Fortuna Seafoods Pty Ltd v The Ship 'Eternal Wind'
[2005] QSC 4
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- Fortuna Seafoods Pty Ltd v The Ship 'Eternal Wind'[2005] QSC 4
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Fortuna Seafoods Pty Ltd v The Ship 'Eternal Wind'[2005] QSC 4
Fortuna Seafoods Pty Ltd v The Ship 'Eternal Wind'[2005] QSC 4
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Claim |
ORIGINATING COURT: | |
DELIVERED ON: | 14 January 2005 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 16, 17, 18 August 2004 |
JUDGE: | Douglas J |
ORDER: | Judgment for the plaintiff for $163,256.00 and interest at 9% per annum from 5 December 1998. |
CATCHWORDS: | TORTS – Negligence - Essentials of Action for Negligence -Duty of Care - Reasonable Foreseeability of Damage –Generally - Relationship of Proximity - Economic loss — Determining existence of duty – Whether the defendant knew or had the means of knowing that the plaintiff was a member of an ascertainable class of vulnerable persons who were unable to protect themselves from harm – Plaintiff marketed seafood for and had some common shareholders and common directors with related company whose ship was damaged in a collision with the defendant – Plaintiff claimed as damages the profit it would have earned from processing and selling seafood that it obtained from related company and sold as its agent – Plaintiff also a trustee of discretionary trust of which related company was a beneficiary. Bow Valley Husky (Bermuda) Ltd v Saint John Shipbuilding Ltd [1997] 3 S.C.R. 1210, referred to Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529, applied Canadian National Railway v. Norsk Pacific Steamship Co. [1992] 1 S.C.R. 1021, referred to Candlewood Navigation Corp Ltd v Mitsui OSK Lines Ltd (The Mineral Transporter)[1986] AC 1; (1985) 3 NSWLR 159, referred to Carbone v Ursich (The Del Rio) 209 F 2d 178 (1953), referred to Cattle v Stockton Waterworks Co (1875) LR 10 QB 453, referred to Christopher v MV “Fiji Gas” (1993) Aust Torts Rep. 81-202, distinguished Hadoplane Pty Ltd v Edward Rushton Pty Ltd [1996] 1 Qd R 156, referred to Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27, referred to Main v Leask [1910] SC 772, referred to Morrison Steamship Co Ltd v Greystoke Castle (Cargo Owners) [1947] AC 265, referred to Natcraft Pty Ltd v Det Norske Veritas [2001] QSC 348, referred to Perre v Apand Pty Ltd (1999) 198 CLR 180, discussed and applied Société Anonyme de Remorquage à Hélice v Bennetts [1911] 1 KB 243, distinguished United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1, cited Valleyfield Pty Ltd v Primac Limited [2003] QCA 339, referred to Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 78 ALJR 628, applied |
COUNSEL: | Dr A Greinke for the plaintiff Mr A W Duffy for the defendant |
SOLICITORS: | Thomson Rich O'Connor for the plaintiff Ebsworth & Ebsworth for the defendant |
[1] DOUGLAS J: On 5 April 1998 the fishing vessel, Melina T, and the motor bulk carrier, Eternal Wind, collided 48 nautical miles east of Noosa Heads. The Melina T was owned by a company called Fortuna Fishing Pty Ltd. That company’s action for the loss of the vessel and other ancillary losses has been compromised. This action is brought by a related company, Fortuna Seafoods Pty Ltd, claiming as a separate loss the profit it would have earned from processing and selling seafood that it obtained from Fortuna Fishing and sold as its agent. The amount of the loss, taking into account an agreed apportionment of liability for the collision between the two vessels, is also settled at $163,256.00. The negligence of the owner of the Eternal Wind, Ganta Shipping SA, in contributing to the collision between the vessels is, therefore, not in issue. Nor do I need to concern myself with third party proceedings brought by Ganta Shipping against Fortuna Fishing. The issue that was litigated is whether a duty of care was owed by Ganta Shipping to a company in the position of Fortuna Seafoods where its claim is simply for economic or commercial loss arising out of the damage to Fortuna Fishing’s vessel.
