New South Wales Supreme Court CITATION : Jang & Anor v Kyoko [2005] NSWSC 464 HEARING DATE(S) : 9 May 2005 JUDGMENT DATE : 18 May 2005 JURISDICTION : Common Law Division JUDGMENT OF : Master Harrison DECISION : (1) Leave to appeal is refused; (2) The appeal is dismissed; (3) The decision of Magistrate Lulham made on 21 October 2004 is affirmed; (4) The further amended summons filed 17 January 2005 is dismissed; (5) The plaintiffs are to pay the defendant's costs as agreed or assessed. CATCHWORDS : Leave to appeal decision of Local Court Magistrate - evidence LEGISLATION CITED : Local Courts (Civil Claims) Act 1970 (NSW) - 69(2) & (4) Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Carr v Neill [1999] NSWSC 1263 Devries v Australian National Railways Commission (1993) 177 CLR 472 CASES CITED : Fabre v Arenales (1992) 27 NSWLR 437 Jones v Dunkel (1959) 101 CLR 298 R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588 Swain v Waverley Municipal Council [2005] HCA 4 Jung Kim Jang (First Plaintiff) Peter Kiyoung Jang PARTIES : (Second Defendant) Taninishi Kyoko (Defendant) FILE NUMBER(S) : SC 13785/2004 Mr Dragan Gasic (Plaintiffs) COUNSEL : Mr J Mendel (Defendant) Tim Young & Associates (Plaintiffs) SOLICITORS : John Doolan (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 12259/2003 LOWER COURT JUDICIAL OFFICER : Lulham LCM IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION MASTER HARRISON WEDNESDAY, 18 MAY 2005 13785/2004 - JUNG KIM JANG & ANOR v TANINISHI KYOKO JUDGMENT (Leave to appeal decision of Local Court Magistrate – evidence) 1 MASTER: By further amended summons filed 17 January 2005 the plaintiffs seek firstly, leave to appeal from the whole of the judgment of Local Court Magistrate, His Honour Mr Lulham, made on 21 October 2004 in proceedings 12259/2003 at the Downing Centre Local Court; secondly, an order that the plaintiffs have leave to appeal the judgment partly on questions of mixed law and fact; thirdly, an order setting aside the judgment or orders appealed from and in lieu thereof an order that there be judgment and verdict for the plaintiffs (or either of them) for the full amount claimed in the statement of claim by which the Local Court proceedings were commenced; fourthly, or in the alternative, an order setting aside the judgment orders appealed from and remitting the matter to the Local Court for determination; fifthly, an order that the defendant pay the plaintiffs' costs of the Local Court proceedings of 21 October 2004, of this appeal and of the arbitration of 5 May 2004; and sixthly, an order, with the leave of the court, affirming the costs order made against the defendant at arbitration of 5 May 2004. The plaintiffs relied on two affidavits of Timothy Roy Young sworn 15 January 2005 and 28 February 2005. 2 The first plaintiff is Jung Kim Jang. The second plaintiff is Peter Kiyoung Jang. For convenience in this judgment I shall refer to Jun King Jang and Peter Kiyoung Jang as Jang. The defendant is Taninishi Kyoko. I shall also refer to the defendant by name. 3 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiffs. Section 69(2) of the Local Courts (Civil Claims) Act 1970 (NSW) (the Act) permits a party who is dissatisfied with a judgment as being erroneous in point of law to appeal to this Court. The onus lies on the plaintiff to demonstrate that there has been an error of law. What is a question of law (as opposed to a question of fact) was considered, inter alia, in Allen v Kerr & Anor (1995) Aust Torts Reports 81-354 and Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156 and two more recent cases, namely Carr v Neill [1999] NSWSC 1263 and R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082. It cannot be said that the judicial officer acted on evidence inconsistent with facts incontrovertibly established by the evidence - see Devries v Australian National Railways Commission (1993) 177 CLR 472 per Brennan, Gaudron and McHugh JJ at 479 and State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588. Recently, in Swain v Waverley Municipal Council [2005] HCA 4, the Chief Justice at [2] reiterated that in the common law system of civil justice, the issues between the parties are determined by the trial process. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal. 4 Section 69(4) of the Act provides that the court may determine an appeal by either (a) setting the judgment or order aside or (b) by varying the terms of the judgment or order or (c) by setting the judgment or order aside and remitting the matter for determination in accordance with the court's directions or (d) by dismissing the appeal. Grounds of appeal 5 Mr and Mrs Jang appeal from the whole of the decision of Magistrate Lulham dated 21 October 2004. The grounds of appeal are that the Magistrate erred in law or made an error of mixed fact and law in: firstly, neglecting to make a finding that the agreement was between Peter Jang and Taninishi Kyoko in light of probative documentary evidence; secondly, neglecting to make a finding that the cleaning business was Taninishi Kyoko's to sell; thirdly, neglecting to make a finding that Taninishi Kyoko retained the $18,700.00; fourthly, neglecting to make a finding that the