Spearman, G.S. v Alfarm Australia Ltd

[1991] FCA 729

THE F E D E W COURT OF AUSTRALIA ) No. QG 93 of 1989

ISTRICT REGISTRY 1

m#ERAL DIVISION )

BETWEEN: GEORGE SIMON SPEARMAN AND

JIIANE MARGUERITE SPEARMAN

Applicants

AND: &FARM AUSTRALIA LIMITED

Respondent

AND: JiLFARM AUSTRALIA LIMITED

Cross-Claimant

AND: JOSEPH MICHAEL MIZZI

Cross-Respondent

MINUTES OF ORDER

JUDGE MAKING ORDER:	PINCUS J.
BATE OF ORDER:	25 NOVEMBER 1991
W R E MADE:	BRISBANE
THE COURT ORDERS THAT:

1.    Judgment be entered for the applicants in the sum of $373,783.91.

The respondent pay the appl .icants' costs of and

incidental to the proceedings.

mm:	Settlement and entry of orders is dealt with in
Order 36 of the Federal Court Rules.

m THE FEDERAL COURT OF AUSTRALIA	1	No. QG 93 of 1989
-ENSLAND	DISTRICT REGISTRY	1

GENERAt DIVISION )

BETWEEN: GEORGE SIMON SPEARMAN AND

DIANE MARGUERITE SPEARMAN

Applicants

AND: ALFARM AUSTRALIA LIMITED

Respondent

AND: ALFARM AUSTRALIA LIMITED

Cross-Claimant

AND: JOSEPH MICHAEL MIZZI

Cross-Respondent

m:	PINCUS J.
m:	BRISBANE
m:	25 NOVEMBER 1991

PEASONS FOR JUDGMENT

On 14 September 1990, reasons for judgment were
given in this matter, but no order was made; the trial was

adjourned and subsequently further submissions were made and

evidence adduced. These are the final reasons for judgment.

It is not proposed to repeat what is set out in the preliminary reasons, but they should be summarised, so far as presently relevant. The claim is for damages relating to the acquisition of a cane harvester. The trial proceeded with no appearance by nor evidence from the respondent, which is in

receivership. I have found that representations were made on

behalf of the respondent which induced the applicants to

acquire their interest in the harvester, described below, and that those representations were untrue. The applicants took the harvester under hire purchase from the Commonwealth Development Bank of Australia, the cash price being $290,000 of which $60,000 was accounted for by deposit and trade-in. The total amount payable was $336,894, payable by thirty instalments of $11,229.80, each beginning in August 1989; no instalments were payable other than from August to January

inclusive - the cane harvesting season.

The applicants' claim is principally for monies due under the hire purchase agreement and lost profits. In addition, there are lesser claims, mentioned below. The applicant8 have given evidence that they "propose to surrender" the goods under the hire purchase agreement, having paid nine instalments of $11,229.80 each. There is no evidence that the surrender has been effected, but it seems to me right to infer that the applicants' intention was carried out. Under the hire purchase agreement, the amount due on surrender ie to be calculated in accordance with 8.15 of the - t 1959 (Q.) ("the Hire Purchase Act"). It

Hire Purchase Ac
does not appear to be necessary to set the relevant provisions
out in full. The calculation involves subtracting the
statutory rebates from the total amount payable and then
subtracting the consideration given:

According to the evidence, the applicants propose, however, to "exercise our rights against the Commonwealth Development Bank of Australia". That is a reference to rights under s.5(2) of the Hire Purchase Act, which implies a condition that the goods shall be of merchantable quality. If the applicants succeed in showing that this condition has been infringed, then presumably they will not have to pay the sum of $182,723.62 and may recover back part or all of the sum of $161,060.20 already paid.

In his written submissions, counsel for the applicants suggests that it is "inappropriate to consider the outcome" of proceedings against the bank. If that is accepted, then the applicants are entitled to receive under this heading $343,791.82, consisting in the sum payable on surrender plus the amounts already paid. There is no entirely satisfactory solution. The bank is, of course, not bound by the findings made in this suit. In other circumstances, one might make some allowance for the prospects of success against

the bank - which would seem to me to be pretty high - and	reduce the damages accordingly. But here that would be
unorthodox and I can see no logical solution short of allowing the full sum of $343,791.82.
The loss of profits claim is based on the applicants' estimate of profits over five years. These appear to me, on the evidence, to be entirely speculative. It is true that there is nothing put forward by the respondent to the contrary, but still the onus lies on the applicants to prove their loss. There is evidence that the first applicant earned substantial sums in the time saved by being deprived of the opportunity to earn money by cane harvesting. In my opinion, no loss of profits should be allowed.
The other figures claimed seem to create no difficulties, except that there is a claim for extra expenses of maintenance. This was pleaded at a sum a little over $2,000, but the evidence calculates the proper sum to be $9,664.05. The exhibited invoices, accounts and receipts do not add up to that sum, but come to about $7,500.

The damages awarded will therefore be:

Amount due under hire purchase agreement

Hire of old machine

Maintenance of old machine

Compensation for extra hours worked

Total

There will be judgment for the applicants in the sum

of $373,783.91, with costs.

I certify that this and the

three preceding pages are a true copy of the reasons for judgment herein of his Honour Mr. Justice Pincus.

Associate

Date 2.5 PImCmb~.u \TT\