Patrick Nicholas Collin v Botany Fork and Crane Hire Pty Limited and the New Zealand Insurance Company Limited (Third Party) [1993] ACTSC 9; (1993) 113 FLR 83 (16 February 1993)

SUPREME COURT OF THE ACT

PATRICK NICHOLAS COLLIN v. BOTANY FORK AND CRANE HIRE PTY LIMITED and THE NEW
ZEALAND INSURANCE COMPANY LIMITED (Third Party)
No. SC339 of 1986
Number of pages - 29
Negligence - Oral contract - Damages - Interest - Insurance
[1993] ACTSC 9; (1993) 113 FLR 83

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Miles CJ(1)

CATCHWORDS

Negligence - duty to take reasonable care - injury to property - no issue of principle.

Oral contract - breach of contract - implied warranty to take reasonable care - no issue of principle.

Damages - injury to property - unusual craft - Italian gondola - mitigation of damages, whether cost of repair or replacement - loss of profits.

Interest - calculation of interest where long delay of case not caused by defendant.

Insurance - contract of insurance - exclusion clause - whether property in "custody or control" of insured.

Livingstone v. The Rawyards Coal Company (1879-80) 5 App. Cas. 25 at 39

Owners of Dredger Liesbosch v. Owners of Steamship Edison (1933) App. Cas. 449 at 459

Fleming on Torts 8th ed at 250

Pomphrey v. James A. Cuthbertson Limited (1951) SC147

Darbishire v. Warren (1963) 1 WLR 1067 at 1075

O'Grady v. Westminster Scaffolding, Ltd. (1962) 2 Lloyd's List LR 238

Parramatta City Council v. Lutz (1988) 12 NSWLR 293 at 312

Bank of New South Wales and Others v. The Commonwealth and Others [1948] HCA 7; (1948) 76 CLR 1 at 385

Federal Commissioner of Taxation v. ANZ Banking Group Ltd and Others (1979) 23 ALR 480

HEARING

CANBERRA, 1, 2 and 17 December 1992
16:2:1993

Counsel for the plaintiff: Mr. C. Whitelaw

Solicitors for the plaintiff: Meyer Boettcher and Clapham

Counsel for the defendant: Mr. G. Lunney

Solicitors for the defendant: Barker and Barker

Counsel for the Third Party: Mr. D. Nock

Solicitors for the Third Party: Higgins Solicitors

ORDER

The Court orders that:
1. There be judgment for the plaintiff in the sum of $30,000.

2. There be judgment for the third party in the third party
proceedings.

DECISION

This is an action for damages for injury done by the defendant to a boat belonging to the plaintiff. The injury occurred on 22 May 1980 when the plaintiff engaged the defendant to supply a forklift and driver to lower the boat from where it was kept in storage, suspended from the trusses of a warehouse, down to the floor of the warehouse, a distance of about three to four metres. It was in the course of that manoeuvre that the boat fell from the tines of the forklift on to the concrete floor and was extensively damaged.

2. The plaintiff sues the defendant in breach of contract and alternatively in negligence. The contract was wholly oral. It was alleged by the plaintiff that it was an implied warranty or term of the agreement that the defendant would carry out the work in a good and workmanlike manner with due skill, care and diligence. The defendant denied the contract, denied the implied term and denied breach. The claim in negligence was, as a matter of pleading, confused with the claim in contract, but counsel for the defendant was ready to meet both claims at the hearing. Contributory negligence was not pleaded.

3. In the end, I do not think that there is any real practical distinction for the purposes of the present case between the two alternative causes of action. There is no doubt that there was an implied term in the agreement as alleged. Otherwise the agreement did not make commercial sense. Perhaps situations can arise when one person engages another to perform a service of the nature required in the present case without an understanding on the part of both that the undertaking will be carried out with the exercise of reasonable care, but this is not such a case. The contractual relationship in any event gives rise to the proximity between the parties whereby the duty to take reasonable care not to injure the other will be imposed by the law so long as it is not in conflict with the precise terms agreed upon between the parties. Where, as in this case, the duty of care owed by the terms of the contract and the duty owed as a result of the proximity brought about by the contractual relationship are identical, the breach of one will be a breach of the other.

4. Whether the conduct of the defendant involved a breach of duty to take reasonable care is a question of fact depending on the circumstances. It is therefore necessary to look at the facts in some detail.

