Middle East v Nemes

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

20173/96 - Middle East Trading Consultants Pty Limited v Nemes & Anor

JUDGMENT 1 HIS HONOUR: In this matter I delivered a judgment on 14 July 2000. In that judgment I held that the defendant Mr Nemes had been negligent in advising the plaintiff in relation to (i) the distributorship agreement of 9 July 1992 (ii) in November 1992 (iii) in mid-1993 and (iv) in September 1993. 2 In pars308-331 of my judgment of 14 July 2000 I said a number of things about the assessment of the damages the plaintiff should recover for the negligence of Mr Nemes but I said that I would defer making an assessment of those damages, until after counsel had had the opportunity of making further submissions on damages. I stated that it was my intention to assess damages only in accordance with the assumptions underlying what counsel for the plaintiff had described in written submissions as scenario A for the assessment of damages. 3 Counsel have now made further written and oral submissions concerning the assessment of damages in accordance with scenario A. I have received, either before or after I delivered my judgment of 14 July 2000, no fewer than seven sets of written submissions dealing, wholly or partly, with the assessment of damages in accordance with scenario A, namely:-

(ii) Defendant's outline submissions dated 19 April 2000.

(iv) Plaintiff's supplementary submissions on damages prepared by junior counsel for the plaintiff.

(v) Defendant's further submissions on damages dated 20 October 2000.

(vii) A number of schedules of damages prepared by counsel for the defendant. 4 In addition to the written submissions, there were nearly two days of oral argument on 7 and 8 November 2000. A number of points which have been argued are capable of being argued back and forth almost interminably. I have taken into account all of the written submissions and all of the oral submissions. 5 I confirm that I will be assessing damages only in accordance with scenario A. In par311 of my judgment of 14 July 2000 I set out the assumptions on which schedule A was based:- 6 Mr Nemes was negligent in mid-1992 in not advising that Metco should seek to obtain an equitable charge from Jesseron; that, if Mr Nemes had not been negligent and had given such advice, then Mr Akhyani on behalf of Metco would have taken such advice and would have sought to obtain an equitable charge from Jesseron; that, if Mr Pritchard on behalf of Jesseron had been asked for a charge, he would have been willing for Jesseron to give such a charge and Jesseron would have given such a charge in mid-1992; and that, if such a charge had been given, Metco would have appointed a receiver pursuant to the power to appoint conferred in the charge in about June 1993. In my judgment of 14 July 2000 I found that all of the assumptions on which scenario A was based had been established. 7 The amount of damages claimed by the plaintiff under scenario A can be set out in a table. In the table set out below an arithmetical error which appeared in the table set out at par326 of my judgment of 14 July 2000 has been corrected.

1. Debt due from Jesseron to Metco as per Mr Crick's Report $685,659.97 Price of Oct'93 shipment $51,533.68 $737,193.65
2. Less: Actual Net Recoveries Gross Receipts $313,924.11 Expenses Repackaging ($45,681.35) Storage/Transport ($32,295.51) Commission/other charges ($6,425.98) $229,521.27 $507,672.28

3. Plus: Legal Accountancy Costs (re appointment of receiver and granting of charge) $69,272.63

$42,000.00 4. Plus: Salary claim by Mr Akhyani between July '93 and Aug '95 $618,944.91

8 In addition, the plaintiff claimed that it is entitled to damages for the loss of the use of money in accordance with the decision of the High Court in Hungerfords v Walker (1990) 171 CLR 125. 9 The plaintiff's case on damages was that, if the assumptions underlying scenario A had been fulfilled, then in June 1993, when the receiver of Jesseron would have been appointed, the claims by Metco against Jesseron with respect to stock supplied to Jesseron would have amounted to $685,659.97. To this amount should be added an amount in respect of a further shipment of stock, which had been ordered in early 1993 but which did not arrive in Australia until October 1993. If a receiver had been appointed, all of this "debt" totalling $737,193.65 would have been recovered by the receiver. The amount of the actual net recoveries which Metco made by selling the stocks of dates returned to it under the deed of compromise of 30 June 1993 had to be offset against the amount of the "debt". To Metco's claim had to be added legal and accountancy costs, and particularly the costs of litigation, which it incurred in connection with the purported granting by Jesseron of an equitable mortgage on 30 June 1993 and the purported appointment of a receiver of Jesseron pursuant to that document. To Metco's claim also had to be added a claim for salary amounting to $42,000. 10 In his further written submissions on damages of 20 October 2000, which were prepared after I had given my judgment of 20 July 2000, counsel for the defendants disputed some of the steps in counsel for the plaintiff's calculation of damages and conceded some of the other steps. The steps which were disputed were:-

The amount of the "debt" from Jesseron to Metco, including the inclusion of an amount for the October 1993 shipment.

That the amount of the "debt" would have been fully recovered, if a receiver had been appointed.

That the cost of re-packaging should be taken into account in determining the actual net recoveries.

A very small part of the plaintiff's claim for legal and accountancy costs (counsel for the defendant was prepared to concede an amount of $67,211.04).

The claim for salary. 11 All the other steps in the plaintiff's calculation of damages were conceded by counsel for the defendants in his written submissions of 20 October 2000. 12 It is necessary to deal with each of the disputed steps in the calculation of damages.

