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High Court of Ireland Decisions |
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Pat O'Donnell & Company Ltd. v. Truck & Machinery Sales Ltd. [1996] IEHC 3; [1997] 1 ILRM 466 (7th June, 1996) URL: http://www.bailii.org/ie/cases/IEHC/1996/3.html Cite as: [1996] IEHC 3, [1997] 1 ILRM 466 |
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1. For
the purpose of convenience in the judgment I will refer, because it is
confusing when a Plaintiff is effectively a Respondent, to Pat O'Donnell &
Co. Limited either by name or as Defendants to the Counterclaim and to Truck
& Machinery Sales Limited either as Counterclaimants or by their corporate
name.
2. The
primarily factual issues to be determined upon the hearing of this Counterclaim
relate to an agreement between both parties of the 12th February, 1992, for the
sale and exchange of a substantial quantity of mechanical shovels; as further
set forth in a signed written consent of the 23rd March, 1992, which also
detailed the related basis of compromise of pending proceedings involving the
Counterclaimants and German vendors of like equipment who may be referred to as
Zettelmeyer.
3. The
agreement was concluded between the respective managing directors of both
companies, Mr. James Mansfield and Mr. Pat O'Donnell, each of whom had traded
in the business of earth moving equipment for in excess of 25 years, and who
were the most crucial witnesses in the hearing.
4. On
both the liability and potential measure of damage issues, there transpired to
be a particularity of detail, to such an extent that the trial's projected
duration was more than trebled. But the particular circumstances giving rise
to the agreement may be summarised as follows.
5. As
Mr. Mansfield's business of leasing earth-moving equipment in Ireland,
primarily to those working quarries and gravel pits, and selling on such
equipment both in Ireland and internationally, increased, he came to have need
of a substantial consignment of four-wheeled mechanical shovels. He had
dealings with Mr. O'Donnell's company who had held the franchise in such
equipment for the Volvo Group since 1970 back in 1988 when a substantial and
mutually satisfactory agreement for the purchase of several Volvo dump trucks
was concluded between them.
6. The
range of mechanical shovels available for purchase in Ireland at the time
comprised of the American Caterpillar, the then market leader; the Japanese
Komatsu; Volvo; and Zettelmeyer.
7. Of
these, Mr. Mansfield bought 11 Zettelmeyers for approximately £900,000 of
two different types, in late 1989 and 1990, and had cause to regret the
decision, for they proved unreliable.
8. Upon
getting no satisfaction from Zettelmeyer personnel, Mr. Mansfield commenced
High Court proceedings in May 1991. His problems in this regard were
compounded when Mr. O'Donnell informed him in 1991 that Volvo were in the
course of taking over Zettelmeyer, and this acquisition duly took place.
9. Mr.
Mansfield's need to address a situation in which shovels that were
unsatisfactory might also acquire built-in obsolescence provided a heaven-sent
sales opportunity for Mr. O'Donnell, for in 1991 Volvo were in the course of
launching on the market a new model, the L150, with a view to competing much
more effectively with the highly regarded mid-range Caterpillar 966 model than
had its predecessor the L160.
10. Knowing
Mr. Mansfield to be the largest potential purchaser in Ireland, Mr. O'Donnell
made intense efforts in the latter portion of 1991 to interest Mr. Mansfield in
purchasing L150's, emphasising excellent performance in demonstrations held in
a range of Irish locations subsequent to the launch. It became clear to Mr.
O'Donnell that if an agreement was to be finalised it would have to be on the
basis that included returning the 11 Zettelmeyers or otherwise resolving the
ongoing litigation in regard to them.
11. Matters
came to a head at a meeting between the two men at Mr. Mansfield's Rathcoole
office on the 29th January, 1992. Following discussion of various
permutations, mutual interest favoured a basis of dealing whereby the 11
Zettelmeyers would be returned to Mr. O'Donnell for shipping on a basis of a
one-for-one exchange with new L150 Volvo models, accompanied by a further cash
purchase of other L150's.
