New South Wales Supreme Court CITATION : Bassili v Wheelies [2007] NSWSC 61 HEARING DATE(S) : 2 February 2007 JUDGMENT DATE : 13 February 2007 JURISDICTION : Common Law Division JUDGMENT OF : Associate Justice Harrison DECISION : (1) The appeal is dismissed; (2) The decision of the Magistrate dated 17 February 2006 is affirmed; (3) The summons filed 17 March 2006 is dismissed; (4) The plaintiffs are to pay the defendant's costs as agreed or asessed. CATCHWORDS : Appeal decision of Local Court Magistrate - contract, breach, damages LEGISLATION CITED : Local Courts Act 1982 (NSW) - ss 73, 75 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 Gorczynski v Beilby [2005] NSWSC 884 CASES CITED : Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 Jung v Son NSWCA 18 December 1998 Pettitt v Dunkley (1971) 1 NSWLR 376 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (in Liq) (1999) 160 ALR 588 Stoker v Adecco Gemvale Constructions Pty Ltd & Anor [2004] NSWCA 449 Swain v Waverley Municipl Council (2005) 220 CLR 517 Adel Bassili & Michelle Nigl t/as We Care Tours & Travel - Plaintiffs PARTIES : Wheelies Specialised Vehicle Hire Pty Ltd t/as Wheelabout, Wheelchair Accessible Van Rentals & Sales - Defendant FILE NUMBER(S) : SC 11272/2006 COUNSEL : Mr B DeBuse - Plaintiffs Mr K J Manion - Defendant SOLICITORS : Bell Lawyers - Plaintiffs Fraser Clancy Lawyers - Defendant LOWER COURT JURISDICTION : Local Court LOWER COURT FILE NUMBER(S) : 7015/2005 LOWER COURT JUDICIAL OFFICER : Freund LCM LOWER COURT DATE OF DECISION : 17 February 2006 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ASSOCIATE JUSTICE HARRISON TUESDAY, 13 FEBRUARY 2007 11272/2006 - ADEL BASSILI & MICHELLE NIGL t/as WE CARE TOURS & TRAVEL v WHEELIES SPECIALISED VEHICLE HIRE PTY LTD t/as WHEELABOUT,WHEELCHAIR ACCESSIBLE VAN RENTALS & SALES JUDGMENT (Appeal decision of Local Court Magistrate - contract, breach, damages) 1 HER HONOUR: By summons filed 17 March 2006 the plaintiffs seeks firstly, an order that the judgment of Her Honour Freund LCM, dated 17 February 2006 in proceedings 7015/2005 be set aside; secondly, an order that the defendant's cross claim be dismissed; and thirdly, an order that the matter be remitted to the Downing Centre Local Court for rehearing. The plaintiffs relied on the affidavit of Paul Donald Blunt dated 11 August 2006. The defendant relied on the affidavits of Nasir Hanafi dated 1 February 2007 (2). 2 The plaintiffs in these proceedings are Adel Bassili and Michelle Nigl t/as We Care Tours & Travel (Bassili). The defendant is Wheelies Specialised Vehicle Hire Pty Ltd t/as Wheelabout, Wheelchair Accessible Van Rentals & Sales (Wheelies). For convenience, in this judgment, I shall refer to the parties by name. Bassili and Nigl were the plaintiff/cross defendant in the Local Court proceedings. Wheelies were the defendant/cross claimant in the Local Court. Wheelies hires motor vehicles and in particular, vehicles that accommodate disabled persons. 3 At the outset, it may be helpful to make some brief comments concerning the remedy pursued by the plaintiff. Section 73 of the Local Courts Act 1982 (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; Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 155-156; Carr v Neill [1999] NSWSC 1263 and RL & D Investments Pty Ltd v Bisby (2002) 37 MVR 479. 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. 4 In Swain v Waverley Municipal Council (2005) 220 CLR 517, 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. 5 Section 75 of the Act provides that the Court may determine an appeal by either (a) varying the terms of the judgment or order or (b) setting the judgment or order aside or (c) setting the judgment or order aside and remitting the matter for determination in accordance with the Court's directions or (d) dismissing the appeal. Grounds of Appeal 6 Bassili appeals from the whole of the decision of the Magistrate. The grounds of appeal are difficult to discern. There are four main points, the Magistrate erred in law, firstly, when she failed to comment upon and give findings as to the credibility of the witnesses for the plaintiff and the defendant particularly in relation to the effect of documents 15173 and 15174; secondly, in the construction of Terms and Conditions, paragraphs 3(a) and(b); thirdly, in relation to damages in that they should have been limited to the sum of $500; and finally, when she awarded damages for consequential loss. Local Court proceedings 7 In the Local Court Bassili sued Wheelies for breach of contract in relation to a vehicle hired by Bassili from Wheelies for the use by disabled overseas visitors. The car was damaged in an accident on an unsealed road and Bassili claimed that after damage to the car that they were entitled to the cost of a replacement car. The Magistrate held that there was no provision in the contract that obliged Wheelie to provide a replacement vehicle. The plaintiffs' statement of claim was dismissed. This part of the judgment does not form part of this appeal. The appeal arises from the cross claim. Wheelies cross claimed for damages including damages to the vehicle and loss of profits. Judgment on the cross claim was entered in favour of Wheelies in the sum of $29,828.90 plus interest and costs. 