Transport Welding Engineering P/L t/as Mansell Heavy Towing v Heavy Haulage Australia P/L

[2015] QDC 6

DISTRICT COURT OF QUEENSLAND

CITATION:

Transport Welding Engineering P/L t/as Mansell Heavy Towing v Heavy Haulage Australia P/L [2015] QDC 6

PARTIES:

TRANSPORT WELDING ENGINEERING PTY LTD (ACN 010 251 091)
trading as “MANSELL HEAVY TOWING”
(plaintiff)

v

HEAVY HAULAGE AUSTRALIA PTY LTD
(ACN 100 650 226)
(first defendant)

and

JON KELLY
(second defendant)

FILE NO:

1345/14

DIVISION:

Civil

PROCEEDING:

Claim

ORIGINATING COURT:

District Court

DELIVERED ON:

3 February 2015

DELIVERED AT:

Brisbane

HEARING DATES:

27 and 28 November 2014

JUDGE:

Dorney QC, DCJ

JUDGMENT & ORDER:

1. The judgment of the Court is that the first and second defendants pay to the plaintiff the amount of $162,589.86 (including interest to this day of $8,115.21).

2. The Court orders that all parties file and serve submissions, if any, concerning costs by 4pm on 10 February 2015.

CATCHWORDS:

Contract – oral – disputed terms and certainty – whether restitutionary remedies available – whether Consumer Law breached where future matter the subject of the conduct  – whether “reasonable” value of benefit proved

LEGISLATION CITED:

Competition and Consumer Act 2010 (Cth) Schedule 2: s 2, s 4, s 4(2), s 18(1), s 236, s 237

Trade Practices Act 1974 (Cth), s 52

CASES CITED:

ACCC v Michigan Group Pty Ltd [2002] FCA 1439

ACCC v Universal Sports Challenge Ltd [2002] FCA 1276

Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd [2014] HCA 14

BBB Constructions v Aldi Foods [2010] NSWSC 1352

Brenner v First Artists Management Pty Ltd [1993] 2 VR 221

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592

Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7

Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89

Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217

Jones v Dunkel (1959) 101 CLR 298

Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (no 3) [2014] WASC 162

Lewarne v Momentum Productions Pty Ltd [2007] FCA 1136

Lumbers v W Cook Builders P/L(in liq) (2008) 232 CLR 635

Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221

Quinlivan v ACCC (2004) 160 FCR 1

Re Golden Key Ltd [2009] EWCA Civ 636

Roxborough v Rothmans of Pall Mall Australia Ltd (2001) 208 CLR 516

Tagget v McLean Austquip Pty Ltd [2014] NSWSC 1310

Yorke v Lucas (1985) 158 CLR 661

Young Investments Group Pty Ltd v Mann [2012] FCAFC 107

COUNSEL: 

Mr B Hall for the plaintiff

Mr M Alexander for the defendants

SOLICITORS: 

Creevey Russell Lawyers for the plaintiff

Hillhouse Burrough McKeown Solicitors for the defendants

Introduction

1. On 18 February 2013 the first defendant, Heavy Haulage Australia Pty Ltd (“Heavy Haulage”), by the use of a prime mover and float (the “truck and trailer”) was (having been engaged by a third party to do so) transporting a 78 tonne generator to Tambo in the State of Queensland when it was involved in an accident near Augathella in Queensland (being approximately 800 kilometres from Brisbane).

1. As a result of that accident, both the truck and trailer and the generator needed to be recovered from the site of the accident and transported (to destinations which are irrelevant for the present proceeding).  This was done.

1. The issue in this proceeding is who bears, ultimately, the responsibility for the costs incurred in the overall recovery of the generator by the plaintiff, Transport Welding Engineering Pty Ltd [trading as “Mansell Heavy Towing” (“MHT”)].

Background

1. MHT was a heavy vehicle recovery and towing provider.  Daniel Webster “Webster” was at relevant times, and is, MHT’s Operations Manager.

1. Heavy Haulage, as is obvious from the circumstances set out above, was in the business of heavy load haulage and transportation.  The second defendant, Jon Kelly (“Kelly”), was at relevant times, and is, both a director and the National General Manager of Heavy Haulage.

1. Heavy Haulage had been engaged by a third party, Trans Global Projects Pty Ltd, to transport the generator.

1. MHT was engaged by the insurer of Heavy Haulage’s truck and trailer (Transcorp Insurance) to recover those particular vehicles. There is no dispute about that recovery in this proceeding.

1. Between 18 February 2013 and 21 February 2013 the generator was recovered.  After being lifted by recovery vehicles onto a float provided by Heavy Haulage, the generator was transported by Heavy Haulage to its Brisbane depot.