The amount of the "debt" from Jesseron to Metco 13 The figure of $685,659.97 claimed by the plaintiff was taken by counsel for the plaintiff from Mr Crick's report dated 11 June 1993 of the "intercompany position as at 30/4/93", in which he stated that "the accounts for both companies show the amount owing by Jesseron to Middle East as at the end of the period as $685,659.97." 14 It is clear that the amount stated by Mr Crick to be "owing" by Jesseron to Metco was not the same as the amount which as at 30 April 1993 would have been legally due and payable by Jesseron to Metco in accordance with the provisions of the distributorship agreement. Under the distributorship agreement an amount did not become legally due and payable by Jesseron to Metco, until a quantity of a product which had been ordered and paid for by Metco and delivered to Jesseron had been on-sold by Jesseron, Jesseron had received payment from its purchaser and seven days had elapsed after Jesseron had received payment. Mr Akhyani was right in saying in paragraph 5 of his affidavit of 12 July 1999 that the amount of $685,659.97 shown in Mr Crick's report "was made up of monies paid to and owing to Jesseron by retailers in respect of stock supplied by Metco, as well as stock supplied by Metco but not yet sold by Jesseron". 15 However, the inclusion in the total amount "owing", not merely of amounts in respect of stock which Jesseron had on-sold and for which it had been paid, but of amounts in respect of stock which Jesseron had on-sold but for which it had not been paid and of amounts in respect of stock which it had not yet on-sold, in determining the amount of the "debt" from Jesseron to Metco for the purpose of assessing damages in accordance with scenario A, is, in my opinion, justifiable. If a receiver of Jesseron had been appointed in accordance with scenario A, then, in the case of stock which had been on-sold by Jesseron but not paid for, the receiver would have sought to collect the monies outstanding to Jesseron from its purchasers. After such monies had been collected, amounts would have become due and payable by Jesseron to Metco. In the case of stock which had not yet been on-sold by Jesseron, a receiver would have proceeded to sell the stock, in which case amounts would ultimately have become due and payable by Jesseron to Metco, or the receiver would have returned the stock, which had been paid for by Metco, to Metco. Accordingly, the total claims by Metco against Jesseron, actual, contingent and prospective, with respect to stock delivered to Jesseron could properly be determined on the basis on which Mr Crick calculated the amount "owing" by Jesseron to Metco. 16 It was submitted by counsel for Metco that corroboration of Mr Crick's figure of $685,659.57 could be found in two ways. 17 Firstly, Mr Crick's figure could be seen to approximate fairly closely to the difference between, on the one hand, Metco's total expenditure on imports, that is $870,489.43, amounting with some adjustments to $891,762.03, and, on the other hand, the total payments made by Jesseron to Metco from the beginning to 30 April 1993 of $223,057.05, that is to a sum of $668,704.98. 18 Secondly, Mr Crick's figure could be seen to be not very dissimilar to the figure stated by Mr Beale in Mr Beale's report of 25 June 1993, when the different bases on which Mr Crick and Mr Beale had arrived at their respective figures were taken into account. 19 In his report of 25 June 1993 Mr Beale showed the amount of the debt from Jesseron to Metco at 21 June 1993 as being $320,392. However, Mr Beale did not include in this figure any amount for stock which had been delivered to Jesseron but which had not been on-sold by Jesseron. According to the stock-take conducted on 19 June 1993 by Mr Akhyani and Mr Pritchard of the stock of dates held by Jesseron which had not been on-sold by Jesseron, the value of the stock of unsold dates was $267,388.10. According to the balance sheet of Jesseron as at 21 June 1993 prepared by Mr Crick, the value of the stock of unsold cherries was $33,939.74. When these two amounts are added to the sum of $320,392, a total figure of $621,719.84 is produced. 20 Counsel for the defendants submitted that the amount of the "debt" from Jesseron to Metco should be taken to be the figure stated by Mr Beale in his report, that is (with some rounding off) $320,000. It was submitted that this figure should be adopted, because Mr Beale was Metco's accountant, Mr Beale had produced his report after the stock-take had been conducted on 19 June 1993 and Mr Beale's figure had been accepted by both parties as the starting point in the negotiating of the compromise figure of $260,000 in the deed of compromise of 30 June 1993. 21 As previously indicated, Mr Beale's figure did not include any amount with respect to stock held by Jesseron which had not been on-sold by Jesseron. In determining the total amount of the "debt" from Jesseron to Metco in June 1993, in the sense of determining the total value of the claims, immediate, contingent or prospective, of Metco against Jesseron with respect to stock ordered and paid for by Metco and delivered to Jesseron, the choice is not between $685,659.97 (Mr Crick's figure) and $320,000 (Mr Beale's unadjusted figure) but between $685,659.97 and $621,719.84 (Mr Beale's figure, plus $301,327.84 being the value of the unsold stocks of dates and cherries held by Jesseron). 22 Counsel for the plaintiff submitted that I should adopt Mr Crick's figure. It was pointed out that in his letter of 25 June 1993 reporting to Mr Nemes Mr Beale had said that his figure of $320,392 was "an estimate" and was a "minimum" estimate. 23 However, in my opinion, Mr Beale's figure (plus the adjustment for stocks of unsold dates and cherries) should be adopted. Mr Beale was Metco's accountant and, if the assumptions in scenario A had been fulfilled, it is likely that Mr Akhyani and a receiver appointed by Metco would have relied on a figure determined by Mr Beale and not a figure determined by Mr Crick. The figure determined by Mr Beale, and not the figure determined by Mr Crick, was the figure in fact used in the negotiations in June 1993 which led to the deed of compromise. The date as of which Mr Beale made his estimate was somewhat more proximate to the date on which, in accordance with scenario A and Mr Akhyani's evidence, a receiver would have been appointed. 24 I accordingly consider that the amount of the "debt" (subject to the October 1993 shipment) should be found to be $621,719.84. 25 The plaintiff sought to add to the amount of the debt from Jesseron to Metco the amount of $51,533.68 for what was described as "the October 1993 shipment". The goods in the October 1993 shipment were ordered by Metco in about February 1993 but were not imported until October 1993. The cost of the October 1993 shipment was $31,382.20. The realisable value of the October 1993 shipment was alleged by Metco to be $51,533.68. 26 In his affidavit of 12 July 1999 Mr Akhyani was content to claim the cost price of the October 1993 shipment. However, in written and oral submissions counsel for the plaintiff claimed the sum of $51,533.68 as being the realisable value of the shipment. 27 Counsel for the defendants submitted that no amount for the October 1993 shipment should be included in the award of damages, because, if Mr Nemes had not been negligent and if a receiver had been appointed, the goods in the shipment would not have been delivered to Jesseron and no amount in respect of the shipment would have been included in the "debt" from Jesseron to Metco, however expansively the word "debt" was interpreted. Alternatively, it was submitted that only the cost price of the shipment should be included in my award of damages. 28 In reply, counsel for the plaintiff in effect conceded that the amount claimed by the plaintiff in respect of the October 1993 shipment was not part of any "debt" from Jesseron to Metco. However, it was submitted that the right question to ask was, not whether the amount claimed formed part of the "debt" from Jesseron to Metco, but whether the amount claimed was a loss suffered by Metco which had been caused by the defendants' negligence. It was submitted that a loss had been suffered by reason of the defendants' negligence, because, if a receiver had been appointed, Metco, having the benefit of Jesseron's lines of distribution and brand names and without any interference by Mr Prichard, would have been able to sell the goods in the October 1993 shipment at cost price, plus a mark up. Such amounts as Metco in fact received from the sale of the goods in the October 1993 shipment were included in the actual net recoveries for which Metco was allowing credit to the defendants. 29 In my opinion, the submissions of counsel for the plaintiff are to be preferred and I have decided that I should allow an amount for the cost price of the October 1993 shipment, plus a mark up. However, the amount of the mark up claimed by counsel for the plaintiff is more than 60 per cent and is, in my opinion, excessive. The mark ups achieved by Jesseron from time to time fluctuated and I have decided to allow a mark up of one third. Accordingly, the amount allowed by me for the October 1993 shipment is $41,842.93. 30 The total of the amount of the debt due from Jesseron to Metco and the amount I have allowed for the October 1993 shipment is $663,562.77.

