The principles
121 As we have already indicated, it was common ground on appeal that save for that pleaded at para 9(a) of the Statement of Claim, the representations inducing the appellant to enter into the contract and the lease with the bank were representations with respect to future matters engaging s 51A of the Act. As we have also noted, the respondents accept that the primary judge did not expressly consider (and therefore did not determine) in respect of each future matter representation found to have been made, whether the respondents had adduced "evidence to the contrary" for the purposes of s 51A(2) of the Act and if so whether the appellant had established that the respondents did not have reasonable grounds for making each representation found to have been made: s 51A(1).
122 The question of whether the primary judge erred in fact or in law in assessing whether the appellant had suffered loss or damage by conduct of the respondents done in contravention of s 52 of the Act for the purposes of s 82 of the Act should be answered on the footing that each of the representations as found constitutes a contravention of s 52, having regard to the lacunadescribed earlier.
123 The amount of the loss or damage suffered by the appellant by conduct of the respondents done in contravention of s 52 of the Act is measured for the purposes of the statutory remedy of s 82, by asking what measure of damages properly conforms to the remedial purpose of the statute and does justice and equity in the circumstances of the case: Henville v Walker (2001) 206 CLR 459 (Henville) at [18] per Gleeson CJ. In this case, the appellant was induced to enter into the contract and the lease with the bank in reliance on the representations as found. It suffered loss by contravening conduct (for the purposes of this discussion) in terms of the well known passages in the judgment of Mason CJ, Dawson, Gaudron and McHugh JJ in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at 525‑526. Once such a connection is found to exist, nothing in s 82 suggests that the recoverable amount should be limited by reference to analogues drawn from contract, tort or the principles governing the application of equitable remedies, although these references will usually be of "great assistance": Henville 206 CLR 459 at [130] per McHugh J. That is so because the common law principles have had to respond to problems of the same nature as the problems which arise in the application of the Act. These principles "are not controlling, but they represent an accumulation of valuable insight and experience which may well be useful in applying the Act": Henville 206 CLR 459 at [18] per Gleeson CJ.
124 Although these principles provide great assistance, insight and valuable experience and learning, s 82 (like s 87 in respect of a likelihood of suffered loss or damage by reason of the relevantly contravening conduct) is singular and sui generis in the sense that s 82 is cast in broad terms, is unconfined by analogues drawn from the common law and is capable, by its terms, of being adapted to accommodate approaches to the assessment of damages that provide proper compensation in all the circumstances provided the particular approach serves the purpose of doing justice and equity in the circumstances of the case: Marks v GIO Australia Holdings Ltd (1998) 196 CLR 494 (Marks) per Gaudron J at [17], per McHugh, Hayne and Callinan JJ at [38], [41], per Gummow J at [103], per Kirby J at [152]; Henville 206 CLR 459per Gleeson CJ at [18], per McHugh J at [130], [131]; I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109 per Gaudron, Gummow and Hayne JJ at [42] to [48]; Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388 per Gleeson CJ, McHugh, Gummow, Kirby, Hayne, Callinan and Heydon JJ at [31], [44] and [45].
125 However, as to the assistance these principles derived from the general law might provide, McHugh J observed in Henville 206 CLR 459at [132] that the general principles for assessing damages may have to give way altogether in particular cases to solutions best adapted to give the injured claimant an amount which will most fairly compensate for the wrong suffered. The Court must, in particular cases, configure solutions best adapted to giving a claimant that amount in damages which will most fairly compensate for the wrong suffered: Johnson v Perez (1988) 166 CLR 351 per Mason CJ at 355 and 356. The appropriate approach is to identify what loss or damage the appellant has suffered by way of prejudice or disadvantage in consequence of altering its position in reliance upon the contravening conduct: Henville 206 CLR 459at [132] per McHugh J. In Toteff v Antonas (1952) 87 CLR 647 in the context of the assessment of damages in an action of deceit at common law, which provides some useful assistance, Dixon J at p 650 observed that a plaintiff is entitled to recover as damages a sum representing the prejudice or disadvantage he or she has suffered in consequence of altering his or her position under the inducement of the fraudulent misrepresentations and what is recoverable is the difference between the real value of the property [acquired] and the sum which the plaintiff was induced to give for it. His Honour approved the formulation of Sir James Hannen P in Peek v Derry (1887) 37 Ch D 541 at 594, that the question is how much worse off is the plaintiff than if he or she had not entered into the transaction. The general principle is that the plaintiff is to be put, so far as possible, in the position he or she would have been in if he or she had not acted on the inducement: Gould v Vaggelas (1985) 157 CLR 215 (Gould) at 221 per Gibbs CJ.
