As the courts have maintained a somewhat global

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Unformatted text preview: public policy of efficient use of the court's time and resources. In Beach Petroleum NL. and Claremont Petroleum NL v. Malcom Keith Johnson and Others14 (1993) the Federal Court drew upon Cullen v Trappelf5 (1980) and Todorvic v Waller16 (1981) to support the stance that it is not the actual opportunity cost, i.e., the likely use that this pl (1996) 139 A.L.R. 595 at 621. [1998] H C A 20 (unreported) (26 March 1998). [1996] 140A.L.R. 57. (1993)11 ACS.R. 103. [1980-1981] 146C.L.R. 1. [1981] 150 C.L.R. 402. 335 w ould have m a d e of sums at issue, but there is a presumption that market rates o f interest should be used in calculating interest on a damages award. This was to be the preferred procedure unless "it is clearly established by evidence that a particular plaintiff would not invest available capital and cash reserves in a way that would produce at least the 77 — market rates". The evidence in the Beach case showed that Beach would "almost certainly have invested its shareholders' funds in oil and gas exploration interests or producing properties rather than leaving millions of dollars on cash deposit over a three year period." From a strictly theoretical standpoint, to scrutinize evidentially the opportunity cost of a particular plaintiff seems more consistent with a minimisation of tension between the legal perspective in the assessment of opportunity cost, and the economic perspective. As the courts have maintained a somewhat global viewpoint, consistent with the governance of stare decisis, this tension in unlikely to be resolved in the foreseeable future. It also indicates a concern with a public policy of efficiency in th courts and the lingering fear of the time that trials may take when examining this issue, as examined in Chapter Eight. Another view is that the courts discourage claims by plaintiffs or defendants regarding specific activity by their respective adversary which would lengthen trials in needless scrutiny of tedious details unless a plaintiff or defendan can clearly anticipate that the evidence introduced regarding the plaintiffs opportunity cost (or the defendant's rebuttal) is enough to convince the court to deny (or award) it. This would encourage consent orders between the parties and help to shorten litigation costs. This is consistent with the judicial attitudes towards the use of courts' time in keeping with the policy of efficiency examined in Chapter Eight. [1993] at §657. 336 This does not m e a n that courts are insensitive to the opportunity costs of a particular plaintiff. In Fuller v Meehann (1999) the Queensland Court of Appeal (de Jersey CJ, Pincus and Thomas JJA) scrutinized the financial circumstances of the appellant very carefully to ascertain the tax implications on a sum included in a prior property settlement between former de facto partners. Concluding that the appellant would receive a tax penalty, as he had clearly withheld cash income from his income tax returns to the Federal Commissioner for Taxation and, subsequent to the original action, had been served with a notice of amended returns by the Commissioner. In the court's opinion it would be unjust to award compound interest against the appellant for a part of the period from the rise of the cause of action until judgment without adjusting the opportunity cos awarded to the respondent in the previous settlement to take account of the appellant's income tax burden. These cases reflect judicial attempts to incorporate notions of recoverable opportunity cost on a case by case basis. Within Chapter Eight, which examined the public policy of efficiency, it was noted that the common law develops on an incremental basis, case by case, attempting to do justice between the litigants in each particular conflict. The somewhat disjointed statements and assertions of the courts in the time from Hungerfords to the present reflect what would be expected where a loss is to be proven by evidence. It seems fundamentally contradictory to defend the point that opportunity costs should be governed by a rule of evidence, and then to point out inconsistencies in awards where crucial elements were decided upon matters of evidence. Courts do not speculate upon matters needlessly, but hand down judgments based on the facts in each case which have satisfied the evidential burden. The courts do not normally attempt to [1999]QCA37. 337 speculate upon unproven matters. T h e court tacitly accepted this point in Seguna and Seguna v Road and Traffic Authority of New South Wales19 (1995) where the opportunity cost the plaintiffs claimed as part of the degradation of land value from the defendant's works, failed to be recoverable on the ground that the plaintiffs had failed to prove that they intended to take the course of action which would have increased their investment returns, the opportunity costs of which plaintiffs had sought to claim. The court considered the claim in this case required the court to presume not only what the return would have been, but also what the investments might have been.80 This failed to discharge the burden placed upon the plaintif...
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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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