised of any change in rates from the day that he started until the day that he stopped. I do not accept this evidence for the following reasons.
Mr Pertsinidis said that the various tow rates applicable to different destinations were common knowledge among the subcontractor drivers during the period that he worked for Sneaths. He also told the court that he knew a driver called Jim Prialux who had been a Sneaths’ contractor for a significant period of time and who knew all the rates backwards (T187). I infer from this, as I am sure Mr Pertsinidis wished me to, that at all times Mr Pertsinidis either himself knew or had ready access to the applicable rates. Furthermore, I have explained above how Mr Pertsinidis, as a general rule, obtained an SPA with respect to a particular trip with the completed information dealing with the amount he was to be paid and the amount of any deductions, some weeks after the conclusion of each trip. For the reasons I have already set out, I readily understand that Mr Pertsinidis was not in a position easily, or perhaps at all, to check whether the various deductions had been properly calculated. However, given the fact that he regularly worked a relatively small number of standard routes on the eastern corridor for Sneaths over a significant period of time, I find it quite unlikely that he did not know, at the time he performed each trip, what the standard rate of remuneration for that trip was. At one point in his evidence (T188) Mr Pertsinidis said this:
We were familiar with the rates at the time. Well, I was familiar with the rates at the time. The rates were standard across all Sneaths’ company trucks in accordance with the schedule.
I consider it highly likely that if Sneaths had allowed Mr Pertsinidis the incorrect amount for a particular trip, Mr Pertsinidis would have realised this upon receipt of the relevant SPA and notwithstanding that he received it some weeks after completion of the trip in question.
Furthermore, appendix 9 in D6, a business record of Sneaths, is headed as follows:
EFFECTIVE FROM: 1/02/97
VAN PULLER RATES WITH LOADS UNDER REFRIGERATION.
The document on its face purports to be a schedule of rates “effective from” 1 February 1997, a date some fourteen or so months after the commencement of the relationship between the parties.
Mr Pertsinidis’ evidence was to the effect that this rates schedule was only provided to him upon his first discovering discrepancies in the Sneaths’ account towards the end of the relationship. He said that he had never seen a schedule prior to that time but had “only gone on the amounts that Keith Sneath had advised me would be paid for the loads and they were consistent with this schedule”.[21] In final submissions, it was put on behalf of Mr Pertsinidis that the date on the heading of the document at appendix 9 of 1 February 1997 is explainable by the fact that it was only provided to Mr Pertsinidis some time in 1997.
[21] T106-107, but compare in cross-examination at 183-193.
I do not accept this explanation and on this topic I do not accept Mr Pertsinidis’ evidence. In my view Mr Pertsinidis has engaged in reconstruction with respect to this issue. I am not persuaded that the rates of carriage for the eastern corridor which Mr Pertsinidis understood to be applicable throughout his relationship with Sneaths were always as set out in appendix 9 in D6. I infer from that business record only that those rates applied on and after 1 February 1997. Mr Pertsinidis did not complain about the rates of carriage as and when recorded on the various SPAs received by him which rates, I accept, were common knowledge at the time. Mr Pertsinidis only complained when he was concerned generally about the state of accounts between the parties in late 1997 and when as a part of that process he obtained a copy of appendix 9 in D6.
It follows that I am not persuaded that Mr Pertsinidis has a contractual entitlement to have the Sneaths’ Schedule reworked by applying the rates of carriage set out in appendix 9 to the whole period of the relationship. I find it more likely than not that the appendix 9 rates of carriage only applied on and after 1 February 1997. I disallow Mr Pertsinidis’ claim that the accounting by Sneaths should be adjusted in his favour by the amount of $20,365 being alleged underpayments based on the wrong carriage rates being applied.
Insurance premium contributions
There is no dispute between the parties that the total of the amounts claimed by Sneaths under this heading is $9,000. Mr Pertsinidis challenges Sneaths’ entitlement to be paid any moneys at all on account of load insurance premiums. If in fact Sneaths has no such entitlement, the Sneaths’ accounting will need to be adjusted in favour of Mr Pertsinidis by the amount of $9,000.
Sneaths bases its entitlement on a provision which appears on the back of each SPA and which Sneaths maintains was a term of each individual cartage contract. Mr Pertsinidis does not appear to challenge that this provision did in fact form part of the terms and conditions of each contract of carriage. For present purposes, as previously indicated, I am prepared to assume, without finally deciding, that this was so.
The relevant provision[22] provides as follows:
Payment of this agreement is subject to the following conditions and rider A under (sic) (i) The subcontractor or authorised agent for the purpose requests Sneaths Freightlines Pty Ltd to arrange insurance for the subcontractor indemnifying him against his legal liability for loss of or damage to goods in transit on the above manifest for any amount exceeding $100 and up to a maximum of $2000,000 [sic] and authorise the company to deduct up to 2½% of the subcontractor’s freight charge in consideration for the company arranging this insurance. (ii) In the event of loss or damage to the goods, the subcontractor or authorised agent authorises the company to deduct from the subcontractor’s freight charge such an amount (not exceeding $100) as shall represent the value of the goods lost or damaged however that loss or damage occurs. Particulars of the conditions and exclusions attaching to such insurance can be obtained from the company.
Thereafter followed another provision dealing with the circumstances in which payment would be made to a subcontractor and the requirements to be observed by the subcontractor in order to ensure that payment for the load was made.
[22] See the rear of exhibit P7.

The provision set out above purportedly entitled Sneaths to deduct up to 2½% of the freight charge but in consideration for Sneaths arranging particular insurance. In my view, the relationship between any entitlement to receive up to 2½% of the freight charge (that is, any obligation in Mr Pertsinidis to pay this amount) and Sneaths’ obligation to procure insurance for Mr Pertsinidis of the stated type, is one of dependency.[23] This is the commonsense and practical way in which this provision is to be construed. In other words, whilst the provision operates as a “request” from Mr Pertsinidis to Sneaths for Sneaths to procure the relevant insurance, Sneaths’ entitlement to be paid 2½% of the freight charge only accrues if and when the insurance is arranged. The 2½% deduction is expressed to be consideration for the company arranging the insurance, not consideration for the company’s promise to arrange such insurance.
[23] See generally Carter and Harland Contract Law in Australia, 4th ed at [1805] to [1807].
Mr Pertsinidis gave unchallenged evidence that, notwithstanding a number of requests by him for evidence of payment of insurance on his behalf, in the context of a willingness to negotiate and obtain his own insurance, no evidence of any policy having been taken out and paid for was provided to him at any time (T109-111). Furthermore, notwithstanding that Mr Sneath gave evidence on behalf of Sneaths, no evidence was adduced either orally or in any documentary form, to suggest that Sneaths had in fact, at any time, taken out an insurance policy which extended cover to Mr Pertsinidis and satisfied the requirements of this provision. I find that at no time during the parties’ relationship did Sneaths act upon the “request” to procure insurance and take out a policy of insurance in terms that would extend cover to Mr Pertsinidis to the extent contemplated by the provision.
Counsel for Sneaths submitted that, whether or not Sneaths had such insurance in place, the effect of the provision was to confer a right on Mr Pertsinidis to be indemnified by Sneaths itself in the circumstances contemplated by the provision. The provision itself does not, by its terms, confer a direct right of indemnity.[24] It is possible that the provision would give rise to a claim for damages in favour of Mr Pertsinidis in the event that no insurance was in place such that he suffered a loss in circumstances where a third party claim was made against him. This might well have the effect of indemnifying him with respect to any such loss. However, and in any event, a contractual right of indemnity by or to damages against Sneaths is a very different thing from a right to claim under an insurance policy with an insurance company ordinarily subject to prudential regulation pursuant to Australian law. In short, Mr Pertsinidis “agreed” to pay 2½% in exchange for a policy with an insurer, not in exchange for a promise by Sneaths either to indemnify him or pay him damages.
[24] See generally, Andar Transport Pty Ltd v Brambles Ltd (2004) 217 CLR 424.
For these reasons I find that Sneaths did not have a contractual entitlement to deduct the $9,000 on account of insurance premiums insofar as that entitlement might be founded on the provision on the back of each SPA document.
Counsel for Sneaths submitted that the fact that Mr Pertsinidis was being charged up to 2½% for insurance was or should have been known to him from early in the parties’ dealings because each such deduction was recorded on an SPA.[25] Counsel further submitted that there was no evidence of any complaint nor of seeking any adjustment in respect of insurance until the claim, the subject of these proceedings, was made.
[25] By way of example, counsel for Sneaths referred to SPA 19116 (document 1.301 in exhibit P1) which is dated 27 November 1995 and shows a deduction for insurance of $12.50.
Mr Pertsinidis said that he became aware of insurance deductions for the first time approximately three months into the relationship with Sneaths, “… it would have been early 1996 approximately” (T110). He said that he queried it directly with the Mount Gambier office and was told that Sneaths deducted 2½% on account of insurance. It was then that he asked for information with respect to the policy and to see a copy of the insurance policy (T111, 204, 207).