126 The measure of damages in such an action consists in the loss or expenditure incurred by the plaintiff in consequence of the inducement on which he or she relied diminished by the corresponding advantage in money or monies worth obtained by him or her on the other side: Potts v Miller (1940) 64 CLR 282 (Potts) at 297. The loss a claimant can recover includes consequential losses flowing directly from the misrepresentation: Potts 64 CLR at 297 and 298.
127 In Henville 206 CLR 459 at [135] McHugh J concluded, in the context of the circumstances of the particular case, that he could see no reason why these principles applicable in an action for deceit at common law should not be applied in the assessment of damages under s 82 of the Act, particularly having regard to the purposes of the Act which include promoting fair trading and protecting consumers from contraventions of the Act which, in his Honour's view, are more readily achieved by ensuring that consumers recover the actual losses they have suffered as a result of contraventions of the Act. His Honour observed at [135]:
Where a person contravenes the Act and induces a person to enter upon a course of conduct that results in loss or damage, an award of damages that compensates for the actual losses incurred in embarking on that course of conduct best serves the purposes of the Act and should ordinarily be awarded.
128 Gummow J at [152] agreed with these observations of McHugh J, and Hayne J at [167] concluded, for the reasons his Honour advanced (agreeing with McHugh J in the outcome), that the claimants were entitled to recover the whole of the amount lost on the footing that the loss claimed was caused by the conduct in question in contravention of s 52 of the Act.
129 If the respondents in this case had not made the representations, the appellant would not have entered into the contract or the lease and none of its loss would have occurred. The loss suffered is directly attributable to the contravening representations.
130 As to the additional power costs, was the appellant worse off as a result of purchasing the new line? The primary judge refused to bring the additional power costs to account on the footing that his Honour had rejected the appellant's claim that any representation was made to it to the effect that the appellant's power costs would be less if the new line were acquired. The claim was not rejected on the footing that the evidence did not establish that the appellant had incurred additional power costs through the use of the new line. The particular item of expenditure by which the appellant is, in part, worse off is not to be eliminated from the calculation simply because no representation was made as to power costs. The expense is directly related to operating the new line which the appellant was induced to acquire and operate in reliance on the representations as found.
131 Moreover, increased power costs were not only foreseeable but contemplated, having regard to the evidence, although the particular representation alleged by the appellant was found not to have been made. The appellant is worse off by reason of those additional power costs although, in the calculation of loss or damage overall, benefits otherwise derived by the appellant might offset those additional power costs, having regard to any corresponding advantage in money or monies worth obtained by the appellant on the other side. In Gould 157 CLRat 221 Gibbs CJ said:
There may be cases in which the purchaser continues to trade, either because he has no real alternative or because he has not become aware of the nature of the fraud, and in those circumstances incurs losses which are not represented by the difference between the price and value of the business. There is no reason in principle why the defrauded purchaser should not recover damages for all the loss that flowed directly from the fraudulent inducement (unless, possibly, the loss was not foreseeable). If the purchaser, besides paying more for the business than it was worth, has suffered additional losses which resulted directly from the fraud he ought to be compensated for them. Of course, the court must be satisfied that the loss did result directly from the fraud and not from some supervening cause such as the folly, error or misfortune of the purchaser himself, and must ensure that no additional compensation is given for losses when those losses, or the probability of their occurrence, has already been taken into account in determining the value of the business.