The amount of the "debt" from Jesseron to Metco (and the amount for the October 1993 shipment) which would have been recovered, if a receiver had been appointed 31 Mr Akhyani gave evidence that, if a charge had been given by Jesseron in about July 1992, a receiver would have been appointed at some time between late May 1993 and mid-June 1993. On 16 June 1993 a meeting took place between Mr Akhyani and Mr Nemes in which Mr Akhyani expressed his concern to Mr Nemes about the amount of the indebtedness from Jesseron to Metco. I consider that I should proceed on the basis that, if a receiver had been appointed, he would have been appointed within this period in mid-1993. 32 Counsel for the plaintiff submitted that, even if the amount of the indebtedness was as high as $737,193.65 (the amount contended for by counsel for the plaintiff), the full amount of the indebtedness would have been recoverable, if a receiver had been appointed in mid-1993. 33 It was submitted by counsel for the plaintiff that a receiver of Jesseron would have assumed control of the stocks of dates, cherries and figs held by Jesseron which had not been sold by Jesseron. The value of these dates and figs, as determined by the stock-take carried out by Mr Akhyani and Mr Pritchard on 19 June 1993 was $610,836. The value of the cherries (together with some other minor items of stock held by Jesseron), as shown in the balance sheet of Jesseron prepared as at 21 June 1993, was $34,798.68. The total of $610,836 and $34,798 is $645,634. 34 It was submitted by counsel for the plaintiff that the accuracy of these figures as being the value of dates, cherries and figs held by Jesseron was supported by the values shown for Jesseron's stock in hand in the balance sheet of Jesseron prepared by Mr Crick as at 30 April 1993, in which the total value of stock in hand is shown as $677,070.35. 35 Apart from its stock in hand, Jesseron, according to its balance sheet as at 21 June 1993, had trade debtors amounting to $173,575.02. That the amounts owing by these trade debtors were regarded as being collectable was suggested by the separate inclusion in its assets in the balance sheet of an asset "doubtful debts" amounting to $48,511.01. 36 When the amount of $173,575.02 for debts not adjudged to be doubtful is added to the total value of stock of $645,634, a total of $819,209.80 is arrived at. 37 In the balance sheet of Jesseron as at 21 June 1993 total current assets are shown as $706,755.50 but this figure is arrived at after taking into account a contra item of an indebtedness on an overdrawn bank account of $93,608.63. 38 It was next submitted by counsel for the plaintiff that a receiver would have been able to sell all, or almost all, of the stock and to collect all, or almost all, of the debts owed by trade debtors, so that the amounts which would have been recovered by a receiver, even after allowing for the costs of the receivership, would have exceeded the amount of the indebtedness from Jesseron to Metco. 39 It was submitted that the figures I have quoted understated the position, because a receiver would have been likely to sell stock at a substantial mark up from the figures used in the stock-take and in the preparation of the accounts of Jesseron. 40 It was the plaintiff's case that the receiver would not have engaged in a quick "fire sale" of Jesseron's assets but would have realised its assets in an orderly and measured way. 41 Counsel for the plaintiff pointed to evidence that Jesseron's income from sales of stock in the period of four months from 1 July 1993 to 31 October 1993 had been $520,436 and that these sales would not have included any of the dates and cherries which had been returned to Metco under the compromise entered into on 30 June 1993. 42 In the six months between 1 July 1993 and 31 December 1993 a high proportion of the dates returned to Metco were in fact sold. However, a receiver would have achieved better results than Metco did, because a receiver would have had unhindered access to the distribution lines of Jesseron, would have been able to use Jesseron's brand names and would not have been hindered by the disruptive tactics that Jesseron under Mr Pritchard's control adopted during this period. During this period Jesseron itself kept supplying supermarkets and Mr Pritchard told supermarkets that Metco was not entitled to sell dates and that supermarkets should not buy dates direct from Metco. 43 Counsel also pointed to statements made by Mr Pritchard within this period to the effect that there was a good demand for dates in this period. 44 As regards Jesseron's trade debtors, a full recovery would have been likely, because the debtors were large retailers who would have had an undoubted capacity to pay and who would have wished to maintain continuity of supply. 45 Counsel for the defendants based his submissions on affidavit and oral evidence from Mr Donnelly, who became the liquidator of Jesseron. 46 A copy of a report by Mr Donnelly dated 9 May 1997 was annexed to Mr Donnelly's first affidavit of 28 May 1997. In his report Mr Donnelly noted that his instructions were to prepare a report "on the worth of Jesseron and the value of a charge over the company's assets at certain points in time". The points of time selected by Mr Donnelly were 9 July 1992, 6 November 1992, 6 May 1993 1 July 1993 and 1 January 1994. In view of evidence tending to show that, if Jesseron had given a charge in July 1992, the receiver would have been appointed in "mid-1993", the most relevant of the dates selected by Mr Donnelly were 6 May 1993 and 1 July 1993. 47 In paragraph 6.03 of his report Mr Donnelly estimated the value of a charge over Jesseron as at 6 May 1993 as being $434,606. Mr Donnelly arrived at this figure by taking the balance sheet of Jesseron as at 30 April 1993 prepared by Mr Crick and estimating the realisable value of the assets shown in the balance sheet. 48 The two principal assets shown in the balance sheet were trade debtors and stock. Mr Donnelly adopted a 70 per cent realisation estimate for trade debtors and this reduced the book value of trade debtors of $189,399 to a realisable value of $132,579. Mr Donnelly adopted a 50 per cent realisation rate for stock and this reduced the book value of stock from $677,070 to $338,535. 49 After making slight adjustments to the book values of other, minor, assets and after allowing $40,000 as the receiver's costs, Mr Donnelly arrived at his estimate of the value of the charge as being $434,606. 50 In paragraph 6.04 of his report Mr Donnelly estimated the value of a charge over Jesseron as at 30 June 1993 as being $266,259. Mr Donnelly arrived at this figure by taking a balance sheet of Jesseron as at 30 June 1993 and estimating the realisable values of the assets shown in the balance sheet, adopting the same realisation percentages as he had used in paragraph 6.03 of his report. Accordingly, debtors shown at a book value of $241,155 were reduced to a realisable value of $168,809, by adopting a realisation percentage of 70 per cent. Inventories, or stock, shown at a book value of $249,654 were reduced to a realisable value of $124,827, by adopting a realisation percentage of 50 per cent. After making other minor adjustments and after allowing receiver's costs of $30,000, Mr Donnelly arrived at his figure of $266,259. 51 It was submitted by counsel for the defendant that if a receiver had been appointed in "mid-June", the total amount which the receiver would have realised would not have exceeded $434,606 and that the appropriate course would be to select a mid point between the amount of Mr Donnelly's estimate as at 6 May 1993 and the amount of Mr Donnelly's estimate as at 1 July 1993, that is a mid point between $434,606 and $266,259. 52 In oral evidence in cross-examination Mr Donnelly accepted that the probable explanation for most of the difference between the book value of the stock in the balance sheet as at 30 April 1993 ($677,070) and the book value of the stock in the balance sheet as at 30 June 1993 ($249,654) was that in the latter balance sheet the stock of dates and cherries which were returned to Metco under the compromise were not included. That the balance sheet of 30 June 1993 had been prepared on the footing that the deed of compromise of 30 June 1993 had been entered into, is confirmed by a note to the accounts which refers to a secured debt from Jesseron to Metco of $260,000. 53 Mr Donnelly is an experienced company receiver and liquidator. However, he said in his evidence that he had had no previous experience of being the administrator of a company engaged in Jesseron's lines of business. By the time he was appointed liquidator on 6 September 1994 Jesseron had no assets of any substance. 54 As regards his estimate of the realisable value of debtors, Mr Donnelly said that he had carried out numerous insolvency administrations in which there were debtors which were large supermarkets, like Coles and Woolworths. The value of debts owing by such debtors should not be discounted on the ground of any inability of the debtor to pay, because such debtors have undoubted capacity to pay but "those sort of retailers would apply a lot of deductions and credits and rebates, whatever, which inevitably results in not getting paid 100 cents in the dollar". Mr Donnelly accepted that he could not draw on any specific facts relating to Jesseron, which would enable him to put a percentage realisation value on the book value of the debtors. 55 As regards his estimate of the realisable value of stock, Mr Donnelly said that the 50 per cent discount percentage he had adopted was "my best guess". Mr Donnelly had adopted a 50 per cent realisation percentage, on the basis that there would be a forced sale or an auction of the stock. He accepted that a receiver would have had more chance of getting a higher return from the realisation of the stock, if he had carried on the business for a time, rather than selling the stock at an auction. 56 Mr Donnelly was asked in cross-examination:- "…It would be desirable to…. carry on business, that is, if the company of which one was appointed receiver had a large quantity of stock, say in the order of $600,000, it was capable of being sold to an established market comprising reliable buyers, those factors would point strongly in favour of carrying on business, wouldn't they?" 57 Mr Donnelly answered this question "Yes", although with the qualification that it would usually be necessary to enter into a new arrangement with the retailers and, if the business was being carried on otherwise than on a short-term basis, consideration would have to be given to ordering more stock. 58 I have to perform the hypothetical task of determining what amount of the indebtedness of Jesseron to Metco, including the amount for the October 1993 shipment, of $663,562.77 would have been recovered, if, contrary to fact, a receiver of Jesseron had been appointed pursuant to an equitable charge given in July 1992. There are, obviously, many imponderables. 59 If a receiver had been appointed, the receiver would have assumed control of the debts owing to Jesseron and of the stocks of dates, cherries and figs and would have sought to realise those assets. 60 I do not consider that I should accept the submission made by counsel for the defendants that I should adopt as a probable figure for the realisation of Jesseron's assets the mid point between the figures of $434,606 and $266,259 in paragraphs 6.03 and 6.04 of Mr Donnelly's report. A sufficient ground for rejecting this submission is that the balance sheet of 30 April 1993 from which the figure of $434,606 was derived and the balance sheet of 30 June 1993 from which the figure of $266,259 was derived were prepared on different bases. 61 As regards the debtors, the debtors, being mainly large supermarkets, undoubtedly had the financial capacity to pay the debts in full. It seems to me that Mr Donnelly's view that only 70 per cent of the book value of the debts would be recoverable is too low. On the other hand, although Mr Donnelly had had no experience of acting as an administrator in these particular lines of business, I consider that I should give some weight to his evidence, as evidence of a person who has conducted many company administrations involving supermarkets as debtors, that supermarkets are adept at extracting deductions, credits and rebates and that this inevitably results in a creditor company receiving less than 100 cents in the dollar. However, even allowing for this factor, I consider that a receiver would probably have achieved more than a 90 per cent realisation of trade debtors. 62 As regards stock, the plaintiff's case was that at least 100 per cent of the book value of the stock would have been recovered by a receiver. It was pointed out that a receiver would probably have sold the stock, not at the book value, but at a substantial mark up from the book values. The defendants relied on Mr Donnelly's opinion that only 50 per cent of the book values of the stock would have been recovered. 63 The plaintiff's estimate of what would have been recovered from a realisation of the stock depended on there having been an orderly realisation of the stock over an extended period. Mr Donnelly's estimate was based on there having been a rapid realisation of the stock at a fire sale or auction. 64 I consider that, for the reasons indicated by counsel for the plaintiff, the likelihood is that there would not have been a fire sale and that the receiver, if necessary with the support of Metco, would have carried on the business of Jesseron for some months and would have succeeded in recovering at least close to the book value of the stock. 65 In my opinion, it is likely that the full amount of what I have found to be the "debt" from Jesseron to Metco, including the amount in respect of the October 1993 shipment, would have been recovered, if a receiver had been appointed.