I do not see that this evidence assists Sneaths in its claim to be entitled to the contribution to insurance premiums, in circumstances where no relevant policy was procured. The fact of Mr Pertsinidis continuing to “pay” the 2½% as and when charged, albeit begrudgingly given that Mr Pertsinidis thought that he could do better elsewhere, can only have been on his assumption that an appropriate policy was in place which assumption, as I have found, was incorrect.
It follows that Sneaths are not entitled to the $9,000 in dispute and that the Sneaths’ accounting should be adjusted to reflect this.
Expenses (non-fuel) charged to Sneaths’ accounts with third party suppliers
Under this heading, Mr Jorgensen has calculated that Sneaths have overcharged Mr Pertsinidis by the amount of $1,508 (rounded down). This is made up essentially of two components. The first component is a particular transaction for Monday, 2 September 1996, where the supplier was Pitstop and where Sneaths appear to have charged Mr Pertsinidis $16,000 for a $15,000 transaction.[26] The second is a collection of SPAs where a charge, usually of the order of $5, appears to have been included as part of an expense actually incurred by Mr Pertsinidis.[27]
[26] See the purchase order 28.56 in exhibit P3 and document 15.2 in exhibit D8.
[27] In this category there are, in fact, six cases of a mark up greater than $5; see the schedule handed up by counsel for Mr Pertsinidis during submissions, referred to in the next paragraph in the text.
In a supplementary written submission, Mr Pertsinidis has listed each SPA or purchase order about which complaint, in this respect, is made and which in total give rise to an alleged overcharging of $1,554.54. At paragraph 25 of the written outline of submissions provided by counsel for Sneaths, Sneaths have acknowledged that there is no dispute as to the accuracy of Mr Jorgensen’s arithmetic. In a written response to the Pertsinidis’ supplementary submission referred to above, provided to the court on 6 February 2007, counsel for Sneaths identified a number of errors in it. The errors identified by Sneaths suggest that the Pertsinidis’ supplementary submission overstates the alleged overcharging by approximately $46. In the circumstances, I accept that the Jorgensen figure of $1,508 is mathematically correct.
The issue between the parties is as to whether or not Sneaths had a contractual entitlement to charge the additional amount of $1,508 identified by Mr Jorgensen.
I deal first with the apparent mark-up of $1,000 on the Pitstop invoice. The explanation given by Sneaths as to how this mark-up may have arisen came late in submissions, during counsel for Sneaths’ reply. Counsel for Sneaths drew my attention to document 28.56 in exhibit P3 and, in particular, the third page in that document bundle, being a purchase order/invoice No 22853. As counsel for Sneaths acknowledged, there is no oral evidence directly bearing on this document. However, it does appear to relate to the Pitstop invoice (the previous page in document 28.56) for $15,000. Recorded under the column “value” on purchase order/invoice 22853, is the notation “$15,000 plus interest”. In the adjacent column the words “A/c Theo Pertsinidis charge $16,000” are recorded. Counsel for Sneaths invited me to infer from this business record that the explanation for this additional charge is that interest of $1,000 was charged by Sneaths to Mr Pertsinidis, presumably on account of delayed payment.
Whether the additional $1,000 which Sneaths concede has been charged, is explicable by way of some form of administration charge or, indeed, as an interest charge, there is no evidence before me from which I can conclude that Sneaths had a contractual entitlement to make such a charge. I have earlier found that the right to impose an administration fee or charge was not a term of the parties’ contracts and there is no evidence at all of any contractual entitlement to charge interest.
As for the administrative mark-ups making up the balance of the $1,508 said to be overcharged, I make the same finding. Furthermore, I am not able to find on the evidence of either Mr Pertsinidis or Mr Sneath that Mr Pertsinidis was told that an administration fee in the order of $5 per third party transaction (or some of them) was to be charged nor does the evidence support a finding that Mr Pertsinidis ever agreed to such a charge. It is true that from time to time these charges were included on SPAs that were provided to Mr Pertsinidis. However, such a charge was not separately listed on the SPA or any other documentation and identified, as, for example, “administration charge - $5”. The additional charge was usually incorporated into a global figure charged to Mr Pertsinidis by way of reimbursement for the particular deduction in question.[28]
[28] See for example, T641.8 to 642.10.
It follows, and I find that Mr Pertsinidis has made good his claim to have been overcharged in the amount of $1,508 and the Sneaths’ accounting must be adjusted to reflect this.
The alleged overcharging for fuel
The Sneath’ accounting identifies that Mr Pertsinidis incurred fuel expense either by way of direct purchases from Sneaths or on the Sneaths’ account with third party suppliers, during the relationship, of $208,072. This figure is based on the amounts charged against Mr Pertsinidis’ account from time to time as recorded on the SPAs or purchase orders issued by Sneaths during the relationship. These documents are contained in exhibits P1 to P3. The relevant fuel entries or charges recorded in these records have been extracted and are set out in the Sneaths’ Schedule being appendix 4 in exhibit D6. The Sneaths’ Schedule has been reproduced, together with additional columns setting out evidence references, as exhibit P5.
Each charge for fuel on an SPA was taken from some other primary record or records. In the case of fuel purchased from a Sneaths’ depot bowser, this primary record comprised a clipboard sheet showing litres of fuel purchased and filled out at the time of purchase, presumably together with some record held by Sneaths of the price per litre that it charged for its depot bowser fuel from time to time.[29]
[29] See generally T194-195, 198 and 200.
In the case of fuel purchased on the road by Mr Pertsinidis from third party suppliers, the primary records would have comprised the relevant third party invoice that Sneaths received showing litres purchased together with the third party’s price per litre (as charged to Sneaths), subject to any adjustment to the price per litre passed on to Mr Pertsinidis by Sneaths.
There is a significant lack of this third party documentation in evidence against which the accuracy of the Sneaths’ Schedule and the fuel entry records in P1 to P3 can be tested.
Mr Jorgensen, on behalf of Mr Pertsinidis, attempted to test the Sneaths’ Schedule insofar as it purported to record expenses incurred by Mr Pertsinidis. He looked at sample transactions identified in the Sneaths’ Schedule and attempted to find independent or third party documentation which might lend support to each such transaction (T400). This exercise resulted in the preparation of appendix 7 to his reports. Appendix 7 at first indicated to Mr Jorgensen that he could not find external documents which supported the Sneaths’ Schedule. However, he did find some third party documentation bearing the same date and recording the same supplier as recorded in various entries in the Sneaths’ Schedule but in each case the amount recorded was “slightly different”.[30] This reference to finding support for some of the Sneaths’ Schedule entries but for the dollar amount being “slightly different” I infer to be a reference to the problem of administration fees already dealt with in this judgment and as to which I have decided in favour of Mr Pertsinidis.
[30] See the example that Mr Jorgensen was taken through at T402.
Mr Jorgensen was extensively cross-examined on appendix 7 and ultimately conceded that it was very difficult to make sense of it and that in its present form appendix 7 could not usefully be relied upon.
As presented I would need to go through it line by line with the individual documents in here to explain how it actually works (T401).
That exercise was not undertaken and I am unable to place any reliance on appendix 7 as posing a challenge to the Sneaths’ Schedule, insofar as it purports to accurately record fuel purchases actually undertaken by Mr Pertsinidis. It is the case that very little of the underlying primary documentation which would have been relied upon to generate the SPAs in P1 to P3, and ultimately exhibit P5, is in evidence or was available to Mr Jorgensen.
Mr Pertsinidis disputes the Sneaths’ figure of $208,072. He told the court that it was his practice to maintain “trip sheets”. For each journey, he or his driver would record on handwritten sheets relevant information including the date, location, quantity and cost of fuel purchased. As far as fuel purchased on the road was concerned he would record the bowser price as indicated at the time of purchase.[31] As far as fuel purchased from a Sneaths’ depot was concerned, Mr Pertsinidis recorded what he understood to be the daily price charged by Sneaths when he was able to find this out by inquiring with other drivers at the time he acquired the fuel (T235). At some stage Mr Pertsinidis prepared a schedule referred to in evidence as the Pertsinidis Schedule and tendered in evidence as appendix 3 in D6 which schedule purported to set out in summary form all of the information contained on the trip sheets dealing not just with fuel purchases but with other transactional information as well.
[31] This bowser price was, of course, not necessarily the price per litre that the third party would charge Sneaths for the fuel as purchased by Mr Pertsinidis.
Mr Jorgensen attempted to test the accuracy of the Pertsinidis Schedule by reference to the trip sheets. He found the Pertsinidis Schedule to be incorrect and unreliable (T399). He therefore, in effect, commissioned Mr Pertsinidis to prepare a new document being simply a record of all fuel entries on the trip sheets. This document became appendix 10 to his report and is appendix 10 in D6.
Mr Jorgensen was instructed to ignore the Sneaths’ Schedule and to rely on appendix 10 in order to calculate relevant fuel purchases made by Mr Pertsinidis. By reference to appendix 10 Mr Jorgensen has calculated[32] that Mr Pertsinidis incurred fuel expense in the amount of only $186,680. It is the difference between the Sneaths’ Schedule figure of $208,072 and the Jorgensen appendix 10 figure of $186,680, that is, $21,392 that is the nub of the dispute between the parties on this topic.