8 The cross claim sought damages from Bassili on the basis that he breached the terms of the contract with Wheelies. It was common ground that the Danish tourists had a motor vehicle accident on a dirt road. There was no evidence that the Danish driver had been negligent. Wheelies alleged that Bassili breached terms of the agreement firstly, by driving on an unsealed road (Cl 3(a)); secondly, using the vehicle in a negligent or dangerous manner (Cl 3(h)); and thirdly, using it in contravention of motor traffic regulations (Cl 3(i)). 9 The Magistrate considered that the following matters were not in dispute. "a. That Les Still ("Still") provided the Defendant with agreement 15173 which named the Defendant as a party to the hire agreement and Plaintiff/Cross Defendant as the Hirer of the vehicle; b. That Still was advised there would be additional drivers of the vehicle; c. That the Plaintiff/Cross Defendant was provided with an additional blank hire agreement number 15174; d. That the Plaintiff signed the acknowledgement that he had read and understood the terms and conditions of the hire agreement number 15173." (Judgment [10]) The Magistrate's reasons in relation to contract for hire of services 10 Bassili submitted that the Magistrate in her reasons failed to resolve two different contested versions of the circumstances surrounding entry into the contract for hire. Alternatively, Bassili submitted that the Magistrate failed to expose her reasoning in relation to the construction of the contract. Mr Bassili runs a travel agency and arranged the hire of a Chrysler Voyager motor vehicle for some Danish tourists. It was Bassili's case that he had an agreement with Wheelies to obtain the written agreement of the Danish tourists for hire of the vehicle. There was evidence from Bassili, Still and Stevens and two documents, Nos 15173 and 15174. 11 Document 15173 is a Vehicle Rental Agreement/Tax Invoice. Under the heading 'Company Name' is the words "Wheelies Specialised Vehicle Hire Pty Ltd". The document is signed by Mr Bassili. Document 15174 is also signed by Mr Bassili. Under the heading 'Company Name' appear the words "Rune Nielsen" followed by the words "all parking fines and traffic offences if any during the hiring period to be charged to the credit card". 12 Mr Bassili's (Aff, statement 13/02/2006) evidence is that: "23. I was then handed the rental agreement and saw that the dates were from 10 February 2005 to 9 March 2005. I then said words to the effect, "I am not the driver for the period from 14 February 2005 to 2 March 2005." I then said words to the effect, "Do I have to sign for another person?" He then said words to the effect, "Oh yes, that's right." He then handed me a blank form. This form was rental agreement 15174. 24. When he handed me the other form he the (sic) agreement Les said words to the effect "You fill out these details here exactly as per agreement 15173 and make sure to have all the drivers that will driving the vehicle listed on the rental agreement and have the persons sign here". At all times Les showed items on the front of the agreement. He did not show me the rear of this agreement. 25. Les then handed me the other agreement and said words to the effect "Can you sign here?" When he said this he pointed to an 'X' marked on a rental agreement 15173. This agreement was attached to a hard clip folder. At no stage did he show me the back of the agreement. I then signed the agreement. Les then handed me the original of the agreement. Annexed hereto and marked with the letter 'H' is rental agreement 15173." 13 When Mr Bassili gave evidence was in Court, at times he admitted that he was the hirer of the vehicle but at other times he disputed that he was the hirer (t 10, 11 & 17). Mr Still's evidence is that he completed form 15173 after checking with Mr Scott Stevens at Wheelies. Mr Stevens's evidence concerning the conversation supports that of Mr Still. According to Mr Still, he completed the vehicle rental agreement document (No 15173) for hire on behalf of Wheelies. Mr Bassili then completed his details and also signed the agreement on behalf of himself and his company, We Care Tours and Travel. Mr Bassili then informed him that "There are going to be additional drivers of the vehicle". Mr Still relied "Wheelies require that the additional drivers be noted on the hire agreement". Mr Bassili replied, "I don't know the full details of the additional drivers yet. Perhaps if you give me another hire agreement I can insert their details on the agreement". Mr Still then said to Mr Bassili "I will need to speak to Mr Scott Stevens at Wheelies to confirm that this is acceptable". After the phone call Mr Still said "that should be okay. I can give you another hire agreement to note the details of the additional drivers". (Aff, 7, 9 & 10). 