132 The general principle that the appellant contends must give way altogether in this case so as to craft a solution best adapted to fairly compensating it for its loss (above [125]) and accommodating the remedial purpose of s 82 in a way that does justice and equity in the circumstances of the case (above [123]), is that the measure of damages usually applicable in the case of an acquisition of an asset in reliance upon conduct in contravention of s 52, is the difference between the real value of the asset and the price paid for it, plus consequential losses, at the time of acquisition. In HTW Valuers v Astonland Pty Ltd (2004) 217 CLR 640 (HTW Valuers), the Court per Gleeson CJ, McHugh, Gummow, Kirby and Heydon JJ at [65] observed that:
… a primary reason for the common adoption, in assessing damages in deceit, of the test of comparing the price paid for an asset with its true value when acquired is the desirability of separating out losses resulting from extraneous factors in the later history of the asset.
Lord Browne‑Wilkinson observed in Smith New Court Securities Ltd v Citibank NA [1997] AC 254 (Smith New Court Securities) at 266 that "It was the desire to avoid these difficulties of causation which led to the adoption of the transaction date rule".
133 The "well‑settled" rule is only a rule of practice: McAllister v Richmond Brewing Co. (NSW) Pty Ltd (1942) 42 SR (NSW) 187 at 192 per Jordan CJ: HTW Valuers 217 CLR 640 at [35]. In HTW Valuers at [35] the Court said:
The approach of subtracting value from price is commonly employed where the acquisition of land, chattels, businesses or shares is induced by deceit. It has also been commonly employed under s 82 of the Act (Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 6‑7, per Gibbs CJ; at 12, per Mason, Wilson and Dawson JJ; Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 at 291, per Brennan, Deane, Dawson, Gaudron and McHugh JJ). It is sometimes described as the rule in Potts v Miller. Even in the areas in which that approach is often applied, and even apart from cases in which consequential losses have been recovered, the "rule" is not universal or inflexible or rigid. This perception is not novel. It has existed at least since the judgment of Dixon J in Potts v Miller and has been quite plain since that of Gibbs CJ in Gould v Vaggelas.
134 At [36] the Court said of the flexibility of the rule:
One key qualification of the rule which prevents it from being inflexible is that the test depends not on the difference between price and "market value", but price and "real value" or "fair value" or "fair or real value" or "intrinsic" value or "true value" or "actual value" or what the asset was "truly worth" or "really worth" or "what would have been a fair price to be paid … in the circumstances … at the time of the purchase". This distinction is sometimes difficult to draw, but it is old and fundamental.
135 In all of these examples, although the focus of the discussion concerned the comparison between value assessed by reference to the various descriptive terms and price, rather than a comparison between price and market value, particularly having regard to the way in which market value might be affected by manipulation or improper practices, the comparison nevertheless was struck at the date of purchase.
136 Assessments of value or compensation payable at a particular date are commonly made taking account of all matters known at the date of the Court's assessment, and that approach applies to s 82 of the Act when the Court assesses damages by comparing the price paid and the real value of the asset at the date of acquisition: Kizbeau Pty Ltd v W G & B Pty Ltd (1995) 184 CLR 281 (Kizbeau); HTW Valuers 217 CLR 640 at [39]. In considering post‑acquisition events, if the cause of the decline in value is inherent to the asset itself, then the decline in value should be taken into account in determining the real value. If, on the other hand, the cause is "independent", "extrinsic", "supervening" or "accidental", the additional loss is not the consequence of the inducement: HTW Valuers at [40].
137 In what circumstances is it appropriate to adopt an alternative approach to assessing damages to that of comparing the price paid and the real value of the asset at the date of acquisition (the "transaction date")? In HTW Valuers 217 CLR 640, at [63] to [66] the Court considered the merits of an alternative approach conditioned by the circumstances of a particular case that might represent the right vehicle for the application of such an approach. The Court said of a method of assessing damages based on an entitlement to recover the difference between the purchase price of the asset and whatever [value] was left in the hands of the buyer:
… does not lack merit whether it is viewed as the only acceptable path to damages under s 82 in this case, or whether it is viewed as a means of checking the soundness of results achieved by other possible paths.