12. One
immediate problem arose, however. The L150's were specified as being supplied
with twenty-three and a half by twenty-five inch tyres, ("the smaller tyres")
whereas Mr. Mansfield was adamant that to comply with the requirements of his
rental customers, and merit appropriately enhanced rates of rental, he would
only be prepared to enter into an agreement if all the L150's could be provided
with twenty-six and a half inch by twenty-five inch tyres, ("the larger
tyres"). Mr. O'Donnell stated that he would check whether this alteration was
feasible with Volvo personnel in Sweden. He did so and upon again meeting with
Mr. Mansfield on the 12th February, 1992 stated that it would be feasible to
supply the shovels with the larger wheels. What was said or unsaid between the
two in the context of it being a less than desirable option to take the shovels
with the larger wheels for work in quarries and gravel pits is one of the
principal matters of controversy on the evidence.
13. It
was common case, and must in any event have been apparent to two experienced
professionals, that the revision of specification would inevitably to some
degree impact upon performance, but a significant gap exists in the
recollection of the witnesses.
14. However,
in the course of the latter meeting an agreement was speedily concluded whereby
11 Zettelmeyers would be replaced by eleven L150's with a further nine such
models to be purchased at a price of £900,000. Whilst an order form
recording essential details was then signed by both Mr. Mansfield and Mr.
O'Donnell, it was agreed that the formal terms of the Agreement, in particular,
having regard to the basis of settlement of the Zettelmeyer litigation; would
be subsequently drawn up in conjunction with legal advisors. A written consent
was accordingly prepared by Messrs. Goodbodys, Solicitors to Volvo in Ireland,
and executed by all relevant parties on the 23rd March, 1992.
15. Pursuant
to the agreement, the 11 Zettelmeyer shovels were returned and a schedule of
delivery of L150's was embarked upon. Payment was duly made by the
Counterclaimant to the Defendants in respect of those models requiring payment,
save that by consensual variation of the agreement Mr. Mansfield sought that
two of the latter models should be changed to the larger and more expensive
L180 model. It is in respect of non-payment for those two shovels that the
present proceedings were instituted by Pat O'Donnell & Co. Limited.
16. However,
the first sign of overt controversy between the parties related to events far
beyond Ireland.
17. Mr.
Mansfield caused eight of the new L150's to be shipped to the Middle East as
part of a large consignment of varying types of equipment intended for resale.
The consignment came to be stored in Dubai, and currency and other problems
arose, which greatly hampered the Middle East venture, and have given rise to
further and unrelated proceedings instituted by Truck & Machinery Sales
Limited.
18. What
is primarily relevant for present purposes is that efforts to sell L150's to
the Pakistan Army appear to have antagonised local Volvo sales personnel with
like intentions. It was in this context that what came to be known in the
proceedings as "The Volvo letter" was written. This was a document of the 24th
September, 1992 written by Mr. Liljan-crantz, of local Volvo personnel, to the
representative retained by the Pakistan Army decrying, inter alia, the absence
of oil bath filters in the exported L150's, the fitting of the larger and
unrecommended tyres as tending to make the shovel become "sluggish" and the
fitting of "old" axles in contrast to a new and preferable version locally
available.
19. Although
there is again conflict in the evidence as to whether or not Mr. Mansfield had
exclusively committed the L150's acquired in the agreement to the Irish rental
market and a term to that effect has been pleaded in the Defence and
Counterclaim, it seems to me that on the evidence, as a whole, the
probabilities fall appreciatively short of Mr. Mansfield having furnished any
such binding undertaking on behalf of the Counterclaimant.
20. However,
from a Volvo standpoint, it is not difficult to conceive of the reaction when
what was thought of as a discounted Irish purchaser for a home market
re-emerged as a competitor to local Volvo agents in the Middle East. A copy of
the letter quickly reached Mr. Mansfield who taxed an initially incredulous Mr.
O'Donnell with it, and he in turn ascertained on contacting Volvo in Sweden
that the letter was genuine.
21. Being
in possession of the two new L180 shovels which had not yet been paid for, Mr.