Whether the cost of repackaging should be taken into account in determining the actual net recoveries 66 The plaintiff claimed as an expense to be taken into account in determining the amount of the actual net recoveries the sum of $45,681.35, being the cost of re-packaging stocks which had been returned to it under the deed of compromise of 30 June 1993. 67 It was not disputed by counsel for the defendants that the plaintiff had incurred this cost for re-packaging. However, it was submitted that this cost should not be taken into account, on the grounds that it had not been caused by the defendant's negligent conduct, or, if it had been caused by the defendant's negligent conduct, it was nevertheless too remote from the defendant's negligent conduct to be taken into account. It was submitted that the need to re-package the stock had arisen because of Mr Pritchard's conduct, in contravention of the deed of compromise of 30 June 1993 and the non-exclusive distributorship agreement, in telling supermarkets not to purchase direct from Metco products in packaging which was associated with Jesseron. It was contended that this deliberate, wrongful conduct by Mr Pritchard was a novus actus interveniens, which prevented there being any causal connection between Mr Nemes' negligence and the incurring of the cost of re-packaging or, alternatively, which rendered the cost of re-packaging too remote from Mr Nemes' negligence. 68 I do not consider that these submissions should be upheld. 69 In the first place, I consider that the cost of re-packaging should be regarded, not as loss or damage for which the plaintiff is seeking damages, but as a cost incurred by the plaintiff in seeking to mitigate its damages by selling the stocks returned to it under the deed of compromise of 30 June 1993. So regarded, the cost of re-packaging should be taken into account in determining the amount of the actual net recoveries made by the plaintiff from selling the returned stock, if the plaintiff acted reasonably in incurring the cost of re-packaging. I am satisfied that the plaintiff acted reasonably in incurring the cost of re-packaging and, indeed, the contrary was not suggested by counsel for the defendants. 70 If, on the other hand, the question of whether the cost of re-packaging should be taken into account is to be resolved by determining whether there was a causal connection between Mr Nemes' negligence and the incurring of the cost of re-packaging and whether, if there was such a causal connection, the cost of re-packaging was not too remote from Mr Nemes' negligence, I am still of the opinion that the cost of re-packaging should be taken into account. 71 Under the decision of the High Court in March v E & M.H. Stramare Pty Limited (1990-1991) 171 CLR 506 and subsequent decisions, a question of causation is to be resolved by applying common sense to the facts of the particular case. It is sufficient for a causal connection to be established between a defendant's negligence and damage sustained by the plaintiff that the defendant's negligence materially contributed to the sustaining of the damage by the plaintiff. A defendant's negligence can be a cause of the plaintiff's damage, even though some act or decision of the plaintiff or of a third party was a more immediate cause of the plaintiff's damage than the defendant's negligence. See Kavanagh v Akhtar (1998) 45 NSWLR 588 at 597 per Mason P. I am satisfied that there was a causal connection between Mr Nemes' negligence and the incurring of the cost of re-packaging. 72 I am further satisfied that, at least insofar as Metco's action is framed in tort, by the "undemanding" test for remoteness of damage in actions in tort (Habib v The Nominal Defendant (1995) 22 MVR 454 at 463 per Kirby P), the cost of re-packaging is not too remote. There are many cases in the books in which an item of damage has been held not to be too remote, notwithstanding voluntary, deliberate conduct by the plaintiff or a third party intervening between the defendant's negligence and the sustaining of the item of damage and notwithstanding what might have been thought to have been an unlikely sequence of events between the defendant's negligence and the sustaining of the damage. Some examples are Nader v Urban Transit Authority (NSW) (1985) 2 NSWLR 501; Commonwealth of Australia v McLean (1996) 41 NSWLR 389; Kavanagh v Akhtar (1998) 45 NSWLR 588; Habib v The Nominal Defendant (1995) 22 MVR 454. 73 The cost of re-packaging should be taken into account in determining the actual net recoveries.