[2] As the names suggest, Fortuna Fishing and Fortuna Seafoods are companies connected to each other. The shareholders in Fortuna Fishing are Frances Yvonne Rowley and Jonathan Michael Rowley, a mother and son. The shareholders in Fortuna Seafoods are again Frances Rowley and Michael Hebbron Rowley, her husband. That at least is the effect of the information contained in the Australian Securities & Investments Commission company extracts for the companies although Mr Michael Rowley’s affidavit evidence was that his wife and son were the only shareholders in both companies; see ex. 3 para. 3. Mr Michael Rowley is and was a director of both companies and it is probable that Mrs Frances Rowley was the only other director of both companies at the time of the collision.[1] She is no longer a director of either company but her son and her daughter in law are now directors of Fortuna Seafoods with Mr Michael Rowley. Michael Rowley is now the only director of Fortuna Fishing. At the time of the collision Jonathan Rowley was the fleet master of the vessels owned by Fortuna Fishing and skippered one of them, but not the Melina T.
[3] The relationship between the operations of the two companies was relatively simple. Fortuna Fishing owned and operated fishing vessels. It supplied its product to Fortuna Seafoods which processed and sold it as Fortuna Fishing’s agent for a fee, accounting to Fortuna Fishing for the proceeds of sale. Fortuna Seafoods did not buy the fish from Fortuna Fishing, at least according to the oral evidence of Mr Michael Rowley, although in one of his affidavits, ex. 3 para. 5, he says that the fish caught by Fortuna Fishing were sold to Fortuna Seafoods. Fortuna Seafoods did, however, buy fish from suppliers other than Fortuna Fishing but any drop in supply from Fortuna Fishing was “a continuous loss for Fortuna Seafoods” according to Mr Rowley; ex. 2, para 12.
[4] To some extent the dealings between the two companies were conducted at arm’s length. For example, the costs associated with shipping, such as unloading vessels and the packaging of catch were calculated at prevailing industry rates. Mr Rowley said in his evidence in chief, however, that the two companies were treated as one company with two bank accounts. The proceeds of the fishing were fed into the Fortuna Fishing account via the Fortuna Seafoods account. Sometimes money would be transferred between the two companies and both accounts would be used to meet expenditures, depending very largely upon where the funds were lying at the time. He agreed under cross-examination, however, that their financial records were kept separately, recognising that each of the companies was a separate legal entity.
[5] It seems that Fortuna Seafoods was only incorporated because of difficulties associated with using Fortuna Fishing as the operator of an export approved processing plant in New South Wales in the 1980s. Fortuna Fishing was in operation before Fortuna Seafoods was incorporated but, as a fishing company, was regarded as an unsuitable entity to apply to operate such a plant and bypass the New South Wales government’s Fish Marketing Authority; see T. 9, ll. 25-40.
[6] Fortuna Seafoods was also the trustee of a discretionary trust, the potential beneficiaries of which formed a very wide class which included Fortuna Fishing. It benefited from a number of significant distributions from the trust in most of the years between 1993 and 2000. Mr Rowley said that the trust was set up to facilitate Fortuna Seafoods’ operation of the processing plant rather than to minimise income taxation. I accept that was the case but its existence has had the effect, which he acknowledged, of helping to minimise the taxation paid by the companies. For example, the companies’ accountants said in a facsimile of 4 June 2004 that part of the overall planning of the group was to allocate profits from Fortuna Seafoods as trustee to Fortuna Fishing to pay company tax at the appropriate company tax rate.