Mansfield resolved to withhold payment until he received some realistic
satisfaction for what had transpired in relation to the L150's sent to the
Middle East, although he acknowledged in evidence that he had initially
purported in dealings with Mr. O'Donnell to ascribe payment delay to more
critical cash flow problems than he was in fact experiencing.
22. Mr.
Mansfield demanded that a Volvo representative of appropriate standing should
come to Ireland to deal with the position. In response to this, Mr. Paul
Kallmin, Marketing Director of Volvo International Sales Division, came to
Dublin and met with Mr. Mansfield and Mr. O'Donnell on two occasions at the end
of October 1992.
23. Upon
Mr. Mansfield forcefully stating his grievances in regard to the repercussions
of the letter upon his Middle East venture, Mr. Kallmin undertook to enquire
into what redress, including compensation, might be forthcoming. At the later
meeting, he stated no compensation would be paid and Volvo would not go beyond
providing a letter, shown in draft form, which would seek to reassure intending
purchasers; a course utterly unacceptable to Mr. Mansfield.
24. The
parties were now plainly on a collision course. Solicitors' letters were
exchanged, and proceedings were instituted by the issue of a summary summons
by Pat O'Donnell & Co. Limited for the unpaid purchase price of the two
L180 shovels and accrued interest thereon.
25. In
response to the grounding affidavit of Mr. O'Donnell seeking leave to enter
final judgment before the Master, Mr. Mansfield filed a detailed replying
affidavit. Whilst it would not be correct to state that this omitted to make
complaint in relation to the L150's consigned to the domestic hire market,
undoubtedly, the primary thrust of Mr. Mansfield's complaint in that affidavit,
and in the subsequent initial Defence and Counterclaim of the 21st June, 1993,
centred upon what had transpired in the Middle East. Both Volvo and
Zettelmeyer in their appropriate corporate forms were joined to the
Counterclaim. A notice for particulars in relation to the Defence and
Counterclaim was issued, but not apparently replied to, and cross-discovery
proceedings duly took their course. Beyond some correspondence by the
solicitors to Truck & Machinery Sales Limited to the solicitors who had
acted for Volvo in relation to the earlier consent, no steps were taken by the
said Counterclaimant's solicitors to serve Volvo and Zettelmeyer.
26. Following
unsuccessful applications by the said Counterclaimant's solicitors to adjourn,
the matter came before Costello P., and by his Order of the 21st November,
1995, judgment was granted in favour of Pat O'Donnell & Co. Limited for the
purchase price of the two L180's as claimed, together with accrued interest. A
stay upon the said judgment was also thereby ordered pending the due
determination of the present counterclaim.
27. Leave
was granted to Truck & Machinery Sales Limited to amend its Defence and
Counterclaim, the resultant amended pleading being delivered on the 22nd
December 1995, and notice of discontinuance of proceedings against Volvo and
Zettelmeyer was served. Just prior to the commencement of the Counterclaim
hearing, on the 15th April, 1996, the Counterclaimants sought to amend the
commencement date of matters complained of so as to be operative from the time
of the Agreement between the parties rather than in or about the time of the
Volvo letter.
28. Save
in respect of one aspect to which I shall shortly return, the legal principles
applicable to the various alleged causes of action and entitlement to damages
are well settled. I am obliged to Counsel and solicitors on both sides for
speedily and fully setting forth submissions on both law and fact in oral and
written form.
29. The
headings of claim that have caused me least difficulty are the alleged breaches
of Section 14, subsections 2 and 4, of the Sale of Goods Act 1893 and 1980,
respectively, the implied provisions in contracts for the sale of goods that
items purchased shall be of merchantable quality and shall be reasonably fit
for the purpose for which purchased. It does not appear necessary to set forth
the respective subsections verbatim or consider the applicability of any
particular subclauses. In the light of the authorities opened to me in the
submissions by the parties, in addition to relevant portions cited from
Benjamin on the Sale of Goods, allied to the findings of fact that I feel are
appropriate to the evidence in its entirety, I am satisfied that on no
realistic appraisal of appropriately proven defects in the L150's supplied can
it be said that they were not of merchantable quality or reasonably fit for the
purpose for which required.