5. The boat in question was an unusual craft, a gondola constructed in Venice and brought to Australia. Its exact nature and history is in dispute and will be discussed later. It was purchased by the plaintiff in 1977 and rescued from the bed of Lake Burley Griffin where it had lain in three metres of water for a month or two, half full of mud and silt. At that stage the wooden hull was damaged to the extent that two or more of the boards were staved in, the result of ineptitude or recklessness on the part of students who had borrowed the gondola for a prank.

6. The damage was minor and the gondola was repaired by a friend of the plaintiff, Mr. Geoffrey Murphy. Mr. Murphy was a carpenter and general builder by trade. He worked (so it was claimed) on the gondola over a period of eighteen months, spending between 1,500 or 2,000 hours on the job until it was in a condition which caused both men considerable pride and pleasure. Mr. Murphy designed and constructed a trailer to carry the gondola. It was towed, with police escort, and relaunched into the Lake from whence it had come. In September or October 1978 it was displayed on the fountain pond in Civic Square during the Concorso d'Eleganza, where it was said to "rock serenely as a central attraction" as part of an exhibition of Italian high fashion, high culture and fine cars. Plans were made to hire it out at the Moomba festival in Melbourne and the Blessing of the Fleet in Sydney.

7. The gondola was eleven to twelve metres long, 1.4 metres across the beam at its widest and 0.8 metres deep. The hull was curved from bow to stern, but with a flat section in the middle about 3.5 metres long. A sort of cabin was built over this section. The cabin was about 2.5 metres in length. The uprights consisted of metal rods and fabric was fitted over them to form a roof or canopy. The bow curved upwards markedly, and at its extremity and highest point was about 1.5 metres above the water. The stern curved upwards also to about half that height. Nobody ever put the gondola on a weighbridge or used any scientifically accurate method of assessing its weight or displacement. Mr. Murphy, who said that he had experience in country sawmills handling heavy logs and in lifting the rears of FJ Holden cars, thought it weighed about a ton. Mr. Nicholas Masterman of Balmain, an expert boat builder and restorer of wooden boats, estimated that it weighed a ton and a half. Mr. Brian Lay of Queanbeyan, a carpenter and joiner in the boat building business, estimated the weight at about three quarters of a ton.

8. The trailer that Mr. Murphy built weighed half a ton. It may have been registered under the Motor Traffic Act, it may not. The evidence conflicted. It was made from steel pipes or tubing, square or rectangular in section. There were three members that ran longitudinally, each about 6 metres long. The two outer members were made of 4 x 2 inch piping. The centre member was made of 4 x 4 inch piping. The outer members sat so that they were 4 inches in the vertical and so all three members were level or in the one plane. They were joined by sections of similar piping welded at right angles to them. The assembly was fixed to and set atop what Mr. Murphy described as a standard trailer axle set with the two wheels 6 feet apart. When the gondola sat on the trailer, the stern was almost over the towball socket. At the other end the bow projected about 3 metres beyond the end of the trailer. The gondola was fixed to the trailer by straps.

9. Storage of this craft presented a problem. Soon after its restoration Mr. Murphy and the plaintiff hit on the idea of suspending it from the trusses of a warehouse leased by a company controlled by the plaintiff. So suspended it would be out of the way and secure from thieves and vandals. Some time in mid 1978 the services of the defendant were engaged by the plaintiff in order to have the gondola and the trailer to which it was fastened raised together by means of a forklift to a position about 3.5 metres above the concrete floor level. When the gondola had been raised to that position, Mr. Murphy passed ropes over the roof trusses and under the trailer and tied them together, thus keeping the gondola and trailer suspended. When it came time for the gondola to be used, for whatever purpose, the plaintiff engaged the defendant to lower the gondola and trailer to the concrete floor of the warehouse. Conversely, when the plaintiff wanted the gondola to be placed back in storage, similar arrangements were made for the defendant to raise the gondola to a position where it could be tied to the roof trusses. Thus the gondola was lifted and lowered by the defendant at the request of the plaintiff on several occasions prior to 22 May 1980. Details of the arrangements made on these prior occasions were not given in evidence.