1. Concerning the relevant invoices raised, it is not in dispute that:

·         on 9 April 2013 Heavy Haulage issued invoices (though each were dated 6 March 2013) addressed to MHT in the total of $115,390.00 for fees for the recovery of the generator and on 11 June 2013 MHT paid the amount of $115,390.00 to Heavy Haulage pursuant to its invoices;

·         MHT paid third party suppliers involved in the recovery of the generator, Noonauto Pty Ltd, trading as “Loughlin Crane Hire”, and BJ & E Radel & Sons Pty Ltd;

·         by a document dated 1 March 2013 but issued on 30 May 2013, MHT raised an invoice addressed to AIG Australia Limited (“AIG”), which was another insurer of Heavy Haulage, in the amount of $154,474.65 for the recovery of the generator (which amount included fees charged by Heavy Haulage);

·         on 1 September 2013, MHT issued an invoice addressed to Heavy Haulage in the amount of $155,354.65 (which was the amount contained in that invoice addressed to AIG, plus an additional $880.00 for administrative debt collection charges); and

·         Heavy Haulage has refused to pay the sum of $155,354.65, or any amount, to MHT.

1. Concerning those insurances held by Heavy Haulage, the evidence at trial was that Heavy Haulage had two relevant policies of insurance, one being with Transcorp in relation to the truck and trailer and one being with AIG with respect to the carriage of the generator.  There was evidence also that no claim had been made by Heavy Haulage on AIG in respect of the invoice issued by MHT and addressed to Heavy Haulage concerning the recovery of the generator.

The issues in dispute

1. Given that there was abandonment of some issues (and consequential causes of action) raised in the Statement of Claim, it is necessary to state what remains.  The claims advanced at trial and in submissions were, against Heavy Haulage, for:

·         damages for breach of an agreement alleged to have been entered into on 18 February 2014 between Webster, for MHT, and Kelly, for Heavy Haulage;

·        restitution;

· damages for misleading and deceptive conduct pursuant to Schedule 2 of the Competition and Consumer Act 2010 (Commonwealth) (“the Consumer Law”); and

·        interest.

1. The claim against Kelly was also pursuant to the Consumer Law, based upon him being knowingly concerned with the misleading and deceptive conduct alleged against Heavy Haulage.

1. The defences raised by the defendants, as summarised in their written submissions, were that:

·         a concluded bargain was not entered into on 18 February 2013;

·         the restitutionary claim cannot succeed as it is “impossible to calculate on the evidence adduced” what “reasonable” charges ought be paid;

·         Heavy Haulage did not engage in misleading or deceptive conduct as:

·           while Kelly did represent that Heavy Haulage had a policy of insurance, he did not represent that it would claim on it in relation to the generator as an item separate from the truck, trailer and generator; and

·           any representations which were made were as to future matters and matters which Kelly could not have “properly” made in any event (i.e. that an insurance claim would pay such amounts); and

·         consequently, Kelly is not personally liable.

Was there an Agreement?

1. The Agreement, as alleged by MHT, was that there was an oral agreement arising from telephone discussions between the respective authorised representatives of MHT and Heavy Haulage on the evening of 18 February 2013.

1. It is unnecessary to canvass the legal principles applicable to the formation of an oral agreement.  Of course, if there is not satisfaction to the relevant standard that an oral agreement was reached by identified communications, an agreement may be implied from the conduct of the parties where such conduct is consistent with the probable hypothesis that the parties had reached that end, by an intention to create legal relations.

1. It has, yet again, recently been stated by the High Court about what is necessary to establish the content of an agreement, particularly in a commercial context.  As held by French CJ, Hayne, Crennan and Kiefel JJ in Electricity Generation Corporation v Woodside Energy Ltd,[1] the meaning of the terms of a commercial contract is to be determined by what a reasonable business person would have understood those terms to mean; an approach which is not unfamiliar, requiring consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract: at [35]. As the judgment went on to then note, appreciation of the commercial purpose or objects is facilitated by an understanding “of the genesis of the transaction, the background, the context (and) the market in which the parties are operating”: also at [35]. Relying upon an observation by Arden LJ in Re Golden Key Ltd (citation omitted), they held that, unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption “that the parties … intended to produce a commercial result”, it being necessary to construe a commercial contract so as to avoid it “making commercial nonsense or working commercial inconvenience”: also at [35].

   [1] [2014] HCA 7.

1. The above principles, necessarily, depend upon some agreement having been determined by a court to exist.  In this proceeding, there can be no doubt that at least some agreement was reached if only because Heavy Haulage raised an invoice directed to MHT and the same was paid.  Thus, the only determination here is whether other terms were also incorporated into the agreement or whether it simply was limited to the raising, and paying, of that invoice - and, if so limited, why would Heavy Haulage charge for recovery of its own load where such necessity explicitly arose from its own accident?

1. Since both Webster and Kelly acknowledged that they had participated in relevant phone calls on the evening of 18 February 2013 - yet they have significant disagreement about what each said - it is necessary to reach some conclusions on the questions of credibility and reliability. 