[32] I do not understand Sneaths to dispute these calculations, that is, that the result arrived at by Mr Jorgensen is mathematically correct as based upon the entries in the trip sheets themselves. Sneaths does not accept that the trip sheets are in all cases complete nor necessarily accurate.
In essence, the court has been provided, without objection, with a series of Sneaths’ business records, that is, P1 to P4, which taken at face value support a finding that fuel expense incurred amounted to $208,072, subject to Sneaths having charged the correct rate per litre. However, the court has also been provided, again without objection, with a set of Pertsinidis business records, the trip sheets, which if taken at face value support a finding that Mr Pertsinidis incurred fuel expense of $186,680, again subject to Sneaths having charged the correct rate per litre.
I make the following further observations:
(i)As far as the Sneaths’ business records are concerned, I am not persuaded that the attack by Mr Jorgensen on the accuracy of these records has succeeded. There is, as I have said, minimal underlying third party documentation to which reference can be made. Further, it is not uncommon for a fuel entry in the Sneaths’ records to be an amalgamation of a number of fuel purchases rendering it impossible to reconcile these against dates and quantities recorded in the Pertsinidis’ Schedule. In addition, much of the attack on the Sneaths’ Schedule relies on an assumption that the Pertsinidis’ trip sheets are themselves accurate.
(ii)This does not mean that the Sneaths’ Schedule necessarily is accurate. However, I accept that entries were made by office staff on the various SPAs from which the Sneaths’ Schedule has been drawn relatively contemporaneously with the receipt by Sneaths of underlying primary documentation which justified the entries then made. Whilst there is always potential for transcription errors it is likely that over time any such transcription errors would sometimes favour Sneaths and sometimes favour Pertsinidis and, broadly, cancel each other out.
(iii)As for the Pertsinidis’ trip sheets, there is likely to have been significant opportunity for error to occur in the recording process given the circumstances in which it must have occurred from time to time.[33] Further, a number of these sheets were filled out by Dino Pertsinidis. I have no evidence as to how regularly or strictly he filled out the trip sheets for which he was responsible. In addition, it is likely that, over the more than two years of the relationship, a trip sheet on occasions was not completed at all or, if completed, was mislaid. In some cases (albeit not a large number) trip sheets in evidence are incomplete; whilst these suggest that fuel purchases were made it is not possible to identify the amount.
(iv)As a general consideration, it seems to me that the Pertsinidis’ trip sheets are more likely, accidentally or inadvertently, to understate purchases than is the Sneaths’ recording to overstate purchases.[34] In other words, in my view, there are more likely, in all of the circumstances, to be errors of omission in the Pertsinidis’ record-keeping process than errors of commission in the Sneaths’ record-keeping process.
[33] The time of day or night, weather conditions, driver fatigue, whether the driver was running on time or behind schedule are just some of the factors that might have a bearing from time to time on the accuracy of such record- keeping over a period of more than two years on the road.
[34] Leaving aside the price per litre issue.
Left to my own devices the wisdom of Solomon[35] commends itself. However, our system of litigation usually leads to a winner takes all approach. In all of the circumstances, I am not persuaded that the Sneaths’ Schedule has been shown to be inaccurate. On a balance of probabilities I find the Sneaths’ Schedule to be accurate insofar as it records the fuel purchased from Sneaths or on its account and the amounts charged by Sneaths for that fuel. I am not persuaded that Mr Pertsinidis’ trip sheet records, as summarised in appendix 10 in D6, provide an accurate record of these matters.
[35] 1 Kings 3:23-28.
That is not the end of the matter. I have already found that Mr Pertsinidis was entitle to a “pass through” price. The evidence as to the difference between the price per litre charged by Sneaths from time to time and the price charged to Sneaths by its third party suppliers from time to time is scant. However, Mr Sneath did give evidence that he thought Sneaths charged a two cents a litre margin on depot fuel purchases and that there might have been a one cent per litre variation with respect to fuel purchased on the road (T637-638). Mr Sneath also said that there might have been some administration fee with respect to fuel purchased on the road. Doing the best I can with Mr Sneath’s evidence, it being the only evidence on the topic, I find that Mr Pertsinidis was overcharged by the amount of two cents per litre with respect to all of the fuel purchases made on the Sneaths’ account or from a Sneaths’ depot.

Both parties agree, through their respective expert witnesses, that the average fuel price across the period of the relationship was approximately 77 cents per litre.[36] Accordingly, Mr Pertsinidis has been overcharged an amount equivalent to 2/77^ths of the fuel expense of $208,072 charged by Sneaths. This means that Mr Pertsinidis has been overcharged and should be allowed a credit in the amount of $5,404.
[36] Jorgensen, D17 at paragraphs 6.25 to 6.27; Morris, P22 at page 11.
Conclusion as to the Accounting Exercise
It follows that, insofar as the Accounting Exercise is concerned, Sneaths claim and Mr Pertsinidis’ counterclaim should both be allowed, in part. Sneaths initially claimed to be entitled to $17,101. I have found, with this as the starting point, that Mr Pertsinidis should be credited with $9,000 on account of insurance premium wrongfully charged, $1,508 on account of other expenses overcharged and $5,404 on account of the fuel expense overcharged. The nett result is that on completion of the Accounting Exercise Mr Pertsinidis owes Sneaths the sum of $1,189.
Pursuant to s39(3) of the District Court Act 1991, I award a lump sum of $850 in lieu of pre-judgment interest on this amount of $1,189.
The Perth Contractual Issue
Mr Pertsinidis claims that the Perth trips, unlike the eastern corridor work, were not each the subject of a separate contract as and when agreed to by the parties. He maintains that the parties entered into a separate five year contract pursuant to which Sneaths undertook to provide Mr Pertsinidis with a weekly trip to Perth over the whole of that five year period at the rate of $8,200 per trip but otherwise on the same terms and conditions as applied to the eastern corridor work.
Background to the Perth work
The circumstances leading up to the parties’ negotiations with respect to the provision of regular Perth work by Sneaths are not in contest. Mr Pertsinidis, both prior to and for a short time after commencing the eastern corridor work, also conducted a freight haulage service between Adelaide and Perth for a third party (TEAC) using his second truck, a Volvo prime-mover. The driver on this Perth work was usually his brother, Dino Pertsinidis. As a general rule, Mr Pertsinidis was required to pick up freight in Adelaide on a Friday and arrange for its delivery to Perth by the Monday morning.
In March 1996 an accident occurred on the road between Perth and Adelaide; the Volvo prime-mover was badly damaged and Dino Pertsinidis was seriously injured. As a result, substantial repairs to the Volvo were necessary and it was out of service for several months. Mr Pertsinidis lost this Perth work to another freight transport company.
Mr Pertsinidis told the court that when the Volvo came back into service in or around June 1996 he introduced it to the eastern corridor work. However, he wanted to find replacement work for the Perth work that had been lost and he was planning, in due course, to return the Volvo to the Perth route because it was a new vehicle, it had a two trailer capacity (unlike the Mercedes) which suited long-haul work, and the Perth work had been lucrative. Mr Pertsinidis said that he had regular work available to him coming out of Western Australia so that if he had freight going to Western Australia he could “regularly turn the equipment around quickly and receive a rate coming back”.
Mr Pertsinidis, after some months of working for Sneaths on the eastern corridor, formed the view that Sneaths did not service or adequately service the demand for Perth freight work available from Sneaths’ existing customer base. He identified, in particular, work apparently available from SAFRIES.
According to Mr Pertsinidis, he approached Mr Sneath in June 1996 with a proposal that Mr Pertsinidis would undertake the transport work, apparently required by SAFRIES between Mount Gambier and Perth. In short, Mr Pertsinidis saw an opportunity to commence a regular freight service to Perth which he presented to Mr Sneath.
The evidence of Mr Pertsinidis as to the formation of the alleged Perth contract
Mr Pertsinidis gave evidence about his negotiations with Mr Sneath with respect to Perth work on a number of occasions throughout his evidence-in-chief and cross-examination.
Mr Pertsinidis put together a business case or proposition for the carrying of the SAFRIES freight to WA from Penola which he discussed with Mr Sneath. Mr Sneath responded positively to the possibility of taking freight to Perth. During an early discussion with Mr Sneath about this Mr Sneath told him that Sneaths had other freight, which if Mr Pertsinidis was interested, and if appropriate terms could be negotiated, could be made available for him to take from Adelaide to Perth.
At first Mr Pertsinidis identified the business proposal initially prepared by him as that contained in the document at tab 24 of exhibit D8. Mr Pertsinidis told the court that this original proposal involved two road trains running to Perth weekly and would necessitate the acquisition by him of two prime-movers, four refrigerated trailers and two converter dollies (coupling devices).
These discussions were said to have occurred in about June of 1996.