[7] Fortuna Seafoods’ case, as pleaded in reliance on these facts, is that a duty of care was owed to it because it was in a relationship of proximity with Ganta Shipping as part of a special ascertainable class vulnerable to economic loss from a collision between the Eternal Wind and the Melina T. The pleading draws attention to the position of Fortuna Fishing as a beneficiary of the discretionary trust of which Fortuna Seafoods is trustee, their status as related companies allegedly controlled and managed as a single economic entity and both companies’ use of the Melina T to conduct the fishing operation as a common enterprise, where the loss of the Melina T had a direct impact on the processing operations of Fortuna Seafoods.
The existence of a duty of care
[8] There is no single governing principle that will help me determine whether Ganta Shipping owed Fortuna Seafoods a duty of care to compensate it for the pure economic loss it has suffered. The lack of certainty in this area affects not only common law systems but most of those based on the European civil codes.[2] The approach of Gibbs J in Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad (1976) 136 CLR 529, 555, that a duty may be owed “where the defendant has knowledge or means of knowledge that the plaintiff individually, and not merely as a member of an unascertained class, will be likely to suffer economic loss as a consequence of his negligence”[3], and of Stephen J, pointing out as one of a number of salient features the defendant’s knowledge that the property damaged was of a kind inherently likely when damaged to be productive of consequential economic loss to those who rely directly upon its use,[4] needs to be supplemented.
[9] The most recent decision of the High Court dealing with these contentious issues is Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 78 ALJR 628. The recent decision most similar conceptually to these facts is Perre v Apand Pty Ltd (1999) 198 CLR 180. From my analysis of those decisions it is my view that the plaintiff here needs to show:
●reasonable foresight of the likelihood of harm;
●the defendant’s knowledge, including imputed knowledge, that the Melina T was likely, when damaged, to be productive of consequential economic loss to those who relied directly upon its use;
●that it was not a case of indeterminate liability;
●that the defendant knew or had the means of knowing that the plaintiffs were members of an ascertainable class of vulnerable persons who were unable to protect themselves from harm;
●that the implication of a duty would not impair the legitimate pursuit by the defendant of its own commercial interests; and
●that the damage flowed from the occurrence of activities within the defendant’s control. [5]
[10] There will be other salient features in other contexts but these seem to me to be the main relevant issues in this case.[6]
[11] The foresight of the likelihood of harm poses no problem here. If a fishing vessel is sunk it requires little imagination to expect that those who make a profit from processing and arranging the sale of its catch may suffer loss, especially if they have limited numbers of suppliers. Nor do I have any difficulty in inferring that the defendant knew that the Melina T was likely, when damaged, to be productive of consequential economic loss to those who rely directly upon its use as a fishing vessel, including those who process and arrange the sale of its catch. Fortuna Seafoods is also a “first line victim” whose loss is ascertainable, not indeterminate.[7] Nor would the implication of a duty impair the defendant’s legitimate pursuit of its own commercial interests. It already had a duty to take care to avoid a collision with the Melina T and, as there is no contractual relationship between the parties to the collision, there is no issue of tortious liability outflanking the law of contract as in Woolcock Street Investments Pty Ltd v CDG Pty Ltd.[8] The damage here also flowed from activities within Ganta Shipping’s control, the navigation of its vessel.
Ascertainable class
[12] On that analysis the remaining issue here is whether the defendant knew or had the means of knowing that the plaintiff was part of an ascertainable class of vulnerable persons unable to protect themselves from harm. There is only one company said to constitute the class on these facts, the plaintiff, which processed and arranged the sale of the catch of the Melina T. The description of the class is further limited by reference to the claim that the plaintiff operated in substance as part of a single economic entity with the owner of the vessel, Fortuna Fishing, or was a “common venturer” with it. Further it is said to be part of an ascertainable class to which a duty is owed as damage to the vessel caused it to suffer economic loss because of the relationship that existed between it and the vessel owner, including the contractual right to the exploitation of the catch.
[13] In other words the class is said to consist, in general terms, of closely related “common venturers” with the entity whose property suffers physical damage and who suffer loss because of that relationship.
