Canvas Graphics Pty Ltd v Kodak (Australasia) Pty Ltd A28/1995 [1995] HCATrans 391 (23 November 1995)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Adelaide No A27 of 1995

B e t w e e n -

CANVAS GRAPHICS PTY LTD

Applicant

and

HEIDELBERG GRAPHIC EQUIPMENT LTD

First Respondent

MILES INC.

Second Respondent

Office of the Registry

Adelaide No A28 of 1995

B e t w e e n -

CANVAS GRAPHICS PTY LTD

Applicant

and

KODAK (AUSTRALASIA) PTY LTD

Respondent

Applications for special leave to appeal

BRENNAN CJ

GAUDRON J

GUMMOW J

TRANSCRIPT OF PROCEEDINGS

FROM ADELAIDE BY VIDEO LINK TO CANBERRA

ON THURSDAY, 23 NOVEMBER 1995, AT 10.44 AM

Copyright in the High Court of Australia

______________________

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR N.W. MORCOMBE, QC, for the applicant in each of these matters. (instructed by White Berman & Co)

MR T.A. GRAY, QC: If the Court pleases, I appear with my learned friend, MR M.E. HOILE, for the first respondent in Heidelberg Graphic Equipment. (instructed by Johnson Winter & Slattery)

MR M.F. BLUE: If the Court pleases, I appear with my learned friend, MS K.N THOMAS, for the second respondent in that matter. (instructed by Fisher Jeffries)

MR D.M.J. BENNETT, QC: If the Court pleases, I appear with my learned friend, MR W.J.N. WELLS, QC, for the respondent in the Kodak matter. (instructed by Thomsons)

BRENNAN CJ: Yes, Mr Jackson?

MR JACKSON: Your Honours, may I just inquire as to the times involved in these matters?

BRENNAN CJ: Well, there are two proceedings, Mr Jackson, and if you should take your entitlement - - -

MR JACKSON: Your Honour, I was looking for my maximum entitlement as distinct from the time that I - - -

BRENNAN CJ: Well, you are entitled to your full two pounds of flesh.

MR JACKSON: Your Honour, I will not respond to that. Your Honours, may I deal first with the first matter listed and that is Canvas Graphics v Heidelberg Graphic Equipment. Your Honours, as is apparent from the summary of argument, the issues in this matter as, indeed, in the other matter, we would say immediately, is the question whether the primary judge's assessment of damages and the view taken by the Full Court also was sufficiently unsatisfactory to merit the grant of special leave. Each of them is an interest of justice case, if I could put it shortly.

Your Honours, may I say, in relation to the Heidelberg Case, one thing before moving to the particular matters upon which we would rely in support of the contention that the grant of special leave is merited, and it is this: namely, that the summaries of argument in this case on behalf of the respondents dwell, if I may say so somewhat lovingly, on the findings largely adverse as to the credit of Mr Knox, the principal, to put it shortly, of the applicant and, secondly, upon the length of the trial and the size of the appeal record in the Full Court, and matters of that kind. In reality, the issue is now narrow and it concerns only the approach taken to the quantification of damages based on the findings made in the courts below.

Now, could I go then and take your Honours to paragraph 2(d) of our summary of argument in this matter and your Honours will see that at page 2, and your Honours will see that the award of damages in this case, which perhaps one might call shortly the Agfa Case, leaving aside interest, consisted of two elements, namely wasted expenditure and what was described as loss of profits, but that term being used in a limited sense. Could I deal with them in that order. Now, as your Honours will see, in relation to wasted expenditure - and may I take your Honours to the application book at page 126, line 60, at the bottom of the page. Your Honours will see in a passage that commences at line 60 on page 126 and goes through to line 21 on the next page what the primary judge did was to award the sum of $75,000 to cover what he described as being wasted expenditure in the period to October 1991, and the reason why the judge selected that date appears at line 16 on page 127 and that is, he said, it was the date on which the solicitors for the first respondent "Advised that their client accepted the repudiation of the contract".

