Air Express Ltd v Ansett Transport Industries Operations Pty Ltd [1981] HCA 75 | Case summary

Air Express Ltd v Ansett Transport Industries Operations Pty Ltd [1981] HCA 75 | Case summary | Zoe

[18]

On 19th December 1972 there was notified in the Commonwealth Gazette the fact that the Governor-General in Council had approved the change of name of the former Department of Shipping and Transport to the Department of Transport and the name of the office of its permanent head from the Secretary to the Department of Shipping and Transport to the Secretary to the Department of Transport. On 5th March 1973 there was published in the Gazette approval by the Governor-General of certain administrative arrangements by which there were specified the principal matters dealt with by the Department of Transport and the Acts of Parliament which were to be administered by the Minister for that Department. The principal matters were "Navigation and shipping, Lighthouses, lightships beacons and buoys, Land transport, Ship building". In the Gazette (No. 82) dated 30th November 1973 there was notified an order made by the Governor-General under s. 19B of the Acts Interpretation Act that references in any Act, or in any instrument (including regulations) made or issued under any Act to certain Ministers designated should be read as a reference to other Ministers designated in their place and that any references to certain specified departments should be read as a reference to departments specified in their place. That order required references to the "Minister of State for Civil Aviation" to be read as references to the "Minister of State for Transport" and references to the "Department of Civil Aviation" to be read as reference to the "Department of Transport". In the same Gazette there was notified the appointment of the defendant Halton to "the office of The Secretary to the Department of Transport and Director-General of Civil Aviation" to take effect on and from 30th November 1973. In a further issue of the Gazette (No. 183) dated 30th November 1973 there was notified the approval by the Governor-General of the abolition, in pursuance of s. 64 of the Constitution, of (inter alia) the Department of Civil Aviation and of the abolition, in pursuance of the Public Service Act 1922-1973, of (inter alia) "the office of Director-General of Civil Aviation". That Gazette also notified the creation in pursuance of the Public Service Act of the office of "The Secretary to the Department of Transport and Director-General of Civil Aviation" to be the permanent head of the Department of Transport. In the same Gazette there was also notified the revocation by the Governor-General of "so much of the Administrative Arrangements Order made on 19th December 1972" as related to the Department of Civil Aviation and so much of the Administrative Arrangements Order of 5th March 1973 as related to the Department of Transport. It also set out the approval of administrative arrangements which included the specification of the matters to be dealt with by the Department of Transport and the Acts to be administered by the Minister administering that Department. The matters to be dealt with by the Department of Transport included "Civil Aviation" and the Acts specified included the Air Navigation Act 1920-1973 and other Acts relating to air transport matters, but did not include the Customs Act or any part of it.

[49]

Then, again, the Court must have regard to the amount of damage; if it be trifling or remote the court would not be justified in directing an inquiry as to damages, though the injury might not be so remote that an action would not lie and [34] : Apart from this, I am of opinion that there is no sufficient proof of any damage having been sustained, and that if any was sustained it is too remote for the present purpose. I might indeed, say too remote for any purpose. It is said that the Cab Company had agreed to take a lease for seven years at a rack rent, but there was in fact no agreement, nothing but negotiations. Brett L.J. said [35] : Again, I am strongly of opinion that the question whether an inquiry as to damages should be granted is within the discretion of the Judge who originally tries the case, and that his discretion ought not lightly to be interfered with. In exercising this discretion the Court should act as nearly as may be on fixed rules, or by analogy to fixed rules. Now in the present case there is no undertaking with the opposite party, but only with the Court. There is no contract on which the opposite party could sue, and let us examine the case by analogy to cases where there is a contract with, or an obligation to the other party. If damages are granted at all, I think the Court would never go beyond what would be given if there were an analogous contract with or duty to the opposite party. The rules as to damages are shewn in Hadley v. Baxendale [36] . If the injunction had been obtained fraudulently or maliciously, the Court, I think, would act by analogy to the rule in the case of fraudulent or malicious breach of contract, and not confine itself to proximate damages, but give exemplary damages. In the present case there is no ground for alleging fraud or malice. The case then is to be governed by analogy to the ordinary breach of a contract or duty, and in such a case the damages to be allowed are the proximate and natural damages arising from such a breach, unless as in Hadley v. Baxendale, notice had been given to the opposite party, of there being some particular contract which would be affected by the breach. This doctrine of notice has introduced some difficulty into these cases, and it is not settled what sort of notice is sufficient. Here an alleged agreement for a lease is relied on. In the first place I do not think the existence of such agreement proved. If it did exist, the next question is, whether the injunction so interfered with the erection of the buildings as to entitle the tenant to throw up the agreement. I am not satisfied that it did. But assume that it did, and that the agreement was broken in consequence of the injunction, still I agree with the Vice-Chancellor in thinking that the breach is not by reason of the injunction, but is a consequence too remote to be regarded. If any one obtains an injunction preventing another from proceedings with a building, he must be taken to have notice of everything in the building contract, and all liabilities which the person stopped incurs to his contractor by reason of the stoppage, are a natural and immediate consequence of the injunction. But the fact that the injunction prevents the carrying out of an entirely independent agreement as to the property is too remote. Cotton L.J. said [37] : I think that the damages must be confined to loss which is the natural consequence of the injunction under the circumstances of which the party obtaining the injunction has notice. 1. (1882) 21 Ch.D. 421. 2. (1882) 21 Ch.D., at p. 425. 3. (1882) 21 Ch.D., at p. 426. 4. (1882) 21 Ch.D., at pp. 427-428. 5. (1854) 9 Exch. 341 [156 E.R. 145]. 6. (1882) 21 Ch.D., at p. 430.