Single economic entity or relational economic loss
[14] When one considers whether the plaintiff was part of such an ascertainable class of vulnerable persons, it is necessary to consider the nature of its commercial relationship with Fortuna Fishing. The damages claimed here fall into a category that may be described as “contractual relational economic loss”. Similar claims have been described in those terms by Professor Feldthusen[9] in his attempt at classification of different types of cases where damages for “pure economic loss” have been allowed. Such losses have been treated as recoverable by the Supreme Court of Canada in cases where, for example, the relationship between the owner of the damaged property and the claimant was as parties to a joint or common venture[10]. In Perre v Apand McHugh J referred without criticism to Professor Feldthusen’s classification and the recovery of relational economic loss in Canada where the relationship between the claimant and property owner constituted a joint venture.[11]
[15] Gummow J, however, said that the emergence of a coherent body of precedents would be impeded by the imposition of a fixed system of categories.[12] His Honour favoured instead the identification of a number of “salient features” which combine to constitute a sufficiently close relationship to give rise to a duty of care. It is clear, however, that his Honour would treat the existence of contractual rights between the plaintiff and the entity whose property was damaged as a salient feature.[13] Some of the plaintiffs in that case were, in any event, parties to a joint venture.
[16] Was this a joint venture between Fortuna Seafoods and Fortuna Fishing? The question is difficult to answer in the absence of any agreed definition of that phrase under Australian law. The High Court has considered some of the characteristics of a joint venture in United Dominions Corporation Ltd v Brian Pty Ltd (1985) 157 CLR 1, 10 per Mason, Brennan and Deane JJ:
“The term ‘joint venture’ is not a technical one with a settled common law meaning. As a matter of ordinary language it connotes an association of persons for the purposes of a particular trading, commercial, mining or other financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill.”
[17] Similarly Dawson J said at 15, when seeking to distinguish the concept from that of a partnership:
“Perhaps in this country, the important distinction between a partnership and a joint venture is, for practical purposes, the distinction between an association of persons who engage in a common undertaking for profit and an association of those who do so in order to generate a product to be shared among the participants. Enterprises of the latter kind are common enough in the exploration for and exploitation of mineral resources and the feature which is most likely to distinguish them from partnerships is the sharing of product rather than profit.”
[18] Viewed simply from those points of view there may be an argument that the arrangement between these two companies constituted a joint venture but it does not contain some of the features that attend the most common forms of joint ventures in Australia – those in the mining industry. Several “salient features” of a typical joint venture are listed by the authors of The Laws of Australia ch. 4.8 para. [151]. Some of those features are not present here. There is no precise agreement documented between the “participants”, no property held by them as tenants in common[14], no right to take product in kind and no division in management between the participants. Each company appears to have earned its own income, owned its own property and to have been managed as part of the one group of companies that were, at least partly, commonly owned. In fact Dr Greinke did not base his submissions on the argument that the arrangement between these companies was necessarily typical of a joint venture as commonly understood in Australia and Mr Duffy argued persuasively that it lacked several features necessary for it to be a joint venture.
[19] I do not believe, however, that the only solution to the problem of identifying whether a duty of care exists is to make it depend on whether the relationship between parties that are connected commercially constitutes a joint venture. The contractual relationship required for a joint venture is too ill defined in Australia and capable of different meanings elsewhere[15] to be a sound basis for a rule of general application in the law of tort. That may be why McLachlin J in the Canadian Supreme Court used the phrase “joint or common venturer (or a concept akin thereto) with the property owner” to illustrate the situation where to deny recovery “would be to deny it to a person who for practical purposes is in the same position as if he or she owned the property physically damaged”.[16] That is a fair description of the situation here because of the close relationship between the owners of the shares in Fortuna Fishing and Fortuna Seafoods, the common control of those companies and the interlinked operation of the companies’ fishing businesses. That Fortuna Seafoods was the trustee of a trust of which Fortuna Fishing was a beneficiary, receiving distributions from Fortuna Seafoods’ income, also has some significance in reinforcing the closeness of the commercial links between the companies.