1. From both the way in which both these persons gave evidence and the nature of their recollected content of the phone conversations, I accept that both actually believed the things they have said that they have recalled, even though such were contradictory as between themselves.  This outcome leads to the important consideration of how reliable each was as an historian, despite the fact that, relatively speaking, the recalled conversations were not that long ago. 

1. It is in just this kind of circumstance that surrounding facts, particularly when they are not in dispute, may provide some basis for assessing relative reliability. 

1. Because, pursuant to interlocutory orders that I made (particularly on 14 October 2014), some anticipated witnesses’ summaries of evidence were prepared and have been tendered either without objection or, after objection, in a redacted form, the “recollection” evidence at the trial was a combination of oral and written evidence.  Moreover, it was indicated at the beginning of the trial that the defendants would not be calling one formerly anticipated witness, Shane Warmus.  That approach meant that certain matters, in particular those that Warmus might have contested, then gave rise to the potentiality of the application of the principle in Jones v Dunkel.[2]

   [2] (1959) 101 CLR 298.

1. An important aspect of the evidence given by David McNamara, an insurance assessor, was that those parts of his statement which were not redacted and became Exhibit 2 were, in large part, not the subject of any cross-examination.  This is particularly relevant because McNamara’s statement was that, late in the afternoon of 18 February 2013, he received a telephone call from the representative of Transcorp Insurance and was instructed by that person to “engage MHT to recover the truck and trailer (but not its load)”.  The statement goes on to record that McNamara then telephoned Webster and “orally engaged MHT to recover the truck and trailer, but not the load because this was not covered by Transcorp Insurance”.  McNamara’s statement added that he was “therefore very careful not to do so”.  McNamara further stated that he actually instructed Webster “to recover the truck and trailer (only)”. 

1. McNamara stated that his general practice, in the particular circumstances applicable to the subject recovery, was that he did “not enter into any written correspondence or written agreement with either” the insurer or the contractors engaged.

1. It is also important that it was not in any way the subject of the cross-examination of Webster that he did not have those conversations with McNamara on 18 February 2013.  Such were not hearsay but original evidence of instructions given.

1. Accordingly, when one comes to assess, in terms of reliability, the evidence of Webster when he stated that, particularly in cross-examination, MHT was “only instructed to recover (the) truck and trailer and not (the) load” and that he asked Kelly “did he want something done with his load?”, it must be seen in the light of the uncontested statements to the same effect made by McNamara in his conversations with Webster.  And the same goes with respect to Webster’s denials that he (Webster) told Kelly that “McNamara wanted you to recover the generator as well”. 

1. Kelly’s evidence was to the effect, particularly in cross-examination, that this conversation with Webster was in the context that they “were talking about the recovery of the truck, trailer and a generator as a package” and that there was “no segregation” of the package during those conversations. 

1. It is unnecessary, at this point, to explore any more of the evidence of these three persons.  This is because I am satisfied, on the balance of probabilities, that Webster never did say to Kelly anything of moment which was materially different from what McNamara had told him.  Hence, in light of how adamant Webster was that he did not go outside those particular instructions in his conversations with Kelly, I find that there was never a conversation which packaged together the recovery of the truck, trailer and generator.  That, in turn, means that, given how crucial this matter is, I generally accept that the account of the conversations given by Webster as more reliable than that of Kelly. 

1. But, having so concluded, as I must also bear in mind, as I have already surveyed, that it is the objective understanding of what was said by these two persons during their conversations, in the context of the commercial realities with which they were faced, that the full terms of any agreement reached needs to be determined. 

1. What can next be remarked about the conversation is that it was accepted by Kelly, particularly in cross-examination, that, from his perspective at least, he believed that the insurance for the truck and trailer was with Transcorp Insurance and that there also was insurance covering the recovery of the generator, a belief that he so held during those particular telephone conversations.  Expressed another way, he accepted that Heavy Haulage was “covered entirely” for insurance both in terms of the truck and trailer and “separately, the generator”.  Nevertheless, having admitted that difference, and while stating that he understood that a claim for the truck and trailer would go to Transcorp, his belief was that he was fully covered to “100 percent” and, therefore, was not concerned about the insurance because he knew that Heavy Haulage “had insurance”. 

1. It was not in dispute that Warmus was the driver of the truck and trailer at the relevant time and was, at all material times, at the scene of the accident.  As noted above, Warmus was not called by the defendants.  Kelly admitted that he could not exclude that Webster had said to him that he (Webster) “was ringing for authority to get the generator” after having conversed with Warmus and being directed by him to contact Kelly.  Kelly then went on to say that he did recall that Webster had said to him that, if Heavy Haulage engaged MHT, MHT could “get” the gear to recover the generator off Heavy Haulage or off one of Heavy Haulage’s competitors.  It was in that context that Kelly admitted that he said that he wanted to be clear that Heavy Haulage was “going to get paid” so that, before he made any move, he wanted “a purchase order to ensure that (Heavy Haulage) (was) going to get paid for (Heavy Haulage’s) cost”.  It should be noted that Kelly’s qualification to all of that was that he could not recall having a conversation “siloing the generator by itself”.