According to Mr Pertsinidis, one or two weeks after this initial discussion Mr Sneath raised an alternative proposal in the following terms (T67):
He did however say, he said ‘Well, I’ve got some additional freight’ and I said ‘What about the SAFRIES?’, and he said ‘Well, don’t worry about that just for the moment. I’ve got another proposition for you. How about if I bring some freight out of Sydney and we tranship it in Adelaide, put it on you and you’re our Perth man? You do all of the WA service. All of the WA services are yours’. … ‘You don’t need to worry about the customer because I am supplying the freight, so whatever the freight is, the freight is’ but he said it’s a good opportunity to open up Australia to bring more of the Sneaths’ company trucks, that is, the ones working on the eastern corridor out of Sydney back to Adelaide so he can now take Perth freight as well as Adelaide freight and tranship the Perth freight on my truck.
Mr Pertsinidis told the court (T68) that:
Keith said he only had enough for one road train for the time being. What he wanted to do was establish Western Australia’s service and I was the Perth guy. All the Perth work would go through me …
He was told by Mr Sneath that he would have to supply the equipment “on the dot every Friday”, ready for any transhipment that would come through. It was for a weekly service every week involving two full trailers (T67-69).
Later, in Mr Pertsinidis’ evidence-in-chief (T84) he identified some handwritten notes of his, exhibit D9, as forming the basis of his initial discussions with Mr Sneath in June 1996 concerning the possibility of taking SAFRIES product to Perth. He said (at T64) that the typewritten business case or proposal in tab 24 of D8 “occurred after the road train had been established. However, we had had a similar conversation and proposal prior to the road train being established”.
In any event, Mr Pertsinidis commenced the Perth run in late August 1996. The agreed rate of remuneration was $8,200 ($4,100 per trailer) per one way trip (T89). He had to supply his own equipment including refrigerated trailers. At the time he commenced the Perth operation he used the Volvo prime-mover. He also converted his tautliner which was a dry trailer into a refrigerated trailer, hired a converter dolly (or coupling device) and hired a rear refrigerated trailer. Mr Pertsinidis said that he operated a weekly road train service to Perth, using the road train I have just described, until December 1996 at which time he had another meeting with Mr Sneath. At that time Mr Pertsinidis was looking to purchase additional equipment and, in particular, two refrigerated trailers. The converted tautliner was not as efficient “from a thermal perspective as a purpose built refrigerated trailer” and the hiring of the second refrigerated trailer from Kruger Hire in Victoria was costing something like $880 per week. He told the court that it made good commercial sense for him to purchase his own equipment rather than hire a trailer and use the tautliner. The weekly work to Perth was going “like clockwork”.
Mr Pertsinidis said that during the December discussions he told Mr Sneath that he was looking at purchasing two refrigerated trailers but that he would not purchase them if there was no prospect of the work being available. Mr Pertsinidis recalled his specific words to Mr Sneath as (at T73):
If this is not going to be a weekly service tell me now because I don’t want to get into any commitments, I will keep on renting the equipment.
Mr Pertsinidis said that Mr Sneath responded:
No, no, it’s an ongoing thing, you know, you’re the Perth guys, all the Perth freight goes through you.
Mr Pertsinidis then said that he pressed Mr Sneath on this and explained to Mr Sneath his intention to lease the proposed two new refrigerated trailers over a five year term with a nil residual. Mr Pertsinidis told the court that, after some discussion, the following exchange occurred (T74):
He said ‘Right, OK, five years to nil, well that sounds reasonable’. He said ‘Yes, ok that’s fine’. And I quoted (sic) ‘Well, it’s not fine, I need to know that there is a contract in place that I can cover my position’ and he goes ‘Yes, not a problem, there is always going to be work, you’re our Perth guy, you’re going to do the Perth work, you operate the weekly service for us and yes, you’ve got it for five years’. I said ‘OK, well that’s fine, I’ll go speak to financiers in the case and find some trailers, once I locate some trailers I’m going to have to come back to you for some additional paperwork’. He said ‘Yes, great, that’s fine’ and that’s pretty much where the conversation ended.
Mr Pertsinidis told the court that this discussion occurred in around late November or early December and that he and Mr Sneath were the only persons present. He said that after this discussion he proceeded to source trailers and entered into financial commitments with respect to the purchase of trailers.
Mr Pertsinidis said that in January 1997 he had further discussions with Mr Sneath during which he told him that he had found two trailers suitable for the road train service to Perth and that he would be looking to obtain finance. Mr Pertsinidis (T75) said that at that time,
I reiterated our agreement, which was a road train service every week, and, a five year term. That’s what I was relying on.
He said that Mr Sneath again said, “Yes, no problems, go ahead”. According to Mr Pertsinidis, he gave Mr Sneath several opportunities to, in effect, withdraw from this arrangement but on each occasion Mr Sneath confirmed it.
It is significant that in Mr Pertsinidis’ evidence-in-chief the concept of a five year term was not mentioned by him before he recounted the December conversation with Mr Sneath. However, in cross-examination, Mr Pertsinidis was adamant that this had been the agreement from the beginning of their discussions in August 1996.[37]
[37] See for example, T170.14 to 170.26, T172.24 to 173.3, T176.21-22, T178.16 and T178.21 to 178.32.
Mr Pertsinidis gave very confusing evidence both in chief and in cross-examination as to the finance arrangements for two trailers and a converter dolly that he said he entered into having, on his case, secured a five year contractual arrangement with Sneaths. To assist in negotiating the financial arrangements he procured two letters from Mr Sneath which are to be found at pages 18 and 19 of tab 19 of exhibit D8. Mr Pertsinidis placed some considerable reliance on these letters as being supportive of his claim that Sneaths had agreed to a five year term. In my view they lend no such support and, if anything, they contradict Mr Pertsinidis’ case on this issue.
The first letter (page 18 of tab 19) is simply a personal reference addressed to Mr Barry Henningsen of BankSA dated 10 February 1997. The material terms are as follows:
Over a period of time Theo has become a very reliable and trustworthy contractor for our company.
Due to his knowledge of the transport industry along with his ability to get along with our major customers makes him (sic) a very valued person within our organisation.
There is really no area in a personnel or a business way I am able to find fault. Therefore I have no hesitation in furnishing a reference.
The second letter (page 19 of tab 19) is potentially of more significance. It again was addressed to Mr Barry Henningsen of BankSA and dated 10 February 1997. Its material terms were as follows:
Currently Theo line hauls a weekly road train to Perth with product from one of our major accounts, weekly earnings being approximately $10,200.[38]
It has been agreed in the near future we extend a B-Double service to another major account earnings for this operation would be approximately $9,000.
The other area he is operating, is Millicent to Sydney, with a 45 Ft drop deck, returns for this work should be around $5,000.
As all work is with major customers we see no real supply problems at this time.
[38] According to Mr Pertsinidis' evidence his weekly earnings were approximately $10,400; the $8,200 per trip to Perth and regular work available to him coming back from Perth which paid $2,200 per trip. However, he also explained that the arrangement with Sneaths was that it was entitled to deduct $200 because this ex-Perth work was put through its books (T89-90).
There is no suggestion in either of these letters that Mr Pertsinidis enjoyed a five year contract with Sneaths with respect to the Perth work. This was put to Mr Pertsinidis in cross-examination. Mr Pertsinidis gave what was, in my view, a self-serving and disingenuous answer. He said (at T179):
Well when I spoke to Mr Sneath about the letter after he had provided it, I’d asked him about the five year term and he said: ‘I haven’t put a term on there because he sees the relationship going beyond the five years as an ongoing contract, and that was acceptable to BankSA and Tunbridge Trailers’.
The evidence of Mr Sneath as to formation of the alleged Perth contract
Mr Sneath gave evidence as to his recollections of the Perth arrangements. He was managing director of Sneaths at the time of the relevant events. He had been managing director for a number of years prior thereto and ceased to be managing director in May 2005. At the time of giving evidence he worked as a director of another transport company and was no longer involved with Sneaths.
Mr Sneath told the court that Mr Pertsinidis was working for Sneaths running various destinations including Sydney. He said that Sneaths happened to get work to Perth from EOI (Flora margarine) in Sydney. Mr Sneath said (at T604) that:
Just through general conversation we just decided that he would do the Perth link, and we would bring it with another carrier to Sydney and cross-docket it to our Gepps Cross Depot and then he’d do the Perth leg.
When asked during examination-in-chief whether he discussed the likelihood of the future continuance of such work he said (T604):
It’s hard – I don’t know if I can, no, I’d say I didn’t, because we can’t be sure of retaining the work for how long, its up to the customer. If we perform, we perform. If we don’t we don’t.
Mr Sneath said that Sneaths did not have an arrangement with EOI as to how long its work would be provided to Sneaths. He agreed that the arrangement with Mr Pertsinidis started in about August 1996. Whilst he acknowledged that he probably had various conversations about the Perth work after that time, he could not recall the details. When asked again if he recalled whether Mr Pertsinidis ever asked him to confirm whether or not the work would continue, Mr Sneath said this (T605):
I don’t recall that because the work is really up to the customer. If we perform the tenure of the work is up to us the same as the tenure of Theo doing the work is up to him. So there is no set anything set in concrete (sic) about the term of the work or the tenure of that particular job.
Mr Sneath said that at the time when Mr Pertsinidis ceased working for Sneaths the EOI Perth run was no longer available. He also said that during the period 1995 to 1997 Sneaths would have had between 80 or 100 subcontractor drivers working for it. He said “nobody had contracts”. When asked why, he said (T615):
Well, pretty hard to give contracts when you are working for customers and you are in a transport industry where you are open to competition, which I am sure that everybody knows how cut-throat – you just couldn’t do it.
