Doherty v Kondo [2000] NSWSC 800

New South Wales Supreme Court

CITATION : Doherty v Kondo [2000] NSWSC 800 revised - 14/08/2000 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S) : SC 12047 of 1999 HEARING DATE(S) : 10 August 2000 JUDGMENT DATE : 10 August 2000

David Doherty (First Plaintiff) Jan Doherty (Second Plaintiff) PARTIES : Royce Everingham (Third Plaintiff) Joan Talbot (Fourth Plaintiff) Brenda Elaine Kondo (First Defendant) Karen Therese Stevens (Second Defendant) JUDGMENT OF : Windeyer J at 1

LOWER COURT Local Court JURISDICTION : LOWER COURT 294 of 1997 at Port Macquarie FILE NUMBER(S) : LOWER COURT Magistrate W Evans JUDICIAL OFFICER :

COUNSEL : Mr M C L Dicker (Plaintiffs) Miss E M Olsson (Defendants) SOLICITORS : Donovan Oates Hannaford (Plaintiffs) Garrett Walmsley Madgwick (Defendants) CATCHWORDS : APPEAL from decision of Magistrate - whether adequate reasons provided for findings of fact and law - appeal upheld LEGISLATION CITED : Suitors Fund Act 1951 CASES CITED : Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 DECISION : See paragraphs 29 to 33