1. From that analysis I conclude, to the relevant satisfaction, that Kelly, on behalf of Heavy Haulage, agreed with Webster, on behalf of MHT, that Heavy Haulage would engage MHT to recover the generator.  But that was not the beginning and end of the arguments as to the full terms of the Agreement.

1. The next aspect of the Agreement is what is to be made of the undisputed fact that Heavy Haulage itself prepared an invoice of its costs solely for the recovery of the generator, with that invoice being addressed, by consent, to MHT.  Importantly, this makes the recovery of the generator quite a distinct operation, contrary to Kelly’s general view.  Certainly, from Kelly’s point of view, Heavy Haulage was not going to undertake recovery work in assisting MHT to recover the generator without charging for its own costs.

1. Webster’s perspective on this, again particularly illustrated by the evidence given in cross-examination, was that the discussion was about who was going to be paying for the recovery of the generator and as to that, since Kelly informed him (Webster) “that (his) insurance company would be paying, as (Heavy Haulage) (is) fully covered for the recovery of the generator”, Webster said it was “agreed that (MHT) would send a purchase order”.

1. In Webster’s statement (Exhibit 3) he spoke of the engagement of Heavy Haulage by MHT and, in particular, the wish to “send Heavy Haulage a purchase order for the services that it would provide for the recovery”. This is in the absence of any contemporaneous reference to the fact that an insurance company “would be paying”.  In that part of the statement Webster simply stated that that purchase order could then be used by MHT to recover (utilising Heavy Haulage’s invoice for the recovery) and that it was after that that Webster enquired about insurance and was advised by Kelly that “the costs would go through its insurance”. But the statement needs to be understood in the context that I have accepted that Webster was treating the generator separately and that the only “recovery” of costs for which the discussed invoice could be used was recovery through an insurer.

1. The determination of what the conversation was that was had by Webster and Kelly about the purpose of the invoice to be raised by Heavy Haulage for Heavy Haulage’s own work for recovery of the generator is more difficult than the first aspect that I have decided (namely, the engagement).  What happened later, particularly the sending of the MHT invoice to AIG is, to my mind at least, consistent with either version.

1. Bearing all the interpretative principles in mind, and noting that courts are not destroyers of bargains, I conclude that what the parties (objectively) agreed was that Heavy Haulage would prepare an invoice for the work that it engaged MHT to do for the recovery of the generator but that that work and all associated work was to be charged, and paid, by MHT for the purposes of recovering the total cost of recovery from an insurer.

1. In doing so, I do not accept Webster’s statements about MHT being engaged on a basis other than the work to be undertaken by Heavy Haulage would be the subject of an insurance claim.  This is consistent with Webster’s repeated requests for the details of the relevant insurer; and it means that there is no scope for the implication of any term contradictory to that. In reaching this conclusion I accept Webster’s explanation for the “purchase order” generally being blank as a thing that was done generally, and accepted by traders, in the course of that particular towing trade.

1. A summary of the terms of the agreement so reached is that it (the “Agreement”) provided that:

·         the recovery of the generator was a separate matter from the recovery of the truck and trailer;

·         the recovery of the generator so undertaken by MHT would engage Heavy Haulage as MHT’s main contractor, for which a purchase order would be raised by MHT to Heavy Haulage;

·         Heavy Haulage, for the work it did in the recovery of the generator, would provide an invoice to MHT (impliedly, subject to the costs being reasonable) for which it would be paid by MHT;

·         the invoice was for the purposes of a claim by MHT on such insurer of Heavy Haulage as was identified by Heavy Haulage as the insurer covering such recovery; and

·         MHT would seek to recover its costs of the recovery of the generator, including the costs of Heavy Haulage’s work, as invoiced, for those purposes.

Breach of the Agreement?

1. The breach of the Agreement that is alleged by MHT is that Heavy Haulage failed to pay the invoice that was finally sent to Heavy Haulage in the amount of $155,354.65.  The alleged “loss and damage” said to be caused by that breach is that particular amount.

1. But the Agreement that I have found to exist is not breached in that way.  The agreement was that MHT would use all the invoices (provided that they truly reflected the reasonable costs of the work detailed in them) to make a claim to a later identified insurer (which was, thereafter, determined to be AIG).  There is no doubt that that was done – but only by MHT directly and not by the actual insured, Heavy Haulage.