[20] Mr Duffy for the defendant relied on the decision of the Court of Appeal in Christopher v MV “Fiji Gas” (1993) Aust Torts Rep. 81-202 where a claim for lost income by the crew of a damaged fishing vessel failed. The plaintiffs in that case failed to show that the defendant was aware of the plaintiffs as individuals and not merely as members of an unascertained class who might suffer harm.[17] They were not on the vessel when it was damaged. There was no contractual joint venture or undertaking on foot, covering, for example, any catch of seafood in which they might have had an interest. Nor did they establish any contractual relationship between them and the owner of the vessel that was damaged that they would be taken on as crew when next it went to sea.[18]
[21] Here there was an existing contract by which both companies profited from the Melina T’s catch. Fortuna Seafoods’ interest in maintaining that contractual right was invaded by the negligent navigation of the Eternal Wind. On the analysis discussed by McPherson JA at 61,967 that was an interest capable of attracting the law’s protection leading to a result analogous to the Scottish decision in Main v Leask [1910] SC 772.[19] In Perre v Apand Gummow J said at 251, [191]-[192] that there was much to be said in favour of the point made by McPherson JA as to the tendency of the common law to concentrate upon the actions of the defendant in attempting to define the limits of liability in negligence for economic loss rather than identifying first the interests which are sufficient to attract the protection of the law in this field. In making those comments his Honour also referred to the views of Gaudron J in Hawkins v Clayton (1988) 164 CLR 539, 594, 601 about the effect, in assisting to establish that a duty of care exists, of identifying whether there has been an interference with or impairment of an existing right which is known or ought to be known to the person whose acts or omissions are called into question.[20]
[22] Gummow J’s reasons, agreed in by the majority of the Court, for extending the duty of care beyond the Perre family members, their partnership and their potato growing company to the company that owned its processing facility, suggest strongly that Fortuna Seafoods should also be owed such a duty.[21] As Kirby J said in agreeing with his Honour on this issue: “[I]t would be highly artificial to divide some of the members of this integrated commercial operation from others” when deciding whether a duty of care was owed.[22] For those reasons it is my view that the result in this case is not dictated by the decision in Christopher v MV “Fiji Gas”.
[23] Nor do the time charter cases exemplified by Candlewood Navigation Corp Ltd v Mitsui OSK Lines Ltd (The Mineral Transporter)[1986] AC 1; (1985) 3 NSWLR 159 determine the result. The Judicial Committee, on appeal from the Supreme Court of New South Wales, in distinguishing Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad, relied upon the exclusionary rule expressed in Cattle v Stockton Waterworks Co (1875) LR 10 QB 453.[23] That rule does not now express the law in Australia. One is tempted to ask rhetorically with the losing counsel in that decision, especially in a case such as this, why the wrongdoer should escape paying for part of the loss for which he is responsible merely because the loss is divided between two victims.[24]
[24] Mr Duffy’s answer to that question is partly that to do otherwise is to lift the corporate veil between Fortuna Fishing and Fortuna Seafoods and that Australian courts resist such an approach.[25] That is not strictly correct as the shareholders of Fortuna Fishing or Fortuna Seafoods are not bringing this claim but rather it is brought by Fortuna Seafoods as an associated commercial entity with Fortuna Fishing, owned by members of the same family, directed by the same directors and operating an integrated fishing business with it, a business which, in other circumstances, would most likely have been operated through one company rather than two. In determining whether a duty is owed to Fortuna Seafoods, it seems relevant to me to take those matters into account.