Now, it was not until - and I will take your Honours to the primary judge's finding in this in just a moment - December, not October and not November, that there was any working replacement for the machine that was defective and that that is so appears at page 128, lines 21 through to 50. Now, may I refer your Honours, in particular, to the passage that commences at about line 25 through to about line 40, and so what the judge was saying was that it was not until December that there was a fully operational and faultless item which replaced the one that was defective.

BRENNAN CJ: When did your client first seek to obtain the Linotronic?

MR JACKSON: Your Honour, the Linotronic came, in effect, in two bursts. The first one came, I think, in October but it itself did not work. Now, when did it seek to obtain it? Somewhat earlier, your Honour, I just do not have the exact date to hand. Your Honours will see that the primary judge's finding appears to have been that we were not in a position where we could do what we might have done with the machine that was defective until December, rather than October.

Now, it is just, in our submission, not correct to assert, if I may say so, as the first respondent's summary of argument does - that is the Heidelberg one - in paragraphs 3.1 and 3.2 on page 7. Two things: first that there was a new imagesetter in October 1991. If that is intended to create the impression that the imagesetter was working in October 1991, because as your Honours also have just seen, the findings to which I referred, and the second thing is that that submission in paragraph 3.1 refers to the applicant's statement in paragraph 5(g) in support of this proposition. It says:

There was no significant wasted expense after September 1991 (see applicant's Statement in Support (para. 5(g)).

That document is at page 227 and all that the statement in support says - your Honours will see what it says in paragraph 5(g) at the bottom of page 227. Now, it is rather a large leap to that proposition.

Now, your Honours, the result is - and I will seek to justify the detail of the proposition I am about to make immediately afterwards - that even though there were ongoing expenses in the period October to December, such as, for example, salaries and the cost of borrowed funds, there was no award made in respect of them.

In relation to the ongoing expenses, may I give one example. At page 125, commencing at the bottom of the page, your Honours will see that the primary judge said, "As to wasted expenditure, I would apprehend that"-and it goes through the remainder of that paragraph to page 126. Now, why, we would seek to ask hypothetically, are those expenses to be treated as if they had suddenly stopped in October when a working replacement was not obtained until December? Your Honours, there is just no reason for that apparent in the primary judge's reasons. None appears in the Full Court's reasons. Could I, in that regard, take your Honours to page 214? It is a passage at page 214, line 10, which goes through to page 216, line 16, but may I particularly direct your Honours' attention to the fact that it is clear that the judges are only go up to mid-October 1991 and that that is so appears from three passages. The first at page 214, line 24, and your Honours will see the reference to mid-October 1991. Secondly, page 215, line 11:

The relevant period -

and then at line 16, again:

The relevant period -

both on page 215. And the last reference, page 216, line 2, again:

The relevant period -

Your Honours, we are not talking about a sum which is de minimis or insubstantial and, even taking a simple pro rata on the basis of the January to October award given by the Full Court and treating the October to December period as being, say, six weeks, the amount would be of an order just below $20,000. Your Honours, that is the first aspect.

BRENNAN CJ: When does it appear, if there is a finding to this effect, that Canvas knew that the Agfa equipment would not perform?

MR JACKSON: Your Honour, I think it is right to say that there was a finding - I think, in May, your Honour.

BRENNAN CJ: In May?

MR JACKSON: Yes.

BRENNAN CJ: And is there any evidence as to how long it would take, reasonably, to obtain substitute equipment?

MR JACKSON: Your Honour, there was no evidence, in our submission, which would contradict what is implicit in the finding of the primary judge that it was not until December that there was equipment which was reasonably available to do the job. Of course, your Honours will see that it was sought to obtain the material in October. There was an order placed before that and the material arrived in October. It was no good. So, at the worst, one is speaking about a period of May to October. I just do not have quite to hand, but I will see to get it precisely when the order was, in fact, placed with Kodak.

BRENNAN CJ: The true measure of damages would be the damages which flowed as the result of non-availability of substitute equipment commencing as from the period when it was patent to the purchaser, to Canvas, that the old equipment would not suffice.

MR JACKSON: Your Honour, the evidence was that inquiries were sought to be made in the first place in June and July and it was researching the market for the suitable substitute. That was ordered from Kodak in September. What your Honour will appreciate will be that, having had one's fingers burnt, in effect, one would be looking to seek to obtain something that would do the job.