10. On 22 May 1980 the plaintiff wanted the gondola taken to Lake Burley Griffin for a day on the lake. This was preparatory to a proposal to transport the gondola by truck to Melbourne for participation in the Moomba festival and, on the way, to stop shortly at Albury in order to take part in a parade there. The plaintiff telephoned someone at the defendant's premises which was "three or four doors down the road" and "just ordered the fork to lift the gondola down". The plaintiff had had many dealings with the defendant over several years and was used to hiring forklifts, with drivers, several times a week for the purpose of shifting timber, steel and similar items. Against that background and having engaged the defendant's services for raising and lowering the gondola on previous occasions, the plaintiff's brief, verbal instructions should not, in my view, be construed to contain the whole of the terms of the contract.

11. In particular, the question arises whether on the occasion in question the defendant was obliged to use "slippers" in order to lower the gondola.

12. The plaintiff said in his evidence (which I accept on this point) that it was usual for the forklifts to be supplied with slippers. By that I took him to mean that the forklifts came with slippers available and ready to be attached if needed, not that the forklifts came with slippers already attached. There was no evidence one way or the other on the question whether slippers had been used by the defendant on the earlier occasions when the gondola had been raised or lowered by the defendant at the plaintiff's request. Slippers are attachments which can be fitted onto the tines of a forklift, forming an extension of the tines. They are about 6 feet in length, and when fitted virtually double the length of the tines, and allow loads of greater bulk to be handled by the forklift. Clearly, however, the use of tines will have an effect on the stability of the forklift and of the load, or both, depending on the mass of the load and of the distribution of that mass, a matter to which I shall return. In any event, whilst I do not find that there was an implied term in the contract that the slippers were to be used to lower the gondola on 22 May 1980 (and the statement of claim does not make any such allegation) I do find that the slippers were readily available to the defendant and that the application of reasonable care on the part of the defendant required a consideration whether slippers should be used. I add, for the sake of completeness, that I disallowed oral evidence relating to entries on the subject of slippers said to appear in an order book kept by the defendant. Neither the order book nor any copy of it was in evidence.

13. In response to the plaintiff's telephone call on 22 May 1980, an employee of the defendant, Mr. Stephen Shores, was instructed by Mr. John Belcher (who may or may not have been the person to whom the plaintiff made his request) to "get in the forklift" and to go to 10 Barrier Street for "one lift". Mr. Shores was not told what it was that had to be lifted. In the meantime and immediately after the telephone call, the plaintiff instructed Mr. Murphy to open the warehouse for the arrival of the forklift. Mr. Murphy was present when Mr. Shores arrived. When it came to giving evidence neither of the two men could remember any conversation between them before the fall of the gondola, although it is likely that something was said by one or the other or both. Mr. Shores said in his statement to the Court that he understood that the gondola was to be loaded on to a truck. Mr. Murphy denied saying anything to that effect and I accept Mr. Murphy's denial. I also find that no truck was there.

14. Mr. Murphy either got on to the roof of the forklift or allowed himself to be raised on the tines, and by one means or another thereby gained access to the gondola. Mr. Shores operated the forklift so that the tines "took the weight" of the gondola. He did not say anything in his statement to the Court about whether he observed that the gondola was attached to a trailer. He said nothing about a trailer, and was not asked anything by either counsel about a trailer. If he had noticed a trailer, I think that it would have impressed itself upon him, so that despite the lapse of some twelve years, he was likely to remember it. I conclude either that he did not notice the trailer or that, although it was visually apparent to him, it did not cause him to deliberate on how it might affect the way in which the combined load of the trailer and gondola was to be lowered or where exactly the tines were to be placed in relation to the length of the gondola or the length of the trailer.

15. Mr. Murphy, on the other hand, was astute but not over-zealous for his own safety. He was in a position reminiscent of a man sawing a limb from a tree whilst standing on the outside of the same limb. He noticed that when the forklift took the weight, the ropes went slack. He then climbed from the forklift into the gondola (a manoeuvre which was likely to have been at about midships), untied the ropes at one end and let them drop to the floor. He then made his way along to the other end of the gondola, untied the ropes there, let them drop and then "quietly crawled" back along the hull on the side nearest the mast of the forklift. He then got out of the gondola and down the forklift to the floor, no doubt with a feeling of considerable relief. The quiet nature of Mr. Murphy's progress along the hull of the gondola as it lay balanced on the tines, no longer held by the ropes, was due to a well justified apprehension. He thus proved that his weight was not sufficient to destabilize the load, either lengthwise, like a children's see-saw, or laterally, like a jar rolling off a supermarket shelf. If he had made his way along the centre of the hull or outside the centre away from the mast, it might have been a different story.

