New South Wales Supreme Court CITATION : Imad v Image Desktop Publishing & Anor [2000] NSWSC 832 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 11947/99 HEARING DATE(S) : 17 August 2000 JUDGMENT DATE : 23 August 2000 Tony Imad (Appellant) PARTIES : Image Desktop Publishing & Printing Pty Limited t/as Image DTO (1st Respondent) Aussie 2000 Pty Limited (2nd Respondent) JUDGMENT OF : Studdert J LOWER COURT Local Court JURISDICTION : LOWER COURT 12224/97 FILE NUMBER(S) : LOWER COURT M. Price JUDICIAL OFFICER : P. Cook (Appellant) COUNSEL : V. Sydun (1st Respondent) S. Baker (2nd Respondent) Cordato Partners (Appellant) SOLICITORS : Sydun & Co (1st Respondent) Ward Maxwell & Co (2nd Respondent) LEGISLATION CITED : Supreme Court Rules Suitors Fund Act Pettit v Dunkley (1971) 1 NSWLR 376 Pannezutti v Trask (1987) 10 NSWLR 531 CASES CITED : Soulezmis v Dudley Holdings Pty Limited (1987) 10 NSWLR 247 Palmer v Clarke (1989) 19 NSWLR 158 General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125 DECISION : See para 26 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION STUDDERT J Wednesday 23 August 2000 11947/99 TONY IMAD v IMAGE DESKTOP PUBLISHING & PRINTING PTY LIMITED t/as IMAGE DTO & ANOR JUDGMENT 1 HIS HONOUR: The appellant, Tony Imad, appeals by way of summons from a decision of the General Division of the Local Court. In that Court the second respondent to this appeal, Aussie 2000 Pty Limited, had claimed by way of statement of liquidated claim the sum of $5340 for work done and materials supplied. The appellant resisted that claim and by way of cross claim sued the second respondent for conversion. He also joined the first respondent, Image Desktop Publishing and Printing Pty Limited, as a third party, again for the tort of conversion. The first respondent denied conversion and pleaded a cross claim against the appellant for work done to the value of $1167. The first respondent also cross claimed against the second respondent, that claim being based upon "a misleading and deceptive representation." 2 The factual background to the litigation can be shortly stated: the appellant engaged the second respondent to provide a quantity of leather menu and wine list covers for his restaurant known as the Harbourfront Restaurant at Circular Quay. He had also engaged the first respondent to print the menus for insertion in the leather covers. The appellant paid a deposit for the leather menu covers but he has not paid the contract price for them nor has he paid for the menus which the first respondent claims to have printed. Both respondents are seeking payment in respect of the appellant's alleged indebtedness in the proceedings pending. 3 The factual basis for the claims of conversion I shall address presently. 4 The proceedings came before the Local Court for hearing on 24 June 1999, when the respondents each made application that the claims by the appellant for conversion be struck out. The magistrate considered the pleadings in entertaining those applications, together with statements of witnesses, but he heard no oral evidence. The applications made by the respondents proved to be successful and the claims in conversion were struck out. The appellant seeks to challenge the order striking out the third party claim in conversion against the first respondent. He does not challenge the order striking out the cross claim in conversion against the second respondent but the second respondent nevertheless remains interested in this appeal in which the appellant is seeking that an order for costs made in the Local Court on 30 July be vacated. 5 This brings me immediately to the preliminary issue before this Court. The decision which the appellant wishes to challenge was delivered on 24 June 1999. On 30 July 1999 the learned magistrate refused the appellant's application to extend the time for appealing to this Court from his decision made in the previous month. The magistrate declined to extend the time for appeal and awarded the costs of the application for the extension of time to the first and second respondents. 6 In refusing to extend the time for appeal, the magistrate appears to have considered that the application was out of time because it was entertained on the thirty-sixth day after the decision was delivered. Hence he considered that he had no jurisdiction to extend time, apparently perceiving that the provisions for appeal by way of stated case were applicable. However, these were abolished as from 1 March 1999 and appeal by summons was substituted. Part 51B r 6 of the Supreme Court Rules is directly in point in this case and it provides: "(1) Subject to subrules (1A) and (2) and any provisions made by or under any Act, an appeal must be instituted within 28 days after the material date. (1A) If an application is made to a Local Court under Part 4A of the subject Act, the time for instituting an appeal does not start to run until the application under Part 4A is finally disposed of. (2) Time fixed by subrule (1) may be extended: (a) by the Court at any time; or (b) where the decision appealed from is that of a magistrate - by the tribunal below, but only within the time fixed by subrule (1) for instituting an appeal (as extended by subrule (1A)) or on application filed within that time…" 7 It is to be observed that r 6(2) provides for an extension of the period of twenty-eight days on application made in the Supreme Court at any time or on application made to the Local Court provided it is filed within twenty-eight days of the material date. 8 To pursue an application before the magistrate under the above rule, it was necessary for the appellant to file an application for an extension of time within twenty-eight days of 24 June 1999. The appellant did not file an application but relied upon a letter addressed to the Clerk of the Local Court dated 20 July 1999, which letter is Annexure A to the affidavit of Bernard Alan Smith sworn 10 February 2000 and read in support of the summons. 