138 At [63] the Court noted that a majority of the House of Lords in Smith New Court Securities [1997] AC 254 (Lord Browne‑Wilkinson, Lords Keith of Kinkel, Mustill and Slynn of Hadley concurring), in considering the transaction date rule, recognised that there are circumstances where it is appropriate to calculate damages by reference to the actual proceeds of the asset, provided the party had acted reasonably in retaining it.
139 As to the principles governing the application of the transaction rule, Lord Steyn at 284 said:
And generally the date of the transaction would be a practical and just date to adopt. But it is not always so. It is only prima facie the right date. It may be appropriate to select a later date. That follows from the fact that the valuation method is only a means of trying to give effect to the overriding compensatory rule: … Moreover, and more importantly, the date of transaction rule is simply a second order rule applicable only where the valuation method is employed. If that method is inapposite, the court is entitled simply to assess the loss flowing directly from the transaction without any reference to the date of transaction or indeed any particular date. Such a course will be appropriate whenever the overriding compensatory rule requires it.
[emphasis added]
140 In the circumstances of the damages assessment arising out of the HTW Valuers 217 CLR 640 transaction, the High Court at [64] and [65] said of such an approach:
64. Advantages of the approach. While here the plaintiff cannot bring into account the actual proceeds of sale of the Plaza, because, despite its best efforts, it has not succeeded in effecting a sale, the principle would permit the value of the Plaza at the time of the trial to be the relevant figure.
65. There is certainly no reason why an approach of that kind is not open under s 82 of the Act. The deduction of true value at the acquisition date from the price paid is no more than a guide to the assessment of damages under s 82. Section 82 does not in terms refer to that method, and the width of s 82 permits other approaches to the assessment of damages so long as they work no injustice. … Here, the trial judge found that the decline in value of the Plaza had no cause other than the completion of the [new shopping centre]. The present case is from that point of view an unusually pure one. Since there are no losses resulting from extraneous factors to separate out, there is correspondingly less need to look to a comparison of purchase price and real value on acquisition as the appropriate approach.
[emphasis added]
141 In Smith New Court Securities [1997] AC at 266‑267 Lord Browne‑Wilkinson speaking for the majority said:
In many cases, even in deceit, it will be appropriate to value the asset acquired as at the transaction date if that truly reflects the value of what the plaintiff has obtained. Thus, if the asset acquired is a readily marketable asset and there is no special feature (such as a continuing misrepresentation or the purchaser being locked into a business that he has acquired) the transaction date rule may well produce a fair result. … But in cases where property has been acquired in reliance on a fraudulent misrepresentation there are likely to be many cases where the general rule has to be departed from in order to give adequate compensation for the wrong done to the plaintiff, in particular where the fraud continues to influence the conduct of the plaintiff after the transaction is complete or where the result of the transaction induced by fraud is to lock the plaintiff into continuing to hold the asset acquired.
[emphasis added]
142 In summing up the application of the principles, Lord Browne‑Wilkinson at 267 observed that in assessing damage [loss or damage] the plaintiff is entitled to recover by way of damages the full price paid by him or her but must give credit for any benefits received as a result of the transaction and:
… (4) as a general rule, the benefits received by him include the market value of the property acquired as at the date of acquisition; but such general rule is not to be inflexibly applied where to do so would prevent him obtaining full compensation for the wrong suffered; (5) although the circumstances in which the general rule should not apply cannot be comprehensibly stated, it will normally not apply where either (a) the misrepresentation has continued to operate after the date of the acquisition of the asset so as to induce the plaintiff to retain the asset or (b) the circumstances of the case are such that the plaintiff is, by reason of the fraud, locked into the property. (6) In addition, the plaintiff is entitled to recover consequential losses caused by the transaction; …
[emphasis added]
143 In examining the application of those principles to the facts of the HTW Valuers 217 CLR 640 transaction, the Court observed that Astonland'soptions were confined in the sense that because of the defendant's conduct, the plaintiff was induced to buy the asset at a time when it was perceived to be valuable; was forced by circumstance to retain it during declining utility and value; and the asset was not "a readily marketable asset". Having regard to the principles earlier discussed, the Court concluded that "the alternative contention of the plaintiff produces a fairer result" than that urged by HTW Valuers (namely, the difference between the purchase price and market value at the date of acquisition). However, of course, the determination of the appeal before the High Court did not rest on the plaintiff's alternative contention as the finding of the primary judge of the true value of the asset at the date of acquisition (and the amount of damages by taking account of post‑acquisition evidence of true value at the acquisition date) was not disturbed.