16. To digress a little. Mr. Peter Frederick Hopner, an inspector with the ACT Occupational Health and Safety Office, gave some expert evidence (which I accept) about forklifts and in particular the Komatsu FG20, which is the type of forklift used in the operation in question. It is a counter-balanced forklift. The tines are 1.07 to 1.2 metres in length, with a safe lifting capacity of 1820 kilograms, where the load has a centre of gravity 0.6 metres from the heel of the tines. If the load is within that mass but the centre of gravity is further from the heel of the tines, the stability of the load is diminished, or, as Mr. Hopner put it, "if you wanted to lift a load, say, any heavier in mass and it was located out from the centre of gravity, you would have to reduce that load down. You couldn't lift that particular load. You would have to reduce it down, otherwise you would have a real potential that the load would either come off or the forklift would become unstable and could overturn." So it becomes clear, in my view, that with the gondola of 1.4 metres in beam, sitting on a trailer with a 6 foot axle assembly, and the lot resting on tines between 1.07 and 1.2 metres in length, the centre of gravity along the tines was likely to be beyond 0.6 metres from the heel. Whilst the combined weight of the trailer on the gondola is impossible to assess accurately on the state of the evidence, it was likely to be in the region of 1500 kilograms and the whole scene was one fraught with peril.

17. But the most important aspect, in my view, relates to the position of the tines as they made contact with the bars which constituted the base of the trailer. It was highly unlikely and almost impossible for the tines to make contact with the outermost of the three bars. The tines were simply too short. They could have made contact only with the bar closest to the heel and the bar at the centre. The combined mass rested only on those two bars. The extremities of the tines were in space. Assuming that the mass of the load was evenly distributed in beam, and the central bar being only 4 inches wide, the load was only just balancing on that central bar of the trailer.

18. To return to the scene on 22 May 1980. Mr. Shores, having taken the weight on the tines, considered that there was an obstruction which required him to back the forklift before the load could be lowered. Mr. Murphy denies that there was any such obstruction or any such need. My finding is that, if all that was to be done was to lower the load to the floor, then Mr. Murphy was correct. But it is to be remembered that Mr. Shores thought or said that he thought that the load was to go on to a truck. I have found that there was no truck and therefore there was no instruction to put the load on a truck. So Mr. Shores is either wrong in his recollection or was wrong in his understanding. In any event, without any need to do so, he began to drive the forklift in reverse along the floor. He directed his gaze and attention to the rear of the forklift. Mr. Murphy, on the other hand, was intent to watch the gondola and trailer, poised in the air supported by the forklift. The forklift had travelled but a few inches, when, as Mr. Murphy watched it, the mast "as if in slow motion" swung backwards and forwards, once, twice and on the third movement the inevitable happened. The gondola and trailer turned over and crashed to the floor.

19. It is likely, in my opinion, that as the trailer made its descent, the bar closest to the heel caught the edge of the tines, causing the gondola and trailer to turn further, so that the gondola landed virtually upside down. The flimsy canopy would have struck the floor first, followed by the raised woodwork at the bow and stern, the impact then forcing the weight of the trailer to come down hard on the centre of the hull and what was left of the canopy.

20. I find that the negligence of the forklift driver was essentially his failure to observe the instability of the load. That instability was caused mainly by the fact that the tines did not support the load beyond the centre bar of the trailer and was contributed to by the likelihood that the centre of gravity was more than 0.6 metres from the heel of the tines. For completeness I add that in the circumstances it was negligent to attempt to move the forklift across the concrete floor. Furthermore, had the forklift driver given attention to the obvious instability of the load, reasonable care would then have required a decision that slippers should be used on the tines. The use of slippers would have ensured that the trailer was supported across the whole of its width and the gondola was likely to have been supported across the whole or almost the whole of its beam. That way the faulty lowering of the gondola could have been carried out successfully and the risk of a fall would have been minimized.

21. It would be gratuitous to say anything about whether the owner of this gondola should have been more careful about giving instructions about how such an obviously dangerous manoeuvre should have been carried out, particularly having regard to the owner's experience of the supply of slippers on forklifts on prior occasions. Contributory negligence was not pleaded.