[113]

At some stage in December 1976 Astling entered into discussions with a company named Bill Patterson-Cheney Ltd. ("BPC") which had evidently expressed interest in the Proposal. On 29th December 1976 BPC made a payment of $5,000 to Astling which was expressed to be "deposit on contract". That cheque was enclosed in a letter which stated that BPC was interested in investigating the Proposal with a view to reaching agreement concerning the purchase. The letter concluded by saying "As a tangible indication of our intentions, we enclose a cheque for $5,000 which is to be refunded in the event of us not being able to finalise negotiations for the purchase within two months". Discussions continued during January and on 25th January BPC wrote to Astling stating that it was prepared to enter into an arrangement "for the acquisition of the two companies" and the terms and conditions were set out. They required the formation of a holding company to be called Bill Patterson-Cheney Aviation Pty. Ltd., which company wuld acquire all the shares in Air Express and BBA. The remaining terms offered may be summarized as follows: BPC was to take 60 per cent of the 50 cent shares in the holding company, to be fully paid with a par value of $168,000 and Astling was to take up 40 per cent with a par value of $112,000 but paid up to 11 cents. That 11 cents was to be treated as paid by "using $24,640 of the $25,000 lodged as a deposit for the purchase of the shares in Air Express and BBA". The balance was to be payable at any time within ten years subject to a minimum of 30 per cent of all dividends being applied in that way. Suggested terms of employment of Astling as Managing Director were set out, as well as arrangements to be made if Astling wished to sell his shares. BPC was to provide the holding company with the balance of $76,106 necessary to purchase the shares in Air Express and BBA, and a loan of $150,000, repayment to be secured by charges over the assets of the companies. These arrangements were subject to written approval from the Department of Transport and the Customs Department for immediate import of two Carvairs, finalization of purchase arrangements for two Carvairs, and to completion of various arrangements to replace existing securities granted to the A.N.Z. Bank and the offer of security for the deferred borrowings from Signet Insurance Holdings Pty. Ltd., Mr. Brain and Donlin Investments Pty. Ltd.

[116]

I am satisfied that Gibson was an honest and truthful witness to the best of his recollection, and was careful in expressing his recollection. I am disposed to think that his statement that BPC would not have paid the deposit unless Astling had agreed to the 51 per cent required was more reconstruction than recollection but it seems very unlikely that BPC would have paid some $75,000 as deposit on the Carvairs unless they were satisfied that they could obtain control. In the end I do not find it necessary to resolve this conflict between the various passages in Gibson's evidence because it is clear on any view that no final agreement had been reached and that there was no more than a proposed agreement still in the course of negotiation. A number of matters were still outstanding, including the preparation of a satisfactory written contract and the finalisation of the position of the existing creditors, perhaps including the former shareholders. Gibson said that he understood that there was an arrangement that the loans by the former shareholders would not bear interest and would not be due for repayment until 1981 but evidently expected to have to provide security for such repayment. The question of the manner in which the acquisition of the Carvairs was to be arranged had not been finalised. BPC had provided three quotations with respect to leasing but no decision had been made. The position of the licences held by Air Express and BBA was still to be checked and Gibson said there would have to be a formal agreement before BPC would consider itself bound. Gibson was asked about the announcement that Ipec was to have a licence to import two Argosies and said that BPC had been concerned about that. He said that BPC had not heard of the possibility of Ipec obtaining an import permit until the Minister's announcement on 17th February. He said BPC would not have refused to go ahead on that ground because they understood that the Argosy would be permitted to operate only between Melbourne and Tasmania, whereas Air Express was licensed to operate throughout Australia. He said however that the latter requirement was not essential so far as BPC was concerned, a statement which is hard to reconcile with his explanation of why the competition was not regarded more seriously. He also said that the company ceased negotiations purely because of the injunction and the fact that Air Express was unable to bring the Carvairs into Australia. It is apparent that negotiations were resumed with British Air Ferries after BPC had expressed interest in the Proposal and presumably also after the letter of 25th January from BPC to Astling. In the result BPC paid the balance of deposit of £stg.50,000 on 17th February 1977.