BRENNAN CJ: It depends on the findings of fact, if you have them, to support you. You have to demonstrate, do you not, that the obtaining of the equipment in December was the obtaining of the equipment at the first reasonable opportunity to get it once it was discovered that the old equipment was no good.

MR JACKSON: Your Honour, with respect, we do have the advantage, if I may say so, of the finding to which I referred to earlier, of the primary judge - - -

BRENNAN CJ: They stop short, do they not, of what you need?

MR JACKSON: With respect, your Honour, not quite, because what his Honour was saying and what is really involved in what he was saying was that it was perfectly, in effect, reasonable, for us to be in a position where we did not have a fully working substitute until December. Now, involved in that, your Honour, must be the view that it was reasonable for us to take the steps which we have done in order to obtain one by October. One is not dealing with a terribly long period between some time in May and a time in October when it is actually delivered and your Honour will appreciate that the order goes to Kodak at a time in September - one is only dealing with a period of June, July, August, September and perhaps bits of each - and in the interim, one is looking to see what alternative there is to the one that does not work.

I do not want to labour the point, of course, but what your Honour will appreciate, if I may say so with respect, would be that, in the absence of there being some suggestion that the steps being taken to mitigate the damage by a replacement, were being taken tardily - some suggestion by the primary judge and in the light of what he said in the passage to which I referred, one should assume that his finding in that regard is in our favour. Your Honours, if I could just say one other thing: the reason for the October to December thing is that the Scantext that was supplied by Kodak did not work so that is nothing to do with us, really.

Your Honours, the next matter is this: it concerns the award of $10,000, the second element, which was said to be for loss of profit. If I could take Your Honours to page 4 of our outline of submissions, what your Honours will see - and I do not think I need take your Honours to the references which are given there - is that, as the Full Court said, the term "loss of profit" was, in a sense, a misnomer in that what his Honour was referring to was just, in effect, what might have been the actual net earnings from the ability to obtain colour from the Agfa equipment itself. So, it was not a broad loss of profit in any sense.

Your Honours, in that regard, what we would seek to say is that that award was something that gives nothing at all for the fact that we were delayed getting into the field for a year. If I could take your Honours to the last sentence in our paragraph 4 on page 4, your Honours will see that all we obtain is a sum which is just the amount we might have obtained during that period of January to December. Could I take your Honours to page 127 for just a moment? What your Honours will see, at the bottom of the page at line 60 through to page 128, line 15, what his Honour gave was an amount sufficient to compensate for the loss of profit sustained in the calendar year and the inability to hold out the bureau as a postscript colour bureau, the Full Court treated that as being for loss of net earnings. What it does not deal with at all is the fact that we were delayed, in effect, by the period of 12 months of getting into the business. Your Honours, the next point which we seek to - - -

BRENNAN CJ: Was there evidence to quantify that?

MR JACKSON: Your Honour, no more, in effect, than saying what the value of the prospect was. No doubt something should have been given for it but the fact is that really nothing has been given for it. There are two other things in relation to that: the first is that the primary judge had found that it was our intention to establish a kind of niche market dealing in this area. That that is so appears at page 26, line 60 through to page 28, line 25.

GUMMOW J: Are you on paragraph 7 of your outline, Mr Jackson?

MR JACKSON: I am sorry, your Honour?

GUMMOW J: Is this the third matter?

MR JACKSON: No, your Honour, I have not quite come to that yet. Your Honours, what I was going to say was this, that the next matter to which I would seek to refer is the matter to which we refer in paragraphs 5 and 6 on pages 4 and 5 of our written submissions. This was not just a case where there was a claim in contract, but it was a case where there was also a claim for misleading or deceptive conduct as the judge found had occurred.

Your Honours, in those circumstances, the entitlement to damages was an entitlement, in effect, as we say in paragraph 5, to a sum representing the prejudice or disadvantage which we had suffered in consequence of altering our position and the entitlement to damages went beyond what was the loss directly occasioned simply by not having the equipment working. It was the loss that we had sustained overall. Could I move then, your Honours to the fourth element, the question your Honour Justice Gummow raised a moment ago - - -

BRENNAN CJ: Well, before you leave that, what is the difference when the contractual term on which you rely is one which speaks of the merchantable quality of the goods?