guarantee was enforceable notwithstanding the part-performance of the contract; fifthly, admitting into evidence inadmissible evidence then relying on it; sixthly, finding that an agreement existed between Peter Jang and Mr Cho in circumstances where Mr Cho was not called to give evidence nor was his absence explained; seventhly, finding that Jung Kim Jang's termination by Mr Oh was done on the basis of complaints from gym management and in circumstances where gym management were not called to give evidence; eighthly, allowing into evidence, over objection, Taninishi Kyoko's alleged conversations between herself, Peter Jang and Mr Cho relating to the alleged contract between Peter Jang and Mr Cho, the substance of which was not put to Jung Kim Jang and Peter Jang in cross examination; ninthly, making findings of fact the substance of which was not put to Jung Kim Jang and Peter Jang; tenthly, failing to draw a Jones v Dunkel (1959) 101 CLR 298 inference in respect of the failure to call Mr Cho and gym management as witnesses for Taninishi Kyoko's case; eleventhly, holding that Peter Jang deliberately misled the court; twelfthly, holding that evidence by Tananishi Kyoko and Mr Oh established beyond doubt that the agreement was between Peter Jang and Mr Cho despite the written agreement; thirteenthly, failing to attach any weight to the written agreement; fourteenthly, failing to attach any weight to Mr and Mrs Jang's evidence; and fifteenthly, setting aside the costs order of the arbitration. Leave is required for this appeal as it involves mixed questions of fact and law. Proceedings in the Local Court 6 In the Local Court proceedings Jung Kim Jang by statement of liquidated claim (S/C), sought to recover $18,700.00 from the defendant, Kyoko. The S/C included that Jung Kim Jang entered into a contract to purchase a cleaning business from Kyoko in November 2000. Jang paid $18,700.00 for a cleaning business. Paragraph 3 pleaded that it was a condition of the contract that Kyoko would guarantee the cleaning contract for a 12 month period, that is from November 2000 to November 2001. 7 It was further pleaded that Kyoko cancelled the employment contract after 10 months without notice to Jung Kim Jang and that Jung Kim Jang sought refund of the whole of the purchase price from Kyoko. On 4 May 2004 at arbitration Peter Jang was joined as second plaintiff. 8 In her defence, Kyoko denied that she had sold any business to Jang and said that the moneys paid were paid to other persons and that while she did acknowledge receipt of a payment by the plaintiff, she did not guarantee the cleaning contract and in any event it was terminated by J Young Company. 9 There was a written document tendered in evidence, the translation from the Korean language reads: Contract Contract for Sale I received $18,700.00 for the sale of Health Land St. Leonard Branch. The guarantee period shall be 1 year. (15 November 2000 – November 2001) 16 November 2000 [signature of Kyoko T. affixed] Taninishi Kyoko · In the case of sale of this branch, Taninishi Kyoko shall buy it back. Sydney BOOKLAND Suite 2 *************** Eastwood************ Ph: 61-2-9804****Fax: 61-2-9804-8120 [translator's note: some parts are illegible] Please have it ready by tomorrow evening. BOOKLAND" 10 Jang submitted that despite this written document the Magistrate held that the contract was between Jang and Cho. 11 The Magistrate entered judgment for Kyoko on two bases, firstly, that the contract was between Cho and Jang; and secondly, that the guarantee could never have protected Jang against the failure to do work properly. 12 However the Magistrate did not find Mr Jang a credible witness and stated: "I have come to the view that I am satisfied, and that the agreement was in fact with Cho. I make that finding for the following reasons: I was not impressed at all with the evidence of Mr Jang. Indeed I am satisfied that he deliberately misled the court. His statement was just clearly wrong. There is absolutely no way that the agreement was reached with Kyoko at her residence on 16 November as alleged by Jang in his statement; that is that the whole deal was done on that day; the money was paid on that day; the receipt was obtained on that day. I am convinced beyond all doubt that that did not happen. Indeed Mrs Jang said that she was cleaning the premises on 15 November, the day before. On the plaintiffs' evidence, they purchased this contract, subcontract, to clean the premises at St Leonards, on their evidence, without ever going inside the premises. That is a proposition I just cannot accept. Moreover, they did not give one iota of evidence as to what the cleaning contract was. … For all of those reasons, I am satisfied that in fact the contract was owned by Cho, and that it was Cho who transferred the subcontract to the plaintiffs, and on that basis the plaintiffs could not succeed against Mrs Kyoko as she was not the vendor and therefore she could not have guaranteed the contract. I have made those findings because that was the basis upon which the matter was largely conducted. However, can I say that even if I would be wrong in relation to the finding I have made as between whom the contract was made, it