1. Unfortunately for MHT’s case, I do not find that Heavy Haulage “agreed” that it would bear the cost of that recovery (because both parties had the understanding that some insurance policy held by Heavy Haulage would respond to the projected claim). This is where, in particular, I accept Webster’s version concerning “how” it was that MHT “would be paid” (i.e. as he was informed, by Kelly, it “would be covered under… insurance”).  Necessarily, on a subjective level, Webster may well have believed that the engagement was wider and, in particular, took account of the uncommunicated possibility that the insurance would not respond, or respond in any significant way, to the claim to be made.  If one thing is obvious about the context of the conversation, it is that both Webster and Kelly negotiated against a background where insurance was to be the source of the recovery of the amount eventually sought for recovery of the generator. 

1. What has happened, in fact, in this case is that AIG has not responded - for reasons that will be examined later.  That has left the Agreement in limbo as it has not provided for a default mechanism to be triggered in such circumstances, since it has not been advanced by either party that Heavy Haulage can be contractually required to make the necessary claim under the Agreement.  This is to be distinguished from what is within the ambit of misleading or deceptive conduct.

1. Hence, there can be no recovery pursuant to this Agreement by MHT. 

1. That conclusion, necessarily, has the effect that it is unnecessary to consider the implication of any term that Heavy Haulage “would pay” MHT’s “reasonable” charges for the recovery “of the generator”. 

Restitution

1. The outcome of the High Court’s decision in Pavey & Matthews Pty Ltd v Paul[3] is that an action for a quantum meruit rests not on an implied contract but on a claim to restitution (or based on unjust enrichment).  As expressed more lately in Lumbers v W Cook Builders Pty Ltd(in liq),[4] a question to which Pavey & Matthews directs attention is whether the long-established and well-recognised category of cases constituted by claims for work and labour done or money paid at the “request” of another should be extended or developed to cover the acceptance of a benefit, without a request: per Gummow, Hayne, Crennan and Kiefel JJ at 665 [86].  One important statement that was made in Lumbers was that, to the extent that a quantum meruit depends upon a claim “based on unjust enrichment”, the limits of that were stated by Deane J in Pavey & Matthews as constituting:

“a unifying legal concept which explains why the law recognises, in a variety of distinct categories of case, an obligation on the part of a defendant to make fair and just restitution for a benefit derived at the expense of a plaintiff and which assists in the determination, by the ordinary process of legal reasoning, of the question whether the law should, in justice, recognise such an obligation in a new or developing category of case”;

:set out in Lumbers at 664 [83].

[3] (1987) 162 CLR 221.

[4] (2008) 232 CLR 635.

1. Perhaps the most recent thorough analysis of the present law concerning unjust enrichment was undertaken by Edelman J in Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (no 3).[5]  After holding that, in broad summary, a plea of money had and received “is” a plea in the “taxonomic category” of unjust enrichment because it describes a “form” of action (at [45]-[46]), in discussing Pavey & Matthews, he noted that a majority of the High Court had recognised that money had and received and a quantum meruit were part of a legal concept of unjust enrichment: at [48]. Relevantly for present purposes, he stated that the label, “unjust factor”, usefully directs attention to the requirement for plaintiff in Australia to prove a reason for restitution or, in the words of the unanimous joint judgment in Farah Constructions Pty Ltd v Say-Dee Pty Ltd,[6] “the existence of a qualifying or vitiating factor falling into some particular category”: at [53]. He then noted that, while the boundaries of what will count as an unjust factor are not fixed, the examples included: money paid by mistake on a consideration which happens to fail; or an undue advantage taken of the plaintiff’s situation: at [54].

   [5] [2014] WASC 162.

   [6] (2007) 230 CLR 89.

1. More specifically, Lampson is instructive in its examination of whether a claim based on a “failure of consideration” can arise without an efficacious contract.  This is pleaded, at least in an indirect way, in paragraph 40 of the Statement of Claim.  It is noted that paragraphs 42 to 46 of the Statement of Claim have been abandoned.  Insofar as there is any need to canvass the remaining paragraphs concerning this issue, where the evidence given was not challenged on the basis of irrelevance to the pleaded case, I have, hence, attended to the issue on the basis of the evidence led and contested as to content during the trial hearing.  As is analysed in Lampson, the concept of “consideration” is concerned with the failure of the “basis” or the “condition” upon which benefit was conferred upon another party: at [98]. See, also, the reference to Roxborough v Rothmans of Pall Mall Australia Ltd[7]: at [99]. An instance used by Edelman J is that, where a person requests another to do something, it is not unreasonable for the law to conclude that the former sees some benefit in its performance (however wrong this view may be on an objective basis) and for the law to act on the perception of the recipient: at [111], relying on Brenner v First Artists Management Pty Ltd,[8] at 257-258.  It is, thus, unnecessary here to examine the extension on development of the entitlement because I have found that there was a “request” by Heavy Haulage to MHT (even though it was based on an erroneous unexpressed assumption by Heavy Haulage - but not communicated to MHT - that the then unidentified insurer would not require an “excess” contribution). But, if an extension became necessary to consider, then such a request coupled with a failure by the recipient of the benefit to facilitate an appropriate insurance claim in these particular circumstances would justify such an extension.