[118]

It was submitted on behalf of Ansett that if damage was suffered by Air Express that damage was not a consequence of the injunction but a consequence of the litigation itself. I have already indicated that Air Express did not become a party to the proceedings until 25th February on which date the undertaking was given to the Court in respect of such damage as Air Express might suffer by reason of the order made on that day continuing the injunction. It is plain that the negotiations with Bill Patterson-Cheney had been broken off not later than 23rd February. The breaking off of those negotiations thus took place prior to the giving of the undertaking to Air Express and it is necessary to consider what the situation was on 25th February and thereafter. It was argued on behalf of Ansett that if the injunction had been dissolved at that point but the litigation had otherwise continued, as it is clear that it would have done, then the probability was that the defendant Halton, as Secretary to the Department of Transport, although by then having the necessary authority under the Customs (Prohibited Import) Regulations, would not in fact have signed the relevant permission because to do so would have been to pre-empt the decision of the Court and perhaps to subject the Commonwealth to a substantial claim for damages for breach of the Airlines Agreements. It is plain that an amendment of the proceedings against the Commonwealth would have been sought to add a claim for damages for breach of contract, the original claim having been only for an injunction to restrain a threatened breach. It does not follow from the fact that it was ultimately held that what was threatened would not have been a breach of contract that if the injunction had not been extended on 25th February the defendant Halton would have issued the written permission, either then or after the regulations were amended on 2nd March. The situation was analogous to that dealt with by Myers C.J. in Newman Bros. Ltd. v. Allum, S.O.S. Motors Ltd. (In liq.) [53] in the passage which I have quoted above. In my opinion it is probable that the Secretary would not have pre-empted the decision of the Court in a situation in which the breach alleged to be involved in the grant of the permission would be one which was not reversible because once in the country the aircraft could be used for interstate trade. Unless conditions were imposed on the importation of the aircraft which would have required their re-export if it turned out that Ansett's claim was right, there would be no way in which the Commonwealth could have restored the situation to that which prevailed immediately prior to the commencement of the proceedings. If that had been proposed, it would be very unlikely that the aircraft would have been imported because finance would not have been available on that basis. Although it is perhaps going too far to use the word "inconceivable", as did Myers C.J., I consider that it is probable that the defendant Halton would not have issued the written permission while the litigation was continuing.

[137]

He ultimately asserted that there was no such thing as directional imbalance anywhere. He said that Air Express operated on the basis that it chartered its aircraft at a set figure per hour from Melbourne to Launceston or other Tasmanian airports and return to Essendon, and that the use that was made of the aircraft was up to the charterer but he acknowledged that the charterers (when not carrying their own goods) charged a rate for the southbound journey which was appropriate to cover the cost of the return journey. He also acknowledged that there was imbalance in the rates charges, at the relevant time the southbound rate being about 33 cents per kilo and the northbound rate being sometimes as low as 6 cents per kilo, being fixed so as to match the subsidized sea freight for the same journey. Brown, whose evidence in this respect I accept in preference to Astling's, said that, in relation to the years in which he was managing the BBA operation, the mainland/Tasmania route was severely affected by directional imbalance of cargo. He said that when BBA did the Ipec work about 60 per cent of the flights were chartered for both southbound and northbound journeys, and 40 per cent southbound only. He also said that the round trip aircraft were not regularly filled on the return journey. I also accept the evidence of the Ansett witnesses, Orrock, Rowley and Warton, to the same effect. Warton's evidence was that the northbound cargo was carried at "bedrock rates". Brain expressed the view that the imbalance was more of a seasonal nature but in this respect I prefer the evidence of Brown. Brain was in my view an honest witness but I think that his understanding and recollection of the operations was severely limited and where he differs from Brown I accept the evidence of Brown. Ansett's northbound rate was stated as 19 cents but the evidence was that that rate could not be obtained in practice and business could only be obtained at very slightly above the shipping rate of 6 cents per kilogram. Astling acknowledged that all companies concerned charged more southbound than northbound, but asserted that that does not demonstrate directional imbalance. His evidence on the question of imbalance was evasive and I am not prepared to accept it. Evidence was given that the "Nimmo report" (being a report by a Commission of Enquiry into Transport to and from Tasmania by Mr. Justice Nimmo) stated that for 1974-1975 southbound air freight was 25,000 tons and northbound 12,000 tons.

