5 bennett qc constructed an argument for the

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Unformatted text preview: 9 Ex. 341 (1854) 156 E.R. 145. (1989) 171 C.L.R. 125 at 135. 315 T hese facts reveal circumstances which m a d e it difficult for the courts to avoid consideration of the issue of opportunity cost. The first consideration is the evidential burden, examined in Chapter Six. The original plaintiffs were business persons who accurately recorded expenditure and profit in documentary form which was used to prepare the tax returns and satisfy governmental requirements. There would have been little room to argue against the direct losses, and very strong evidence to accept the consequential losses. The consequential losses were assessed by referring to the actual amounts paid in interest to the plaintiffs' bank to maintain liquidity and for working capital purposes. These were directly ascertainable from the bank statements and other lending contract documents. Arguments of Counsel Counsel for Hungerfords, Bennett Q.C., argued that Walker Stores' claim was a purely financial loss, and the consequential damages from the unavailability of the funds should not be awarded. "This, he asserted, is the first time that a court has awarded damages loss of use of money caused by a negligently inflicted loss of money".5 Bennett Q.C. constructed an argument for the accountants based on four points. The first was an appeal to the public policy of efficiency in the courts: [T]here is a policy problem that if in every case wherefinancialloss is inflicted there has to be calculated not merely that loss but its consequences on the plaintiff, considering what he would have done if the loss had not been inflicted or, in the case of liquidated damages, what he would have done if the debt had been paid on time, the inquiry will require a trial within a trial which will often be expensive, difficult and erratic in its result. 5 5 (1989) 171 C.L.R. 125 at 136 per Mason CJ and Wilson J. (1989) 171 C.L.R. 125 at 129. 316 Counsel also argued that the real cause o f the plaintiffs' losses w as because they were impecunious in the situation. He defined "impecuniosity" in this case as "damage [that] had been incurred as a result of the non-payment or the loss of a sum of money and the unavailability of other funds which might have enabled the injured party to do something about it."7 The issue of causation was examined in Chapter Six, and 'efficiency' as a public policy issue was examined in Chapter Eight. Bennett Q.C. also challenged whether, on appeal, the interference by the Full Federal Court with the findings of the trial judge concerning what would have been done with the additional funds was permissible, and then raised the issue that the original plaintiffs were subsequently incorporated. As a result of the corporate legal personality coming into being from the incorporation process, the company as plaintiff was not the same party as the original partners. Lastly, Bennett Q.C. asserted that s. 30C was evidence th the legislature had intervened and interest should, therefore, not be awarded except unde that section. The case argument for the accountants was constructed upon the line of cases beginning with London, Chatham and Dover Railway Co. v South Eastern Railway Co.* (1893) using the decisions to assert what historically had been the objections to awards for the loss of the use of money,9 as examined in Chapter Four. Counsel pointed out that there should be a strict division between the way courts deal with losses flowing from an intentionally inflicted loss and one which was merely negligent, supporting this stance o public policy grounds: 7 (1989)171C.L.R. 125 at 131. [1893] A.C. 429. this case was examined in Chapter Four. 9 (1989) 171 C.L.R. 125,128-131. 8 317 [Damages] should be recoverable only in respect of deliberate as opposed to negligent breaches of contract and intentional as opposed to negligent torts. Such a rule would be justifiable on public t policy grounds thatfirst,there are fewer claims in the relevant categories and, secondly, i accords more with the needs of justice to compensate in cases of deliberate breaches or intentional torts.10 Counsel for Walker Stores, Gray Q.C, presented an argument which relied mainly upon the second limb of the rule in Hadley v Baxendale11 and the specific knowledge possessed by the firm of accountants who operated in close relationship with the business of the plaintiffs. "The critical feature of this case is that the accountants had special knowledge which made the loss foreseeable so that the court [can] deal with the matter under the second limb of Hadley v Baxendale."12 The loss, he asserted, was a direct consequence of the negligent act, and as Walker Stores was entitled to recover losses foreseeable at time of the contract, the loss of the use of the money was recoverable from the defendant accountants. "For reasons of principle and policy the Court should follow the approach of the New Zealand Court of Appeal ... and state a rule having more commercial reality.&...
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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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