Means of knowledge
[25] There is no direct evidence of what Ganta Shipping knew of the commercial arrangements likely to apply to the ownership and operation of fishing vessels in Australia. The Eternal Wind was a Panamanian registered ship, like so many others engaged in international shipping, and no evidence was given on its behalf. One would expect, however, that its owner or master had the means of knowing that commercial fishing ventures in Australia may consist of a number of companies in a group with related shareholders and different functions for the individual companies, as existed here. In the absence of evidence from the defendant I am able, more readily, to draw the inference that it could have discovered that information, namely that companies in the position of Fortuna Fishing as the owner of a fishing vessel might form part of a related group of companies with another company marketing its catch, and should have had the interests of such another company in contemplation when navigating the Eternal Wind. As McHugh J said in Perre v Apand:
“The common thread that may be drawn from the judgments of Gibbs, Stephen and Mason JJ in Caltex is that more than reasonable foreseeability of harm to a person is required before the defendant comes under a duty of care. Knowledge of harm to the plaintiff is a minimum requirement. However, in my opinion, the indeterminacy issue does not require that the defendant's knowledge be limited to individual persons who are known to be in danger of suffering harm from the defendant's conduct. Its liability can be determinate even when the duty is owed to those members of a specific class whose identity could have been ascertained by the defendant.”[26]
[26] That approach, which reflects the decision reached by the Court in Perre v Apand, is inconsistent with and must be preferred to the analysis of the Court of Appeal in Christopher v MV “Fiji Gas” (1993) Aust Torts Rep. 81-202 at 61,963. The analysis of Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad at 571, when discussing the decision in Morrison Steamship Co Ltd v Greystoke Castle (Cargo Owners) [1947] AC 265, and at 576-577 when he decided that the defendant knew that the property damaged was of a kind inherently likely, when damaged, to be productive of economic loss to those who rely directly upon its use, applies as much to a fishing boat quite possibly engaged in a “common adventure” as to the owner of cargo on a damaged ship or the user of oil previously transported through pipelines that were damaged.[27]
Vulnerability
[27] It was submitted that Fortuna Seafoods was not vulnerable to the loss claimed because it could have obtained an indemnity from Fortuna Fishing against the consequences to it of the loss of Fortuna Fishing’s vessels. Mr Rowley was not cross-examined about that issue and there was no pleading putting it in issue or evidence otherwise dealing with that possibility. There is no obvious reason why Fortuna Fishing would agree to indemnify Fortuna Seafoods against the loss it might suffer should one of Fortuna Fishing’s vessels sink. There are other fish in the sea after all. Fortuna Seafoods may have been able to use a different supplier to replace the catch from the lost vessel. Fortuna Fishing, in the unlikely event of being asked for such an indemnity by an associated company, may have seen no good reason for agreeing to it because of the availability of other suppliers. It may have wanted to be paid a significant sum for the provision of such an indemnity. Even though the companies had the same directors they owed separate duties to each company and its shareholders. I should not assume that an indemnity was there simply for the asking.
[28] It is not the same as the case of the purchaser of a building who might seek a warranty as to its condition from the vendor as part of its bargain.[28] In the absence of evidence on the issue I would not decide that Fortuna Seafoods could have protected itself by seeking and obtaining such an indemnity. If the existence of insurance were relevant in cases such as this, and it is not,[29] I might as well conclude that Fortuna Seafoods could have indemnified itself by an insurance policy in the absence of any evidence that such a policy was obtainable on reasonable commercial terms.
[29] It is agreed that Fortuna Seafoods suffered loss and no other way it could have tried to prevent the collision or its consequences was explored at the trial. My conclusion is that it was unable to protect itself from the consequences of the defendant’s negligence and was vulnerable to those consequences.[30]
Conclusion
[30] The plaintiff’s close association with the company whose vessel was damaged, including the family connection of the shareholders, their common directors, their relationship as trustee and beneficiary and their integrated operation of separate aspects of what was essentially one business, is relevant to the question whether the plaintiff was a member of an ascertainable class. The common experience that groups of related companies operate different aspects of what may be essentially the one integrated commercial operation in Australia and elsewhere, and the absence of evidence from the defendant, allow me to conclude that the defendant had the means of knowledge that a number of related companies could rely directly for their incomes on the operations of the Melina T. Therefore, it is my view that a duty of care was owed by the defendant to Fortuna Seafoods entitling it to recover the agreed figure of damages.
