Consideration
25 Mr Hagemrad's argument must be rejected. A judge must give reasons as to why he or she has assessed damages in a particular way. There will be cases where it is difficult to be precise, as the Full Court in Enzed 57 ALR at 183 suggested. Indeed, in Australian Iron and Steel Limited v Greenwood (1962) 107 CLR 308 at 326, Windeyer J compared the task of a jury in assessing general damages for personal injury with what Lord Goddard CJ had said, as Goddard LJ, in Mills v Stanway Coaches Limited [1940] 2 KB 334 at 349, namely:
Of course, different minds have diferent ideas as to what is moderate in seeking for a mean, a normal or an average. Where there is really no guide it is very like Lord Bowen's illustration of a blind man looking for a black hat in a dark room.
26 However, this is not such a case: cf Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) 196 ALR 257 at 267 [41] per Hayne J, with whom Gleeson CJ, McHugh and Kirby JJ agreed.
27 His Honour did not explain how, in the context of his other findings, he had arrived at a takings figure of $12,000 per week exclusive of GST or $13,200 inclusive of GST. That context consisted of the primary judge's findings that, first, the banking records for the period June 2014 to October 2015 provided a much more reliable record of the takings of the business than the monthly combo reports, secondly, the business had been in a dire financial state over that period, and thirdly, the banking records of the business for the 12 months ended 30 June 2015 showed average weekly takings, inclusive of GST, of $12,442 per week. Given his Honour's findings that the business continued to decline after 30 June 2015, with respect, in our opinion, his Honour did not explain how he arrived at his finding that, in fact, the actual sales figures, excluding GST, for the preceding 12 months were $12,000, which equalised to $13,200 per week inclusive of GST.
28 In those circumstances, his Honour's finding that the average sales were about $12,000 per week, exclusive of GST, appears to have been either a mistake or to have no basis in the evidence. Accordingly, the Court must undertake on a rehearing, pursuant to s 27 of the Federal Court of Australia Act (1976) (Cth), the task that Gibbs ACJ, Jacobs and Murphy JJ identified in Warren v Coombes (1979) 142 CLR 531 at 551, namely:
… in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it. These principles, we venture to think, are not only sound in law, but beneficial in their operation.
29 We reject Mr Hagemrad's argument that his Honour was exercising a judicial discretion in selecting the figure of average weekly takings to arrive at his valuation. The primary judge needed to explain in his reasons how he arrived at the figure of average weekly sales of $12,000 exclusive of GST in light of his other findings which were inconsistent with that finding. The business had been in decline for the 18 months preceding 30 June 2015, which continued thereafter, and had generated an average banked weekly return for the 12 months to 30 June 2015 of $12,442 (or about $11,311 exclusive of GST), as the primary judge found based on the banking records.
30 Although the primary judge made no finding of what the business's banking records revealed for the period between July and October 2015, his Honour's findings in relation to the earlier figures set out above, demonstrated that the business's average weekly earnings were declining from the higher earnings at the beginning of the period, of the 12 months ending 30 June 2015, that ultimately produced the $12,442 figure for the whole of that year. Moreover, his Honour's reference to the actual weekly sales figures appeared to be a reference to the cash value of the receipts, namely, the total cash that the business charged or received from its customers. Those receipts included GST.
31 However, Mr Ozich's report looked at the position exclusive of GST. This may explain what appears to have been a transpositional error in the way in which his Honour came to assess the damages. Be that as it may, we are satisfied that the correct finding on the evidence, based on the primary judge's other findings, is what his Honour found (as we have recorded at [9] above), namely, that the takings as at October 2015 were in the vicinity of $12,000 per week inclusive of GST.
32 On that basis the parties agreed before us that Mr Ozich's valuation would have generated a value of $40,000 for the business and that his Honour's award of damages was, thus, understated by $120,000 plus interest.