14 The Magistrate stated: "8. The Plaintiff/Cross Defendant claims that the Defendant was made aware and agreed to a further agreement between itself and the Danish Tourists in accordance with hire agreement 15174 and that is why the blank hire agreement numbered 15174 was provided to him; I have no doubt that is what the Plaintiff/Cross Defendant had intended to happen but unfortunately for the Plaintiff this argument must fail for the following reasons: a. Hire agreement number 15174 does not name the Defendant/Cross Claimant as a party to the agreement with the Danish Tourists; and b. There is no supporting or corroborative documentation to support the Plaintiff's/Cross Defendant's contention that the Defendant/Cross Claimant had agreed to an agreement between itself and the Danish Tourists." 15 The Magistrate made a finding: "a. That there was no further agreement as maintained by the Plaintiff/Cross Defendant between the Defendant and the Danish Tourists the highest the hire agreement numbered 15174 can be taken is an annexure to agreement number 15173 which listed the additional drivers of the motor vehicle." Duty to give sufficient reasons 16 The duty of a judicial officer to give reasons for his or her decision is uncontroversial (see Pettitt v Dunkley (1971) 1 NSWLR 376; Housing Commission (NSW) v Tatmar Pastoral Co Pty Ltd (1983) 3 NSWLR 378 at 385–6 per Mahoney JA; Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247). The duty does not require the judicial officer to spell out in minute detail every step in the reasoning process or refer to every single piece of evidence. It is sufficient if the reasons adequately reveal the basis of the decision, expressing the specific findings that are critical to the determination of the proceedings (see Stoker v Adecco Gemvale Constructions Pty Ltd & Anor [2004] NSWCA 449 per Mason P, Sheller and Santow JJA; Gorczynski v Beilby [2005] NSWSC 884 Kirby J at [96-97]). To paraphrase, reasons should include firstly, the what, where and when of the matter; secondly, the evidence that goes to liability; thirdly, the findings on the evidence; and fourthly, an indication, where there is conflict, why some rather than other evidence is preferred. 17 In Jung v Son, NSWCA 18 December 1998, Stein JA stated: "While a judge does not have to state reasons for every aspect of the case, his reasons must be sufficient to satisfy the requirements of Pettitt v Dunkley [1971] 1 NSWLR 376. The reasons must be sufficient to enable an appellate tribunal to gain a proper understanding of the basis of the verdict. Not to do so is an error of law (Asprey JA at 382 and Moffitt JA at 388). Failure to give reasons also makes it impossible for an appellate tribunal to give effect to a plaintiff's right of appeal. Issues critical to the case, as these were, must be dealt with by reasons (Samuels JA in Mifsud v Campbell (1991) 21 NSWLR 725 at 728)." 18 In short, the judicial officer should make it clear what he or she is deciding and why. 19 As Mr Bassili, on his own evidence, admitted that he was the hirer of the vehicle, it was not necessary for the Magistrate to comment on the credibility of the witnesses' evidence. The issue in dispute was whether there were two agreements, one between Bassili and Wheelie and the other between the Danish tourist and Wheelies or alternatively, whether the second document merely furnished the names of the drivers. The Magistrate's reasons addressed this issue succinctly. In paragraph 18(a) The Magistrate stated that there was no further agreement and the second document merely listed the additional drivers. The Magistrate's reasons are sufficient. It was open to the Magistrate to come to the conclusion she did. There is no error of law. The Magistrate's reasons for breach of agreement 20 Paragraphs 3(a) and (b) of the terms and conditions of the agreement state: "3. Circumstances where the Vehicle must not be Used (a) Any area outside the Area of Use shown on Page1; (b) Any unsealed roads or off-road conditions unless authorised by the company in the Area of Use on Page 1; …" 21 In the agreement 15173, on the front page, under the heading "The area of use" it is expressed to be "Not Restricted". The same notation appears on document 15174. 22 The Magistrate made a finding: "b. That the voyager was driven in breach of the following term and condition of the hire agreement namely: "Circumstances where the Vehicle must not be used. (b) Any unsealed roads or off road conditions unless authorised by the company in the area of use on page 1." 