In cross-examination Mr Sneath confirmed that he had had many discussions with Mr Pertsinidis, including about Perth freight. He had no real recollection of when these occurred but conceded that they could have been as early as June 1995. He agreed that it may have been with respect to carrying SAFRIES freight that Mr Pertsinidis first approached him. However, Mr Sneath said that Sneaths was not successful in getting the SAFRIES work, but for a few emergency loads. He agreed that he may have described Mr Pertsinidis as “the Perth guy”. Mr Sneath said that the EOI work to Perth went very well for a while but that the reason they lost the work was because they ran late on two or three occasions and after receiving a warning from EOI the work was terminated. Mr Sneath said that EOI had every right to do that because Sneaths had nothing in writing; there was no contract with EOI.
Mr Sneath denied that Mr Pertsinidis specifically raised with him, during their conversations, the need for an assurance that the Perth work would continue for a period of five years. He responded (T631):
Definitely not, definitely not. I did not give any assurances that that work would continue for five years.
Mr Sneath said that he could have discussed in general conversation with Mr Pertsinidis something about a five year residual arrangement with respect to Mr Pertsinidis’ finance. However, he had no recollection of this (T631-632).
Acceptance of Mr Sneath’s evidence on the Perth Contractual Issue
Mr Sneath had difficulty in recalling the details of his dealings with Mr Pertsinidis approximately ten years before and this is not surprising. He was, at the time he gave his evidence, independent of Sneaths and I accept that he was doing his best to assist the court and to give his evidence as accurately and reliably as his memory would allow. Mr Sneath was clear in his evidence to the effect that he did not give any five year commitment to Mr Pertsinidis with respect to the Perth work. He gave a cogent reason why that would be so; the fact that the work that Mr Pertsinidis was doing at the time (the EOI work from Sydney) was not guaranteed to Sneaths. Mr Sneath said that none of the subcontractor drivers had contracts with Sneaths and again gave a cogent and similar reason, namely, that Sneaths only retained carriage work from its clients whilst it continued to perform satisfactorily. Mr Sneath was a very experienced manager of a substantial transport entity at the time. I found his evidence as to, in effect, the impracticality of giving subcontractor drivers fixed term contracts of that length, or at all, given Sneaths own exposure to its customers, to be compelling. I accept his evidence on this topic generally and find it unlikely in the extreme that he would have committed Sneaths to paying out $8,200 for virtually an unconditionally guaranteed Perth run every week for five years.
Difficulties with Mr Pertsinidis’ evidence on the Perth Contractual Issue
I have earlier indicated that I accept much[39] of Mr Pertsinidis’ evidence with respect to the general terms and conditions which governed the individual contracts of carriage performed by Mr Pertsinidis. I did so essentially because Mr Pertsinidis’ evidence in this respect was not challenged and in many of the essential respects was conceded by Sneaths or supported by the evidence of Mr Sneath. However, I did find Mr Pertsinidis’ evidence generally and, in particular, insofar as it bore on the Perth Contractual Issue, to be quite unsatisfactory in a number of respects. Ultimately, I prefer Mr Sneath’s evidence on this topic. Mr Pertsinidis has not persuaded me that Mr Sneath made any statements or otherwise conducted himself in such a way as to lead Mr Pertsinidis or a reasonable person in his circumstances, genuinely to believe that he had received an undertaking (contractually binding or otherwise)[40] that the Perth work would continue on a weekly basis for five years.
[39] I have rejected his evidence, as reconstruction, that appendix 9 in exhibit D6 recorded the rates of carriage applicable at all times throughout the relationship.
[40] A claim based on alleged misleading or deceptive conduct was abandoned by Mr Pertsinidis during the trial.

Mr Pertsinidis’ evidence was given in a very rehearsed manner. Often, in response to a relatively short and straightforward question from either his own counsel or in cross-examination, Mr Pertsinidis would launch into what appeared to be a pre-prepared speech. I was left with a strong impression that over the many years between 1998 and the trial in January 2007, Mr Pertsinidis had mulled over or rehearsed his proposed evidence on this critical issue of the Perth work. This, together with the expected and understandable effect of the passage of such a long period of time, has operated, in my view, to degrade his original memory of the detail of actually what was said and done in 1995 and 1996 and to allow reconstruction to intrude.
Whilst I leave open the possibility that Mr Pertsinidis now may have a belief in what he told the court, he has not persuaded me that, on these essential issues, his evidence was accurate.
As I have indicated, I have a clear preference for Mr Sneath’s evidence over that of Mr Pertsinidis with respect to this topic of the putative five year term for the Perth work. Nevertheless, I make the following further observations.
Mr Pertsinidis’ evidence as to the order of events with respect to his finance negotiations and how these interrelated with his discussions with Mr Sneath was very confused. Furthermore, there is virtually no contemporaneous documentary support for the alleged Perth contractual arrangements with Sneaths or as to the financial arrangements Mr Pertsinidis said he entered into in reliance on having a guaranteed five year term. Mr Pertsinidis’ evidence as to why the financing documentation was not available for him to put into evidence was very unsatisfactory (see, for example, T141-142). Such documentation generated during that period as is in evidence would seem to count against Mr Pertsinidis’ contentions as to a binding agreement. I had the distinct impression that Mr Pertsinidis in his evidence was reconstructing a relationship between his discussions with Mr Sneath and his decision to finance new equipment.
The evidence given by Mr Pertsinidis of financial commitments entered into (T79) was quite at odds with the position as opened on by his counsel (T48) and bore no resemblance to Mr Pertsinidis’ initial proposed financial requirements (tab 24 in D8).
There was considerable confusion in Mr Pertsinidis’ evidence as to the timing and order of the various discussions he says took place with Mr Sneath. This is, of course, not surprising given the passage of time nor is it, of itself, a matter for adverse comment. However, it does indicate an inability in Mr Pertsinidis to accurately recall the events of 1995 and 1996. What Mr Pertsinidis is left with in my opinion is a series of wittingly or unwittingly reconstructed impressions or conclusions from the events at that time.
Mr Pertsinidis struck me as an intelligent man clearly experienced in the interstate haulage industry. He must have realised that an unconditional five year commitment to an owner driver subcontractor would be very usual, to say the least. Furthermore, on Mr Pertsinidis’ evidence, he was preparing to make a significant financial commitment on the strength of his belief that he was guaranteed the Perth work for five years. Nevertheless, he did not ask to have the oral assurances he says he received from Mr Sneath reduced to writing. He did not ask for any written confirmation even after he became aware of the unsupportive terms of the Bank SA letters.
Mr Pertsinidis told the court that he had earlier been party to a written contract with three other trucking companies (T181-183). Each was only for a couple of years. Each contained various terms and conditions, as one would expect. An obvious virtue of a written agreement is that it enables the parties to record the grounds upon which such a contract might be brought to an end by either party, particularly where a term as long as five years is contemplated, in an industry where work is unreliable and ebbs and flows. In these circumstances, and on my assessment of his evidence generally, I do not accept Mr Pertsinidis’ self-serving answer to the effect that in all of the circumstances he did not think a written contract was “absolutely necessary”.
On Mr Pertsinidis’ own evidence, Mr Sneath spoke, during their initial discussions in about June 1996, of “a good opportunity to open up Australia …” and of wanting to “establish Western Australia’s service”. This is not language consistent with a five year unconditional guarantee of weekly work which Mr Pertsinidis said was the understanding from the time of the first discussions.
Assessment of loss on the Perth contract
I turn to consider the loss suffered by Mr Pertsinidis if, contrary to my finding, Sneaths did owe a contractual obligation to Mr Pertsinidis to provide him with a weekly trip to Perth for five years, commencing in or about August 1996.
There is no dispute that Sneaths ceased providing Perth work in September 1997 and that this would have constituted a breach of the contract if such had been in force. Sneaths offered no justification for ceasing to provide the Perth work other than that EOI stopped providing Perth freight for Sneaths and, as I have found, that Sneaths had no obligation, contractual or otherwise, to continue to provide Perth work to Mr Pertsinidis.
When the Sneaths Perth work stopped, Mr Pertsinidis was able to secure some work to Perth from other trucking businesses including one owned by a Mr Snow Grow. Ultimately, Mr Pertsinidis ceased doing any work to or from Perth on or about 30 June 2000 (T91-102).
Mr Pertsinidis gave uncontradicted evidence that he had available to him a regular weekly return trip from Perth carrying frozen pilchards to Port Lincoln for which he was paid $2,200 per trip. I accept Mr Pertsinidis’ submission that when he lost the Sneaths’ Perth work he also lost the opportunity to do the return Port Lincoln work. To this extent, whilst he always was obliged to incur the expenses of a return trip in order to earn his one-way rate of $8,200 from Sneaths, he was deprived of the opportunity to increase his remuneration by a nett $2,000 per round trip.[41]
[41] That is, after deducting Sneaths' "book keeping" fee of $200.
