Mr Gower said that was not the view he was expressing and:-
"No, what I say is the resources, if they are applied to Nilson Avenue, if they had been applied elsewhere, he could have developed one property a year out of those resources. I express no opinion about the resources which he applied to these other developments which had no bearing on the matter in question."
281 Mr Rayment agreed that the gross selling price of the land was $886,000. There were adjustments on settlement for rates, interest and discharge of mortgage costs totalling $2,560.33 giving a net sale price of $883,439.67. Additional costs incurred on settlement by the plaintiff amounted to $41,116.25, and an adjustment for the purchase and purchase costs including stamp duty and solicitor's costs gave a total of $353,727.40. Mr Rayment then referred to a number of adjustments and holding costs giving a total surplus on sale after adjustments of $54,296.95, and acknowledged that this should be deducted from the amount contained in the conclusions of Mr Hughes in Parts 1 and 2 of Exhibit M5. Mr Tobias had initially contended for a higher figure. However, there was no final submission challenging that for which Mr Rayment contended and, subject to leave to re-open, that is the amount I propose to deduct.
282 In Exhibit AE Mr Haigh deposed to the fact that in 1994 three new dual occupancy projects were commenced at 32 Menin Road, 52 Carnegie Circuit and 47 Mawson Parade. All were completed, the latest being in February 1995. In 1995 three new dual occupancy projects were commenced at 29 Woomera Road, 5 Wassell Street and 34 Menin Road, being completed in September and November 1995 and June 1996 respectively. In 1996 one new dual occupancy was commenced in October. In 1997 two new dual occupancy projects were commenced at 55 Hastings Parade, which was completed in October 1997, and at 10 Nyam Street, which was completed in December 1997. In 1998 one new dual occupancy project was commenced at 34 Austral Street and it was completed in March 1999. No new dual occupancy projects were commenced in 1999.
283 It was Mr Haigh's evidence that if the land had not been acquired in 1994 a fourth dual occupancy project would have been undertaken in that year, 29 Woomera Road would not have been built for Mr Kikiras' brother, but rather a total of four new dual occupancy projects would have been commenced in 1995, in addition to the one commenced in 1996 three other dual occupancy projects would have been commenced, and in the years 1997, 1998 and 1999 the plaintiff would have been in a position to commence and would have commenced four new dual occupancy projects in each year. When one has regard to the history of the building activities of Mr Haigh and his associated companies and to the evidence that there was ample land available, even for the building of dual occupancies other than sub-divided ones after March 1998, it seems to me reasonable to assess damages on the basis that Jazabas would have achieved four dual occupancies per year, save for 1996 during which the dispute between Mr Haigh and Mr Kikiras was on foot. For the reasons to which I have referred, it does not seem to matter whether one utilises the cash flow or loss of profits approach.
284 On the approach to which I have just referred there would have been an additional 1 in 1994, 1 in 1995, none in 1996, 2 in 1997, 3 in 1998 and 4 in 1999, making a total of 9 additional developments.
285 Mr Hughes submitted a number of reports, the latest being on 6 December 1999, by which time the issues had been refined.
286 Mr Hughes gave his evidence on 14 and 15 December 1999. He agreed, Tp.239, that the starting point was a net profit of $151,563 per development.
287 In his report of 6 December 1999, Exhibit M3, Mr Hughes summarised the loss as loss of profits on other developments as appearing in Schedule 1 at $2,247,930 and additional costs incurred after September 1999 in accordance with Schedule 1 at $215,836 giving a total of $2,463,766. Overnight he re-worked the figures conformably with Exhibit M5, which produced a total net development profit lost to 31 December 1999 of $3,371,501. This figure was based on a maximum of four projects per year. It was also based on what was said to be a typical dual occupancy, namely 32 Menin Road, Matraville. A second part of the exhibit was based on a total of twenty four projects and showed a total net development profit lost to 31 December 1999 of $4,267,513. These figures are based on the financial years ended 30 June 1995 to 30 June 2000, although Mr Hughes deducted half of the profits for the last mentioned year and calculated the loss to 31 December 1999.
288 Mr Hughes' figures can be tested in a somewhat rough and ready way. He has proceeded on the basis of lost profits of $151,563 for each of four developments per year over a five year period, which produces a figure of some $3.03m. There is no exact correlation, but there is a sufficient coincidence between the figures to show that those adopted by Mr Hughes, assuming for the moment that his starting point of $151,563 is correct, have some reasonable equivalence. However, I consider that in lieu of twenty the preferable figure is nine, which, multiplied by $151,563, gives $1,364,067.