Damages
22. The general principles of law in relation to assessing damages for injury to goods have been well established. The basic principle, simply stated, is that the plaintiff should be placed in the position he or she was in prior to the accident to the extent that money can do it. In Livingstone v. The Rawyards Coal Company (1879-80) 5 App Cas 25 at 39, Lord Blackburn asserted that this is the general rule where any injury is to be compensated by damages. In Owners of Dredger Liesbosch v. Owners of Steamship Edison (1933) App Cas 449 at 459, Lord Wright described this principle as the "dominant rule of law" in relation to an award of damages for injury to property or person.

23. Evaluation of the loss to the plaintiff caused by the injury to the plaintiff's good will usually commence by reference either to cost of repair or to cost of replacement of the property: see Fleming on Torts 8th ed at 250 and cases cited. But the plaintiff is not free to choose the more expensive method of the two. The plaintiff has a duty to mitigate the cost of the defendant. In Pomphrey v. James A. Cuthbertson Limited (1951) SC147 at 161, Lord Jamison applied the "prudent owner" test, that is: what would a prudent owner do in the same circumstances if he or she were to bear the cost, that is to say, which option is the cheaper, the cost of repair or cost of replacement?

24. In Darbishire v. Warren (1963) 1 WLR 1067 at 1075, Pearson LJ stated that the true meaning of "duty to mitigate" is that "the plaintiff is not entitled to charge the defendant by way of damages with any greater sum than that which he reasonably needs to expend for the purpose of making good the loss".

25. There may be a further factor to be considered when the property damaged is such that it holds extraordinary sentimental value or is an antique of rare quality. In the case of O'Grady v. Westminster Scaffolding, Ltd. (1962) 2 Lloyd's List LR 238, the plaintiff owned a vintage car which had been lovingly restored to an almost new condition. Davies J considered the reasonableness of repairing the car and concluded that on the facts repair was reasonable although more expensive than replacement in view of the extraordinary affection the plaintiff placed upon the car and the way in which he had maintained it.

26. However, the governing factor in assessing damages is reasonableness and this usually turns on questions of fact: see Parramatta City Council v. Lutz (1988) 12 NSWLR 293 at 312 per Kirby P.

27. On the face of it, the principles above stated of compensatory damages should not be difficult to apply. Whether one uses the replacement cost approach or the cost of repair approach, the result will ordinarily put the owner in the position in which the owner would have been but for the injury. However, the gondola was a unique craft or vessel, at least in Australia. It obviously had a special personal value to the plaintiff, judging by his demeanour when he was giving evidence about it.

28. Counsel for the plaintiff argued that the plaintiff was entitled to the cost of repairs and restoration, plus interest at commercial rates, plus consequential loss of profits, amounting in all to about $250,000. On the other hand, the defendant's counsel argued that the replacement value was the appropriate method of assessing damages, and even on that approach, the case for the plaintiff should be approached with considerable caution, owing to the absence of documentary or other corroboration.

29. The approach urged on behalf of the plaintiff depends largely on the evidence of Mr. Masterman. Mr. Masterman had particular expertise and experience in the design and construction of timber boats and in the restoration of old timber boats. However, Mr. Masterman, for all his experience, had never seen a gondola before. That does not necessarily mean that he could not express an expert opinion about that subject matter, provided that he were properly qualified to do so. A person born in the twentieth century, if properly qualified, may give evidence about Julius Caesar, and a scientist who has never left Mt. Stromlo, if properly qualified, may give testimony about Jupiter and Mars. Mr. Masterman did some research into gondolas and read books on the subject for the purpose of assessing the cost of damage or repair to the gondola in question. He arrived at the conclusion that it was a Royal Venetian gondola, built circa 1880, and estimated the cost of repair and restoration of what was a rare artefact at $94,400.

30. On the other hand, evidence for the defendant was given by Mr. Brian Lay, a carpenter and joiner by trade, who had worked for many years in his own boat-building business (in Queanbeyan). In 1959 or 1960 he had actually been in Venice, seen gondolas and travelled on a canal in a gondola. Whilst in Venice he had cast a practised eye over what he saw. He also had personal knowledge of the gondola in question. He first saw it in 1970 in a container in a yard in Fyshwick. It appeared to be in new and unused condition. He advised the Queanbeyan Rotary Club, of which he was a member, that it could be of use. Apparently the Queanbeyan Rotary Club acquired the gondola, for what consideration I do not know. Mr. Lay caulked the seams to make it watertight. The gondola was used by the Club as a float (sic) in the Queanbeyan Floral Festival in 1973 and 1974. It was also launched and used on Lake Burley Griffin whilst in the possession of the Queanbeyan Rotary Club. When not in use, which appears to have been most of the time, it was stored in Mr. Lay's boatyard.