MR JACKSON: Your Honour, the difference is this, I suppose: if one is not able to prove that the effect of the lack of merchantable quality of the goods had the result that one would not have made profits, one still may have a situation where activities into which one is engaged and expenses which one has incurred are matters which are attributable to entering into the agreement to acquire their item which are expenses which might otherwise not have been incurred, your Honour, expenses and losses and outgoings and so on.

BRENNAN CJ: That would be because those expenses, losses and outgoings would not be the natural consequence of the breach.

MR JACKSON: Your Honour, it is possible in some cases, but if one is talking about what loss one is entitled to obtain by reason of, for example, misleading and deceptive conduct, the loss that one would be entitled to obtain, prima facie, is the loss that flows from that and one would look to see what the change in position is that has occurred. Now, in relation to that, your Honour, one may be entitled to say that there are items which go beyond or would not be covered by an expectation loss. One looks at it from a slightly different position.

BRENNAN CJ: In this present context at the moment I do not see what that difference would be.

MR JACKSON: Your Honour, could I put it this way, it is just this, that what one has in a situation where what has been done by the courts below is to give a proportion of loss which occurred in a limited period. I have made a point about that already. The second thing that is done is to say you might have obtained a net profit just from doing particular work with the machine and that is all. Now, your Honour, what has not been looked at, something for which nothing has been given, is what can be regarded as, for example, any ongoing obligations of which rent is a possibility and other ongoing expenses, for example, such as the cost of funds borrowed to enter into it, such as the cost of keeping staff on and matters of that kind. None of those matters have been taken into account. All those are matters which, we would submit, are matters that are properly obligations, for example, entered into at least in part attributable to the misleading conduct.

Your Honours, could I move then to the question your Honour Justice Gummow raised, the question of the lease of the premises and the obligations under it. Now, your Honours, could I say immediately that the summaries of argument on behalf of the respondents suggest that there was a dispute as to the existence of the lease. Now, your Honours, it is true to say there was no instrument of lease but the documents showed the minutes of the companies involves dated 27 July 1990 indicating the terms. The document is not before your Honours. It is document No 208 which was an exhibit before the court, and Mr Ferguson's evidence dealt with the issue.

It is true to say that there was some suggestion that his Honour should not pay much account of it because it was a lease between companies in the same stable but not a cent was allowed for any ongoing, that is, after October obligation, under it. The companies were different companies; one of them was a trustee. Your Honours, finally, in this connection - - -

GUMMOW J: But was that agitated in the Full Court?

MR JACKSON: Yes, your Honour, it was. I can take your Honours to the written submissions on our part that dealt with the issue and they are extensive written submissions, hundreds of paragraphs, this is dealt with. Your Honours, finally, there is the matter which is referred to in paragraph 8 of our summary and what your Honours will see is that the Full Court reversed the primary judge - this is page 6, your Honours, I am sorry - and made an allowance for consultancy fees and could I take your Honours to page 214. Your Honours will see at line 20 and going through to line 42 that, in fact, it was accepted that that was overlooked in the preparation of the accounts and his Honour found that an allowance, "should be made in the amount awarded for wasted expenditure".

The difference, however, your Honours, relates to this: a percentage was deducted on the ground that the primary judge had said - and your Honours will see this set out by the primary judge at page 126 at lines 19 to 24 - in relation to the consultancy fees that he would not allow a mark-up. Now, your Honours, the consultancy fees were consultancy fees. They either were or they were not recoverable. The mark-up was simply the difference between direct cost and the price to the company that was providing them and the price at which they were charged out.