289 Mr Gower, in his first report of 27 July 1999, dealt, essentially, with an earlier report of Mr Hughes and, without putting forward any positive figures on his own part, criticised Mr Hughes' methodology and some of his assumptions. In his second report of 9 December 1999, Mr Gower dealt with three matters to which he was required to give attention being calculations of consequential loss detailed in Schedule 4 of Mr Hughes' report of 9 March 1999; Mr Hughes' report of 6 December 1999; and costs attributed to the Nilson Avenue project detailed in Schedule 3 to Mr Hughes' report dated 9 March 1999. In paragraph 5.1.9 he asserted that based on Mr Hughes' methodology, adjusted only for the appropriate level of borrowing capacity, the total lost profit during the period 1994-1999 was $931,017. Mr Gower dealt with certain other matters with which he had the difficulties to which he referred and then with consequential loss, which he assessed at $319,263. The sum of those figures is $1,250,280, which, as a figure, bears a close but probably coincidental relationship to $1,364,067.
290 Commencing at paragraph 10 Mr Gower dealt with what he described as changed methodology assumptions from those adopted by Mr Hughes in his 9 March 1999 report. After dealing with various matters he came to the conclusion that the net profit after tax from the sale of the land was $172,142. As I have said, it is not clear that Mr Tobias has adopted this figure. He has made no submissions in reply to Mr Rayment's detailed ones, which produced the net profit figure on the sale of the land to which I have referred.
291 In his evidence in chief he was asked to comment upon Exhibit M5, which he said he did not consider to be an appropriate approach to determine the ability to carry out the number of projects that Mr Hughes included in his schedule, because it did not fully map the cash flow constraints and needs which the business faced over a period, and it calculated it on a basis, which did not have regard to the cash flow needs during the construction period of each individual project. He said he carried out the exercise, although using some different starting points, in Exhibit 2B, but he noted that the cash flow statement was prepared "under somewhat different assumptions".
292 At Tp.326 he stated why he preferred the cash flow approach and, at Tp.327, he said that the profit and loss approach did not always show the progression of a project over a period of time. Mr Gower also was not content to adopt a borrowing of one hundred per cent of the value of the project.
293 In cross-examination Mr Gower agreed, Tp.328, that Exhibit 2A, being his statement of 27 July 1999, was the form of expert evidence from him right up until the commencement of the trial, and that, apart from making a number of criticisms of the assumptions in Mr Hughes' report, it "contained no information of any alternative basis upon which you would put forward the plaintiff's damages calculations". He said that was not done pursuant to any specific instructions, but was a decision of his own in responding to his instructions, which did not include an instruction to prepare an alternative basis upon which damages ought to be calculated. He said he was asked to provide a critique of Mr Hughes' report and that is what he did. He agreed that Exhibits 2B and 2C, consistently with his instructions, contained his version of damages and a re-working of them.
294 Mr Gower was attacked and, if I may say so with respect with great effect, as to a number of portions of his initial report on the basis that he was commenting on matters which were not the subject of his expertise. However, as I have said, he did not seek to put forward any alternative method for calculating damages.
295 At Tp.341 he was taken to Exhibits 2B and 2C and he agreed that he had reached the conclusion that if the plaintiff had not bought the land it would have been able to complete one project a year and no more. In other words he said that but for the purchases of the land one additional property could have been developed, but he made no comment on how many others may have been.
296 At Tp.343 Mr Gower was asked to assume that the properties built as referred to in Exhibit AE were built, and he gave an answer to which I have referred. He also said, and I have also referred to this evidence at Tp.344, that he did not express a view that Mr Haigh and his associates could not produce more than one development a year.
297 He said, Tp.345, that he had not made an assumption that over twenty five years Mr Haigh as a builder or as a developer had built about one hundred dwellings, but he agreed that the position as at 1994 was suggestive of Mr Haigh's being able, in ordinary times, "to conduct four dual occupancies a year". He said that was confirmed by noticing that in 1995 three further dual occupancy projects were commenced, two were completed and one was completed the following year.
298 He described what he had done in Exhibit 2B at Tpp.345-346:-
"RAYMENT: Q. In your Exhibit 2B do we understand this: you have not sought in any way to analyse the total position of Jazabas or the total assumed position of Jazabas, rather you have asked yourself a question about a state of affairs that, as it were, is treated as an island? That is, the question you have asked yourself is, as you I think told us a moment ago, what, stemming only from the use of the funds that were known to have been devoted in June of 1994 to Nilson Avenue, could Jazabas have done with that money? Is that right?
A. That's correct, yes.
Q. And I think you have assumed, haven't you, that it had no other business, the company had no other business and no other money?
A. I have tried to deal with this question in isolation from other business activities which Haigh or his group of companies may have continued to undertake.
Q. But have you? Because what you have done is to take out the capital withdrawal, have you not, from this, from the money that you envisaged would have been made from your one project?
A. That's correct, yes.
Q. And that would assume that there are no other projects which can provide a source of living expenses wouldn't it?
A. No, not necessarily.
Q. Not necessarily?
A. I have - I made an assumption that you wouldn't conduct these sort of activities unless you generated ongoing living funds of $60,000 is the assumption I adopted."