What amount should be allowed for legal and accountancy costs 74 The plaintiff claimed the amount of $69,272.63 for legal and accountancy costs. The defendants were prepared to allow the sum of $67,211.04 (defendants' submissions of 19 April 2000 par32(b)(4)). 75 The difference between the amount claimed by the plaintiff and the amount the defendants were prepared to allow is $2,061.59. It is unclear what is the explanation for this difference. $2,061.59 is not the amount of any of the itemised legal and accountancy costs in annexure C to Mr Akhyani's affidavit of 15 March 1999. 76 In the plaintiff's original outline submissions on damages it was submitted that, notwithstanding an apparent concession made by Mr Akhyani in cross-examination, fees of 24 June 1993 charged by Heaney Richardson and Nemes should be allowed as part of the plaintiff's claim for legal and accountancy expenses. However, the amount of these fees $2,276 is not the same as the amount of the difference between the amount claimed by the plaintiff and the amount allowed by the defendants and in the defendants' submissions of 19 April 2000 (par32(b)(2)) these fees of $2,276 of 24 June 1993 are admitted. 77 In the circumstances, I will allow only the amount which the defendants were prepared to allow, that is, $67,211.04.

Whether the plaintiff's claim for salary should be allowed 78 In paragraph 14 of the plaintiff's original outline submissions on damages the claim for salary was made in the following terms:- "The absence of a charge in 1992 led to the dispute with Jesseron in 1993 both before and after the compromise agreement. After the compromise agreement, Metco was involved in efforts to sell the returned stock as well as in dealing with the dispute with Jesseron. (Mr Akhyani) estimates that about one-half of his available work time from July 1993 to August 1995 was occupied in dealing with these problems (6 MHA 38). Accordingly, Metco lost the opportunity of earning a salary or consultancy fees for the services of (Mr Akhyani) during the period that was devoted to the Jesseron problem. In (Mr Akhyani's) estimate, about one year of his time was devoted to this. A fair value of that time can be gauged from Mr Pritchard's monthly salary of $3,500 per month. 12 months salary at $3,500 per month equals $42,000". 79 I do not consider that I should award any damages for this claim. 80 Even if Mr Nemes had not been negligent and a receiver had been appointed, it is likely that Mr Akhyani would have spent a considerable amount of his time in dealing with problems between Jesseron and Metco. 81 I am not satisfied that it has been established that Metco would have had any real chance of earning consulting fees from hiring out the services of Mr Akhyani. There is no evidence that after Mr Akhyani's arrival in Australia in 1989 he had earned any income as a consultant or any company had earned any income from hiring out his services as a consultant. There is no evidence that there would have been any demand for Mr Akhyani's services as a consultant in the period between July 1993 and August 1995. 82 The adoption of the salary paid to Mr Pritchard while he was working in the business of Jesseron as a measure of what Metco would have earned by hiring out Mr Akhyani's services as a consultant seems to me to be quite arbitrary. I acknowledge that, if a claim were established, some damages would have to be awarded, whatever the practical difficulties in assessing the amount of the damages. 83 I reject the claim for salary.