does not matter. In my view, the plaintiffs cannot succeed in this matter, even if I be completely wrong, and either the contract was made with Kyoko, and therefore she was a party, and therefore she could guarantee the contract, or alternatively, if it be the situation that although the contract was with Cho, the effect of the document which she signed on 16 November 2000 was that nevertheless Kyoko was guaranteeing the contract. … In those circumstances it did not matter, as I said, who the contract was made, and who guaranteed the contract. The guarantee could never have protected the plaintiffs against their failure to do the work properly. I am satisfied that that is the reason that the subcontract was terminated after 10 months, and as it was terminated as a result of their failure to do the work properly there is no way that they could seek to rely on any guarantee given by Mrs Kyoko, which guarantee, as I have indicated, according to the custom and the understanding and the evidence, went only to protect the purchasers if there was a failure on behalf of the head contractor." 13 Jang's counsel drew my attention to a question asked by Kyoko's solicitor [t 16.32] which was allowed over objection. "DOOLAN: Q. Ms Jang, I put it to you that the contract to clean was cancelled because of unsatisfactory cleaning work performed by yourself? A. I did my best and the employees that I employed were cleaning professionals." 14 It seems to me to have been a proper question. Mrs Jang's evidence was that she spoke to Mr Oh a few days before the employment was terminated and that he told her that he was very satisfied with the level of work. She did say that Mr Oh conducted weekly inspections and he might have had one or two minor complaints but they were fixed on the following day [t 17.12]. Mr Oh was an independent witness being the supervisor at the gym where the cleaning took place. The Oh statement 15 Jang's counsel submitted that the Magistrate should have disallowed Mr Oh's statement as it was served late. The explanation for the delay was the difficulty getting it translated from Korean. After Mr Oh was sworn in the following exchange took place [t 51.51-58; 52.1-15]: "HIS HONOUR: Mr Gasic, you've got to tell me whether there are matters in that statement that caused you prejudice. Can I just say the situation would appear to be that if you objected to the statement I don't know whether we're going to finish this matter today. If you object one would think the matter will be adjourned and there will be some question about the costs of today. Then one would think that you all had sufficient notice and we'll have to get this man back again. GASIC: Certainly. HIS HONOUR: If it causes you particular prejudice, I'm prepared to look at that course to enable you to look at the matter. GASIC: The only problem that I have with the – I note what your Honour has said. In order to expedite matters I won't object to the statement except for any evidence relating to what his conclusions about any contract that Ms Kyoko may have had. HIS HONOUR: He can't give that evidence then." 16 Mr Oh was cross examined. 17 The Magistrate, in the exercise of his discretion, was entitled to take the approach he did and allowed the statement into evidence. Jang's counsel objected to certain parts of the statement and these were disallowed. In my view, the Magistrate's approach was fair to both parties. 18 Mr Oh's evidence did not support Mrs Jang's statement that he was satisfied with her level of work. He said that Jang had been performing substandard work for 10 months [t 53.54] and that he told her several times that they (the gym) were not satisfied. Mr Oh gave evidence that Jang got a second subcontract from Mr Cho. Jones v Dunkel 19 Lastly, Jang's counsel submitted that Cho should have been called by Kyoko and a Jones v Dunkel finding should have been made in relation to the non-attendance of Cho. Both Oh and Kyoko gave evidence that Mr Cho Sung Man owned the contract [t 36-37]. Oh was an independent witness. As Mahoney JA stated in Fabre v Arenales (1992) 27 NSWLR 437 the Jones v Dunkel principle is not concerned with whether a particular inference of fact can be drawn. It is concerned with whether it should be drawn in a particular case. It is my view that the Magistrate was not obliged to make a Jones v Dunkel finding in these circumstances. This ground of appeal fails. 20 The other written grounds of appeal substantially relate to the Magistrate's factual findings and seek to re-argue the case. Hence leave to appeal is refused. The appeal is dismissed. The decision of Magistrate Lulham made on 21 October 2004 is affirmed. The further amended summons filed 17 January 2005 is dismissed. 21 Costs are discretionary. Costs usually follow the event. The plaintiffs are to pay the defendant's costs as agreed or assessed. The court orders: (1) Leave to appeal is refused. (2) The appeal is dismissed. (3) The decision of Magistrate Lulham made on 21 October 2004 is affirmed. (4) The further amended summons filed 17 January 2005 is dismissed. (5) The plaintiffs are to pay the defendant's costs as agreed or assessed. ********** 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.