7 THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

WINDEYER J

THURSDAY 10 AUGUST 2000

12047/99 DOHERTY AND ANOR v KONDO AND ORS

JUDGMENT

1 HIS HONOUR: This is an appeal by way of amended summons from a decision of Mr Evans, Magistrate, given on 16 July 1999 in a civil claim before him in the Local Court at Port Macquarie. 2 The action was brought by the plaintiffs, Kondo and Stevens, against four defendants, Mr and Mrs Doherty, who were jointly represented, Mr Everingham and Miss Talbot. I was told that Mr Everingham and Miss Talbot were in a defacto relationship. They were, however, represented by one solicitor, but not the solicitor for Mr and Mrs Doherty. 3 The claim of the plaintiffs was that they had entered into a licence agreement with Mr and Mrs Doherty for the occupation of what was described as a self storage unit in premises owned by the Dohertys at Wauchope near Port Macquarie. That agreement was dated 6 February 1997. The licence fee payable under it was $100 per week. 4 The plaintiffs in that action, who are now the defendants here, had furniture and required space to store it. They, or at least Kondo, had collected some pieces of old furniture which she was in the habit of restoring and they required somewhere to store this furniture as, apparently, the premises they had previously leased were no longer available to them. 5 The arrangements for the licence were made by Mr Everingham, apparently because the respondents had been involved in some dispute with the Dohertys on a prior occasion and therefore, there could have been some difficulty in their entering into the negotiations. 6 In any event, the licence agreement was signed. The licensees then went into arrears in payment of the licence fee and as a result of that, the licensors changed the locks on the self storage unit, locking Kondo and Stevens out, or making it impossible for them to gain access to their goods which had been stored. The Dohertys gave a key to the new lock to Mr Everingham. A few weeks later, the arrears were paid and the original lock restored. 7 In the interval, some of the goods which had been stored had been removed from the storage facility. It seems that some of them, at least, were removed by Mr Everingham or Miss Talbot. Most of these were returned. Some of them were not returned. 8 The plaintiffs in the Local Court proceedings, being the respondents here, claimed that the value of the goods not returned was $4700. The action in the Local Court was brought on two grounds, namely for breach of contract and for conversion and/or detinue. 9 Claims for breach of contract were not made against Everingham and Talbot, as they were not parties to the contract. The claims in conversion and detinue were made against all four defendants, without in any way being detailed as against the various defendants. 10 The learned Magistrate dealt with both claims. It is a little difficult to quite understand from his judgment how he did this. However, on the claim in conversion for the goods which were not returned, which was put by Kondo and Stevens at $4700, the claimed should be allowed in the sum of $3600. 11 He found that the claim for breach of contract in so far as it was separate from the claim for loss of the goods was established and that the damages resulting from such breach amounted to $6000. Those damages appear to have been for the loss of business opportunity which the plaintiffs claimed to have suffered as a result of either not being able to conduct their business during the time they were locked out, or for the disadvantage they suffered and the embarrassment they suffered through not being able to start up their business, or not being able to charge for their restoration work because they had been locked out for a period, or because some of the goods which they would have restored or sold at a profit were no longer available to them. 12 So far as both claims were concerned, the learned Magistrate held that the Doherty defendants were responsible as to 60 per cent and Everingham and Talbot as to 40 per cent. There are various grounds of appeal. I will deal with them shortly. 13 It is right to say at this stage that there is no doubt whatever that the appeal must be upheld. It is quite impossible to support the decision of the Magistrate. It does appear from the transcript that the learned Magistrate was under some pressure at the time and one appreciates the pressures under which Local Court Magistrates, particularly in the country, are obliged to operate. 14 The first ground of appeal argued, ground 10 was that the learned Magistrate erred in law in failing to provide reasons which adequately dealt with the findings of fact and in law. That is, of course, an appeal on a question of law. 15 In my view, there can be no doubt that any appeal upon this ground must be upheld. It is impossible to ascertain from the decision of the Magistrate the issues before him, the issues on which he found, the evidence on which he came to the decision which he did and the basis for any decisions on any such evidence. On any basis, the decision fails to comply with the requirements for reasons for judgment which are clearly set out in Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430, particularly the judgment of Meagher JA. 16 To take some of the matters which counsel for the appellants has put forward to make the matter clear, it is almost certain that the learned Magistrate found that there was a breach of the contract between Kondo and Stevens and the Dohertys. However, he did not state that in any words and neither did he explain what flowed from that breach by way of damage. 17 In other words, while one assumes that the breach of contract might have been the handing of a key to a new lock to Everingham, if there was no entitlement or implied authority to do so, then he did not state what damage flowed from that breach. 18 He said, for reasons which I am unable to understand, that each of the defendants, namely, all four, bore responsibility for loss of the goods. That, presumably, must have been a finding on the basis of conversion, as no breach of contract was alleged against the Everingham and Talbot defendants, but even assuming that were the position, he then went on to say that the damages claimed as a result of the goods not being available were claimed at $40,000, that these had been reduced to $6000 and that the Dohertys should bear 60 per cent of this loss and the other defendants, 40 per cent. 19 There are no reasons given for the figure of $6000. There are no reasons given which would justify splitting any liability on the ratio that it was split or at all. The decision which has been come to on that basis is entirely without support and without foundation. It must be set aside. 20 So far as the decision as to what might be described as loss of business opportunity is concerned, the findings of the Magistrate as to this are not supported by the evidence. It might have been possible for him to find on the evidence that there were some damages as a result of loss of business opportunity arising from the dispossession of some of the stored goods. However, there was no evidence to support any basis of damages on the grounds that the business had commenced. It had not commenced. There had been no money made from it in the past. It is almost impossible to see how any loss was established, in the way of loss of business opportunity for the period in question. 21 When this matter is redetermined by the Magistrate, it might be possible for him to find some damages. It was not possible for him to do it on the basis set out by him. 22 Next, as far as the claims in conversion and detinue are concerned, no reasons are set out as to how it is determined that claim was established. In other words, while I think it clear enough that the plaintiffs before the Magistrate were entitled to immediate possession of the goods in question, as owners or as bailees and were, therefore, entitled to sue in conversion, the Magistrate does not explain how he could have come to the conclusion that the Dohertys converted the items of property to their own use and he did not make any finding that Everingham or Talbot converted the property not returned to their use. It is possible that he could have done so, but he did not do so. It was not possible for him to treat Everingham and Talbot as one person. It was not possible for him to treat all defendants as one. 23 If he were to find any of the defendants guilty of conversion, then it was necessary for him to determine the property converted and the value of that property. He did not do this. 24 There was no possible basis on which the learned Magistrate could have decided to apportion the amounts of $3600 and $6000 between the defendants grouped into two groups in the way that he did, and no reasoning supported the fixing of the two figures. 25 It is not, I think, necessary for me to deal with any of the balance of the grounds of appeal. Unfortunately, the Magistrate has erred in law by failing to set out proper reasons for his decision in the failing to differentiate between the claims for breach of contract and the claims in conversion. 26 He has failed to set out any basis for his determination as to damages and he has come to a decision as to apportionment of those damages on a basis which has no foundation in law. 27 For all those reasons, the decision must be set aside, the appeal allowed and the matter remitted to the Magistrate to determine in accordance with law. 28 The amount involved in this claim is very small. It is hoped that the parties can come to some agreement without a re-hearing or re-determination before the Magistrate. 29 I order the appeal be allowed. 30 I order that the judgment entered in the Local Court in proceedings No. 294/1997 be set aside. 31 I order that the matter be remitted to the Magistrate to determine it in accordance with the law. 32 I order the defendant to pay the plaintiffs' costs of the appeal, including the proceedings before Mr Justice Sully. 33 The defendants to have a certificate under the Suitors Fund Act.