Claim for Hungerfords v Walker damages 84 As previously indicated, Metco made a claim for damages based on the decision of the High Court in Hungerfords v Walker (1990) 171 CLR 125. This was a claim for compensation for loss of the use of the money of which Metco had been deprived by the defendant's negligence. It was submitted that the measure of this compensation should be compound interest, at rates 5 per cent higher than the interest rates from time to time prescribed under schedule J to the Supreme Court Rules, on the amount of the damages otherwise recovered by Metco. 85 The primary basis on which the claim for Hungerfords v Walker damages was made was that, if Mr Nemes had not been negligent and if all the assumptions underlying scenario A would have been fulfilled (as I have held), then Metco would have used the monies recovered through the appointment of a receiver and the monies which it would not have had to expend, if a receiver had been appointed (the legal and accountancy costs) and the assets which it would have acquired from a receiver of Jesseron (Jesseron's lines of distribution and brand names) in carrying on profitably, and indeed expanding, the business formerly carried on by Jesseron of distributing packaged dates and figs to supermarkets. The business would have been expanded inter alia by exploiting the links Mr Akhyani claimed to have with a company in Iran called Mobinkala, which is a subsidiary of a large Iranian bank. 86 Alternatively, it was submitted that, if the monies received and saved had not been used in carrying on the business formerly carried on by Jesseron, they would have been put to some other profitable business use. 87 Counsel for Metco referred to Hungerfords v Walker itself and to some subsequent decisions, particularly the decision of Giles J, as his Honour then was, in Hobartville Stud Pty Limited v Union Insurance Co Limited (1991) 25 NSWLR 358. 88 In Hungerfords v Walker the appellant accountants negligently erred for several years in calculating the amounts of depreciation allowable as deductions in the income tax returns of the respondent clients. As a result the clients paid more income tax than they should have. When the error was discovered, the amounts of income tax overpaid in the later years were recovered but the right to recover amounts of tax overpaid in the earlier years was statute-barred. The clients sued the accountants in contract and in tort for the loss of the amounts which were not recoverable, with compound interest at market rates of interest upon those amounts and upon the increased amounts of provisional tax which had been paid. 89 The trial judge held that the clients could, in addition to recovering the amounts overpaid, recover damages for the loss of the use of the monies overpaid. The trial judge calculated these damages on the basis that most of the monies which had been overpaid would have been used in the clients' business and by reference to an interest rate of 10 per cent. 90 The Full Court of the Supreme Court of South Australia held that damage resulting from the loss of the use of the money which had been overpaid was compensable. The Full Court increased the rate of interest at which the damages should be assessed to 20 per cent, on the footing that the monies, if not lost, would have been used to repay loans carrying that rate of interest or invested in the clients' business to earn profits at that rate. 91 The High Court dismissed a further appeal by the accountants. The Court held by majority that expenses incurred and opportunity costs arising from money being paid away or withheld as a result of a breach of contract or negligence are losses suffered as a result of the defendant's conduct and are not too remote to be recoverable. 92 In Hobartville Stud v Union Insurance Co Giles J said at p364:- "It still remains necessary to undertake a factual investigation into the loss suffered through being held out of the money. At the end of the day it may be determined that market rates of interest are the appropriate measure of the loss, but that is not necessarily so. Whether the plaintiff would have made a profit from the use of the money withheld from it, and the amount of the profit, must be determined on the evidence, and there is not an automatic allowance of interest upon the money withheld. These and other passages demonstrate that the plaintiff's loss and its quantum are to be found as a fact and assessed on the evidence, not assumed from the withholding of the money and automatically assessed by the application of current market rates of interest. In so holding I decline the plaintiff's invitation to depart from the view I expressed in McBeath v Sheldon (Giles J, 8 August 1990, unreported). I there said, speaking of Hungerfords v Walker : 'It was recognised that damages for breach of contract could include the profit which the plaintiff would have made from the use of money of which he was deprived by the defendant's breach, but while this may be called damages by way of interest that description is liable to mislead. If the assessment of the lost profit is by reference to interest which would have been earned on the money had the plaintiff had its use, or to interest paid in borrowing other money which goes to reduce the profit the plaintiff would otherwise have made, that is coincidental: the interest rate is simply an available and appropriate measure, in the particular circumstances, of the lost profits. In such a case, whether the plaintiff would have made a profit, and the amount of the profit, are issues of fact to be determined on the evidence, and there is not an automatic allowance of interest on any money expended by the plaintiff.' I am not persuaded that this view is wrong, and I adhere to it". 93 It was submitted by counsel for Metco that, if a receiver had been appointed, the receiver would have carried on the business of Jesseron and would not simply have realised its assets in a fire sale and I have already accepted this submission. 94 It was further submitted by counsel for Metco that there would have been no legal impediment to a receiver of Jesseron selling the assets of Jesseron to Metco as the secured creditor who had appointed him. In support of this submission I was referred to a passage in O'Donovan Company Receivers and Administrators (2nd Ed 1998) at p406, in which it is stated:- "On the other hand, it appears that a sale by a receiver to the mortgagee who appointed him will not be improper on that ground alone. While it would be inappropriate to apply a strict fiduciary principle to such a sale, the court should carefully scrutinise the terms of the bargain and the surrounding circumstances to ensure that the company's interests have not been sacrificed. The court should jealously guard the interests of the company because a sale by a receiver to the mortgagee who appointed him amounts to a de facto foreclosure, yet the company will remain liable under the personal covenant in the mortgage or charge to pay the balance of the debt owing to the mortgagee or chargee. In the foreclosure this personal covenant is extinguished". 95 I am prepared to accept what O'Donovan says as a correct statement of the law, although I note that what O'Donovan says is somewhat guarded and qualified. 96 An important question for me to determine is whether on the evidence, if the monies recovered and saved had been used by Metco in the carrying on of the business formerly carried on by Jesseron and if the assets of Jesseron had been acquired by Metco, the business would have been carried on profitably and, if so, at what amount or rate of profit. 