144 Nevertheless, the Court recognised that the scope of s 82, in the appropriate case, accommodates the alternative approach discussed above with the result that the application of the approach might bring about a fairer result than the application of the general transaction rule.
145 The appellant contends that this case is the appropriate vehicle for the application of the alternative approach. That is said to follow for these reasons.
146 The new plant and equipment were installed at the Wattleup site in February and March 2003. The primary judge observed at [149] that this involved removing much of the previous plant with the exception of some components used in the new line system. The retained components included equipment described as the tipping hopper, initial grading conveyor tables and brush washers, and some existing "Newtec" and "Gillenkirch" weighing and packing equipment. The installation of the new equipment integrated with some of the old equipment was designed to provide an entirely new line or new system for the processing, grading and packing of carrots. Some of the equipment was to be manufactured by a Belgian company called "Bruynooghe" which manufactured the grading and associated equipment designed to sort carrots into various sizes by width (or girth) and length. The packing equipment was to be manufactured by a German manufacturer called Gillenkirch. The suppliers and installer of the designed integrated new line system was Proud Machinery although the primary judge found that Proud Machinery did not perform the design role: [13] and [149].
147 Key personnel from the suppliers attended the Wattleup site in late February 2003 and early March 2003. Mr Gillenkirch together with Mr Manteca were present for the installation of the Gillenkirch packers. An electrician from Bruynooghe, Mr van der Vermuelen was present; later, other staff from Bruynooghe arrived: [149].
148 The key components of the new line were these.
149 The first section involved washing and polishing of carrots and utilised equipment previously used at the Wattleup plant, namely, two wet hoppers which received approximately 800 to 900kg of carrots at any one time. The wet hoppers fed carrots on to roller grass removers; then to a conveyor system; then to inspection tables for removal of stones and reject carrots; and then to brush polishers where the carrots were polished.
150 After polishing, the carrots passed on to one of a pair of Bruynooghe flume elevators which lifted the carrots up to the diameter or girth graders. At the top of the flume elevators were two infeed vibrators which spread the carrots out before they dropped through appropriate sized rollers of the two diameter graders. These machines could grade the carrots into six streams of diameter sized carrots. The waste removed by the graders was delivered into crates or bins.
151 Next, each of the streams of carrots was delivered to length grading equipment. The extra large carrots were delivered to a tank. Four length graders were capable of grading the carrots into three lengths and could be adjusted to select different lengths. Consistent sizing was not always possible because of the natural variations in the shapes of the carrots.
152 After the carrots were processed by the length graders, they were delivered to nine chiller tanks by gates positioned on eight conveyors located under the length graders. Each size of carrot could be placed into one or more chiller tanks where they were held prior to being moved on to conveyors for packing. On the southern side of the tanks was a refrigeration tank housing refrigeration coils which chilled water delivered from a filter so as to maintain the temperature of the carrots at the required specification. The tank contained submersible water pumps that pumped chilled water into the chiller tanks. The submersible pumps delivered sufficient chilled water to chill the carrots in response to a signal from a temperature sensor located in the chiller tank. Each chiller tank contained an air blower, a submersible pump and temperature sensors.
153 Each of the nine chiller tanks had an exit conveyor which removed carrots and fed them on to one of four distribution belts. The packing sections were fed by five distribution belts or conveyors. Some belts conveyed carrots to a grading table; another to pairs of dual inspection tables and to automatic carton fillers; another to inspection tables and Newtec/Gillenkirch weighing and packing machines. A fifth belt delivered carrots in bulk directly into wooden delivery crates.