[146]

The next task is to evaluate the evidence of Astling upon whose figures Hilton had based calculations of profits and profitability. I found Astling's evidence and his demeanour in the witness box evasive and generally speaking I am not prepred to accept evidence given by him either on affidavit or in the witness box except where it constitutes an admission contrary to his interest or is corroborated by other acceptable evidence, or relates to non-contentious matters. I regard the statements made by Astling in the documents written prior to the litigation as more likely to be correct than statements made in his affidavits or oral evidence. Whilst the statements made in the Proposal were made prior to the litigation, it must be remembered that they were designed to attract financial support and to present an attractive opportunity. Some of the statements therein should, I believe, be viewed with a good deal of reservation. I have indicated above some particular statements which I regard as suspect. I regard Astling's statement in the Proposal that the Argosy was to be sold abroad for an amount equal to about half what could be obtained in Australia in order that it should not fall into the hands of Ipec, which was endeavouring to become a competitor in the Bass Strait trade, as indicating a real fear of the competition which Ipec would provide. That protection from competition for Air Express, as well as BBA, was to be obtained at the expense of the creditors of BBA. This fear of Ipec's competition appears also from Astling's letter of 30th November 1976 to the Minister for Transport, which sets out reasons why an import licence should not be granted to Ipec. Astling gave an explanation of this letter designed to deprive it of any significance but I do not accept that explanation. In that letter he said, "Previous reports and commissions (i.e. relating to the airfreight industry) have failed to establish any excess capacity of freight justifying yet another airline". It is obvious from the context that the words "excess capacity of freight" mean "excess of available cargo over and above the carrying capacity of the existing operators". That letter concludes by saying "any additional licence granted would seriously jeopardize the economic viability of all existing operations". Astling stated in his evidence that he had changed his mind about competition since writing that letter but I cannot accept that evidence. I do not regard the fact that in July 1978 he sold BBA's Argosy to Ipec as affecting the matter as Ipec already had two Argosies by that time.

[155]

I consider next the position of Kwikasair, the company which had in the calendar year 1976 provided revenue to Air Express of the order of $1 million. Astling's evidence as to his expectations in respect of 1977 and 1978 was described by Edwards, the General Manager of Kwikasair, as being conjectural. Edwards said that the revenue which might have been earned in 1977 and 1978 would have been dependent on three principal factors, first Air Express's rates, second the availability of freight in a declining market and third Kwikasair's ability to convert part of its sea freight to air freight. Edwards said that his prediction in early 1977 that there would be an increasing volume of his company's air freight business to Tasmania in that year had turned out to be incorrect and that there had in fact been an overall drop in air freight throughout the company's business in 1977, including its Tasmanian business. He said that there had been further deterioration in 1978. He agreed that the provision of extra capacity for air freight might generate new business in the sense of attracting formerly done by sea carriage but said that it would depend entirely upon the rate available from Air Express. He said that he did not think that the suggested reduced rate of thirty cents per kilo referred to by Astling would enable Kwikasair to divert any of its sea freight to air freight. Edwards also said that the overall rate for northbound cargo was approximately one-third of the rate for southbound cargo. Edwards said that the business actually done with Air Express for 1977 was about $750,000 and for 1978 about $500,000 but that was not necessarily a guide to what the position would have been if the Carvairs had been in full operation from 1st July 1977. On the whole I am of opinion that the best estimate that can be made for 1977 is that the figure for the second half of that year would not have reached the rate achieved in 1976 and, doing the best that can be done with the material, a figure of $400,000 would be a maximum.