97 In paragraph 16 of his affidavit of 12 July 1999 Mr Akhyani estimated that, in the circumstances I have postulated, Metco would have achieved a net profit of between $150,000 and $200,000 a year. Mr Akhyani based this estimate on what he said were the actual sales of Jesseron in the period from 1 July 1992 to 30 April 1993, $917,768.24, as shown in the accounts for this period prepared by Mr Crick. However, the figure of $917,768.24 was not the figure for sales in the accounts prepared by Mr Crick for Jesseron but the figure for sales in the accounts prepared by Mr Crick for Metco. A consequence of this error was that Mr Akhyani's calculation of the ratio of the cost of sales to sales was also erroneous. 98 In paragraph 16 of his affidavit of 12 July 1999 Mr Akhyani, on the basis of "my experience in business", estimated the "expenses", that is the expenses not included in the calculation of the gross profit, as being $100,000. Mr Akhyani said that he believed that all his estimates (including the estimate of expenses) were "realistic". 99 In a document which became exhibit D at the hearing and in oral evidence at the hearing Mr Akhyani put forward a revised estimate of the profit which would have been made by Metco from carrying on the business of Jesseron. This estimate was based on the accounts which Mr Crick had prepared for Jesseron for the ten month period from 1 July 1992 to 30 April 1993. In these accounts Mr Crick showed sales as being $1,412,798.85 the cost of sales as being $1,045,304.59 and the gross profit as being $367,494.26. In exhibit D Mr Akhyani adjusted these figures for a ten month period to annual figures of sales $1,695,358.62, cost of sales $1,254,365.51 and gross profit $440,993.11. Mr Akhyani then adjusted sales down to $1,600,000 and made a corresponding proportional reduction to the cost of sales so as to produce a figure of $1,183,811.37, thus producing a gross profit of $416,188.63. 100 In the accounts he prepared Mr Crick showed expenses as being $407,768.04. With expenses at that figure, Mr Crick showed Jesseron as having made during the ten month period ended 30 April 1993, not a profit, but a loss of $40,273.78. 101 In exhibit D, on the other hand, Mr Akhyani estimated expenses for the twelve month period ended 30 June 1993 on sales of $1,695,358.62 as being $320,000 and on sales of $1,6000.00 as being $300,000. With these estimates of expenses, the profit was $120,993.11 on expenses of $320,000 and $116,188.63 (rounded off to $116,000) on expenses of $300,000. 102 His reasons for departing from Mr Crick's figures for expenses were set out by Mr Akhyani at the foot of the revised profit estimate in exhibit D as follows:- "1 About half of expenses are fixed so they do not increase by sales. 2. Amount of stock imported was overestimated in year 1, so on consecutive years a better management based on past experience would have resulted in less interest payments as well as less storage costs. 3. Many of expenses in year 1, were promotion and new line fees, which by nature were not recurring in consecutive years of operating the business. 4. With use of broker and payment of commission some expenses would be reduced. 5. Brokerage for established lines could be negotiated down, in subsequent years". 103 In his oral evidence at pp134-139 of the transcript Mr Akhyani gave a detailed breakdown of his estimate of expenses, by commenting on each item of expense shown in the profit and loss statement prepared by Mr Crick and saying whether in his opinion each expense would be lower or higher or about the same, if Metco was carrying on Jesseron's business. Mr Akhyani claimed to be qualified to give this evidence by virtue of his experience in working in the office of Jesseron and his general business experience. 104 Many of Mr Akhyani's estimates were different from Mr Crick's figures. The differences included estimates by Mr Akhyani which were lower than Mr Crick's figures for advertising and promotion, art work and type setting, bad debts, consulting, freight costs, entry and wharfage charges, customs clearance, discounts allowed, dumped goods, legal fees, insurance, motor vehicles, fumigation and quarantine, storage fees and telephones and faxes. 105 Apart from the reasons given in exhibit D, some of the lower estimates were sought to be justified by Mr Akhyani on the basis that the higher figures in Mr Crick's accounts were attributable to coconuts and Metco, if it had carried on Jesseron's business, would have abandoned the distribution of coconuts. 106 It was submitted on behalf of the plaintiff, and I would accept, that the figure of $1,600,000 for sales is supported, not merely by the figure for sales in Mr Crick's accounts for Jesseron for the ten month period ended 30 April 1993 but also by the figure for sales in Jesseron's accounts for the full year ended 30 June 1993. 107 It was also submitted, and I would accept, that the gross profit margin disclosed in Mr Crick's accounts for the ten months ended 30 April 1993 and adopted by Mr Akhyani in his revised profit estimate is supported by accounts of Jesseron for the full year ended 30 June 1993, in which sales are shown as $1,509,252 and the cost of sales as being $900,613.01, producing a gross profit which Mr Donnelly in cross-examination agreed was very close to 40 per cent of sales. 108 As regards other expenses, it was submitted on behalf of Jesseron that I should accept Mr Akhyani's estimate for the reasons given in exhibit D and in his oral evidence. It was accepted by counsel that Mr Akhyani's estimates of expenses were not in accordance with the actual historical results of Jesseron for any period. While under Mr Pritchard's control Jesseron had not traded profitably. However, it was submitted that this was because of the low level of sales achieved while Jesseron was under Mr Pritchard's control. It was submitted that the business being carried on by Jesseron was a kind of business such that, if sales could be expanded, there would not be a commensurate increase in expenses, with the consequence that, if a higher level of sales could be achieved, a profit would be achieved and that Metco, if it had been carrying on Jesseron's business, would have been able to achieve a higher level of sales. 109 It was submitted by counsel for the plaintiff that I should accept evidence by Mr Akhyani that under his control the business of Jesseron could have been operated as a one man operation. All that would have been required was an office, a telephone and a fax machine. Metco would have used the services of finance providers, customs agents, warehouse organisations and brokers. In this way some of the expenses shown in Mr Crick's accounts would have been saved. 110 In opposing the claim for Hungerfords v Walker damages counsel for the defendant made a number of submissions. 111 Some of the submissions made by counsel for the defendants should be rejected. It was submitted that Metco had not shown how it would otherwise have used the money which it had outlaid in its venture with Jesseron but this submission mistakes the nature of Metco's case on Hungerfords v Walker damages. Metco did not claim Hungerfords v Walker damages on the basis that, if it had not entered into the venture with Jesseron, it would have outlaid the money which it outlaid in the venture with Jesseron in pursuing one or other of the other business opportunities which Mr Akhyani in his affidavit of 12 July 1999 said he had investigated before Metco entered into the venture with Jesseron. It was also submitted by counsel for the defendants that the claim for Hungerfords v Walker damages was a claim for expectation damages "by the back door". However, Metco's claim, properly understood, should not be so characterised. Metco's claim was not a claim for damages for the loss of something which would have been gained, if some promise by the defendants had been true or had been performed. 