23 The judgment makes no reference to Clause 3(b) of the agreement. However, Bassili has not discharged its onus of proof and demonstrated that Clause 3(b) was drawn to the Magistrate's attention. Wheelies submitted that it was not. There is some support for Wheelies' contention, as the notes of submissions made in the Local Court as recorded by the solicitor present for the Wheelies makes no reference to it. In any event, while the "Area of Use" was expressed to be "Not Restricted" on page one it does not necessarily follow that travelling on unsealed roads or off road conditions was authorised. The area of use was unrestricted. As the issue and argument concerning the interpretation of Clause 3(b) of the terms and conditions of the agreement was not raised before the Magistrate and, in my view, should not be litigated now. There has been no error of law. The excess sum of $500 24 Mr Bassili submitted that he was only liable for the amount of $500 which is expressed on the front page of the agreement to be "Collision damages/Loss liability". There was no pleading in the defence to the cross claim to this effect. 25 The evidence is that Bassili passed on the credit card details of the Danish tourist so that Wheelies could deduct $500 from that credit card. Wheelies did not do so. Bassili has not paid the sum of $500. 26 And Clause 5 of the agreement states: "5 General Provisions (a) If there is any incident involving loss or damage to the Vehicle or involving the Vehicle while rented under this Agreement, You and/or the Authorised Driver shall promptly report such incident to the Company at the location where the Vehicle was hired as well as delivering to the Company immediately upon receipt by You and/or the Authorised Driver, every summons, complaint or paper in relation to such incident involving such loss or damage. You and/or the Authorised Driver must also report all incidents to the police or other proper authority; (b) You and/or the Authorised Driver irrevocably release and hold harmless the Company (and its agents and employees) from all claims for loss or damage to your personal property, or that of any other person's property left in the vehicle, or which is received, handled or stored by the Company at any time before, during or after the rental period, whether due to the Company's negligence or otherwise; … (k) You and/or the Authorised Driver agree to indemnify the Company from and against any or all claims, demands, actions, liabilities, losses, costs and expenses (including, but not limited to legal costs on an indemnity basis) incurred by the Company as a consequence of the failure for whatever reason of the due and punctual performance of your obligations under this Agreement; (l) You acknowledge that the Company has not in any way represented itself to You as an entity carrying on the business of insurance." 27 The issue of liability being limited to $500 was not argued before the Magistrate. But even if it was, Bassili was still liable under Clause 5 of the agreement. Consequential loss 28 Finally, Bassili submitted that he was not liable for consequential loss. Once again, this was not raised in the pleading. The Magistrate in her judgment at paragraph 12 recorded that there was no dispute between the parties as to the costs of repair to the vehicle. The Magistrate accepted the evidence of loss assessor together with that of Mr Stevens. 29 Mr Steven's evidence was that: "The amount of money the company list (in addition to repair and towing costs) as a result of the vehicle having to be repaired due to the damage sustained in the collision on 16 February 2005, is calculated as follows: (a) Loss of income ($3,200.00 per month – the daily rate for the vehicle was approximately $140.00 - $150.00 per day with a utilisation rate of about 75% [vehicle was hired for about 20-25 days per month] for 2 months): $6,400.00 (b) Recovery of vehicle from Wyong: $500.00 (c) Total: $6,900.00 30 As the issue of the disallowance of the sum representing consequential loss was not raised at the hearing in the Local Court it was open to the Magistrate to include the sum of $6,900 in the assessment of damages. An appeal is not an opportunity for the losing party to re-run its case so that it may now be successful. The Magistrate gave sufficient reasons. There has been no error of law. The appeal fails. The decision of Her Honour Magistrate Freund dated 17 February 2006 is affirmed. The summons filed 17 March 2006 is dismissed. 31 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) The appeal is dismissed. (2) The decision of the Her Honour Magistrate Freund dated 17 February 2006 is affirmed. (3) The summons filed 17 March 2006 is dismissed. (4) 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. 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