New South Wales Supreme Court CITATION : Bechara v Tourism Queensland [2005] NSWSC 356 HEARING DATE(S) : 15 April 2005 JUDGMENT DATE : 21 April 2005 JURISDICTION : Common Law Division JUDGMENT OF : Master Malpass at 1 DECISION : The summons is dismissed; the plaintiffs are to pay the costs of the summons. CATCHWORDS : Agent and disclosed principal - failure to enter judgment or dismiss cross-claim - failure to make necessary findings of fact - failure to give reasons - erroneous rejection of evidence - no error of law justifying a disturbing of the decision. LEGISLATION CITED : Tourism Queensland Act 1979 (QLD) Maria Bechara, Dianne Bechara & Giselle Bechara (Plaintiffs) PARTIES : Tourism Queensland t/as Sunlover Holidays FILE NUMBER(S) : SC 13024/04 Mr S Galitsky (Plaintiffs) COUNSEL : Mr B Katekar (Defendant) Bechara & Company (Plaintiffs) SOLICITORS : Crown Solicitor (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 3138 of 2002 LOWER COURT JUDICIAL OFFICER : O'Shane LCM - 7 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Master Malpass 21 April 2005 13024/04 Maria Bechara & Ors v Tourism Queensland t/as Sunlover Holidays JUDGMENT 1 Master: The plaintiffs are three sisters. One of them is a solicitor. 2 The defendant is a statutory corporation established under the Tourism Queensland Act 1979 (QLD). It has the functions and powers set forth in Division 2 thereof. 3 On 12 December 2000, the plaintiffs made arrangements with the defendant for a holiday package at a resort on Long Island. The total cost of the package was $9,151.62. Payment for the package was made to the defendant by the plaintiffs (in individual proportions upon the making of the arrangements). 4 The plaintiffs arrived at Long Island on 2 January 2001. The plaintiffs were unhappy with the accommodation. On 3 January 2001, the first plaintiff (on behalf of herself and her sisters) made further arrangements for upgraded accommodation on Hayman Island. The additional cost for the upgrading was $10,334.36 (again, payable in individual proportions). 5 The plaintiffs arrived at Hayman Island on 3 January 2001. Upon completion of the holiday, they left on 12 January 2001. 6 On 31 January 2001, the defendant made payment by cheque to the resort on Hayman Island in respect of the cost of the accommodation for the plaintiffs. Thereafter, each of the plaintiffs disputed authorisation in respect of credit card payments (signed credit card authority forms were not returned to the defendant). 7 On 14 March 2002, the defendant filed a statement of liquidated claim in the Local Court, claiming, inter alia, the sum of $10,334.36. The pleading alleged two contracts. The first contract was alleged to have been made on or about 12 December 2000 (to provide services of arranging a holiday package). The process pleaded payment to the defendant for the services in the sum of $9,151.62. The second contract was alleged to have been made on or about 3 January 2001 (to supply further services for the arranging of alternative and/or preferred accommodation at Hayman Island). The process pleaded an agreement to pay the defendant the sum of $10,334.36. 8 Although the pleading commenced with an allegation that the plaintiff was agent for the two resorts, each of the two contracts was alleged to have been made between the defendant and the plaintiffs. 9 The plaintiffs filed notice of grounds of defence which, inter alia, did not admit the first contract and denied the second contract. 10 The plaintiffs filed a notice of cross-claim. Generally speaking, it may be described as a claim for general damages in respect of loss of enjoyment. It pleaded a contract made in or about December 2000 which had as an essential term that the defendant would arrange "5 star" accommodation. The claim for damages was alleged to arise from breach of that essential term and/or misrepresentation. The alleged misrepresentation involved the matter of the "5 star" accommodation. 11 A notice of grounds of defence was filed to that cross-claim. Whilst it admitted the alleged contract, it put in issue the alleged essential term and the misrepresentations. 12 The proceedings came before O'Shane LCM. Judgment was delivered on 19 August 2004. The judgment concluded with the following [at p7]:- Altogether then, it was evident to the Court that the evidence of the Defendants failed to establish their claim, first, that they or either one of them on behalf of all three, had sought "5 star" accommodation; second, that they are not liable to pay the monies claimed by the Plaintiff. On the other hand, as already indicated, the Court is satisfied on the balance of probabilities that the Plaintiff has established its case. In particular, the Court is not satisfied on the balance of probabilities that the Defendants have made out their defence. Accordingly, verdict and judgement are entered for the Plaintiff in the amount claimed, together with Interest and Costs. Costs to be paid in an amount as agreed, or as assessed. Alternatively, leave granted to the parties to argue the issue of costs, on 14 days' notice. 13 There was dispute between the parties as to what was put in issue by the defence filed by the plaintiffs. 14 The plaintiffs sought to argue that the defendant did not have the status to sue for the moneys claimed. It was said that this was because the defendant was suing as agent for a disclosed principal. The plaintiffs relied upon the following:- The applicable principles for ascertaining the parties to the contract, are set out by Professors Greig and Davis in The Law of Contract (Law Book Company, 1987 Sydney) at p1000, as follows: (A) Disclosed Principal a principal may, expressly or impliedly, authorise his agent to enter into a contract on his behalf. If the latter, in doing so, discloses the fact that he is acting as an agent, the general rule is that the contract is that of the principal alone, and that the agent cannot sue on it ( Lucas v Beale (1851) 10 CB 739; 138 ER 292; Farlie v Fenton (1870) LR 5x 169 and see Storaker v Southouse and Long Limited (1920) 20 SR (NSW) 190). This can scarcely be regarded as an exception to the doctrine of Privity, the agent, having fulfilled his function of bringing the contract into existence, thereafter drops out of the picture, leaving his principal as the party to the contract. 