Counsel for Sneaths faintly submitted that Sneaths, on any analysis of the evidence, was not responsible for the loss of any freight Mr Pertsinidis might have been able to secure for the return journey; on Mr Pertsinidis’ case, Sneaths only promised him one way freight. However, the loss of the Sneaths’ Perth work caused this loss of opportunity for return freight and additional income. This loss is not too remote.[42] I find that in assessing Mr Pertsinidis’ contractual loss, account must be taken of this loss of opportunity to earn an additional $2,000 per return trip.
[42] See Hadley v Baxendale (1854) 9 Ex 341 at 354; 156 ER 145 at 151.
Both parties adduced extensive and detailed evidence from their respective expert accountants; Mr Jorgensen for Mr Pertsinidis and Mr Morris for Sneaths. In essence, they agreed on the appropriate model for calculating Mr Pertsinidis’ contractual loss. That model, in simple terms, provides for an assessment of the amount of Mr Pertsinidis’ gross profit, that is, contribution to fixed costs that he has been deprived of by the premature termination of the Perth contract. They disagreed as to various of the inputs into that model. Of course, the proper amount of the inputs will depend upon the evidence.
This lost contribution to fixed costs is to be determined by calculating the total income that Mr Pertsinidis would have earned over the full five year period and deducting from that figure both the total variable costs that would have been incurred in earning that income and the total gross profit or contribution to fix costs actually earned by Mr Pertsinidis, as a result of doing Perth work during the period. I accept this model as a starting point for the assessment of Mr Pertsinidis’ loss.
Mr Jorgensen has prepared two calculations of the loss alleged to have been suffered by Mr Pertsinidis; one based on the Pertsinidis’ Schedule (appendix 3 in D6) and one based on the Sneaths’ Schedule (appendix 4 in D6). These calculations are set out in paragraphs 3.3 and 3.4 respectively of his final report; exhibit D17. His conclusion is that Mr Pertsinidis has suffered a total loss of $1,011,347 if the Pertsinidis’ Schedule is relied upon and $1,019,412 if the Sneaths’ Schedule is relied upon.
I have found that, insofar as income and significant variable costs (fuel and truck maintenance and repairs) are concerned, the Sneaths’ Schedule is to be preferred. I therefore will refer only to Mr Jorgensen’s calculations leading to a proposed loss of $1,019,412.[43]
[43] See the Persinidis' written closing submissions at paragraph [100].
Mr Jorgensen started with a total expected income of $2,711,429 based on $10,400 per week for five years (52.14 weeks per year). He deducted the amount of $1,228,746 on account of variable costs which Mr Jorgensen estimates would have been incurred over the five year period. This gave a nett expected contribution to fixed costs over the five year period of $1,482,683.
Mr Jorgensen then identified the actual amount of income earned and estimated the variable costs that would have been incurred by Mr Pertsinidis in using the Volvo rig both for the Sneaths’ Perth work and return and for other work obtained after Sneaths ceased to provide Perth work. The amount of Volvo income actually earned amounted to $847,196. I do not understand this figure to be challenged by Sneaths. Mr Jorgensen estimated the variable costs actually incurred during the use of the Volvo rig to be $383,927. This gave rise to an estimated gross profit or contribution to fixed costs actually enjoyed by Mr Pertsinidis on account of Perth/Volvo work performed, of $463,269. On this basis, Mr Jorgensen calculated a loss to Mr Pertsinidis of $1,019,412 ($1,482,683 less $463,269).[44]
[44] The subtraction in the parenthses in the text actually results in $1,019,414. I put this down to a rounding down issue in the underlying calculations.
Sneaths, essentially on the bases set out in Mr Morris’ evidence and final report (exhibit P22) challenges this calculation. I do not set out here the detail of the various challenges. However, Mr Morris does identify a number of assumptions on which the Jorgensen’ calculation is based.[45] They include:
·A contract existed that entitled Mr Pertsinidis to derive income at the rate of $10,400 per week for 365 days per annum for a period of five years;
·Mr Pertsinidis would have undertaken one trip each week to Perth;
·The distance for a return trip to Perth is approximately 5,500 kilometres;
·Mr Pertsinidis would have achieved fuel consumption of 0.6035 litres/km and fuel would have cost $0.7688 per litre, resulting in a fuel expense of $2,551 per trip;
·Mr Pertsinidis would have incurred fuel costs in respect of the refrigeration unit of $369 per trip;
·Mr Pertsinidis would have incurred labour costs of $1,210 per week;
·Mr Pertsinidis would have incurred other variable expenses, comprising tyres and maintenance of $583 per trip;
·Mr Pertsinidis would not have incurred an insurance expense in the nature of premiums for load insurance that had been charged for by Sneaths.
[45] Page 9 of exhibit P22.
There is no doubt that the Jorgensen calculation is based on these and a number of other assumptions. One of the many difficulties in this case is that there is only limited information as to the actual variable costs incurred by Mr Pertsinidis during the period of time he worked the Perth run and this information, itself, is not in the most useful form.[46] Nevertheless, in assessing damages, the court must do the best it can on the evidence available.
[46] For example, as to the actual price per litre that Mr Pertsinidis should have been charged, as already discussed. Furthermore, fuel prices are notoriously variable, particularly over a five year period.
Mr Morris has reworked Mr Jorgensen’s calculations but on the basis of different assumptions in some respects. He calculates Mr Pertsinidis’ loss as either $351,196 or $454,705 depending on two differing sets of assumptions.
I do not accept that the final calculations by either Mr Jorgensen or Mr Morris give the best assessment of Mr Pertsinidis’ likely loss. In what follows I work through the material assumptions having regard to the evidence and indicate which assumptions I accept together with where and why I might differ from the assumptions adopted either by Mr Jorgensen or Mr Morris.
The expected income
I accept, for present purposes, that if a contract for five years existed it was on the basis that Sneaths was obliged to offer a weekly Perth trip throughout that period and to pay a haulage rate of $8,200 per one way trip.
I accept Mr Pertsinidis’ unchallenged evidence that at the time he was doing the Sneaths’ Perth work he had available to him a weekly return journey to Port Lincoln carrying frozen pilchards at $2,200 per trip but that Sneaths was entitled to be paid $200 per trip for putting that work through its books.
On this basis, Mr Pertsinidis would expect to earn $10,200 per weekly return trip over the five year period, at least for those journeys where the Port Lincoln return work was available.
It follows that, as a starting point, for the purposes of calculating Mr Pertsinidis’ damages, Mr Pertsinidis expected to earn $10,200 every week for five years. I say, as a starting point, because I am not persuaded, on the evidence, that Mr Pertsinidis necessarily would have had the Port Lincoln pilchard work every week for those five years. There is nothing in the evidence to suggest that Mr Pertsinidis had a contractual entitlement to this work (unlike, on Mr Pertsinidis’ case, the Sneaths’ Perth work). No evidence was called from the consignor or freight forwarding head contractor as to how regular and long term this work was likely to be. Just as the Sneaths’ Perth work was out of Sneaths’ and Mr Pertsinidis’ ultimate control and came to an end on short notice, there was always the possibility that the Port Lincoln work would come to such an end. It may not be appropriate, in these circumstances, to calculate Mr Pertsinidis’ loss on the basis of a guaranteed entitlement to $2,000 per week for all of the five years. I will return to this issue.
Leaving aside my qualification relating to the Port Lincoln income for the present, the question arises as to how many weeks per year Mr Pertsinidis would have earned this weekly amount of $10,200. Sneaths’ obligation was to provide a weekly trip. However, it cannot fairly be assumed that Mr Pertsinidis necessarily would have been able to perform every single week for five years. Driver illness, mechanical difficulties with the Volvo or part or all of the rig, accidents and other unforeseen events might have prevented Mr Pertsinidis from being ready, willing and able to perform on some occasions.
One of the variable expenses included in the calculations is the cost of labour for each trip. It follows, that Mr Pertsinidis himself or his brother, Dino, could readily be replaced by another driver at minimal additional expense if necessary. However, unavailability for one reason or another of the Volvo rig or part of it would present more difficulty. No doubt Mr Pertsinidis would have endeavoured to have repairs and maintenance performed during the days the Volvo was not on the road to and from Perth, but this could not be assured in all potential circumstances.
The Volvo was, in fact, unavailable on one occasion during the period of the Perth trips actually conducted and Mr Pertsinidis subcontracted the work to Brunkers and the trip was performed. However, no evidence was given as to what additional costs Mr Pertsinidis might have incurred on this occasion or as to whether or not Brunkers took part or all of the $8,200 haulage rate payable. In addition, on such occasions, if they were to occur, Mr Pertsinidis would have been unlikely to enjoy the full Port Lincoln fee or perhaps any of it, if in fact that journey also had to be undertaken by a relief rig.
In short, it is unrealistic to expect that Mr Pertsinidis’ Volvo rig would have performed every week for five years. On some occasions, either Mr Pertsinidis would have been deprived of his haulage fee, or some of it, or he would have incurred an expense in procuring a relief rig (or part of a rig). In this respect, I note that Mr Pertsinidis when preparing his quotation for the SAFRIES’ proposal (tab 24 of exhibit D8) worked on a “48 week running year” and Mr Sneath said (T615) that it was virtually impossible to run a prime mover for 52 weeks per year and that with Sneaths’ fleet it worked on 48 weeks for a calendar year.
