Degree Name

Doctor of Philosophy


School of Accounting and Finance


This thesis examines the history and contemporaneous common law position on the recovery of opportunity costs associated with money sums which are paid late or otherwise withheld from proper payment by defendants. Economics and finance define opportunity cost as 'the next most profitable employment of an asset', but this definition has only recently been recognised in Australian courts. Since the formation of the common law in the post-Conquest era, opportunity costs have not been recognised in litigation as recoverable losses. In contrast, opportunity costs have been recognised by courts when associated with tangible assets such as land or goods through the action of mesne profits. The origin of the dichotomy stems from the religious influence of the church during the crucial formation period of the common law, coupled with the view that lending at interest in any form was the hateful sin of usury. The use of clerics as judges and the monopoly which the church enjoyed over the instruments of learning gave the church unmistakeable and plenary power over the common law processes, a power which is seen through the rules of both evidence and law which permeated early courts and lingers within the modem common law courts. The dichotomy of treatment between real assets and money was entrenched through the doctrine of stare decisis in the seminal 1829 case of Page v Newman which became known for the principle that no common law court had the power to award interest on an overdue sum of money in the absence of clear contractual terms or recognition of trade practice such as bills of exchange. This hindered commercial practice in Europe and England for centuries, stifling enterprise and subjecting plaintiffs to systemic injustice from unscrupulous defendants. This thesis assigns a stipulative definition of 'classification dilemma' to the divergent common law treatment of the opportunity costs of assets and money. This dilemma existed until partially resolved by the High Court of Australia in 1989 through the case of ii Hungerfords v Walker, which recognized the common law action for the loss of the use of money. The religious legacy, however, still lingers through the evidential burden and the rules of 'remoteness' which influence the recovery of damages in the litigious process, for Christianity formed an integral part of the common law from the formation period. Therefore, the fundamental methodology of the common law is antithetical in many respects to the commercial paradigm of economics and finance.

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03Vol2.pdf (2893 kB)



Unless otherwise indicated, the views expressed in this thesis are those of the author and do not necessarily represent the views of the University of Wollongong.