15 I should digress to add that whilst there was no dispute between the parties that the extract from Greig and Davis was a correct statement of principle, there was dispute as to its application in this particular case. 16 This purported defence (the agency defence) had not been specially pleaded. The argument between the parties was whether or not it had been put in issue by the plaintiffs' denial of the alleged second contract. 17 The matter was agitated during the hearing. It may be that it was not resolved by the Magistrate. The Magistrate did observe that the agency defence had not been raised on the pleadings. The defendant sought to tender certain documentation (the documentation) to meet the possibility that the plaintiffs may have been allowed to run the agency defence. The documentation related to arrangements between the defendant and Hayman Island and payment by the defendant to Hayman Island for the accommodation had by the plaintiffs. The plaintiffs objected to the tender of this material. It was ultimately admitted by the Magistrate. 18 I should further digress to add that, subsequently, the plaintiffs came to see this material as being of assistance to their case and then later they came to complain that the Magistrate had failed to address it in her judgment. 19 I should also add that during the conduct of the trial, the Magistrate made what presents as a ruling. It is in the following terms:- Right. If you want my ruling on the matter right now I would say to you Tourism Queensland is the properly identified plaintiff in these proceedings having regard to s6 of the Tourism Queensland 1979 which I accept until I am otherwise or if I am otherwise informed or something further is produced to indicate that that act has been repealed and replaced with something else which would lead me to a different conclusion on the matter. 20 The plaintiffs brought proceedings, by way of appeal, in this Court. They now rely on an amended summons filed on 20 October 2004. 21 The hearing of the appeal took place on 15 April 2005. Counsel for both sides relied on written and supplementary oral submissions. 22 It is common ground that for present purposes, the appeal lies only in respect of error in point of law. The plaintiffs bear the onus of satisfying the Court that there is error of law which justifies the disturbing of the decision of the Magistrate. 23 The plaintiffs make a number of complaints about the judgment. Of significance, is the agency defence. Not only do they say that it is a defence that should have succeeded before the Magistrate, they also say that the Magistrate failed to deal with it in her judgment. It is said that there was a failure to make necessary findings of fact. It is said that there was a failure to give reasons, or sufficient reasons. It seems to be suggested that findings were made which had no supporting evidence. It is said that the Magistrate overlooked dealing with the cross-claim. It is said that she wrongly rejected evidence. 24 Whether or not the agency defence should have been specially pleaded may be a contentious issue. In this case, it is unnecessary to decide the point. 25 It seems to me that this is a case which turns on its own particular facts. In my view, the principle relied on by the defendants had no application in those circumstances. 26 The case advanced by the defendant was one in which it was said that the defendant was the contracting party with the plaintiffs. Whether or not it was an agent was irrelevant to the case as pleaded. There was evidence before the Magistrate which supported a finding that the second contract was made between the defendant and the plaintiffs (inter alia, what may be seen as admissions made on behalf of the plaintiffs during cross-examination, witness statements and documentation (including material contained in the documentation)). It was reasonably open on the material, to make such a finding (which is what the Magistrate did). Such a result implicitly rejected the agency defence. 27 Any failure to mention the documentation seems to me to be of no significance. In my view, it does not assist the plaintiffs in this appeal. I would add that it is not incumbent upon a judicial officer to make express mention of all of the evidence. 28 To the extent that there may be any basis for the complaint that there was a failure to expressly deal with matters, it seems to me that what was done arises clearly by implication (inter alia, from the pleadings and what was said by the Magistrate in her judgment). 29 It is true that the Magistrate did not either enter judgment for the defendant on the cross-claim or dismiss it. However, it seems to me, that the failure to do so is of little moment. 30 The Magistrate made the necessary findings. She did not accept the evidence led to establish the alleged essential term and misrepresentations. In the light of these findings, the cross-claim had to fail. In addition to the making of the findings, she also observed, inter alia, "the defendants failed to establish their claim". 31 The plaintiffs did seek to lead evidence of what was said to be the uninhabitable conditions of the Long Island resort. Certain of that evidence was rejected. As I understand the position to be, some of it was rejected by reason of form. I am also told that leave was given to lead supplementary oral evidence (a leave that was not taken advantage of). 32 If it be the case that any of this evidence was erroneously rejected, it is my view that it is a matter of no significance. The cross-claim had pleaded uninhabitable condition of the accommodation as a matter of breach of the essential term. The matter of breach ceased to be of significance upon the plaintiffs' failure to establish the alleged essential term. It may be that such evidence would not have established breach of the essential term (what really had to be established was a failure to meet the criteria of "5 star" accommodation). Such a consideration does not have to be further explored. 33 I see no need to dwell on any question of the sufficiency of the disclosed reasoning process by reason of the failure of the plaintiffs to demonstrate any basis for the disturbing of the decision of the Magistrate. 34 The appeal fails. The summons is dismissed. The plaintiffs are to pay the costs of the summons. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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