New South Wales Supreme Court CITATION : Venus Adult Shops Pty Limited v Lanier (Australia) Pty Limited [2006] NSWSC 63 HEARING DATE(S) : 16 February 2006 JUDGMENT DATE : 23 February 2006 JURISDICTION : Common Law JUDGMENT OF : Associate Justice Malpass at 1 DECISION : The judgment of the Local Court of 6 April 2005 is set aside; I propose to direct the entry of judgment for the defendant in respect of the claims which have been earlier identified in this judgment; the parties are to identify the precise sum in respect of which that judgment should be entered; I have been asked to reserve the question of costs and do so; the defendant is to prepare short minutes. CATCHWORDS : Appellate grounds raise matters not in issue before Local Court - challenge to adequacy of reasons - error in quantum of judgment - judgment entered in favour of defendant for lesser sum. PARTIES : Venus Adult Shops Pty Limited (Plaintiff) Lanier (Australia) Pty Limited (Defendant) FILE NUMBER(S) : SC 12253/05 COUNSEL : Ms M Gerace (Plaintiff) Mr B Burke (Defendant) SOLICITORS : I & T Solicitors (Plaintiff) Shaw McDonald (Defendant) LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 84183/2003 LOWER COURT JUDICIAL OFFICER : Maloney LCM - 5 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Associate Justice Malpass 23 February 2006 12253 of 2005 Venus Adult Shops Pty Limited v Lanier (Australia) Pty Limited JUDGMENT 1 His Honour: Dispute arose between the parties concerning business equipment supplied by the defendant. The dispute made its way to the Local Court. It was heard by Maloney LCM on 6 April 2005. His Honour found in favour of the defendant (who was the plaintiff in the proceedings) in the sum of $35,821.53 together with interest and costs. 2 Although the claim had originally been presented on alternative bases, what was ultimately run was a claim for money due under a contract (in respect of use and purchase of equipment). An agreement dated 22 May 2003 had been made between the parties (the agreement). The agreement had been admitted by the plaintiff in the pleadings. It made provision for the payment of 48 monthly instalments by the plaintiff in respect of the use of equipment. The plaintiff also admitted the supply of equipment. 3 At the time of the commencement of the proceedings in the Local Court, 21 monthly payments had fallen due. The plaintiff had paid only two of them. Subsequent to the commencement of the proceedings, the defendant regained possession of certain of the equipment. 4 In the proceedings, the defendant did not restrict its claim to the 21 payments. It sought to recover what it saw as its full entitlement under the agreement. It is now conceded that a cause of action in respect of 21 payments only had accrued at the time of the commencement of the proceedings. 5 The judgment of the magistrate allowed for the 46 payments, together with a sum of $1,464.43 owing for toners and service fees. 6 The plaintiff has brought an appeal in this court. It seeks the setting aside of the judgment of the Local Court on the basis of error of law. It does not dispute the plaintiff's entitlement to the sum of $1,464.43. 7 The summons has been the subject of a number of amendments. The plaintiff presently proceeds on a further amended summons filed on 8 December 2005. It seeks, inter alia, an order that the judgment of the Local Court be set aside. There is no express reference to relief in respect of interest and costs. The summons contains ten grounds of appeal. 8 The appeal was heard on 16 February 2006. During the hearing, there was a change of position and many of the grounds were abandoned. Ultimately, the plaintiff relied only on grounds 1, 2, 5, 6 and 7. 9 Counsel for the parties prepared detailed written submissions. These were supplemented by oral argument. 10 A significant component of the written submissions relied on by the plaintiff concerned a contention that the Magistrate had failed to make findings concerning what was said to be the legal status of the agreement. One aspect of this contention was an alleged failure to determine whether the agreement was on foot or had been terminated. Another aspect was said to be a failure to determine whether there had been a repudiation and an acceptance of that repudiation. 11 It was not open to the plaintiff to argue such matters in the appeal. They had not been in issue before the Magistrate and were matters upon which the parties may have wished to adduce evidence. 12 I should mention that counsel for the plaintiff took the court to the transcript and the few references to termination that appear therein. These references fail to assist the plaintiff in this appeal. Termination was not an issue that the Magistrate was called upon to determine. The agreement was presented by the parties and dealt with by the Magistrate on the basis that it was on foot at the time of the commencement of the proceedings. 13 Some discussion also took place concerning mitigation. This matter was irrelevant and not pursued before the Magistrate because the defendant did not press an alternative claim for damages. 14 The Magistrate had before him a statement of agreed facts and issues. By the time it came on for hearing, the only matters left in issue by the plaintiff were:- 1. Whether the photocopier was reasonably fit for the purpose for which it was required; 2. Whether or not the photocopier was of merchantable quality. 15 In his judgment, the Magistrate dealt with both of these issues. He found that there was no evidence to support them. As a result, he held that the plaintiff was unsuccessful on both of them. 16 The plaintiff seeks to have the matter remitted to the Local Court so that a fresh hearing can take place and other issues can be ventilated. The primary basis on which it seeks that result is an attack on the disclosure of reasoning process (ground 1). It is said that his Honour "erred in failing to state reasons for his judgment sufficient to gain a proper understanding of the basis of the verdict". 17 It may be that the expression of reasoning process could be the subject of criticism. Be that as it may, it does not seem to me that this ground would justify the remitting of the proceedings back to the Local Court for a further hearing. 18 The Magistrate had before him what could be regarded as a simple claim for monthly instalments due under the agreement. The material before him entitled the defendant to a judgment in respect of, inter alia, the 21 monthly payments. As I understand the position to which the defendant came to move that this was the case is not in dispute. The only defences relied on were those raised in the statement of agreed facts and issues. 19 Upon the Magistrate rejecting the two defences, there was no bar to the defendant recovering the amount of the instalments that had fallen due at the time of the commencement of the proceedings. 20 What was to be awarded involved an uncomplicated mathematical calculation. The Magistrate erred in allowing the plaintiff to recover for 46 instalments (instead of allowing for 21 only). Whether or not this arose out of a misconstruction of the agreement is of no moment. It might be thought that the plaintiff bears a share of responsibility for the error. The defendant now concedes that the only moneys recoverable by way of unpaid monthly instalments are restricted to the 21 payments that had fallen due at the time of the commencement of the proceedings. The Magistrate was not called upon and did not deal with any question of damages. As a consequence, any question of mitigation had no relevance. 21 The defendant does not dispute that the error needs to be rectified. The course proposed by it was the setting aside of the existing judgment and the substitution therefore of a judgment for the moneys to which an entitlement has been established (the 21 instalments, the sum of $1,464.43 and interest). In my view, that is the correct approach to be taken in this case. 22 Save as to the error that has just been mentioned, I am not satisfied that any other basis has been made out for the disturbing of the judgment. Further, I am not satisfied that there is any basis for remitting the proceedings back to the Local Court. 23 The judgment of the Local Court of 6 April 2005 is set aside. I propose to direct the entry of judgment for the defendant in respect of the claims which have been earlier identified in this judgment. The parties are to identify the precise sum in respect of which that judgment should be entered. I have been asked to reserve the question of costs and do so. The defendant is to prepare short minutes. ********** 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.