   [7] (2001) 208 CLR 516.

   [8] [1993] 2 VR 221.

1. I am, therefore, satisfied that there does exist in Australia a right given to a plaintiff such as MHT to seek recovery, on a restitutionary basis, where work has been requested to be done (as here by Heavy Haulage) but where the foundation or basis of the Agreement under which it was done has “failed” (as here, because AIG, as the identified insurer, has not paid up, as the Agreement had expected that it should), particularly where the unjust factor arises from a failure by Heavy Haulage to claim under the relevant insurance policy with AIG.  No defences, such as those of change of position, or detrimental reliance, as examined in Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd,[9] have been canvassed here by the first defendant.

   [9] [2014] HCA 14.

Breach of the Australian Consumer Law?

1. What was formerly s 52 of the Trade Practices Act 1974 (Commonwealth) is now incorporated into Schedule 2 of the Competition and Consumer Act 2010 (Commonwealth) in s 18(1), thereby becoming part of the Australian Consumer Law.  It prohibits, in trade or commerce, engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive.

1. The content of such “conduct” is not simply what the parties have pleaded.  Rather it is what I have found to have occurred primarily during the conversations on the evening of 18 February 2013.  This is because the trial was run in that way.

1. Among the conclusions that I have reached is that Heavy Haulage itself, through Kelly, did not undertake to pay for the costs of recovery of the generator.  What I have found is that both Heavy Haulage and MHT had an objective understanding that there was an insurance policy which would respond in its cover to a claim for recovery of the generator, although it was not explicitly known at the time that this was AIG.

1. Before turning to analyse the conduct more closely, the following acts are not in dispute.  First, Heavy Haulage did issue an invoice for its own work to another legal entity for that recovery – it was, with MHT’s consent (by reason of the purchase order) addressed to it.  Secondly, AIG did not accept the claim as made by MHT – perhaps unsurprisingly (since it was not an insured person).  Thirdly, when MHT issued its invoice addressed to Heavy Haulage, which both parties then knew was for the purpose of Heavy Haulage making a claim on AIG, Heavy Haulage did not make that insurance claim (which was made clear by Kelly in his evidence).  Fourthly, as to MHT’s submissions which assert that the reason for the failure by Heavy Haulage to make the insurance claim was that Heavy Haulage would have had to pay an excess of $50,000.00, Kelly’s response was that he now knew about the excess, that the excess would have taken effect if a claim “got processed”, and that Heavy Haulage’s position was that “currently” it would not pay such an excess (explaining “currently” as characterising the position from the date that MHT issued the invoice to Heavy Haulage until the time of cross-examination).  The explanation proffered for this implicit rejection of making a claim to AIG was that it was “because (Heavy Haulage) (was) only undertaking to MHT that the whole policy fell under the one contract”; and that it was Kelly’s assertion that it should be claimed under an insurance policy held by the owner of the generator.  Fifthly, in response to a question by the Court, Kelly admitted that it was “correct” that in making the charges with respect to the generator by Heavy Haulage, it was clear that, if Heavy Haulage was charging for something that it did, it would have to be, therefore, concerning a claim against someone else and, in this case, it would be an insurance company.

1. While the alleged impugned conduct in this case took place on 18 February 2013, the subsequent events do go to an understanding of the context in which the statements were made on that particular date.

1. Because there is no issue that the conduct was other than in trade or commerce and no denial that Webster, as the authorised representative of MHT, was in fact relying upon what was said to him by Kelly, it is simply necessary to examine the nature of the actual conduct. The crucial representation relates to a future matter, bringing into effect s 4 of the Australian Consumer Law and the “onus” on the defendants in such a circumstance to produce evidence of reasonable grounds, pursuant to s 4(2).