154 Some exit conveyors directed carrots to the Newtec multi‑head weighers on the pre‑pack line which were then packed by the Gillenkirch packing machines. The new line system also incorporated a touch screen which when used brought up windows or pages which allowed the adjustment of settings, conveyor speeds and the like in the operation of the new processing line. Each machine could be turned on or off and its operation could be adjusted by touching the page on the screen that related to that machine.
155 These features are described throughout the judgment but the component features are discussed at [150] and [151] of the reasons.
156 The appellant says that these considerations demonstrate the specialist nature of the plant and equipment. It was large and complex. Further, the appellant had sold, as the primary judge recognised at [149], its existing plant apart from those components integrated into the new system. The new line was installed in the appellant's shed at Wattleup as the new system for processing carrots. The appellant had to conduct its business through the use of the processing system. In that sense, the appellant was dependent upon and locked into use of the new line.
157 At the hearing of the appeal, Mr Allanson SC for the appellant put the argument (transcript 54 lines 27‑33) thus:
The position that we were in was that we purchased specialist equipment. We replaced existing equipment, we purchased specialist equipment. There was evidence before the court that there was only a limited market for that equipment. But in any event we weren't in a position where we could just sell that equipment because if we sell that equipment our means of production is gone. So this is our means of production. We've sold our existing plant, we've got the new line installed in the shed. We have to continue our business.
He continued (transcript 56 lines 5‑12):
If you were simply looking at it in terms of the difference between the value of the property - the value of the line when it was purchased and what it cost you, with respect, are going into a unrealistic exercise in these circumstances where you have a line of equipment which the appellant has got no choice but to operate. So he operates it over a four-year period during which time he is able to shut it down, move his operations elsewhere, and you look at the net position at the end of that four-year period.
158 In the course of the reasons, the primary judge plots the sequence of exchanges and meetings between the appellant, the respondents and representatives of the equipment manufacturers in seeking to deal with problems in the operation of the new line the subject of the appellant's complaints (meritorious or otherwise). Those exchanges took place throughout 2003 and culminated in a meeting in November 2003 which, as the primary judge observes, seemed to go close to resolving the four particular matters which were identified as the subject of continuing concern. One particular problem concerned the functionality of the flume elevators and that matter remained unresolved.
159 At [373] the primary judge notes Mr Tana's evidence that the appellant's packing operations would be conducted from a farm pack house at a different property, (the Lancelin property) from late October 2007 with the exception of a pre‑pack line for 10kg cartons for small to medium carrots. Otherwise, the new line would from that date cease operation. At [374] to [377], the primary judge discusses the disruptions to the operation of the new line by reason of the problems associated with the flume elevators and Mr Tana's approach to that problem. The primary judge was not persuaded that it was reasonable for the appellant not to have replaced the flume elevators by June 2004 if there were production difficulties of any substance caused by the flume elevators: [375]. The primary judge found that the cost of replacing and installing the flume elevators was €60,000.
160 Mr Jonathan Gregson carried out an inspection of the new line plant on 21 May 2007 and prepared an itemised valuation report for the purpose of assessing the present day value of the plant (leading up to trial) to establish the realisable auction value if the plant was to be offered as one lot. An alternative salvage break‑up value was also considered. The primary judge noted that Mr Gregson, although an experienced auctioneer, had no formal qualifications as a valuer and had no experience in selling equipment of the kind incorporated within the new line system: [389]. Mr Gregson observed:
My past experience in specialised equipment that is presented for sale by public auction has proved that generally in the first five years since purchase it has a greatly depreciated auction value unless you have a willing buyer at the time of sale that can fully utilise a plant in an already established market. As the plant ages the realisable auction value decreases at a quicker level generally due to technology and advancement in the process industry. Part of this plant will be difficult to sell because of their specialised nature. Given the above information and in, my experience, I have estimated that in a well published public auction, offered as one lot, this plant would realise approximately 20‑30% of the original purchase price, ie, $640,000 - $960,000. An auction value would best reflect the price [the appellant] could obtain for the plant.
Overall Conclusions as to Value
In conclusion … the most appropriate method to establish a true assessment of the value of the plant in its present format as one lot would be to offer it at a properly promoted, conducted and attended onsite public auction sale which would have to take into consideration such inflationary or depreciable conditions as physical location, difficulty of removal, adaptability or specialisation, marketability, physical conditions, overall appearance and total psychological appeal. It furthers takes into consideration the ability to attract interested buyers.
