In our previous issue of
Insurable Interest we reported on a recent decision of the
Victoria Supreme Court arising from the Black Saturday bushfires of
2009. Justice Forrest found that the lead plaintiff in the Horsham
bushfire class action was entitled to recover damages for farm
fixtures (fences, sheds and stockyards) destroyed by fire where he
has used his own labour and the labour of volunteers to reinstate
the property. As we reported, Powercor appealed Justice
Forrest's decision on this point.
On appeal, Powercor again argued that the plaintiff should not
be entitled to damages for his own labour unless he could establish
that he suffered a loss to his income producing activities while he
was carrying out the repairs. Powercor also argued that the
plaintiff had an obligation to mitigate his losses by undertaking
the repairs himself where he had the capacity to do so.
These arguments were comprehensively rejected by the Victorian
Court of Appeal in a unanimous decision. The key finding is that
the plaintiff was entitled to compensation for the damage directly
to fixtures at the time of the fire. The loss crystallised at that
time and is to be measured by the reasonable commercial cost of the
labour. His claim was not for consequential loss. It follows that
the question of mitigation is irrelevant. The Court contrasted the
plaintiff's claim with a claim for the cost of agisting cattle
while fences are repaired which is a claim for consequential loss
and which may involve questions of mitigation.
It was also held that the key question in relation to voluntary
labour is whether the volunteer undertook the work for the
plaintiff's benefit or in order to reduce Powercor's
liability. In this case, it was agreed by both parties that the
volunteer labour was for the benefit of the plaintiff. Accordingly,
the Court ruled that the voluntary labour should not be taken into
account so as to reduce Powercor's liability for the property
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This was an interlocutory decision about the appointment of a tutor for the child appellant, to carry on his proceedings.
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