Of course, if Mr Pertsinidis did not run his rig for say four weeks per year, whilst he would lose some or all of his fee he would not incur the variable expenses attributable to these trips. Therefore, and doing the best I can to take account of these various possibilities, I allow as my starting point income of $10,200 per week for 50 weeks per year over the five years; giving an expected total income of $2,550,000.
Expected (truck) fuel expense
Both Mr Jorgensen and Mr Morris agree that the average price per litre of diesel as purchased by Mr Pertsinidis during the relationship with Sneaths was of the order of 77 cents and that Mr Pertsinidis’ rate of fuel consumption was approximately 0.60 litres per kilometre.[47]
[47] See Jorgensen D17 at paragraph 6.21 and Morris P22 at page 11.
However, the relationship ended in February 1998 whereas, had the five year term been observed, it would have ended sometime in late 2001. Mr Morris has estimated that over that five year period diesel would have sold for an average of 78.6 cents per litre.[48]
[48] Morris P22 at page 12.
I have already found that Mr Pertsinidis was entitled to a discount on bowser price of 2 cents per litre. Therefore, in the circumstances and again doing the best I can on the evidence available, I accept Mr Jorgensen’s figure of 77 cents per litre.
Both Mr Jorgensen and Mr Morris accepted that the round trip from Adelaide to Perth and return is approximately 5,500 kilometres. It is agreed that a deviation to Port Lincoln on the return adds a further 300 kilometres. In Mr Pertsinidis’ quotation for the SAFRIES’ work[49] (which concerned a proposal to cart freight from Penola to Perth) he allowed an additional 10% for “distance tolerances”. The making of such an allowance makes sense to me. Whilst there was no direct evidence on the point I take the view that 10% would be on the high side – a conservative figure to include in a quotation. Furthermore, there is some support in the evidence that the Adelaide Perth trip is something less than 5,500 kilometres. In all the circumstances, I propose to allow only 5% by way of distance tolerances but based on a total distance of 5,800 kilometres. This would give rise to a total distance, for damages calculation purposes, of 6,100 kilometres (rounded up) per return trip (including the Port Lincoln deviation).
[49] Tab 24, exhibit D8.
This leads to an expected fuel consumption per trip of 3,660 litres at 77 cents per litre giving a fuel expense per trip of $2,818. The expected total fuel expense for 50 trips in each of five years is $704,500.
Expected (refrigeration) fuel expense
Mr Jorgensen has calculated this at $96,204 over the five years and Mr Morris does not disagree with the calculation. However, Mr Jorgensen has based his calculation on 52.14 trips per year whereas I have only allowed 50 trips per year. This leads to a reduced refrigeration fuel expense of $92,255.
Expected labour expense

Mr Jorgensen has allowed $1,210 per week. He has taken this figure from Mr Pertsinidis’ SAFRIES’ quotation[50]. That quotation was prepared in mid 1996 and related to a proposed journey of 6,875 kilometres, giving a labour rate of 17 cents per kilometre.
[50] Tab 24, exhibit D8.
Both Mr Jorgensen and Mr Morris agree that the current rate for heavy haulage truck driver labour is of the order of 28 cents per kilometre. Given that I am looking to apply labour rates for the period between late 1996 to late 2001, I agree with Mr Morris that a rate somewhere between those two figures should be adopted. I accept Mr Morris’ suggested rate of 22.5 cents per kilometre. The expected labour cost per round trip of 6,100 kilometres therefore would be $1,372, giving a total labour cost over the 50 weeks for five years of $343,000.
Expected trip (or load) insurance expense
Mr Jorgensen has allowed nothing for this on the basis that Mr Pertsinidis was not liable to pay Sneaths any contribution for insurance expense. I have upheld Mr Pertsinidis’ claim in this respect. However, that does not mean that Mr Pertsinidis necessarily would not have incurred, as a variable expense, load or freight insurance premiums. Mr Pertsinidis’ evidence was to the effect that he objected to paying Sneaths for load insurance because he believed he could get a better rate elsewhere. It was not Mr Pertsinidis’ evidence that he did not want or need such insurance at all. Ordinarily, I expect that Mr Pertsinidis, acting prudently, would have procured insurance cover of this nature. However, if the parties had continued to conduct their relationship for the full five years in the same manner as they did before it came to an end, Mr Pertsinidis would have continued to pay insurance contributions to Sneaths in circumstances where, as I have found, Sneaths was not entitle to retain them. If so, Mr Pertsinidis would have remained, in fact, uninsured in this respect throughout but would have been entitled to a refund of these contributions.
Whether this would have eventuated or Mr Pertsinidis would have won his ongoing argument with Sneaths on this issue and taken out insurance elsewhere is, on the evidence as it stands, a matter of speculation. In the circumstances, I am not persuaded that Mr Pertsinidis would have, in fact, incurred an insurance expense throughout the five years and I therefore ignore this potential variable expense when calculating his loss.
Expected other variable expenses
In running his road train from Adelaide to Perth and back, Mr Pertsinidis incurred and, had he done so for the full five year period, would have continued to incur, variable expenses in addition to fuel. These include tyres, prime mover repairs and maintenance and trailer repairs and maintenance.
In arriving at the expected amount of these other variable expenses over the five year period, Mr Jorgensen adopted a figure of $583 per return trip. He took this amount from the Pertsinidis’ SAFRIES’ quotation[51]. On this basis Mr Jorgensen calculated a total other such expense of $151,866.[52]
[51] Tab 24, exhibit D8.
[52] See paragraph 3.4 of the Jorgensen report, exhibit D17. A calculation based on 52.14 weeks for five years gives a total of $151,988, but I ignore this discrepancy.
The quoted amount purportedly derives from Mr Pertsinidis’ own knowledge and experience of running interstate road trains. However, the figure of $583 in the quotation appears only to relate to “tyre cost estimates”, “thermal plant” (which I take to be the refrigeration units) and “prime mover”. There is no reference to maintenance and repairs for the two trailers or the dolly (the coupling device between two trailers). Furthermore, the accuracy and reliability of Mr Pertsinidis’ evidence on this topic (T519-522), particularly insofar as tyre expenses are concerned is significantly compromised when reference is made to actual tyre expenses evidenced in P24. Mr Jorgensen made it plain that the amount of $583 per trip was an assumption on his part and that he had been unable to confirm the accuracy of this figure or its component figures.[53]
[53] Jorgensen D17 at paragraphs 6.43 to 6.46.
Mr Sneath also gave evidence on this topic. As I have said, he impressed me as being very experienced in the interstate haulage business. He said that in 1995 to 1997 he used, as the average cost for repairs, maintenance and tyres including labour and materials: 10 cents a kilometre for running a trailer, 7 to 8 cents a kilometre for a dolly, 8 cents a kilometre for the prime mover and 1.5 cents a kilometre for the “thermo- kings”, that is, the refrigerated units that Mr Pertsinidis was operating (T611-615).
I prefer Mr Sneath’s evidence generally over that of Mr Pertsinidis, including on this topic, and I accept it. However, there is an ambiguity in Mr Sneath’s evidence on this topic. The evidence was given in the context of an attempt to ascertain the costs associated with the use of Mr Pertsinidis’ Perth rig and Mr Sneath was clearly aware of this.
However, his answer with respect to the cost of trailer maintenance was in response to a question that referred to “trailer” in the singular. It is not entirely clear whether Mr Sneath was saying that the maintenance cost was 10 cents a kilometre per trailer or 10 cents a kilometre with respect to two trailers as pulled by Mr Pertsinidis. In contrast, Mr Sneath’s answer of 1.5 cents a kilometre was directed by him at the two “thermo-king” refrigeration units.
I accept Mr Sneath’s evidence here as being 10 cents a kilometre for both trailers. I do this for these reasons. First, I think it is an available inference based on his evidence as a whole on this topic in the context in which it was given. Second, it would surprise me if each trailer, at 10 cents a kilometre, cost more to maintain than the prime mover at 8 cents a kilometre. I acknowledge that there are more tyres on a trailer than on a prime mover, but this would partly be offset by the greater cost of both steer and drive tyres (T609). Finally, the total figure for other repairs and maintenance costs based on Mr Sneath’s evidence, read this way, is broadly consistent with the amount of those expenses actually incurred by Mr Pertsinidis, as set out in the Sneaths’ Schedule.[54]
[54] Appendix 4 in exhibit D6.
I need to clarify this last point. I calculate below that the total of other variable expenses expected to have been incurred over the five year period would amount to $411,750.[55] This, as a proportion, is 16.15% of the total income expected to have been earned over the period ($2,550,000). This is broadly consistent with the fact that the total other expenses actually incurred, as recorded in the Sneaths’ Schedule, of $95,912 represents, as a proportion, 14.82% of the total income actually generated of $646,973, as recorded in that Schedule.[56]
[55] On the basis of an amount of 27 cents per kilometre for other variable costs.
[56] It is recognised that the Sneaths' Schedule records expenses incurred and income earned with respect to both the Mercedes (eastern corridor work) and the Volvo (Perth work). However, this should not affect the usefulness of the comparison.