30. Even
on a breach of warranty, ex post facto basis, it seems to me, construing the
evidence in its totality as best I can, that given such factors as the relative
prices obtained on resale in varying circumstances, the overall hire records,
durability and income generated in favour of the Counterclaimants by those
shovels which became part of the hire fleet, the relative incidence of repairs
required and the apparent evaluation of the L150's in Ireland and other
marketplaces by other purchasers and users that neither term has been shown to
be infringed.
31. For
some piecemeal items in respect of which defects were either admitted or not
seriously contested, a contractual basis of redress might still remain arguable
but on the view that I have taken in regard to the Counterclaim as a whole, I
believe those items may properly be deferred for consideration under
alternative headings.
32. The
remaining causes of action relied upon in the Counterclaim are those of
negligent misrepresentation and statutory misrepresentation pursuant to Section
45(1) of the Sale of Goods and Supply of Services Act 1980.
33. Following
upon the decision of the House of Lords in
Hedley
Byrne & Company Limited -v- Heller & Partners Limited
,
(1964) AC 465, it was accepted by Davitt P. in
Security
Trust Limited -v- Hugh Moore & Alexander Limited
,
(1964) I.R. 417 that an action for negligent misrepresentation could succeed in
this jurisdiction where a relationship between two parties was of such a nature
that upon one seeking information from the other damage resulted from a breach
of a duty to take reasonable care that the information furnished was correct.
In
Doolan
-v- Murray & Ors
.
(unreported, 21st December, 1993), Keane J. approved the dictum of Lord
Denning, MR, in
Esso
Petroleum Company -v- Marden
,
(1976) 2 ALLE.R.5, to the effect that:
34. In
setting forth a statutory entitlement to damages for non-fraudulent
misrepresentation in 1980, the Oireachtas did not require that a duty of care
should exist between representor and representee. By Section 45(1) of the Sale
and Goods and Supply of Services Act, 1980, it is provided that:
35. Having
appraised the evidence on both sides, I am of the opinion that the
Counterclaimants are entitled to succeed in respect of misrepresentation both
on a basis of negligent misrepresentation and statutory misrepresentation, but
primarily in respect of the former.
36. Patently,
Mr. O'Donnell was under a duty of care in relation to the representations he
made to Mr. Mansfield with a view to inducing sales. He was a specialised and
experienced dealer and up to 90% of his business was Volvo-produced; he knew
from previous dealings over dump trucks that Mr. Mansfield was not a person who
would exhaustively study vehicle specifications, and he had, on his own
evidence, assiduously canvassed Mr. Mansfield as a large potential purchaser of
L150's, whilst further knowing of his difficulties regarding Zettelmeyer over
whom Volvo had attained control.
37. Equally
clearly, the recommendations made by Mr. O'Donnell in relation to the L150 were
instrumental in persuading him to enter into the agreement. The actual
elements of conflict in accounts given by both principal witnesses are in fact
appreciatively less than in many other areas of controversy in the
Counterclaim. Although there are conflicts it seems to me to be established as
a relatively clear probability that in circumstances where he was made aware
that Mr. Mansfield required shovels that were at least the equal of the
Caterpillar 966 for arduous quarrying work, Mr. O'Donnell conveyed emphatically
to Mr. Mansfield that the L150 was a new and entirely up-to-date model of the
highest standard that would be equal to, and in some ways superior to, the
Caterpillar 966.
38. Mr.
O'Donnell was furnished with and was familiar with a significant amount of
promotional and technical literature which conveyed to him that in such matters
as speed in low gears, and in breakout force, a particularly significant
attribute in a quarrying concept, the L150 was not equal to the Caterpillar 966.
39. He
did not convey to Mr. Kallmin that he was selling L150's to Mr. Mansfield on a
basis of being equal to or superior to the Caterpillar 966 nor did he tell him
that quarrying was the main projected use by Mr. Mansfield's hirers.