31. Mr. Lay thought that the gondola was made of Baltic pine, a relatively light and cheap timber. It was light enough to be moved around the boatyard and, on one occasion, six men lifted it over a brick wall. He thought that the gondola was a traditional gondola such as he had seen in Venice, of which there were hundreds, if not thousands. He contrasted the traditional gondola with the so-called taxi gondolas used in Venice when he was there in 1959 or 1960. Taxi gondolas were of simpler construction and power driven. He knew nothing of the Royal Venetian variety of gondola.

32. The gondola apparently proved to be no source of profit to the Queanbeyan Rotary Club and there were unsuccessful attempts to sell it. Eventually it was exchanged for a motorcycle which could be raffled. For the purpose of the raffle, the motorcycle was held out to the public to be worth $400. The new owner of the gondola was Mr. John Grant, who owned a motorcycle business. It was a Mr. John Grant from whom the plaintiff purchased the gondola and I conclude that the man who sold it to the plaintiff was the man who had acquired it a few years previously in exchange for a motorcycle worth about $400.

33. The plaintiff bears the onus of proving that the damaged item had the characteristics and value of a Royal Venetian gondola of the antiquity claimed. On this issue I do not think that Mr. Masterman spoke with the authority of a true expert. His evidence was really based on research on a subject to which his own experience, expertise and interests were relevant and he no doubt found the exercise easier and more interesting than a person without his qualifications and interests. Nevertheless, I think that his evidence on the antiquity and nature of the craft in question was more in the nature of hearsay than of expert evidence. Whilst I make a positive finding that the gondola was built in Venice, I am unable to make a positive finding as to its age, or its date of construction, except that it must have been before it was brought to Australia, which itself must have been before 1970.

34. Similarly, I am not positively convinced that the gondola was of teak construction as Mr. Masterman maintained. His evidence on this aspect was somewhat vague. I prefer the evidence of Mr. Lay. I think that the gondola was probably of Baltic pine construction, and as to whether it was a Royal Venetian gondola of relative antiquity, or simply an example of a typical Venetian gondola of which there were at least hundreds in use in Venice at the relevant time, I do not know. Accordingly, I do not share the view of Mr. Masterman that the gondola should be regarded as a rare artefact. Accordingly, I do not agree that, as such, to fail to repair and restore it would be a "heinous crime".

35. In my view, the most appropriate way of measuring the damages sustained by the plaintiff would be to assess its replacement value by ascertaining the cost of delivering to the plaintiff, in Canberra, in May 1980 a new or slightly used gondola of the traditional variety, constructed in Venice and imported to Australia. I would regard that as the replacement value of the gondola at that time. Unfortunately, there is simply no evidence tendered with the object of assessing the damages in that way, and I must do the best on what is available.

36. The plaintiff's evidence was that he paid $10,000 cash for the gondola, and carried out building work for the vendor to the value of about $6,000 or $7,000. That evidence has to be approached with care in the light of the evidence of Mr. Lay, which I accept, that the gondola had been exchanged a few years before for a motorcycle worth $400. On the other hand, it is not unlikely that the replacement value of the gondola was unknown to the committee of the Queanbeyan Rotary Club. Furthermore, I doubt whether the person who bought it from the Queanbeyan Rotary Club would have known its replacement value. However, the plaintiff said that, before the purchase, he did some research and made enquiries through the Italian Embassy about the value of the gondola. As he appears to have been in other respects a successful man of business, I think that he must have satisfied himself that it was worth what he paid for it.