If the figure of 37 cents per kilometre for other variable expenses was to be taken from Mr Sneath’s evidence and applied, the proportion of expected total other expenses to expected total income would be 22.13%[57] and significantly higher than the 14.82% derived from the Sneaths’ Schedule.
[57] $564,250 (expected total other expenses) as compared with $2,550,000 (expected total income).
On this basis I find the expected rate of costs for variable expenses, other than fuel, labour and insurance, to be of the order of 27 cents per kilometre.[58] On this basis, the expected total cost of other variable expenses on the Perth run and return over the five years would be $411,750.[59]
[58] 8 cents for the prime mover, 10 cents for the trailers, 7.5 cents for the dolly and 1.5 cents for the refrigeration units.
[59] 27 cents per kilometre over 6,100 kilometres for 50 trips in each of five years; an average of $1,647 per round trip.
Expected gross profit or contribution to fixed costs over five years
It is now possible to calculate the contribution to fixed costs that Mr Pertsinidis would have expected to receive over the five year period based on the findings I have made. This amount is the expected total remuneration or income of $2,550,000[60] less the expected total variable expenses of $1,551,505[61]; giving an expected contribution to fixed costs of $998,495.
[60] $10,200 per week for 50 weeks in each of five years.
[61] $704,500 for fuel expense, $92,255 for refrigeration fuel expense, $343,000 for labour expense and $411,750 for other expenses.
Nett loss of contribution to fixed costs
In order now to ascertain Mr Pertsinidis’ nett loss of contribution to fixed costs, I need to ascertain and deduct from this figure the gross profit or contribution to fixed costs actually received by Mr Pertsinidis for the Perth work and other Volvo work performed during the five year term.
Mr Jorgensen in paragraph 3.4 of his report records Mr Pertsinidis as having earned $847,196 on account of Sneaths’ Perth work and other Volvo work.
He derives this figure by adopting an amount of $303,615 as being the gross payments allowed to Mr Pertsinidis by Sneaths for the Perth journeys he did complete[62] and adding to that the amount of $543,581 said to have been earned by Mr Pertsinidis for non-Sneaths work undertaken using the Volvo after the arrangement with Sneaths came to an end.[63] The explanation as to how he arrived at the figure of $303,615 given by Mr Jorgensen is not made entirely clear. Furthermore, the invoices said to support the non-Sneaths’ work are not before the court, unless they are buried somewhere in the fifteen volumes of documents in D8; if so, my attention has not been drawn to them. Nevertheless I accept Mr Jorgensen’s evidence that he has sighted invoices that support this amount of $543,581. Furthermore, neither in cross-examination of Mr Pertsinidis nor through the evidence of Mr Morris does Sneaths challenge that Mr Pertsinidis earned this amount of $847,196 with respect to the Sneaths’ Perth work and other Volvo work.[64]
[62] Jorgensen D17 at paragraph 6.53.
[63] Jorgensen D17 at paragraph 6.58.
[64] Mr Morris does work on the basis that Mr Jorgensen has relied on gross actual income of $861,946, being the figure set out in paragraph 3.3 of Mr Jorgensen's report, but those calculations are based on the Pertsinidis Schedule (appendix 3 in D6) whereas the calculations in paragraph 3.4 and the figure of $847,196 is based on the Sneaths' Schedule (appendix 4 in D6). I have already indicated my preference for working from the latter.
In order to calculate the contribution to fixed costs actually received by Mr Pertsinidis, I need to ascertain the variable expenses actually incurred by him in deriving this income of $847,196 or some best approximation thereof.
The source materials available in evidence, such as they are, do not permit such a calculation to be made. Mr Jorgensen has attempted to solve the problem by assuming that these variable expenses would bear the same proportionate relationship to the actual income derived as the expected total variable expenses over the five year period bears to the expected total income over that period. Thus, in paragraph 3.4 of his report, his ”actual” total variable costs of $383,927 comprise 45.32% of his actual income earned of $847,196 and his expected total variable costs over five years of $1,228,746 comprise the same proportion (45.32%) of his expected total income to be earned over that period ($2,711,429).
There is an hypothetical element to this reasoning. However, given that the available data does not permit a calculation of these actual expenses incurred and given that the expected expenses are, in my view, properly founded on the evidence, I accept the validity of this approach.[65]
[65] It would not be appropriate to obtain a proportion simply by comparing all variable expenses as recorded in the Sneaths' Schedule with all income earned as recorded therein. It is not necessarily the case that all of Mr Pertsinidis' variable expenses were incurred on Sneaths' accounts so as to find their way onto the Sneaths' Schedule. Furthermore, and perhaps more importantly, there is no record of labour expense on the Sneaths' Schedule.
I have found that the expected total variable expense over five years is $1,551,505. This comprises 60.84% of the expected total income found of $2,550,000. On this basis, I find that Mr Pertsinidis would have incurred an actual total variable expense of $515,434 in earning the actual total income derived of $847,196. This gives rise to a gross profit or contribution to fixed costs actually received whilst doing the Sneaths’ Perth work and the non-Sneaths Volvo work of $331,762.
I conclude that the starting figure for assessing Mr Pertsinidis’ loss by way of damages for breach of contract is $666,733 being the expected gross profit or contribution to fixed costs over the five year period of $998,495 less the amount of contribution to fixed costs actually received of $331,762.
I need now to explain why I refer to this as a starting point for the calculation of Mr Pertsinidis’ damages, in the event that I am wrong on my primary finding and a five year contract was in force.
Final assessment of putative loss
I have characterised this amount of $666,733 as a starting point for the assessment of Mr Pertsinidis’ damages because there are two further considerations. Thus far, I have allowed by way of additional expected income $2,000 per week for 50 weeks over five years, on account of the Port Lincoln work. However, as I have said there is no evidence that this work was guaranteed for the five years. In fact, I have very little information about this work other than Mr Pertsinidis’ evidence that it was regularly available to him each time he went to Perth.
No doubt, if and when this work was not available from time to time or if it ceased to be available on a regular basis or at all, Mr Pertsinidis would have looked for and may have picked up, from time to time, alternative ex-Perth work. However, in my opinion, it would not lead to a proper assessment of his loss to treat the Port Lincoln work as guaranteed in the same way that the Sneaths’ work is assumed to have been. Something must be allowed for the contingency that Mr Pertsinidis might not have had available to him the Port Lincoln work or some alternative for every one of the 50 weeks in each of the five years or, that it and any alternative work might have ceased being available at all sometime during the five years.
Doing the best I can, I reduce the expected number of Port Lincoln trips by ten per annum (20%) to reflect this contingency.
This leads to a reduction in expected total income of $100,000. [66] However, Mr Pertsinidis also would have been saved the variable expenses relevant to the Port Lincoln section (300 kilometres) of each of these 50 trips now not to be allowed for.
[66] Ten trips per annum at $2,000 per trip for five years.
I have calculated Mr Pertsinidis’ expected total variable expenses over the five years to be $1,551,452. This is equivalent to $1.01 per kilometre travelled.[67] The ten Port Lincoln trips per annum, now not allowed for, lead to a reduction of 15,000 kilometres and total variable expenses saved of $15,150.
[67] The total of kilometres expected to be travelled is 6,100 per trip for 50 trips per annum over five years, that is, 1,525,000 kilometres.
When this contingency is allowed for in this way, Mr Pertsinidis’ putative loss, that is, his putative contractual damages, is reduced from $666,733 to $581,883.[68]
[68] After allowing for a nett offset of $100,000 minus $15,150.
The other consideration to which brief reference needs to be made concerns a matter of mitigation. Mr Pertsinidis finally ceased using the Volvo rig for haulage work at the end of June 2000. From the time Sneaths stopped providing Perth work until then the work available for the Volvo rig had been sporadic. Mr Pertsinidis said that it simply became uneconomic to continue. At this time, the putative contract with Sneaths for Perth work would have had something less than eighteen months to run. The evidence as to what work, other than Sneaths’ work, was available to Mr Pertsinidis, if any, is very limited. Mr Pertsinidis was not seriously challenged in cross-examination as to the reasonableness of his actions either in seeking alternative work or in closing down his operations in June 2000.
The onus to prove a failure by Mr Pertsinidis properly to mitigate his loss rests with Sneaths. On the evidence available, I am not persuaded that Mr Pertsinidis acted unreasonably in this respect, and I make no finding of any failure to mitigate loss.
It follows that, if a contract for Perth work, in the terms alleged by Mr Pertsinidis was in place, Mr Pertsinidis has suffered damage in the amount of $581,883.
Orders
I make the following orders:
(i)The claim by the plaintiff (Sneaths Freightlines Pty Ltd) is allowed in part;
(ii)The counterclaim by the defendant (Theo Pertsinidis) insofar as it relates to the Accounting Exercise, is allowed in part;
(iii)The defendant is to pay to the plaintiff the sum of $1,189 together with the sum of $850 by way of a lump sum in lieu of interest, making a total of $2,039;
(iv)In all other respects the counterclaim of the defendant is dismissed.
I will hear the parties as to costs.