40. Whilst
I accept Mr. O'Donnell's evidence that he was surprised and dismayed at the
content of the Volvo letter, and likewise accept the evidence of the Volvo
witnesses that design modifications are part and parcel of the business of
marketing an evolving product, it remains the fact of matters that on such
significant aspects as the type of axle and the standard wheel fittings,
significant preparations were in train and at an advanced state of development
to adapt to a product more suitable to Mr. Mansfield's needs. In the context
of the allegedly extensive dealings between Mr. O'Donnell and Volvo and the
latter's detailed consideration of whether or not to proceed with the proposed
agreement at all on a basis of larger tyre fittings, it would seem that these
aspects ought to have been elicited and conveyed to Mr. Mansfield.
41. It
would be an unwarranted finding to hold that the L150's supplied were no more
than an experimental prototype, yet it remains noteworthy in the light of the
representations made, that L150's supplied to Mr. Mansfield constituted a
significantly high percentage of, approximately, 200 shovels manufactured in
toto under the older format. It is difficult not to be inclined to a view that
this may have reflected some differences between the design and marketing arms
of Volvo. All this must be assessed in conjunction with the conflict of
evidence in regard to what passed between the parties with regard to the
provision of the larger wheels. Mr. Mansfield accepted that he insisted on
larger wheels and acknowledged that some limited loss of traction and breakout
force would result, but he denied the basis of repeated efforts to dissuade him
and warnings and caveats advanced by Mr. O'Donnell.
42. On
balance, and I have regard to a degree of difference in relevant testimony
between Mr. O'Donnell and Mr. Kallmin, and to the complete absence of any
contemporaneous written reference whatsoever, I am inclined to the view that no
serious or adequate warning was given by or on behalf of the vendors with
regard to the unsuitability of larger tyres for the existing specification.
43. Indeed,
as neither principal witness conveyed to me any impression of seeking to give
wilfully misleading or unworthy evidence, it is worth remembering that the
inherent complexity of the proposed agreement may well have distracted
attention from a fully reasoned appraisal of the likely repercussions of
fitting larger tyres or indeed the place of use projected for the L150's sold.
44. The
contract was indeed a large and crucial one for both parties, but the
Zettelmeyer and other attendant complications may have diverted a degree of
attention from aspects that would otherwise have been explored more fully.
There remains an issue as to whether or not in law or in fact, in so far as the
supply of L150's with larger wheels undoubtedly very significantly contributed
to the losses complained of, Mr. Mansfield should be held to have contributed
towards any resultant misfortune that accrued. By section 34(1) of the Civil
Liability Act, 1961, it is provided that:
45. These
provisions, expressly including breaches of contract as wrongs, are more widely
drafted than equivalent English legislation and appear to reflect the view of
Professor Glanville Williams that contributory negligence should be extended to
contract law and that, as argued by him at page 215 of his work on Joint Torts
and Contributory Negligence (1951), "Contributory negligence is appropriate
even where the contractual duty broken is a strict one".
46. As
recently as in
Lyons
-v- Thomas
(1986) I.R. 666, Murphy J. noted and applied the wide definition of wrong as
aforesaid. Further in
Gran
Gelato Limited -v- Richcliff (Group) Limited & Others
,
(1992) Ch. 560, it was held that in principle the concept of contributory
negligence applied to statutory misrepresentation under the Misrepresentation
Act, 1967, Nicholls, VC, holding that such a defence should be applicable in
the context of statutory misrepresentation, no less than in respect of
negligent misrepresentation founded upon the same representation.
47. In
the light of the foregoing, I am of the view that contributory negligence is in
principle applicable to a case such as the present Counterclaim, although I
would readily accept that in many commercial cases involving representations or
contractual terms it may be deemed inappropriate. Should it be applied in this
present instance? Mr. Mansfield was an accomplished and experienced
businessman who was able to recall in evidence that he had purchased 10 million
pounds worth of equipment in the Falkland Islands. He was well versed in the
practicabilities of mechanical shovels. He insisted on a relatively radical
departure from the then standard specification for his own commercial reasons,
in the knowledge that it must to some degree impact negatively upon
performance, albeit not to the extent of a general sluggishness.