9 The point has been taken against the appellant that that letter does not constitute an application filed for the purposes of r 6(2)(b). That submission is strictly correct, so that no application had been filed in the Local Court to enliven the jurisdiction of the magistrate under r 6(2)(b). It follows that the magistrate was correct to reject the application and the appellant cannot succeed in the application to vacate the orders for costs made in favour of the respondents on 30 July 1999. 10 This leaves, however, for consideration the jurisdiction of this Court to extend the time for appeal under r 6(2)(a). 11 The relief which the appellant seeks in para 1 is that the time for instituting the appeal be extended to the date of the filing of the summons, which date was 12 August 1999. The relevant timetable of events was as follows: ° the decision under challenge was given on 24 June 1999; ° a tape recording of the decision was sought by the appellant's solicitors on 29 June 1999 and received on 16 July 1999; ° the transcription of the tape did not include the magistrate's decision of 24 June and on 20 July 1999 the magistrate indicated he was unable to locate the court file; ° the file was located on 22 July 1999 and the application to extend time followed eight days later, following the letter written to the Clerk on 21 July 1999. 12 This is not a case in which the appellant did nothing by way of response to the decision made against him. His energies thereafter in the Local Court were misdirected because, of course, there was nothing to prevent him from immediately filing a summons in this court. Whether or not he was then able to present a complete statement of the grounds relied upon to support the appeal would not have prevented the filing of the summons. 13 Ms Sydun, for the first respondent, and Mr Baker, for the second respondent, submitted that leave should be refused, having regard to the circumstances in which the delay occurred, having regard to the quantum of the claim and having regard to the merits. However, I am persuaded by Mr Cook's submission that I should grant the extension of time sought in para 1 of the summons. There was no significant delay, and such delay as there was has been satisfactorily explained. I am also influenced by the merits of the appeal considered below. 14 This brings me to the substance of the appeal. 15 The appellant's claim in conversion is evidenced by extracts from various of the statements which the magistrate had before him and to which Mr Cook took me in the course of submissions: (i) On 27 September 1997 the leather covers were delivered to the appellant's restaurant, together with the invoice I referred to earlier: see the statement of Charles Chappuis, para 10, (Annexure I to the affidavit of Bernard Alan Smith sworn 10 February 2000). (ii) On 13 October 1997 Ms Staines went to the restaurant to collect the leather menu covers and loaded them on to a trolley which she took back to the first respondent's premises where the menus which had been printed were placed inside the covers. Ms Staines gave instructions for Mr Haubrich of the first respondent to return the menus to the restaurant and to pick up a cheque: Ms Staines' statement, para 13, (Annexure K to the said affidavit). (iii) On the same day Mr Haubrich attended at the restaurant, taking with him the menu covers with the menus inside them. Whilst he was waiting to see the appellant he overheard somebody trying to collect a debt from an employee at the restaurant and he had a conversation with Mr Chappuis of the second respondent, who was also present there at the restaurant trying to collect payment for the leather menu covers. Being concerned about the exchange between the apparent creditor and the appellant's employee, Mr Haubrich decided to take the menus back to the premises of the first respondent and told Mr Chappuis he was going to do so. One or two days later Mr Chappuis attended the premises of the first respondent, informing Mr Haubrich that the leather covers had not been paid for and he said he would take the covers away. Mr Chappuis removed the first respondent's menus from the covers and took the covers away with him: statement of Roger Douglas Haubrich, para 2-5, (Annexure J to the said affidavit). (iv) On 29 October 1997 Mr Chappuis sent a facsimile to the appellant, again seeking payment of the balance due for the leather menu covers and informing the appellant that the menus would be delivered upon payment of the balance in the manner specified: statement of Mr Chappuis, para 18, (Annexure I to the said affidavit). 