30c in such a way that it forecloses the authority of

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Unformatted text preview: e loss of the use of a specific sum of money which the wrongful act of a defendant has caused to be paid away or withheld, they are contrary to principle and commercial reality and should not be followed.40 The phrasing of Brennan and Deane JJ in this passage has an interesting connotation regarding the priorities which the law and commercial reality enjoy. It appears the Brennan and Deanne JJ. measured the law in the light of commercial reality which puts commercial reality in a superior philosophical position. This may be interpreting the 38 (1989) 171 C.L.R. 125 at 146. Pure economic loss and the difficulties previously associated w recovery are discussed in Chapter Eight. 39 (1989)171C.L.R. 125 at 143. 325 w ords too widely, but in any event it portrays h o w consideration of commercial practices has changed the perspectives of the judiciary in the late 20th century. Mason CJ and Wilson J dealt with the claim that the court should not award any interes except under the provision of s. 30C of the Supreme Court Act 1935 (S.A.). Their Honours were unconvinced that any evidence had been presented which gave a sound reason why the enactment of the statute in the form above precluded an award under a common law principle: We see no reason for construing s. 30C in such a way that it forecloses the authority of the courts to award damages in accordance with the principle established by Hadley v Baxendale and the measure of damages governing claims in tort. The section is not intended to erect a comprehensive and exclusive code governing the award of interest... It w ould be a strange result if, in the face of this provision, the Court were to hold that the enactment of s. 3 0C precluded the award of damages for loss of the use of money, in accordance with the logical development of fundamental c o m m o n law principle so as to accord with commercial reality... W here a legislative provision is designed to repair the failings of the c o m m o n law and is not intended to be a comprehensive code, the existence of that provision is not a reason for this Court refusing to give effect to the logical development of c o m m o n law principle. It would be ironic if a legislative attempt to correct defects in the c o m m o n law resulted in other flaws becoming ossified in the c o m m o n law.41 T he court avoided the consequence of the statute by narrowly construing the effect of the legislation a nd the interpretation that s. 30C(4)(e), w hich states that s. 3 0C does not "limit the operation of any other enactment or rule of law providing for the award of interest." This, in the court's opinion, expressly exhibits the intention that interest at c o m m o n l aw m a y be recoverable. B y denying that s. 3 0C was intended to cover the field of interest awards, the court avoided the criticism that the judiciary was abrogating the 40 41 (1989) 171 C.L.R. 125 at 152 per Brennan and Deane JJ. (1989) 171 C.L.R. 125 at 147-8. 326 doctrine of Parliamentary sovereignty by refusing to submit to the express intention of the legislation. The gate, against which the historically conservative religious prohibition against the practice of usury had stood, was now openly ajar, even if only partially. Although opportunity cost was awarded with reference to a compound interest rate in this case, opportunity cost as recognized in financial theory as "the most profitable alternative use" of a sum still did not fit into the legal paradigm.42 This may be expected if it is considered that the evidential burden, tangibility of proof, and disdain for unnecessarily theoretical issues still characterise the court system. The internal inconsistency between the issues of remoteness and the doctrine of restitutio in integrum still largely remains, although through Hungerfords it was noticeably eroded. Subsequent cases to Hungerfords show how the controversy is still lingering within the common law in Australia. Subsequent Cases Since the decision in Hungerfords, the courts have further developed awards of opportunity cost in some respects, but restricted awards in other ways. A significant number of reported cases have dealt with the principle in Hungerfords, and the following cases will attempt to put the developments into perspective. 42 In Dart v Decor (1993) 179 C.L.R. 101, however, the court recognised the economic definition of opportunity cost in the context of an intellectual property dispute. This case will be considered below. 327 In Jad International Pty. Ltd. v International Trucks Australia Ltd.43 (1994) the plaintiff/appellant was unanimously refused compound interest despite evidence showing that it carried an overdraft during the entire relevant period. A dealership had purchased truck from the defendant in circumstances where both the defendant and the plaintiff had thought the truck had a late model diesel engine. The plaintiffs mechanic, upon receiving and examining the truck, gave advice to the dealership owner that the engine was in poor condition. The owner still sought to 'on sell' the truck, but without succ...
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This note was uploaded on 09/03/2012 for the course LAW 1501 taught by Professor Garva during the Three '12 term at University of Adelaide.

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