48. It
accordingly seems to me that when dealing with redress, some appropriate
discounting on a basis of contributory negligence will require to be ordered.
49. With
regard to the contentions belatedly advanced on behalf of Defendants to the
Counterclaim, that the Counterclaimants should be (a) precluded from recovering
consequential losses pursuant to the standard conditions of sale set forth on
the reverse of the signed order form and (b) precluded from recovering any
losses that would seem to accrue to HSS Limited, the associate leasing arm of
Mr. Mansfield's group of companies, I have decided that the entire substantive
merits of losses flowing from the relevant misrepresentation should be
adjudicated upon in the proceedings as presently constituted.
50. Apart
from the issues now being more generically akin to negligence, than to a basis
of contractual privity, the concurrent designation of the relevant companies as
the Mansfield Group in the Consent of the 23rd March, 1992, and some possible
argument as to whether all such standard terms were duly incorporated into the
agreement for the purposes of the Counterclaim, these aspects have not been
pleaded in the amended Reply and Defence to Counterclaim at the conclusion of
the extensive and protracted pleadings. If I felt, nonetheless, in law
constrained to uphold either argument I would of course do so. But it is
difficult to see how the interest of either party could be advanced by leaving
undetermined a small portion of the merits exhaustively canvassed at hearing.
51. I
turn in conclusion to the issue of damages and whilst differences in the
measure of damages appropriate to negligent misrepresentation and statutory
misrepresentation may arise, it seems clear that what is applicable is such a
sum of money as should suffice to place the Counterclaimants into the position
they would have been in had the relevant misrepresentations been true.
53. I
have to say that a purported claim exceeding three quarters of a million
pounds, bears little reality to the substantive merits of the case as heard
over 11 days of evidence.
54. Given
that the critical focus of the Counterclaimants grievances until an advanced
state of proceedings was on the general mishaps that had befallen the Middle
East venture, an aspect expressly abandoned for the purposes of these
proceedings at the outset of the hearing, and that minimal if any
dissatisfaction with the L150's had been expressed until after the Volvo
letter, it is difficult to repress a view that the entire basis of claim has
been belatedly and implausibly recast.
55. This
has entailed Mr. Richard Mahon and Mr. Brendan Gibbons, respectively, financial
controller and maintenance fitter foreman to the Counterclaimants, advancing
documents and figures that appear predominantly to me to import a high degree
of artificiality, and in a process akin to the workings of revisionist
historians, to Mr. Jim Corkery, Financial Controller to Pat O'Donnell & Co.
Limited, and Mr. Leander of Volvo, furnishing detailed rebuttals. Whilst the
gulf between competing figures on such aspects as projected sales losses,
hiring, downtime, repair costs and realistic expectations is absurdly large, I
find the evidence on behalf of the Defendants to the Counterclaim more cogent
and impressive in this regard.
56. The
evidence of purportedly disgruntled hirers and users of L150's adduced on
behalf of the Counterclaimants had a mantra-like predictability, and whilst
accepting that the contrary evidence of Mr. Tom Cleary of Roadstone did not
reflect the most arduous of applications, I find it more in keeping with the
general proposition that clearly emerged that the L150 model has been generally
successful in this country and many others and has very significantly improved
the Volvo market share in the comparatively low-volume, but important, market
of mid-range shovels.
57. Similarly,
the evidence and report of the motor engineer, Mr. Kenneth Robinson, was based
upon one comparatively limited early examination of one L150 model, and
thereafter was limited to an evaluation on paper between documentation
applicable to both the L150 and the Caterpillar 966.
58. In
assessing the totality of the evidence, documentation and submissions, as
carefully as I can, I have had regard to what seems to me a veritable myriad of
infirmities in the quantum of the Counterclaim as alleged. Despite a general
evidential picture of machines that resold relatively competitively, required
or were provided with relatively few repairs in the context of industry norms,
and which worked and have continued to work long hours in a demanding market,
thereby producing valuable economic returns for their hirers, it appears to me
that unacceptable evidence has been advanced in an endeavour to support a
Counterclaim that has been spuriously inflated to a high degree.