16 The magistrate was asked to give reasons for his decision to strike out the claims in conversion and he did so: "It's not necessary to restate the whole of the cases for the plaintiff, the defendant and the third party. Suffice it to say that their respective cases are as set out in that written material or statements. It is perhaps early to be making determinations or findings of fact but on the available material what was sought of the plaintiff was the design and manufacture of leather folders. Equally the printing services of the third party were utilised and without going into great detail and leaving to one side the aspect of a new chef in the defendant's restaurant and any consequential delays, the menus or inserts were prepared. In short the menus were printed and the elaborate leather folders were produced and both were available to the contracting party, the defendant. What comes through on the available material is that both entities, the plaintiff and the third party, contracted or dealt with the defendant on a certain basis, specifically as to payment. In what might be described as a public spectacle both parties representatives were subjected to the events of the defendant's business premises culminating in at least the plaintiff's representative being told to get out of here. Both parties concluded or deduced that their terms of trading and specifically as to payment were not likely to be met. Nevertheless the tenure of the facsimile of 29 October 1997 still indicates a willingness to supply subject to the appropriate terms of payment. That apparently reflected the attitude of both parties, specifically the plaintiff and the third party. Insofar as the material indicates, a removal of the leather folders from the restaurant, this can readily be characterised as a necessary procedure to enable the third party, that's Image DTO, to appropriately insert the printed material. The available evidence simply does not sway this court that the item or items have been converted to the use of anyone, indeed the evidence clearly suggests that the folders and inserts were done in accordance with instructions. They remained and continue to remain available to the defendant and he was so informed and informed properly. In short, the evidence does not satisfy this court that an action in conversion is sustainable and in short not maintainable. It's for these reasons the motion was acceded to and granted." 17 Mr Cook has submitted that the appeal should succeed for two reasons: (i) the learned magistrate has not given sufficient reasons for the course that he took; (ii) the evidence to which Mr Cook referred and which I have identified above suffices to show that there was an arguable case in conversion and that to arrive at the decision which he did reach the magistrate must have applied too demanding a test of the appellant. 18 I have concluded that Mr Cook's submissions should prevail. 19 The requirement for a court of first instance to give reasons where an appeal lies to a higher court is well settled. This requirement addresses an important need, namely to afford an opportunity to a party to effectively exercise that right of appeal: see, for example, Pettit v Dunkley (1971) 1 NSWLR 376; Pannezutti v Trask (1987) 10 NSWLR 531; Soulezmis v Dudley Holdings Pty Limited (1987) 10 NSWLR 247 and Palmer v Clarke (1989) 19 NSWLR 158. 20 The learned magistrate has not addressed the claims in conversion against the two respondents separately and in my opinion there is merit in Mr Cook's submission that the reasons given do not sufficiently disclose the process of reasoning which led the magistrate to his conclusion. 21 Further the authorities in point make it clear that an application for summary judgment should only succeed where the absence of a triable issue is clearly demonstrated, and the claim is manifestly groundless: see General Steel Industries Inc v Commissioner for Railways (1964) 112 CLR 125. Nor are triable issues limited to issues of fact. The reasons stated by the learned magistrate do not make it clear that he had these considerations in mind when he arrived at his decision. 22 As I indicated in the course of submissions, I do not find the material to which Mr Cook took me as evidencing the tort pleaded by any means compelling, but Mr Cook's task in resisting an application to strike out the claim is a relatively undemanding one and in my opinion the issue as to whether the first respondent committed the tort of conversion ought to be permitted to proceed to trial, particularly when there are other issues for trial involving these same parties in any event. In my opinion, the decision of the magistrate was erroneous in law and this Court should intervene. 23 This brings me to the issue of costs. 24 It is plain that the costs already incurred in this litigation are altogether disproportionate to the amounts in issue. However, the appellant has succeeded on this appeal against the first respondent, except on the appeal from the decision made on 30 July 1999. Not without some hesitation, I have concluded that the appellant should have his costs on the summons against the first respondent, other than the costs referable to the joinder of the second respondent. 25 The appellant brought the second respondent to this Court seeking to have set aside the costs order which the magistrate made against the appellant in favour of the second respondent on 30 July 1999. The appellant has failed on that issue and I consider therefore that he should pay the second respondent's costs on the summons. Formal orders 26 1. I make the order sought in para 1 of the summons. 2. I remit to the Local Court the third party claim against the first respondent in matter 12224/97 to be heard and determined according to law. 3. I order the first respondent to pay the appellant's costs on the summons, except for such costs as are associated with the joinder of the second respondent. I grant to the first respondent an indemnity certificate pursuant to the Suitors Fund Act . 4. I order the appellant to pay the second respondent's costs on the summons. ********** Last Modified: 09/27/2000 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.