One company was charging, as one might expect, something making some element of profit to cover overheads and other matters. Now, your Honours, it is very difficult, in our submission, to see how, if those sums are to be allowed, they are not to be allowed in a sum which takes into account what the true cost was. Your Honours will see, if I could go then back to the Full Court, at page 214, commencing at about line 49 that the judge found:

there was a cross-charging agreement -

and their Honours say:

It is, therefore, difficult to see the basis on which such a discount or reduction can be applied to what was on the evidence an incurred debt. However -

they say -

it was a matter in which his Honour had a discretion -

Now, your Honours, the position, of course, is that no doubt the assessment of damages, speaking rather loosely, may be akin to the exercise of a discretion, but in the exercise of a discretion, your Honours, the basic facts have to be correct and, your Honours, we would submit that there is simply no basis upon which that sum could have been deducted. The Full Court seemed to say it was wrong to deduct it but, on the other hand, say his Honour has got a discretion. If one looks at the manner in which the discretion was exercised, the basis for it appears to have been incorrect.

Now, could I finally in relation to this matter take your Honours to Part IV of our written submissions at page 6 and we are conscious, of course, there are two separate actions but your Honours will appreciate they were heard one after the other, judgment given after both of them heard, dealt with the same way in the Full Court, and some indication, in our submission, of the fact of there being error is indicated by what we refer to in paragraph 2 in page 6 and that is where in the other proceedings, the Kodak proceedings, what the primary judge said was that he was:

conscious of the fact that some of Canvas Graphics' losses after October 1991 are nevertheless traceable back to the Agfa claim -

the Heidelberg claim. Now, your Honours, the only element of the first claim was the $10,000 and we would submit it seems pretty unlikely that his Honour was referring to that sum.

Your Honours, those are the submissions I wish to make in relation to the first matter. I move then to the second. May I commence by saying once again that the case, of course, is concerned with relatively narrow issues of damages. The whole case is not to be retried and, your Honours, once again there are several points we wish to make in support of the proposition that the assessment of damages was sufficiently unsatisfactory to merit the grant of special leave. There are several points I wish to make.

Could I go first to the matter referred to at page 2 of our written submissions in paragraph 6 and referred to also on page 3 in paragraph 2. Your Honours, the assessment of damages by the primary judge in this case involved two elements. One element was a sum of $40,000-odd in respect of losses which he said were losses from October 1991 to June 1992. The second was an element, the precise number of dollars involved not being identified by his Honour because he added something for interest but being worked out by the Full Court as being about $110,000, being for loss of profits up to October 1995, which was when the lease of the Kodak equipment would have come to an end. Could I just invite your Honours to note that the primary judge in this case took the view there would have been profits of the business in that period.

Now, your Honours, the first matter to which we would wish to refer is this: that the primary judge, and in consequence the Full Court, relied on the evidence of an accountant called for the respondent, a Mr Baker, and what Mr Baker did was, if I can put it shortly first of all and then come to indicate a little more precisely what it was, was to work out what was incremental loss. Your Honours, what was contemplated by the term "incremental loss" - and I should say that the amount that was awarded by the primary judge in respect of past loss comes from Mr Baker - but the amount that he - - -

BRENNAN CJ: Back to when? Back to what date?

MR JACKSON: He took a period, your Honour, October 1991 to June 1992.

BRENNAN CJ: Why start in October 1991?

MR JACKSON: Because, your Honour, that was the date when the Kodak equipment, the one that did not work, was delivered.

BRENNAN CJ: I see. So the losses from that point on were still being attributed to Kodak?

MR JACKSON: No, your Honour, it would be nice if that were the case. What happened was that incremental loss - and that is what I want to come to, your Honour - after that date was attributed to Kodak and incremental loss was, in effect - and I will take your Honour to this shortly - the loss in addition to the loss Mr Baker treated as being caused by the Agfa losses. Now, if I could endeavour to take your Honours very shortly to what is involved in this, your Honours will see a small book called "Supplementary Documents" which contains two reports of Mr Baker. The pages should be numbered in the top right-hand corner and I wanted to refer first to page 15 and paragraph 6.4. Your Honours will see that he is speaking there of profit but "incremental" is used in the same sense throughout. He said:

Accordingly, the difference between the two present values, we believe, represents the incremental future profits lost as a result of the alleged failure of "Prophecy" -

which is the Kodak equipment -

over and above the loss Graphics would have incurred by using Agfa.