[174]

The Proposal attributes an actual figure to the Bristols for 1975-1976 of $1.232 million and uses that in the Forecast Profit for the first full year's operation, which also attributes $1.2 million to each Carvair on the basis of one Carvair equals two Bristols. This however is misleading and the error involved affects all the subsequent assumptions. The figure for 1975-1976 was derived from the use of three Bristols, not two. With two Bristols prior to restriction on loads the figure must be assumed to be $820,000, and there should be attributed to each Carvair the same figure. For the second half of 1977 one may assume that one Carvair would have done the work of the two retired Bristols and earned $410,000. The next step is to estimate the earnings of the other Carvair from new business. I have already said that I regard it as impossible that Air Express's business would have doubled for the whole of that six months, but I think that some APD business would have been obtained. I do not think however that a figure of more than $100,000 for that six months is justifiable, and on a like basis I think a figure of $100,000 is the maximum justifiable for Kimberly-Clark. That gives a total of $200,000 additional business for that six months period. I am prepared to assume that some reduction invariable operating costs would have occurred but no reliable basis for estimating that was made available. It would be unrealistic to reduce them proportionately or to leave them unaltered. I think therefore that a reduction of one fifth rather than one quarter would be reasonable. The "selling and administration expenses" are less easy to deal with but I do not think it sufficient merely to eliminate the amounts allocated to the Bristols. The figures in the Proposal are distorted by the fact that some items representing significant costs for the Bristols are not attributed to the Carvairs in either the fixed or variable operating costs. These items should therefore be added to their costs, namely in fixed costs $35,000 for rent and rates for hangars and in variable operating costs repairs and maintenance for plant and equipment, $2,000, and electricity in hangars $3,000; a total of $5,000. Again selling and administration expenses exhibit inexplicable omissions from the costs attributed to the Carvairs and at least the following items must be transferred to the Carvairs, from the allocation to the Bristols; general depreciation (not aircraft) $5,000, long service leave $500 and motor vehicle expenses $1,300, a total of $6,800. No basis for reduction of overheads generally in this context was suggested. It is not correct to assume that the retirement of the Bristols would reduce the overheads by the whole of the amount which is allocated to them but it is reasonable to assume some reduction. A figure of one-half of that allocation, after transferring the items referred to would appear not ungenerous. On this basis it will also be necessary to make some reduction in the variable operating costs because of the conclusion that the two Carvairs would not have been fully employed in the latter half of 1977. Again neither party made any submissions on how this should be done but it is by no means unfavourable to Air Express to assume a 25 per cent reduction in those costs (after the adjustments referred to above) for this half year.

[201]

The object of requiring a plaintiff who seeks an interlocutory injunction to enter into an undertaking of this kind is to attempt to ensure that a defendant will receive compensation for any loss which he suffers by reason of the grant of the injunction if it appears in the event that the plaintiff was not entitled to obtain it. The insistence upon the giving of an undertaking is a very important, if not an essential, means of preventing injustice from being done by the court when it makes an order at an interlocutory stage, before the rights of the parties have been finally determined. The court has a discretion not to enforce such an undertaking, but unless the defendant has been guilty of conduct that would render it inequitable to enforce the undertaking it would seem just, speaking generally, that a plaintiff who has failed on the merits should recompense the defendant for the damage that he has suffered as the result of the making of the interlocutory order. However, it is perfectly clear, and it appears from the words of the undertaking themselves, that the only damages to which a defendant is entitled are those which he has sustained by reason of the grant of the injunction. The generally accepted view is that the damages must be confined to loss which is the natural consequence of the injunction under the circumstances of which the party obtaining the injunction has notice: see Smith v. Day [19] and the cases cited in Kerr on Injunctions, 6th ed. (1927), p. 667, and Halsbury , 4th ed., vol. 24, par. 1077. However, in the present case the question is not whether loss caused by an injunction was a natural consequence of making it, but whether any loss which the appellant suffered was caused by the making of the injunction. In the circumstances I do not find it necessary to discuss the dictum of Cussen J. in Victorian Onion and Potato Growers' Association v. Finnigan [No. 2] [20] , that "the word "damages" in that undertaking is to be given a very general meaning, and is not necessarily to be given the same meaning as the word "damages" when used in connection with breaches of contracts", which, although its meaning is not altogether clear, appears to be inconsistent with the statement of Lord Diplock in Hoffmann-La Roche v. Trade Secretary [21] , that the assessment of damages for breach of an undertaking "is made upon the same basis as that upon which damages for breach of contract would be assessed if the undertaking had been a contract between the plaintiff and the defendant that the plaintiff would not prevent the defendant from doing that which he was restrained from doing by the terms of the injunction".

