Elders v Wade [2000] NSWSC 748

New South Wales Supreme Court

CITATION : Elders v Wade [2000] NSWSC 748 revised - 7/08/2000 FILE NUMBER(S) : SC 12589/99 HEARING DATE(S) : 27/07/00 JUDGMENT DATE : 27 July 2000

PARTIES : Elders Limited - Plaintiff Dawn Florence Wade - Defendant JUDGMENT OF : Brownie AJ

LOWER COURT Local Court JURISDICTION : LOWER COURT Narrabri - 84 of 1997 FILE NUMBER(S) : LOWER COURT Ms Carney LCM JUDICIAL OFFICER :

COUNSEL : Mr G.P. McNally - Plaintiff Mr V.F. Kerr - Defendant SOLICITORS : Locke Harris McHugh - Plaintiff Bell & Johnson - Defendant CATCHWORDS : (1) Application of s.11(4) of Consumer Claims Tribunal Act 1987 - (2) Merger of cause of action into decision of Tribunal - (3) Application of principle in Hadley v Baxendale - (4) Costs incurred in proceedings before Tribunal not recoverable. LEGISLATION CITED : Local Courts (Civil Claims) Act 1970 Consumer Claims Tribunal Act 1987 CASES CITED : Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543 at 561 Hadley v Baxendale (1854) 9 Exchequer Reports 341 DECISION : The appeal should be allowed and an order should be made in terms of paragraphs 1 to 5 of the Summons.; The present defendant should pay the present plaintiff's costs.; If a certificate is necessary, I grant the present defendant a certificate under the Suitors Fund Act.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