Now, what your Honours will see, if I could take your Honours to a couple of other references in that supplementary volume, at page 22 is the appendix C/1 to which he refers and you will see that the figure of $199,000, which is at page 15, is the amount attributable to Kodak and then your Honours see the way in which the calculation is there done. Returning to page 15 your Honours will see paragraph 7.1 referring to incremental costs in respect of that period to 30 June 1992 and then going to a further report of his at page 27 your Honours will see the nature of it from the starting page at page 27 and then paragraph 1.2 on page 28, he indicates the purpose of that report. Then on page 31 at paragraph 3.11, your Honours will see the figure of $42,000-odd that was the figure for past losses that was accepted by the primary judge.

Your Honours will see in paragraph 4.3 a reference to $124,000 as being:

total incremental loss and damages on the assumption training costs are recoverable -

That is the view taken by the Full Court and could I just say, your Honours, that in the respondent's summary in paragraph 9 on page 2, if I could just say one thing about it, it suggests that the Full Court should have taken into account only a portion of that additional sum. If I could just invite your Honours to note in passing what is being compared is like with like and the submission is not correct that the Full Court should have reduced it in some way. The $42,000 itself was not reduced.

Your Honours, could I say this: that the Agfa equipment, the subject of the other claim, of course, was not being used at any time during the time in question and no damages were awarded to the applicant in the Agfa action in respect of the period after October except, of course, the $10,000 to which I referred. The approach taken by the primary judge in adopting that was to work out, in effect, what loss the Kodak defective equipment might have added to the loss caused by the Agfa equipment instead of asking how much of the loss in that period was attributable to the Kodak equipment.

Your Honours, as we submit, on page 3 in paragraph 2, the losses, in our submission, go beyond what one can quarantine off as simply directly attributable in that sense to the Kodak equipment. The next point we would seek to make is that referred to in paragraph 3 on page 3 and that is that if there was to be an allowance made in respect of loss of profits after 30 June 1992, as there was of course, then a sum should also have been allowed in respect of a continuing obligation to pay rent because it was a case where there was a continuing outgoing.

The judge, of course, found there would be profits. He was talking about a period of three years and your Honours will see that there was an allowance which was made by the Full Court in respect of rent. But the Full Court only did so up to the end of June 1992. Could I just say then, in relation to the question of profits, and I am referring your Honours to page 4 paragraphs 5 and 6, our learned friends contend, in effect, that Mr Baker's figures could not be relied on because they were based, it said, on Mr Martin's assumptions which were rejected. What was rejected was not the assumption but rather the result of it and could I say that as appears from the transcript of proceedings, page 3414, line 26, Mr Baker had accepted that the Martin approach was a reasonable way to go about it.

Your Honours, the last thing I would seek to say is this: could I come to the admitted error of $10,000 to which we refer in paragraph 7 on page 4 and to what is said in paragraph 5.4(ii) of our learned friends' submissions at page 6. We would simply say three things in effect. The first is that the Full Court was simply treating the amount to the date of the primary judge's judgment as a Hungerfords v Walker type of interest, not interest under the statutory provision. The second thing is that the amount of the future profits was being discounted back to an earlier time and the third thing is that it is clear, if this be the only matter of difference, that a broad brush was being applied.

Your Honours, finally, we would seek to refer to the matters set out in our summary of argument at the bottom of page 4 and on page 5 and in that regard, could I refer particularly to what is in paragraph 2 where what your Honours will see is that the primary judge said that he was "conscious of the award that was made in the Agfa proceedings", and what we wish to say is set out in the remainder of that paragraph. Your Honours, those are our submissions.

BRENNAN CJ: It would suit the Court's convenience best if we were to call next on you, Mr Bennett, to deal with the question of the $10,000.

MR BENNETT: Yes. Your Honours, might I hand to the Court - - -

BRENNAN CJ: We do not wish you to think that that is the only point on which we will call on you: it would just simply suit our convenience best if you were to deal with that first.

MR BENNETT: Yes. Our short point is this, your Honours: it is a matter which can and should, if necessary, be corrected under the slip rule. I can take your Honours through the sections if your Honours wish me to do so but it is probably unnecessary.