[31] Accordingly I shall give judgment for the plaintiff for $163,256.00 and interest at 9% per annum from 5 December 1998. I shall hear the parties as to costs.
Footnotes
[1] T35 ll 10-11 and exs 7 and 8.
[2] See Bussani and Palmer (eds), Pure Economic Loss in Europe (CUP, 2003) esp. at pp. 123-159 and F H Lawson, “The Duty of Care in Negligence: A Comparative Study” (1947-1948) 22 Tul L Rev 111 esp. at pp. 118-119, 123-124.
[3] See also Stephen J at 576-577 and Mason J at 593.
[4] At 576 and adopted by the majority decision in Woolcock Street Investments Pty Ltd v CDG Pty Ltd (2004) 78 ALJR 628, 633, [22].
[5] This summary is derived principally from the reasons of Gleeson CJ in Perre v Apand at 194-195, [10]-[15]; McHugh J at 204, [50], 220, [103]-[105], 222-223 [109]-[113], 231, [133]; Gummow J at 259-260, [216]-[220]; Hayne J at 299-300, [329], 303-308, [335]-[351] and Callinan J at 326-329, [406]-[425]. Although Gaudron, Kirby and, to some extent, Hayne JJ analysed the circumstances in which a duty was owed differently from the other members of the Court, Gaudron J’s comments at 202, [40]-[42] and Kirby J’s at 289-291, [297]-[302] appear to recognise the relevance of these issues. See also Woolcock Street Investments Pty Ltd v CDG Pty Ltd at 633, [22] and the analyses by Professor J L R Davis, “Liability for careless acts or omissions causing purely economic loss: Perre v Apand Pty Ltd” (2000) 8 Torts L J 123, 129-130 and Professor Jane Stapleton, “Comparative Economic Loss: Lessons from Case-Law-Focused ‘Middle Theory’ ” (2002-2003) 50 UCLA L Rev 531.
[6] See, for example, the analysis of the negligent misstatement cases by reference to notions of assumption of responsibility and known reliance by the majority in Woolcock Street Investments Pty Ltd v CDG Pty Ltd at 634, [24] and see also McHugh J at 643, [74]-[75]. Chesterman J in Natcraft Pty Ltd v Det Norske Veritas [2001] QSC 348 at [45] and Jerrard JA in Valleyfield Pty Ltd v Primac Limited [2003] QCA 339 at [115] set out useful lists of relevant features. The reasons of Gillard J in Johnson Tiles Pty Ltd v Esso Australia Pty Ltd [2003] VSC 27 at [755] provide other possible example of salient features. His Honour’s adoption at [744] of the three step methodology of reasoning favoured by Kirby J, including the requirement of a relationship of proximity, is out of step however, with the views of other members of the High Court; see, e.g., Woolcock Street Investments Pty Ltd v CDG Pty Ltd at 632-633, [18], 636, [37].
[7] See McHugh J in Perre v Apand at 222-223, [111]-[112]. See also the article by G Todd Stanley, “Economic Loss in Maritime Law: On Course for Reevaluating the Exclusionary Rule”, (1995) 53 U Toronto Fac L Rev 312, at 340-344 arguing that indeterminate liability should not be a significant issue in maritime claims because of shipowners’ capacity to limit their liability.
[8] See McHugh J at 646-647, [90]-[96].
[9] Professor Feldthusen, “Liability for Pure Economic Loss: Yes but Why?”, University of Western Australia Law Review, vol 28 (1999) 84, 98. The term “ricochet loss” is also used; Bussani and Palmer, op cit, at pp. 10-11.
[10] Bow Valley Husky (Bermuda) Ltd v Saint John Shipbuilding Ltd [1997] 3 SCR 1210, 1242 and Canadian National Railway v. Norsk Pacific Steamship Co. [1992] 1 S.C.R. 1021, 1162-6.