1. Although cases such as Lewarne v Momentum Productions Pty Ltd[10] have interpreted, at least under the earlier legislation, the effect as meaning that the person making the representation can only avoid the deeming provision by establishing, on the balance of probabilities, that there were reasonable grounds for making that representation (per Stone J at [82]),  since the contrary is seemingly correct (i.e. there is no ultimate reversal of onus: per Emmett J in ACCC v Universal Sports Challenge Ltd[11] at [47] and per the combined effect of s 4(2) and s 4(3)), I accept in this case that Heavy Haulage, on the whole of the evidence, did at least have reasonable grounds for making the particular representation that the generator was covered by insurance. But it is also clear that its authorised representative, Kelly, stated that he knew that the AIG policy had a $50,000.00 excess – though that knowledge was expressed, in a tangled way, as subsequently realised knowledge, explicable by the context of this accident being the first in 13 years of transport, where the assertion was that Heavy Haulage was “only undertaking (to MHT) that the whole policy fell under the one contract”, with that contract believed by Kelly as at 18 February 2013 to be the one covering the truck and trailer as well. I accept, particularly from his answers in cross-examination, that as far as he (Kelly) was concerned the relevant insurer was the insurer which had expressly instructed MHT – although it would appear that he never bothered to check it at that time. But I do conclude that this last aspect – taken together with the other relevant circumstances – make that representation one which was not made on reasonable grounds. Of course, by s 4(4), even if the representation was made on reasonable grounds, it does not conclude the matter: cf. Quinlivan at [14]. The problem that Heavy Haulage has triggered has been caused by its failure to make an insurance claim against AIG. It can be discerned from its identified objectively viewed conduct that it was representing that it would make, or facilitate, a claim rather than simply representing that it had insurance that was able to respond to the circumstance: see, under the earlier legislation, Futuretronics International Pty Ltd v Gadzhis[12], which held that bidding at an auction was a representation of an intention to sign a contract.  Here, the lack of reasonable grounds arises from the failure to state that the making or facilitating of such a claim could be conditional (e.g. depending on the nature and extent of any “excess”) when no check was undertaken of who the insurer was and what the policy did state.  Even if it were to be held that there were reasonable grounds, I would have still held that the conduct of Heavy Haulage, through Kelly, was misleading.

   [10] [2007] FCA 1136.

   [11] [2002] FCA 1276.

   [12] [1992] 2 VR 217.

1. The conclusion is sufficient to establish a breach of s 18(1) of the Australian Consumer Law.  This is consistent with the analysis in Butcher v Lachlan Elder Realty Pty Ltd[13] that, for a case such as this, for it to be found that a representation was made and, if it so made, that it constituted contravening conduct in the circumstance that pertained here, the “plaintiff must establish a causal link between the impugned conduct and the loss that is claimed” and that “depends on analysing the conduct of the defendant in relation to that plaintiff alone” (emphasis added): at 604 [37], per Gleeson CJ, Hayne and Heydon JJ.

   [13] (2004) 218 CLR 592.

1. As for the case against Kelly, it is pleaded that he was a person “involved” in a contravention within the meaning of s 236, or s 237, of the Australian Consumer Law (which, in turn, picks up the definition in s 2).

1. The Full Court of the Federal Court of Australia, in Quinlivan v ACCC,[14] has held (in the joint judgment of Heerey, Sundberg and Dowsett JJ) that, since such a provision has been held by the High Court in Yorke v Lucas[15] to import the requirements of the criminal law, the person sought to be made liable must be shown to have had knowledge of the essential matters which go to make up the contravention, in contrast to the rule as to primary liability where liability may attach even though a corporation acts honestly and reasonably: at 4 [8]. As they went on to hold, “knowledge” means actual and not constructive knowledge, which is an essential matter which must be both alleged and approved: at 4-5 [10]. As to their conclusion that any “reversal of onus” does not apply where accessorial liability is relied on (at 5 [11]), that is now reversed by s 4(2). Finally, they held where accessorial liability is in issue in relation to a representation with respect to a future matter, the existence or otherwise of reasonable grounds will still be relevant because, if reasonable grounds exist, there will have been no contravention and thus no question of accessorial liability will arise. But that, again, has been affected by s 4 (see the above discussion). As against the alleged accessorial respondent, the onus will be on the applicant to show that the respondent had actual knowledge both that the representation was made and that it was misleading: at 6 [15].

   [14] (2004) 160 FCR 1.

   [15] (1985) 158 CLR 661.

1. See, also, Young Investments Group Pty Ltd v Mann[16] at [11], to the same effect.

   [16] [2012] FCAFC 107.

1. On the conclusions that I have already reached, I am satisfied to the requisite standard that the onus on MHT has been satisfied because it has been shown that Kelly had actual knowledge of all relevant facts, since he was the very person who made all relevant statements and who held all of the corporate knowledge, and that he knew it was misleading if Heavy Haulage were not to make or facilitate a claim against the actual insurer.

Recovery

1. Since one basis on which I have found that a cause of action can be sustained is that of restitution, it is first necessary to consider the extent of recovery under it.

1. What is of concern to the Court for this restitutionary remedy is, in particular, the value of the benefit which is conferred.  In Lampson, Edelman J adopted a further passage of Byrne J in Brenner to the effect that, in a case where the services were requested and accepted, the law will not stop to enquire whether they were, on any other basis, of benefit to the party requesting and accepting them: at [111].

1. Thus, the only real issue in this case is whether MHT has satisfied the court to the requisite standard that the amount for which it seeks recovery satisfies a proper analysis of what a recoverable benefit is.  On the facts specific to this case, what Heavy Haulage received was not only payment for the work that it did for the recovery of the generator which it itself would have otherwise borne (either by itself or through causing some insurance policy to respond) but also the benefit of the recovery of the generator without incurring any of the expenses for that recovery (such as were otherwise incurred by MHT). As McDougall J in BBB Constructions v Aldi Foods[17] has held, besides the conferring and accepting of the benefit, neither party must have expected that the benefit would be provided gratuitously: at [366]. That is satisfied here because of the expectation of an insurance payout pursuant to a policy or policies held by Heavy Haulage to MHT.