37. I am prepared to draw the inference that articles in the Canberra Times in August and September 1978 (Exhibits F and E) were based upon information supplied by the plaintiff. Copies of the articles were put in evidence in the plaintiff's case and the plaintiff did not protest or dispute in his evidence that what was published in The Canberra Times was accurate. It is notable that there is no reference in either article to the purchase price of the gondola, but there is a statement in one article that the cost of the work done on the gondola was $2,000 and in the other that the cost was more than $2,000. I think that this must refer to the amount spent on materials to repair and restore the gondola, because I have little hesitation in accepting the evidence of Mr. Murphy, which supports that of the plaintiff, relating to the time and attention given to the restoration, for which he was not paid. However, I bear in mind also, that Mr. Murphy was not a boat builder and in the circumstances I am not satisfied that the time spent by Mr. Murphy on the restoration and repair could not have been reduced if carried out by one whose expertise was in boat building rather than in general carpentry. In other words, I am not convinced that a competent boat builder needed as much as 1,500 to 2,000 hours of work on the gondola to bring it to a reasonable finish and condition. However, I think that by the time the restoration was completed the plaintiff had in his possession an item which was worth more than the total of the sum he had paid for it together with the amount actually expended on repair and restoration. Some allowance has to be made for Mr. Murphy's efforts. Furthermore, it was, after all, a unique item, and attracted a certain amount of attention in Canberra at the time.

38. There are several unsatisfactory features about the proof of damage in this case. In particular, there is no explanation (except the appalling lapse of time) for the absence of corroboration of the plaintiff's evidence on several matters where one would expect corroboration. The person from whom the plaintiff purchased the gondola was not called and there is no explanation for his absence. Whilst I do not think that the plaintiff would mislead the Court in falsely stating that he paid $10,000 cash for the gondola, I think that his affection for the craft has led him into wishful thinking as to its value in dollars and cents. I am unable to accept his evidence that it was part of the contract of purchase of the gondola that he carry out building work for the vendor to the value of $6,000-$7,000 and that he carried out his side of the bargain in this respect. Apart from the matter of lack of corroboration from the vendor or in the form of documentation, the plaintiff's evidence on this aspect was vague, lacking in particularity and, according to my observation, lacking in conviction. Doing the best I can on the evidence and the inferences legitimately available, I conclude that the value of the gondola at the time of the fall was $20,000. I am not satisfied that it had any salvage value once damaged by the defendant and the plaintiff's entitlement to damages begins with that sum of $20,000.

39. The evidence about the loss of profits in relation to the gondola is also in most respects unsatisfactory. The plaintiff gave evidence that any profit derived from the use of the gondola was to be shared with Mr. Murphy on a changing basis, for example, sometimes on a 50/50 basis and at other times something different, depending on the amount of profit derived. As to expected profits, the plaintiff claimed that he had entered into negotiations with the Moomba Festival organisers, the Il Globo Newspaper and the Melbourne Italian community but had no documentation relating to the arrangements. He further claimed that he had had negotiations with the "Blessing of the Fleet" organizers in Sydney. He gave evidence that expenses for the Moomba Festival would have been $10,000, $2,000 being expected net profit. The plaintiff expected a slightly lesser amount for the Sydney "Blessing of the Fleet" venture. There was no documentation or other evidence to support the claims. The plaintiff is entitled to damages under this head by assessing the loss of a chance. Bearing in mind the unsatisfactory nature of this evidence, I assess this head of damages at $5,000.

40. There is a claim for interest, which in the circumstances, is greatly exaggerated. It would be grossly unfair to the defendant to require it to pay interest on a commercial basis when the cause of action arose over twelve years ago and where there is no evidence that the defendant contributed to the delay in bringing the action on for hearing. In lieu of interest I exercise my discretion under s.69 of the Supreme Court Act and award the plaintiff the sum of $5,000 in lieu of interest.

41. The plaintiff is therefore entitled to enter judgment for the sum of $30,000 and I so order. Unless the parties wish to be heard, I propose to order the defendant to pay the plaintiff's costs on a party and party basis.

Third Party Proceedings
42. The defendant claims indemnity from the third party relying upon its rights under a contract of insurance. The third party, by way of defence to the third party claim, relies on what it calls "Exceptions to Third Party Liability" contained within the policy of insurance which comprises the contract.

43. It is agreed that exhibit 1 is a photocopy of the relevant part or parts of the policy in question. It is also agreed that the motor vehicle referred to in the policy is the forklift in question. Part of the policy is in the following terms:

"MOTOR VEHICLE POLICY
SECTION ONE - LOSS OR DAMAGE
The Insurer will indemnify the Insured against loss of or damage
to any motor vehicle described in the schedule together with any
spare parts or accessories fitted thereon.
.....
SECTION TWO - THIRD PARTY LIABILITY
Indemnity to the Insured
(i) The Insurer will indemnify the Insured against legal
liability for death of or bodily injury to any person and damage
to property arising from an accident caused by, through, or in
connection with -
(a) the insured vehicle
.....
EXCEPTIONS TO SECTION TWO
The Insurer shall not be liable in respect of -
.....
(b) damage to property belonging to or held in trust by or in the
custody or control of the insured or any person indemnified by
this Section.
....."