[11] At 217-218, [96]-[98]. Professor Feldthusen’s classification has not attracted support from other members of the Court. For a criticism of it see Professor Peter Cane, “The blight of economic loss: Is there life after Perre v Apand?” (2000) 8 Torts L J 246.
[12] At 254, [200]-[201].
[13] See the discussion at 251, [191]-[192] to which I shall refer later and his Honour’s analysis of the evidence at 259-260, [217]-[220].
[14] As McPherson JA said in Christopher v MV “Fiji Gas” (1993) Aust Torts Rep. 81-202 at 61,967: “Almost invariably, however, the venturers [in a single marine adventure] jointly held shares conferring a proprietary interest in the vessel, or in the cargo, which was their stock in trade.”
[15] The Laws of Australia ch. 4.8 para. [153].
[16] Canadian National Railway v. Norsk Pacific Steamship Co at 1162-4. See also the reference to “common adventure” by Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad at 571, when discussing the decision in Morrison Steamship Co Ltd v Greystoke Castle (Cargo Owners) [1947] AC 265.
[17] At 61,963.
[18] See the analysis by McPherson JA at 61,967-8.
[19] See also the discussion of Main v Leask by Gibbs J in Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad at 547 and Carbone v Ursich (The Del Rio) 209 F 2d 178 (1953).
[20] See her Honour’s reasons in Perre v Apand also at 200-202, [34]-[42].
[21] Gummow J at 260, [217]-[220]. See also Gleeson CJ at 194, [12], Gaudron J at 202-203, [44]-[45], Kirby J at 291-292, [303]-[304], Callinan J at 332, [435]; but cf. McHugh J at 234-235, [144]-[145] and Hayne J at 308, [352]-354] where McHugh J would not have extended the duty beyond the potato growers to potato processors and Hayne J would have limited recovery to the growers and processors of potatoes intended for sale to Western Australia, excluding the lessee of the processing facility.
[22] At 292, [305].
[23] At [1986] AC 15; (1985) 3 NSWLR 162-163. See also Société Anonyme de Remorquage à Hélice v Bennetts [1911] 1 KB 243, 248-249 for another decision comparable to this case but decided at least partly in reliance on Cattle v Stockton Waterworks Co.
[24] At [1986] AC 19; (1985) 3 NSWLR 166.
[25] See Hadoplane Pty Ltd v Edward Rushton Pty Ltd [1996] 1 Qd R 156, 160-161, 164.
[26] At 222, [111]; see his Honour also at 218, [100] and Gleeson CJ at 195, [13]; Gaudron J at 202 [42]; Gummow J at 255-256, [206], 259-260, [216]-[220]; Kirby J at 289-290, [298]-[299]; Hayne J at 303, [336]. Callinan J at 326-327, [409] spoke of the actual foresight of the respondent but extended that to the potential victims “as being within a class of people likely to be adversely affected, packers and processors of potatoes, including those who were also growers, or handlers and land owners or facility owners closely connected with them such as those appellants as were not growers”. See also the example given by Lord Roche in Morrison Steamship Co Ltd v Greystoke Castle (Cargo Owners) [1947] AC 265, 280 where his Lordship expressed the view that the driver of a lorry would owe a duty both to the owner of another lorry with which it collided and to the owner of goods in the other lorry, even if they were not physically damaged.
[27] See also Gibbs J at 555-556, Mason J at 593 and Jacobs J at 604-605 for their analyses of the defendants’ knowledge of the likely effects of the damage to the pipeline.
[28] See Woolcock Street Investments Pty Ltd v CDG Pty Ltd at 635, [31]-[32]. Compare the discussion by Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad at 568-569 and that of Kirby J in Woolcock Street Investments Pty Ltd v CDG Pty Ltd at 660-661, [168]-[173].
[29] See Perre v Apand per McHugh J at 204, [50], 230, [130] and Stephen J in Caltex Oil (Australia) Pty Ltd v The Dredge Willemstad at 580-581.
[30] See Woolcock Street Investments Pty Ltd v CDG Pty Ltd at 633, [23].