   [17] [2010] NSWSC 1352.

1. Even given that, there still was a contest as to whether the evidence led was sufficient for the purposes of establishing that the full extent of the benefit claimed is $155,354.65.

1. After the first defendant’s successful objection to an attempt to lead expert evidence from persons concerning whom there was a failure to comply with the Uniform Civil Procedure Rules 1999 (“UCPR”) governing expert evidence, it was submitted by it that MHT could not succeed in establishing the reasonableness of the benefit conferred because it did not succeed in calling any such direct evidence at trial.

1. In a counter to that, MHT relied upon Tagget v McLean Austquip Pty Ltd.[18] There, Hidden J held that a benefit derived at the expense of a plaintiff is not confined to what a party seeking restitution might have outlaid in performing the work or supplying the materials the subject of the claim but, rather, it is the detriment suffered by that party as a result of having furnished services without payment which, in the case being considered there, was the remuneration that the claimant might reasonably have expected for the work undertaken on behalf of the respondent: at [26]. He further accepted that what is “reasonable” does not mean the industry average or the cheapest price available and the determination of what is reasonably necessary does not require independent expert evidence, since it can be established by the practice of a party experienced in a commercial venture, particularly in the absence of complaint by the other party, also experienced in that area, who is the recipient of these services provided: also at [26]. There was no explicit complaint by Heavy Haulage, a party experienced in services of this kind and allied kinds.

   [18] [2014] NSWSC 1310.

1. In the present proceeding, there are five discrete components.  They are:

·     charges for the supply of equipment and services by Heavy Haulage of $99,980.00 (plus GST) (plus a 10% mark-up);

·     charges for the hire of Loughlins’ crane of $25,492.50 (plus GST) (including a 10% mark-up);

·     charges for bobcat hire of $561.00 (plus GST) (including a 10% mark-up);

·     MHT’s standby costs of $4,392.00 (plus GST); and

·     MHT’s co-ordination fee of $800.00 (plus GST).

1. As to the charges by Heavy Haulage, it sits ill in the mouth of it to contend that MHT has not established that its charges were reasonable, particularly in the circumstances where Kelly, in cross-examination, admitted that, at least as to what Heavy Haulage charged and the mark-ups by MHT on that, he had no complaint about MHT’s invoice to AIG and, moreover, he was satisfied with his enquiries (which were to make sure that there were not any “very large mark-ups” on the services that Heavy Haulage provided).  That not only covers Heavy Haulage’s claimed sum but also MHT’s mark-up on it.

1. Given that the mark-up was the same for the several other charges as it was for Heavy Haulage, those also must be taken to be reasonable, in the context of the practice of two experienced entities in the area of the provision of such services.

1. As for the bobcat’s charge and that for the Loughlins’ crane, the former was at a minor cost only (in context) and therefore, bears no hallmark of overcharging and the latter was obtained on the instructions of Kelly himself.  Additionally, the charge for the latter was less than the charge that Heavy Haulage made for a similar crane used by it.

1. I accept that, given that the additional crane and bobcat hire was seen to be necessary by all parties involved, it cannot be said that they were unreasonably obtained.  Additionally, from the examination that I have just done, I conclude that they have been reasonably charged for, particularly when Heavy Haulage, particularly through its authorised representative, Kelly, never raised any complaint about the original MHT Invoice to AIG.  But there was no evidence which convinces me to the requisite standard that the co-ordination fee of $800.00 (plus GST) can be sustained, especially where it was omitted from the invoice sent to AIG.  It is, inescapably, a later considered charge for which there is no evidential support.

1. In such circumstances, I find that the amount claimed $155,354.65 (less $880.00) has been established as the true measure of the benefit which restitutionary relief should properly grant.

1. As for recovery under s 236 of the Consumer Law, given the width of recovery under that provision, the loss or damage must at least be equal to that available for restitutionary relief.  If there were to be any doubt – which there is not, given the statements by Kelly concerning the “excess” as being the impediment – about AIG paying, then s 237(1) could be relied on because of its capacity to rely on likelihood of loss. No independent ground, relevant to this cause of action, has been shown to sustain the additional $880.00.  Since the amounts are identical but the causes of action different, there will be judgment for the single amount against both defendants.

Summary

1. I intend to enter judgment for the plaintiff against the defendants in terms of the defendants paying the plaintiff the sum of $154,474.65.

1. As there have been no detailed submissions on interest, I will award interest from the filing of the Claim on 14 April 2014 pursuant to s 58(3) of the Civil Proceedings Act 2011 (using the Supreme Court interest calculator). Submissions on costs are to be the subject of written submissions to be filed in the period of 7 days following the handing down of this decision.