Case: British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways of London Co Ltd [1912] AC 673 
Outcome: applied
If such a small loss were incurred, it would not accord with commonsense for North East Equity not to have gone ahead with acquiring the new line. In assessing what Mr Tana (as the controlling mind of North East Equity) would have done, it is important to exclude from consideration the subsequent impacts of the fall in the market and the production problems with the farms. Mr Tana was optimistic in 2002 that demand for carrots would increase, so that the labour savings he expected would have been greater, the more carrots were processed. A reasonable business person in the position of Mr Tana and, I infer he too, would have replaced the inefficient old plant with the more efficient new line which gave the actual savings referred to above with the prospect of even greater ones in light of the expectation of greater demand and the significant reduction in future labour costs: Gull v Saunders &amp; Stuart [1913] HCA 55 ; (1913) 17 CLR 82 at 89 per Barton ACJ, Gavan Duffy and Rich JJ approving British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways of London Co Ltd [1912] AC 673: cf at 689-691 per Viscount Haldane LC esp at 691 where the Lord Chancellor referred to replacing obsolete machines with up to date ones. 394 In my opinion, the value of the new line at March 2003 was likely to be substantially more than $1,500,000. So, this last calculation understates the net benefit which North East Equity would have obtained, notwithstanding the assumption that it had proved all of its claims of misrepresentations and breaches of duty under the Trade Practices Act and in tort. The fact that North East Equity chose to move most of its packing operations in October 2007 from Wattleup is not relevant to the application of the methodology suggested by it, since it has claimed the cost of leasing up until May 2008. Had it continued to use the new line, it would not have been worse off. Its decision to change its operations should be viewed in the same way that the decision to buy new turbines in British Westinghouse [1912] AC at 691 was viewed; namely, that the decision to centre operations at Lancelin was commercially sensible and would enable North East Equity to eliminate unnecessary road transport costs, including for transport of rejects and waste. 395 I am not satisfied that North East Equity has established what the new line was, in fact, worth in the condition in which it was installed. Thus, I am not satisfied that it has suffered any loss in receiving something worth less than what it agreed to pay, or what the bank actually paid, for it, other than in the limited respects that I have found (for the flume elevators and disruption). As I have understood the pleadings, these aspects were not the subject of any claim. 396 In conclusion, I find that, in substance, North East Equity's claims for damages for about $4.2 million in wasted expenditure and $4.85 million in economic loss have not been established. I will allow the parties to consider these reasons and address the question of the final orders which ought to be made. I certify that the preceding three hundred and ninety-six (396) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares. Associate: Dated: 12 August 2008 Counsel for the Applicant: MH Zilko SC and MD Cuerden Solicitor for the Applicant: Ilberys Lawyers Counsel for the Respondent: PG McGowan Solicitor for the Respondent: David Deakin Davies &amp; Co Date of Hearing: 17-20, 24-28 September 2007 8-12 October 2007 Date of Judgment: 12 August 2008 AustLII: Copyright Policy | Disclaimers | Privacy Policy | Feedback URL: http://www.austlii.edu.au/au/cases/cth/FCA/2008/1189.html