O'Doherty v T G Eakin Ltd & Anor [2004] NSWCA 38

New South Wales Court of Appeal

CITATION : O'Doherty v T G Eakin Ltd & Anor [2004] NSWCA 38 HEARING DATE(S) : 15/12/03 JUDGMENT DATE : 3 March 2004

JUDGMENT OF : Mason P at 1; McColl JA at 2; Cripps AJA at 3 DECISION : Appeal and cross appeal dismissed.; Order of Certoma DCJ affirmed.; Appellant to pay respondent's costs of appeal.

CATCHWORDS : Contract - "Entire contract" - Construction - Damages - Whether settlement with third party should be taken into account (ND) CASES CITED : Franklins Self Service Pty Ltd v Wyber 48 NSWLR 249 at 254 APPELLANT PARTIES : Kevin Patrick O'Doherty RESPONDENTS T G Eakin Ltd and Tom Eakin FILE NUMBER(S) : CA 40147/03 COUNSEL : Appellant: G J McVay Respondent: J C Kelly SC SOLICITORS : Appellant: Steingold Abel Lawyers Respondent: Gadens Lawyers

LOWER COURT District Court JURISDICTION : LOWER COURT 9737/97 FILE NUMBER(S) : LOWER COURT Certoma DCJ JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40147/03

MASON P McCOLL JA CRIPPS AJA

Wednesday 3 March 2004 O'DOHERTY v T G EAKIN LTD & ANOR Judgment 1 MASON P: I agree with Cripps AJA. 2 McCOLL JA: I agree with Cripps AJA. 3 CRIPPS AJA: This is an appeal from a decision of his Honour Judge Certoma DCJ published on 10 February 2003 in proceedings between the appellant Kevin Patrick O'Doherty and the respondent T G Eakin Ltd. 4 The litigation is concerned with an agency agreement entered into in 1991 between the appellant in Australia and the respondent in Northern Ireland for the promotion and sale of surgical products manufactured in Northern Ireland and sold in Australia and, as well, with an agreement terminating the agency. 5 As will be seen, the appellant in breach of his obligations under the agency agreement, misappropriated money belonging to the respondent by paying cheques made payable to the respondent (or which should have been made payable to it) into his own personal account. 6 The agency was terminated in early February in 1997 and on 9 February 1997 the parties entered into a termination agreement the details of which will be referred to later. 7 In 1997 the appellant commenced proceedings against the respondent for what were claimed to be breaches by the respondent of its obligations under the agency agreement and the termination agreement. 8 The respondent denied the appellant's entitlement to any damages arising under the agreements and, by a cross-claim, sought damages for alleged breaches of the agency agreement and termination agreement. 9 The learned trial judge dismissed the appellant's claim and found for the respondent in the sum of $144,340.81 being the amount the appellant agreed he owed the respondent by operation of the agency agreement and the termination agreement. 10 The respondent also cross-claimed against the National Bank of Australia Limited alleging that in breach of its duty to the respondent it credited to the plaintiff's account the proceeds of cheques drawn in favour of the respondent. The Bank, in turn, cross-claimed against the appellant claiming that if it were liable to the respondent any liability so found should be met by the appellant whose conduct caused the Bank to credit the proceeds of cheques made payable to the respondent into the appellant's account. 11 After the hearing had commenced but prior to judgment being delivered the cross-claim of the respondent against the Bank and the cross-claim of the Bank against the appellant were discontinued upon the Bank paying to the respondent the sum on $100,000. The learned trial judge was aware that the cross-claims had been discontinued but he did not know that the Bank had agreed to pay the respondent $100,000. 12 At the hearing of the appeal, the appellant sought to invoke the "slip rule" to be allowed to raise in the appeal, a claim that the respondent's case against him for monies owing under the agency agreement should be reduced by the sum of $100,000. The explanation for the claim not being raised before the learned trial judge is less than satisfactory. I am not persuaded that the failure by the learned judge to consider what is now claimed by the appellant was relevantly a "slip" amenable to the rule. However, if it is the fact that, in law, the $100,000 paid by the Bank should have been recognised by the trial judge as part satisfaction of the claim brought by the respondent against the appellant there would seem to be no reason why the matter should not be allowed to be raised at the present time bearing in mind that Mr Kelly on behalf of the respondent could point to no prejudice to his client beyond asserting that if the $100,000 is to be taken into account the respondent should be entitled to have deducted from it an amount referable to the costs the respondent incurred prior to the settlement with the Bank. That some costs were incurred by the respondent in its claim against the Bank is evident from the terms of settlement which was signed by the Bank, the appellant and the respondent.