BROWNIE AJ

THURSDAY, 27 JULY 2000

12589/99 - ELDERS LIMITED v DAWN FLORENCE WADE

JUDGMENT

HIS HONOUR: 1 This is an appeal under s69 of the Local Courts (Civil Claims) Act 1970. 2 On 10 May 1995 the present defendant, Ms Wade, agreed with the present plaintiff, Elders Limited, to sell certain cattle. Elders sold the cattle and after deducting expenses held the sum of $5,635.22. At that time Elders was the judgment creditor of Barroock Pty Ltd for a sum exceeding $6,000. Ms Wade was a director of Barroock Pty Ltd, if not then, at least at some stage. 3 Elders asserted that Ms Wade had made the contract of 10 May 1995 on behalf of Barroock and Elders purported to set off the sum of $5,635.22 against the judgment debt it had against Barroock. 4 Ms Wade took proceedings in the Consumer Claims Tribunal asserting that on 10 May 1995 she had contracted, not on behalf of Barroock Pty Ltd, but on behalf of herself and two other persons, and she claimed the payment of the sum of $5,635.22. She succeeded before the Tribunal and Elders paid her that sum. 5 More than a year later Ms Wade brought proceedings in the Local Court against Elders claiming damages for a breach of the contract of 10 May 1995. The claim is complicated factually, but in summary there are two strands to the damages she claimed. 6 First, she claimed certain expenses, either in the nature of legal expenses or out-of-pocket expenses connected with her prosecution of the proceedings before the Tribunal or in relation to obtaining legal advice about the matter more generally. 7 Secondly, she claimed to be entitled to be reimbursed for certain expenses which she had incurred consequent upon the failure of Elders to pay her the $5,635.22 punctually. She was in financial difficulties and had to incur either loss or expense in selling cattle at a time the market was unfavourable, in moving cattle between various properties, and in a number of other ways, the detail of which does not matter much. 8 The case was heard by Ms Carney LCM who directed the entry of judgment for the then plaintiff, Ms Wade, for $19,364.05. Elders now appeals. 9 It says, first, that the Local Court lacked jurisdiction because the subject matter of the dispute litigated in the Local Court was the same as the consumer claim which had been the subject of the proceedings in the Tribunal. This defence is based upon s.11(2) of the Consumer Claims Tribunal Act 1987. The essence of the allegations of lack of jurisdiction is that there was a consumer claim lodged with the Tribunal. 10 Section 11(4) provides that for the purposes of section 11(2) an issue arises under a consumer claim made to a Tribunal only if the existence of the issue is shown in the claim or is recorded in the record made by the Tribunal in accordance with section 9(1)(b). Ms Wade contends that the evidence before the Local Court did not satisfy that criterion, and I accept this as correct. It follows that the learned magistrate was correct in taking the opinion she took on the evidence before her that the Local Court had jurisdiction. 11 Next, Elders says that there was only one cause of action ever possessed by Ms Wade, namely, a claim for damages for breach of contract, that is to say, the contract of 10 May 1995, and that that cause of action based upon that breach merged in the decision of the Tribunal awarding Ms Wade damages for breach of that contract. 12 At times the debate was less than sharply focused. This is not unexpected. The separate juristic concepts of merger of a cause of action in a judgment, res judicata, issue estoppel, and what is commonly called Anshun estoppel, are complex and subtle and many lawyers, perhaps most lawyers, do not have a clear appreciation of how those concepts should be distinguished. In my view, the only one of these doctrines which is relevant to the present case is the doctrine of merger. The others serve only to distract one from the critical question. 13 On Elders' case there was only ever the one cause of action, namely a breach of the contractual obligation to pay to Ms Wade the net proceeds of the sale of the cattle. On Ms Wade's case there were two separate causes of action: One for failure to pay and the other for failure to pay promptly or within a reasonable time. 14 Counsel was unable to point to any authority supporting the proposition that two causes of action arise in respect of a situation like this and it seems to me to be contrary to principle to say that there are two causes of action. (See for example Macquarie Bank Limited v National Mutual Life Association of Australia Limited (1996) 40 NSWLR 543 at 561). Here the term of the contract found to have been breached was not an express term of the written contract, as in the Macquarie Bank case, but an implied term, but I do not think anything turns on that distinction. It was a single obligation to pay, promptly. 15 However, Ms Wade contends that this point was not taken in the Local Court or that if it was taken, it was abandoned. The transcript shows that the point was taken explicitly at one stage. At a later stage, when the matter was being debated, the solicitor who then appeared for Elders responded to a question asked of him by saying that the matter went to "jurisdiction." It does not seem to me that it would be right to categorise this passage as constituting a record of the abandonment of this point. Reading that part of the transcript as a whole, I think that the fairer categorisation is that objection was taken to the plaintiff's case in the Local Court on the basis that the cause of action had merged into the decision of the Tribunal. The submission was not put as clearly as it might have been put, say by a Senior Counsel experienced in commercial litigation, but it was put and it was put explicitly. There seems to have been a measure of imprecision as to whether that went to a defence on the merits or to jurisdiction. In any event, it seems to me that the proper view is that the point was taken and was later misstated. In any event, it is not a question upon which further evidence might have changed the position. 16 The next argument raised by Elders is that damages were assessed on a wrong basis. It was common ground before the learned magistrate that she should assess damages by reference to the principles discussed in Hadley v Baxendale (1854) 9 Exchequer Reports 341, and her Worship referred to the well known passage in that case. Elders contends, however, that her Worship did not apply the principle correctly. 17 It seems perfectly clear now that her Worship did not rely upon the second branch of the so called rule in Hadley v Baxendale. She said at one stage, of certain elements in the damages which she later awarded, that the withholding of the money by Elders created a personal and financial crisis for the then plaintiff, Ms Wade, which led to a significant reorganisation of her personal and business lifestyle and that consequently Ms Wade had to make immediate and future changes to that lifestyle that were not even in Ms Wade's contemplation on or around the date of contract or the date of breach. 18 Of necessity, therefore, Ms Wade must rely upon the first branch, that is to say, she must be able to say that the learned magistrate found for Ms Wade on the basis that the damages awarded were such as, fairly and reasonably considered, arose naturally, that is, in the ordinary course of things, from the breach of contract itself, or from the failure to pay the sum of $5,000 odd on or just after 17 May 1995. 19 It seems quite clear that the learned magistrate, having stated the test correctly, did not apply it correctly. The test changed from the one I have just mentioned to the question whether the various expenses which formed the subject matter of the awarding of damages flowed directly from the breach of contract of Elders. 20 Additionally, it seems that her Worship focused not on what was in contemplation at the time of contract, but rather at the time of breach and perhaps even a couple of weeks after breach. It is not as clear as it might be, but the learned magistrate certainly referred with some emphasis to a letter written by Ms Wade to Elders dated 30 May 1995. It does not seem to me that a legitimate use of that letter can be made in this context. 21 For those reasons I would have concluded that either damages needed to be re-assessed by this Court or by the Local Court. 22 Elders has yet another complaint. It says that certain of the damages awarded should not have been awarded in any event. These are the various items referred to in the document headed, "Particulars of Damage Claimed", being annexure G to the affidavit of Mr Harris of 18 February 2000 and being the eight items marked with a tick on that page. Each of those eight items represents either damages in the general nature of costs or out-of-pocket expenses incurred by the plaintiff in connection with the proceedings in the Tribunal or in obtaining legal advice generally. To the extent that they form part of the costs associated with the claim brought in the Tribunal, they are plainly unrecoverable as a matter of law because the Consumer Claims Tribunal Act forbids it. Additionally, as to those expenses, whatever was payable by way of damages pursuant to the findings of the Tribunal must, of necessity, have included those expenses. What she is claiming now is damages for breach of the very term relied upon in the Tribunal. 23 However, for the reasons I have given, I conclude that the appeal should be allowed and an order should be made in terms of paragraphs 1 to 5 of the summons. 24 The present defendant should pay the present plaintiff's costs. 25 If a certificate is necessary, I grant the present defendant a certificate under the Suitors Fund Act. **********