GUMMOW J: It seems to be Order 35 rule 7 of the Federal Court Rules.

GAUDRON J: Yes, 35, rule 6(7).

MR BENNETT: Yes, I do not have the full rules here, your Honour. We took the view it was section 38 combined with Order 29 rule 11. Your Honours, what we say is, if my learned friend seeks to challenge that under the slip rule, we will also challenge the other aspect of interest which we say provide more than a countervailing amount under the same rule. Your Honours recall in Shaddock's Case this Court held that matters concerned with interest could be dealt with under that rule. We simply say it is a matter which my learned friend should go to the trial court for.

The mistake in the addition is admitted. We would seek to raise something else if they raise it but that is also a matter for that court and there is simply no reason to grant leave to appeal in relation to that issue.

GAUDRON J: You would not oppose an application with respect to the $10,000 in the Federal Court?

MR BENNETT: Your Honour, we would oppose it only on the basis that there are other countervailing slips which outweigh it and we have set those out in our submissions. That is the only basis on which we would oppose that, your Honour. We would not oppose it on any technical ground that it cannot be done under the slip rule, if that is what is concerning you.

GAUDRON J: Yes.

MR BENNETT: Those are my submissions on that matter, your Honour.

BRENNAN CJ: Yes. The Court proposes to adjourn briefly in order to consider the substance of Mr Jackson's applications, but before doing so it would be of assistance, Mr Jackson, if you were to respond to that particular point.

MR JACKSON: Your Honours, in relation to that matter could I just say this. If that were the only issue on which the Court were minded to grant special leave and if we are to take what has been said by our learned friend as a consent to the matter being dealt with by the courts below, notwithstanding the entry of formal orders in those courts, then that is a matter that, no doubt, could be dealt with by those courts. Could I just say if, however, the Court were minded, of course, in that matter to grant special leave - - -

BRENNAN CJ: Oh yes, better the matter to be picked up there.

MR JACKSON: Quite, your Honour.

BRENNAN CJ: Yes. I think there is one outstanding point and that is, on the footing that the orders have been completed in the courts below, is it your position, Mr Bennett, that you would consent to this application?

MR BENNETT: Yes, your Honour, but subject again, of course, to the Court's discretion on the basis of our countervailing claims.

BRENNAN CJ: Yes, I understand that.

MR BENNETT: Yes, your Honour.

AT 11.32 AM SHORT ADJOURNMENT

UPON RESUMING AT 11.42 AM:

BRENNAN CJ: We need not trouble you, Mr Gray, nor you any further, Mr Bennett.

In these actions, the applicant does not submit that appeals would raise such a question of principle as would itself warrant a grant of special leave. Although the careful argument of Mr Jackson, QC raises criticisms of the assessment of damages under several heads, a grant of special leave depends on whether the administration of justice in the particular case requires consideration by this Court: see section 35A(b) of the Judiciary Act 1903 Commonwealth.

This jurisdiction must be sparingly exercised lest this Court wrongly assume the function of a general court of appeal to the prejudice of its function as the ultimate Court of Appeal for Australia and its function as the nation's primary constitutional court. In these cases, the assessment of the damages in totality is not such as to permit a clear conclusion that the aggregate sums awarded are not the true measure of loss. That follows from the nature of the cases which concern the damages flowing from the employment of defective equipment in a newly established business in a highly competitive environment.

Whatever may be the situation where errors in assessment of damages can be demonstrated to produce clear disparity between the aggregate sums awarded and the true measure of damages, this is not such a case. For these reasons, special leave will be refused. Yes, Mr Blue?

MR BLUE: May it please the Court, an application is made for costs on behalf of Heidelberg.

BRENNAN CJ: Yes.

MR BENNETT: And, your Honour, I ask for costs on behalf of Kodak.

BRENNAN CJ: Yes.

MR GRAY: May it please the Court, application is made for costs on behalf of Miles.

MR JACKSON: There is nothing I can say in relation to that issue.

BRENNAN CJ: Special leave will be refused in both cases with costs in favour of the respective respondents.

AT 11.45 AM THE MATTER WAS CONCLUDED