161 Mr Gregson was also asked to comment on what the value of the new line may have been in a public auction "when the plant was relatively new and not producing the represented volume". In response, Mr Gregson said:
It is my opinion that the Plant could have been offered for sale by public auction at that time, either as one lot or in a break up scenario, however to establish a realisable auction value is difficult. As this is going to be determined wholly on there being a willing buyer on the market at the time of sale and most importantly what value the vendor is prepared to accept.
[emphasis added]
162 In cross‑examination, Mr Gregson was asked why he determined that the best method of determining value was by auction. Mr Gregson said, at transcript 278 lines 13‑15:
Because specialised equipment which is limited to a market, like this sort of gear, is very hard to sell and the only way you are really going to determine a market for a total plant is probably by auction or public tender.
163 In re‑examination, Mr Gregson was asked whether he had been involved in the sale of equipment of this kind in the last five or six years for entities other than the appellant. Mr Gregson said at transcript 278 lines 46‑47:
Not really, not a lot of it because it doesn't come on the market too much. Not in relation to carrot processing anyway.
164 The appellant contends that May 2007 is the date on which the true value of the new line in the hands of the appellant ought to be struck. Because the appellant required the new line in order to conduct its business, it was not possible to sell it either as an integrated system or on a break‑up basis once it became the production system essential to the conduct of the carrot processing business. The new line remained a working asset of the appellant's business until at least October 2007: [384]. The primary judge found that the appellant could however have remedied the production difficulties encountered in the use of the new line by an expenditure of €60,000 in 2004. Mr Gregson was unable to attribute a realisable auction value to the new line at the acquisition date for the reason he gave. The new line was not a readily marketable asset.
165 The primary judge at [389] found that the date for determining the true value of the new line in the hands of the appellant was the date of acquisition, four years earlier than Mr Gregson's assessment of the realisable auction value. The primary judge did not discuss the merits of the application of the alternative approach contended for by the appellant in the context of the special circumstances the appellant identified. The judge, without discussion of the merits of the alternative approach, simply applied the general transaction rule. Whether, on the facts, special circumstances were made out which warranted a methodology which brought about a fairer, more just and equitable compensatory outcome for the appellant was not considered.
166 Having regard to the selection of the acquisition date as the relevant date for determining true value, the primary judge concluded that Mr Gregson's appraisal of the realisable auction price at May 2007 provided no reasonable basis on which to derive a value in March 2003: [392]. At [394], the primary judge concluded that the appellant's election to change its operations to the Lancelin property was simply undertaken for commercially sensible reasons of enabling the appellant to eliminate unnecessary road transport costs rather than reasons referable to losses arising out of use of the new line system. That follows because, in his Honour's view, had the appellant continued to use the new line, it would not have been worse off.
167 The appellant contends that the primary judge erred in failing to apply s 82 in such a way that the appellant's loss or damage caused by reason of the contravening conduct of the respondents was calculated having regard to the true value of the new line in the hands of the appellant as at May 2007, that is, in effect, at the trial date.
168 On that assumption, the appellant's loss should be calculated as follows:
Total cost to the appellant of the new line based on the appellant making all lease payments to the bank for five years to 30 May 2008 (being the figure agreed between the parties) $4,328,230
Bring to account the true value of the new line in the hands of the appellant assessed at May 2007 $960,000
Balance loss $3,368,230
Bring to account the labour costs savings achieved by the appellant through the use of the new line for the period to the end of October 2007 representing four years and five months based upon a saving of 34c per carton for 1,955,000 cartons per annum ($664,700 per annum): five months based on a pro rata assessment of the annualised savings is $276,958. $2,935,758
Balance loss $432,472
Bring to account additional power costs directly related to the operation of the new line over a period of four years and five months to October 2007 based on annual additional power costs of $89,700 per annum: five months based on a pro rata assessment of the annual costs is $37,375. $396,175
Balance loss $828,647