59. Taking
the important issue of the realistic actual price paid by the Counterclaimants
for the L150's, there has been considerable divergence as to the respective
sums advanced. Undoubtedly, the whole basis of the sale and exchange agreement
imported a wide measure of comparative imponderables for the Counterclaimants,
who were both being forgiven a sizeable remaining payment in respect of the
Zettelmeyers, and waiving any contingent entitlement in the action that was
settled.
60. But
it is axiomatic that what Mr. Mansfield generally obtained was a unit price
significantly more favourable than the hundred thousand pounds ascribed to the
nine shovels he agreed to pay for in cash. The gulf between that figure and
the suggestion of a sum in the vicinity of £65,000 from Mr. Kallmin is vast.
61. I
have considered the relevant evidence on both sides in relation to actual new
and second hand L150's sales, the uncontrovertible fact that a purchaser buying
an extraordinarily large number of shovels for the Irish market on a partly
cash-funded basis will seek and obtain a significant discount, and the degree
of highly effective agreed bargaining and haggling that enabled Mr. Mansfield
to prevail with a £900,000 ultimatum appreciatively below the asking sum
contemplated by Mr. O'Donnell and Mr. Kallmin.
62. It
seems to me that in all the circumstances a sum of not more than £84,000
represents the realistic unit cost expended in the Agreement, which, given
aspects such as depreciation and the circumstances of some of the sales
subsequently made by Mr. Mansfield, has obvious repercussions on this heading
of claim.
63. Whilst
I have not exhaustively traversed several of the aspects that have caused me
misgivings, I have to say with regret that I find the basis of quantification
of losses advanced by the Counterclaimants so excessive, unreliable, and
punctured by cross-examination and opposing testimony that I find only very
limited reliance can be placed on it in quantifying loss.
64. It
is difficult not to incline at least in part towards the opposing argument that
faced with an indebtedness in excess of £600,000 in the judgment of
Costello P., no stone has been left unturned to set forth a belatedly recast
Counterclaim that unreliably seeks to exceed that sum. Faced with these
conflicts, how are losses to be quantified?
65. Plainly
a sum very significantly less then what is sought only is warranted; and whilst
a court may not be enamoured of inflated or untenable versions advanced in
sworn testimony, it is clear from McGregor on Damages and from the judgments of
the Supreme Court in
Callinan
-v- Voluntary Health Insurance Board
,
(unreported, 28th July, 1994), that it must do the best it can to quantify a
sum that is fair and appropriate.
66. I
have contemplated a number of alternative modes of formulating a proper sum,
either by awarding very heavily reduced figures under such of the heads of
claim as remain applicable or by assessing an appropriate proportion of what I
have found to be the actual unit prices paid by the Counterclaimants. The
computation I have arrived at using the latter method broadly equates with that
obtained from the former.
67. Whilst
the submissions made on behalf of Pat O'Donnell & Co. Limited urge only
nominal damages, if any, it still must be borne in mind that, given the overall
structure of the agreement, some 18 L150 shovels were involved and the
aggregate sums thereby were very substantial.
68. I
award, in the first instance, a sum based on a one eighth or 12½ %
discounting of the £84,000 I have found to have been paid in respect of
each of the 18 units. Because of the finding as to contributory negligence,
already dealt with, whilst bearing in mind that some limited aspects of the
claim were not affected by that factor, I further discount that entitlement to
10%, thereby entitling the Counterclaimants to judgment in the amount of
£151,200, being £8,400 multiplied by 18.
69. There
remains some aspects such as set-off, interest and the like, and indeed the
matter of costs, that I have been asked by the parties to hold over until
further argument and perhaps to enable the parties to evaluate the present
position. The case should be listed for mention speedily, approximately, a
week or so from now, when the persons involved have had an opportunity to
consider what has been stated today.