Ground 9
60Current Images submitted that the trial judge erred in finding that Dupack did not cause any loss or damage to the appellant on three bases. First, that her Honour confused loss of bargain damages with loss of profits damages. Second, that she failed to treat the increased purchase price of the press caused by currency fluctuations as loss of bargain damages. Third, that she failed to make any finding on Current Images' claim for loss of use of money damages.
61First, Current Images submitted that the trial judge confused damages for the sale of goods (loss of bargain) with damages for failure to comply with a service agreement (loss of profits) in dismissing its claim for loss of profits on the maintenance agreement, relying on what was said by Giles JA in Tasman Capital Pty Limited v Sinclair [2008] NSWCA 248; (2008) 75 NSWLR 1 at [70]. It submitted that, even though it entered into a maintenance agreement with the third party purchaser, there was no basis for concluding that Current Images could not have entered into service agreements with both Dupack and the third party purchaser. Current Images had sold six identical presses over the seven years preceding the contract, which, it said, evidenced that the press was not a one-off product, and that the possibility of selling multiple service agreements therefore existed. It submitted that the onus was on Dupack to show that the loss of profit on the service agreement had been mitigated, and that it had not done this.
62This argument ignores the fact that Current Images had previously accepted, for the purpose of calculating damages relating to repudiation of the purchase agreement, that the press was a one-off item of which the subsequent sale to a third party was a substitute sale. It is difficult to see how a maintenance agreement relating to a one-off item could be entered into twice. This is also the way Current Images ran its case below: entry into the maintenance agreement with the third party was included under the heading "Current Images mitigates its loss" in its outline of submissions at first instance. Regardless of the fact that damages for loss of profits may be calculated differently to damages for loss of bargain, if, as the primary judge found at [246], the service agreement was a "back to back" agreement with the purchase agreement, there is no basis for finding that Current Images could have entered into both maintenance agreements.
63Further, whether or not Dupack bore the onus of showing that the loss had been avoided, Current Images produced evidence in reply to Dupack's defence that "the plaintiff failed to make reasonable efforts to mitigate its loss and damage". That evidence included the maintenance contract it entered into with the third party, which on its face appears more lucrative than the original maintenance agreement signed with Dupack. In both agreements, the service price is based on the number of impressions made by the press, and the price per impression reduces as the volume of impressions increases. In the agreement with the third party, the impression price in each volume category is greater than the price in the equivalent volume category in the agreement with Dupack. Current Images submitted that this did not demonstrate that the maintenance agreement with the third party was in fact more lucrative and that evidence that the volume of impressions made by the third party was comparable to or greater than those that would have been made by Dupack would be necessary for Dupack to discharge its onus of demonstrating that damages for the loss of the maintenance agreement had been avoided.
64I do not accept this submission. Dupack is entitled to rely on Current Images' maintenance agreement with a third party, relating to the same press, at price per impression rates in excess of its repudiated agreement as evidence that Current Images had mitigated its loss. Further, Current Images calculated the damages it claimed as a result of loss of profit on the maintenance agreement by averaging the number of impressions made by its other six maintenance clients. There is no reason why Dupack cannot have the advantage of this same averaging treatment in estimating the volume of impressions the third party was likely to make.
65I am not satisfied that Current Images suffered a loss of profit it was likely to have attained, see McRae v Commonwealth Disposals Commission [1951] HCA 79; (1951) 84 CLR 377 at 388; nor that it did not fully mitigate its loss of the maintenance agreement, see Tyco Australia Pty Limited v Optus Networks Pty Limited [2004] NSWCA 333 at [149].
66Dupack also made submissions disputing the length of time Current Images claimed the maintenance agreement covered, however these do not fall to be considered in the circumstances.
67Second in relation to damages, Current Images submitted that the trial judge erred in treating the increased acquisition cost of the press (due to the currency fluctuations between the alleged date of repudiation by Dupack, 2 September 2008, and the belated payment date to Hewlett-Packard Indigo by Current Images, 30 October 2008) as anything other than loss of bargain damages.
68In oral argument counsel for Current Images reformulated this submission. He contended that when Dupack repudiated the contract, on 2 September 2008, Current Images lost profit was the difference between the purchase price of the press, $764,500, and the amount that would have been paid to the supplier, Hewlett Packard Indigo, shortly thereafter (there was evidence before the primary judge that Current Images' policy was to pay the supplier as soon as it had been paid by the purchaser). Accepting the price in Australian Dollars of the press on 2 September 2008 as $502,067, Current Images' loss of profit as at September 2008 was therefore $262,433. It attempted to mitigate this loss by reselling the press to a third party, but it did not make the loss up in full because the actual purchase price from the supplier increased in the intervening time as a result of currency fluctuations. The actual profit Current Images realised on the sale of the press to the third party was $133,773, being the price paid by the third party, $770,000, less the actual purchase price of the press $636,227, resulting in a loss after mitigation of $128,660.
69Whilst it is correct that that increased price payable by Current Images to Hewlett Packard for the machine was due to currency fluctuations, there is nothing to suggest that Current Images did not act reasonably in not paying for the machine in August or on 2 September 2008 and obtaining an extension for payment until 31 October 2008. The fact that it may have paid less (or more) had it chosen a different payment date is immaterial.
70It follows that Current Images is entitled to receive $128,660 for the loss it suffered on resale of the machine.
71Finally, Current Images submitted that the trial judge failed to make any express findings on Current Images' claim for loss of use of money. Current Images claimed that Dupack's failure to pay the purchase price resulted in $26,446.61 net interest charges under its overdraft account, after accounting for instalment payments received from the third party purchaser (see Hungerfords v Walker [1989] HCA 8; (1989) 171 CLR 125 at 142, 144, 149 and 152). The period over which the loss was said to have been incurred was from 2 September 2008 to 21 April 2009 (affidavit Phillip Damian Rennell sworn on 9 August 2010 pars 13-17).
72Dupack was not able to point to any reason why Current Images was not entitled to this amount. It follows that Current Images suffered a total loss of $157,947.09, being $128,660 for loss of bargain on the purchase agreement, $26,446.61 for loss of use of money, and $2,840.48 being the cost of transporting the press from Brisbane to Melbourne to deliver the press to the third party. The claim for loss of use of the money is a substitute for any claim for interest under s 100 of the Civil Procedure Act 2005 up to 21 April 2009.