112 However, other arguments made by counsel for the defendant have more force and I have concluded that I should not allow the claim for Hungerfords v Walker damages. 113 As stated by Giles J in Hobartville Stud v Union Insurance Company I should not automatically allow damages for the loss of the money lost to the plaintiff but should determine on the evidence whether, in the circumstances I have outlined, Metco would have made a profit and the amount of the profit. 114 I have already stated that I accept that Metco in carrying on the business formerly carried on by Jesseron would have been able to achieve sales and a gross profit. However, I do not consider that I should accept Mr Akhyani's revised estimate of the expenses of the business as being as low as $300,000 per annum. 115 The estimate of the amount of the expenses on which Metco relies is an estimate given by its own principal Mr Akhyani. It is, of course, open to me to accept Mr Akhyani's evidence but it is appropriate that I should approach his evidence with some caution. 116 I do not set much store on Mr Akhyani's error in his affidavit of 12 July 1999 in using the figure for Metco's sales instead of the figure for Jesseron's sales. However, I consider that the other error made by Mr Akhyani in his affidavit is more significant. Mr Akhyani's original estimate of the expenses, which he made in his affidavit, was $100,000. In his affidavit he described this estimate as being based on his business experience and as being "realistic". In his oral evidence Mr Akhyani admitted that the figure of $100,000 was wrong, that it bore no resemblance to reality and that at the time he made his affidavit the figure had not stood out to him as being wrong. I consider that Mr Akhyani's original, quite unrealistic, estimate of the expenses throws doubt on his subsequent revised estimate. 117 Mr Akhyani's revised estimate of expenses as being $300,000 seems to me likely to be far too optimistic in its assumptions about what expenses could be avoided altogether or significantly reduced. For example, I am not persuaded that expenses could be reduced by the use of brokers or that Mr Akhyani would be able to negotiate down brokerage rates in subsequent years. It seems to me unlikely that the business could have been conducted without, for example, any legal costs, without allowing any discounts and without suffering any losses through dumped goods. Mr Akhyani said in his evidence that he had not allowed anything for discounts but then claimed that an allowance for discounts had been built into his sales figure of $1,600,000. 118 It seems to me unlikely the business of Jesseron could have been run as a one man operation in the way envisaged by Mr Akhyani. For much of the year ended 30 June 1993 both Mr Akhyani and Mr Pritchard worked long hours in the business of Jesseron. Mr Pritchard, whatever his other deficiencies, had, unlike Mr Akhyani, experience and skills in marketing and devoted considerable time to marketing and I do not consider that the functions which Mr Pritchard had performed could simply have been entrusted to a broker. 119 Mr Akhyani's estimates of the expenses and of profit are not supported by any of Jesseron's actual results, including its accounts for the period of ten months ended 30 April 1993 prepared by Mr Crick; its accounts for the period of twelve months ended 30 June 1993; and its accounts for the period of four months from 1 July 1993 to 31 October 1993. 120 In accounts for the twelve months ended 30 June 1993 sales are shown as $1,509,252.92, the total cost of sales is shown as $900,613.01 and total expenses are shown as $623,165.10, producing an operating loss of $14,525.19, before an amount designated as "other income" $46,317.89, which is not explained, is brought into account. 121 In accounts for the four months ended 31 October 1993 total income is shown as $520,435.80, the total cost of sales is shown as $439,520.48 and total expenses are shown as $190,674.86, producing an operating loss of $109,759.54. After certain other items of income and expense are taken into account a final loss of $101,109.09 is shown. 122 In my opinion, it is quite speculative that if Jesseron's business had been carried on by Metco, Metco would have been able to substantially increase sales and thereby increase profitability. 123 In August 1993 Mr Crick prepared some budgets and forecasts for Jesseron for the year ended 30 June 1994. The document is addressed to someone on behalf of Corporate Advising and Training Pty Limited and its purpose is unclear. In the document Mr Crick expressly makes a large number of assumptions. He says that he has not had the opportunity of discussing "these amended figures" with Mr Pritchard. I do not consider that I should give any weight to these budgets and forecasts. 124 In the proceedings in the Equity Division of the Court brought by Jesseron in 1993 Mr Crick on behalf of Jesseron made an affidavit to which he annexed copies of the accounts of Jesseron for the year ended 30 June 1993, including a profit and loss statement showing sales of $1,509,253, costs of sales of $901,470 and expenses of $624,327, producing an operating loss of $16,544. When "other income", which was not identified, was taken into account, a net profit for the year of $29,774 was produced. 125 In reply to this affidavit an affidavit by Mr Beale on behalf of Metco was filed. In this affidavit Mr Beale, for the specific reasons advanced by him, including the omission of an expense, an unjustified re-valuation of an asset, the treatment of a non-revenue item as revenue and the inclusion of an adjustment from a previous year, expressed the opinion that the stated profit in Mr Crick's profit and loss statement of $29,774 was an "overstatement" by a total amount of $211,426, that is to say Jesseron in the year ended 30 June 1993 had really made a substantial loss. 126 In his oral evidence at the hearing Mr Akhyani said that he did not remember seeing Mr Beale's affidavit at the time of the equity proceedings. However, I am satisfied, particularly in view of Mr Akhyani's keen interest in the equity proceedings, that he would have been aware of Mr Beale's affidavit and would have approved of it being used in the equity proceedings. Accordingly, in September 1993 Mr Akhyani was adopting the position that Jesseron had been operating at a very substantial loss, much worse than the results shown in the accounts prepared by Mr Crick. 127 On the evidence I am not satisfied that, if a receiver had been appointed and Metco had applied the monies received through the appointment of a receiver and the monies which it would not have had to expend if a receiver had been appointed and the assets which it would have acquired from the receiver of Jesseron in carrying on the business formerly carried on by Jesseron, it would have made a profit in carrying on the business formerly carried on by Jesseron or, if it had made a profit, what amount of profit it would have made. 128 If the monies received and saved had been utilised in some other venture, then it is utterly speculative whether Metco would have made a profit and, if so, what would have been the amount of the profit. On the evidence Mr Akhyani has no record of having successfully carried on business in Australia. 129 I accordingly reject the claim for Hungerfords v Walker damages. Metco will of course be entitled to interest, that is simple interest, on the damages it recovers at the rates set out in schedule J to the Supreme Court Rules, which since 1992 have varied between 9.5 and 12 per cent per annum.

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