[206]

The present case is in a number of respects exceptional. In the first place, the injunction was not granted against the defendant who claims to have sustained the loss. In this respect the present case resembles Newman Bros. Ltd. v. Allum, S.O.S. Motors Ltd. (in liq.) [No. 2] [26] . Secondly, at the time when the injunction was granted the Secretary to the Department of Transport had no power to do that which he was restrained from doing. It was not until 1st March 1977 that the Customs (Prohibited Imports) Regulations were amended to give to the Secretary the necessary power to grant permission to import the aircraft. Thirdly, an injunction had originally been granted before the appellant became a party to the action. I am prepared to assume that the grant of the injunction on 18th February 1977 caused the Minister and the Secretary to withhold the written permission to import the aircraft, notwithstanding that they had previously decided to grant that permission. However, the appellant cannot obtain damages for any loss which thereby resulted to it because at that time it was not a defendant and was not entitled to the benefit of the undertaking. What the appellant had to prove was that the permission would have been granted on or after 25th February if it had not been for the order made on that date continuing the injunction. If for some reason the injunction had been dissolved on that date it is clear that the Secretary would then have been aware that he had no power to grant the permission, because of the form of the regulations. The probability, if not the certainty, is that he would then have taken no action before the regulations were amended. That did not occur until 1st March 1977. At that time the demurrers, which raised for the decision of this Court the question whether the issue of the permission would be a breach of the Commonwealth's contractual obligations, were due to be heard on the following day. The questions in issue were complex and difficult, as the judgments of this Court show: see Ansett Transport Industries (Operations) Pty. Ltd. v. The Commonwealth [27] . In all these circumstances I respectfully agree with the conclusion reached by Aickin J. that "it is probable that the Secretary would not have pre-empted the decision of the Court in a situation in which the breach alleged to be involved in the grant of the permission would be one which was not reversible because once in the country the aircraft could be used for interstate trade" and that accordingly it is probable that the Secretary would not have issued the written permission while the litigation was continuing. If it is said that it is merely a matter of speculation whether or not the Secretary would have granted the permission if the injunction had not been in force, the appellant should in my opinion still fail, since it has not proved that it is probable that the permission would have been granted, at some time after 25th February, if it had not been for the injunction. Since the appellant did not call either the Minister or the Secretary it may be inferred that their evidence was not likely to assist its case. I am unable to conclude on the balance of probabilities that any loss which was suffered by the appellant was due to the making of the order on 25th February and would not have been sustained if that order had not been made.

[275]

Had he applied his mind to the hypothetical question whether to proceed with the issue of the written permission on the assumption that proceedings had been commenced by Ansett but no interlocutory injunction had been granted, he would have encountered a number of competing considerations. On the one hand, he would not have wished to pre-empt a decision by the Court, more particularly when importation of the aircraft would have put it beyond the capacity of the Commonwealth to deny authority to Air Express to use the aircraft in interstate air navigation in accordance with the conditions of the permission to import. On the other hand, in the absence of an injunction, the Secretary was entitled to grant the permission. He was free to do so, subject to the risk that if his action constituted a breach of contract, he thereby subjected the Commonwealth to liability for damages to Ansett. Whether he was prepared to take that risk depended on several factors of which there is no evidence. They include the nature of the legal advice which he received and the importance which he and the Minister (or perhaps the Government) attached to the provision of additional air freight services between the mainland and Tasmania. But one thing we do know is that the Secretary and the Minister (possibly with Cabinet approval, because it is a question which, having regard to its importance, one would expect to be taken to Cabinet) had already decided to embark on a course which would expose the Commonwealth to liability in damages in the event that this Court subsequently held that the proposed action constituted a breach of the "Two Airlines Agreement". It can scarcely be supposed that they had not taken into account the possibility, indeed the probability, that Ansett would commence proceedings. It is almost inevitable that they had decided to proceed upon the announced course with this eventuality in mind. It is inconceivable that the decision taken on 16th February or earlier was taken without legal advice.

Air Express Ltd v Ansett Transport Industries Operations Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (289 paragraphs)

Parties

Cited By (11)