44. It was submitted by counsel for the third party that the gondola was "property .... in the custody or control of the insured" within para. (b) of the Exceptions to Section Two. Counsel for the defendant submitted that the gondola remained in the custody and control of the plaintiff at the time of the causing of damage to the gondola.

45. The question is essentially one of fact and the third party bears the onus of proving that the facts of the case come within the exception to the policy.

46. The terms "custody" and "control" have no fixed meaning in law and the meaning will vary according to context and circumstance. In Bank of New South Wales and Others v. The Commonwealth and Others [1948] HCA 7; (1948) 76 CLR 1 at 385, Dixon J, as he then was, said that the word "control" was "an unfortunate word .... of wide and ambiguous import". (His Honour was talking of the suggested implication of the words "from control" at the end of s.92 of the Constitution.) In the context of the insurance policy under consideration, and for the purposes of the circumstances of the case, I do not think that there is anything to be gained by drawing a distinction between the two words "custody" and "control". Each imports a notion of possession, the power in fact, if not in law, to keep others (not necessarily all others) from access to or interfering with the chattel and to effect some degree of physical disposition or management of the chattel. The power is something short of permanent or indefinite in time, but it must be more than merely transitory or ephemeral.

47. In Federal Commissioner of Taxation v. ANZ Banking Group Ltd and Others (1979) 23 ALR 480, Gibbs ACJ, as he then was, said at p 485:

"The two words are sometimes used as synonyms. In Pollock and Wright:
Possession in the Common Law, at p.26, a distinction is drawn between
"physical control, detention, or de facto possession", which is said
to be "an actual relation between a person and a thing .... matter of
fact", and "legal possession", which is "a definite legal relation of
the person to the thing possessed". The learned author goes on to
state that in this connection physical control is generally called
"custody". In Stephen's Digest of Criminal Law 5th ed, p.243, in a
passage cited in Moors v. Burke [1919] HCA 32; (1919) 26 CLR 265 at 270, it is said
"The word 'custody' means such a relation towards the thing as would
constitute possession if the person having custody had it on his own
account".

At 496 Mason J, as the then was, said:

"Although the use of the composite expression "in his custody or
under his control" does not assist us in determining the precise
limits of the meaning of "control", it does evidence a legislative
intention to employ the words in their widest sense."

48. It should be remembered that the composite term "custody or control" occurs in this case in an insurance policy which indemnifies the insured first against loss or damage to a specified motor vehicle together with spare parts and accessories fitted on it, and, secondly, against legal liability for death or bodily injury and damage to property arising from an accident caused by the specified motor vehicle. It covers damage to and damage by the specified motor vehicle, so long as the damage caused by the specified motor vehicle is, on the one hand, to persons or, on the other hand, to property belonging to persons other than the insured. It does not indemnify the insured against loss or damage to the insured's own property, except loss or damage to the specified motor vehicle. It is consistent with the insurance cover provided for by the policy, reading the terms referred to as a whole, that it does not include damage to goods belonging to other persons which are temporarily in the possession (custody or control) of the insured.

49. In the light of these observations, I have no doubt that once the forklift driver had taken the weight of the gondola and trailer on the tines, once Mr. Murphy had freed the gondola and trailer from the ropes that had held them suspended from the roof trusses, and once Mr. Murphy had made his way from the gondola down the forklift on to the floor, the gondola and trailer then came under the control of the forklift driver. They would have remained under his control until they were deposited on the ground or floor and the tines were withdrawn from contact with the trailer. Events, however, did not allow matters to progress so far. The gondola fell from its position on the tines whilst the forklift was being driven by the driver. Whether Mr. Murphy was or would have been in a position to exercise some degree of control at some stage by directing the driver to place the gondola on some particular part of the floor or ground does not arise, having regard to the rest of the evidence. The gondola was still under the control of the forklift driver at the moment it fell. The defendant was vicariously responsible for the action of the forklift driver who was acting within the scope of his authority. The gondola was in the control of the defendant. The third party is not liable to indemnify the defendant.

51. There will be judgment for the third party in the third party proceedings. Unless the parties wish to be heard, I propose to order the defendant to pay the third party's costs of those proceedings on a party and party basis.