American Foods v Beson
[2000] NSWSC 535
•21 June 2000
CITATION: American Foods v Beson [2000] NSWSC 535 CURRENT JURISDICTION: Common Law Division FILE NUMBER(S): SC 10618 of 1999 HEARING DATE(S): 27/09/1999 JUDGMENT DATE: 21 June 2000 PARTIES :
American Foods Pty Limited (appellant)
Robert Bruce Beson (respondent)JUDGMENT OF: Hidden J at 1
LOWER COURT
JURISDICTION :Local Court LOWER COURT
FILE NUMBER(S) :118737/1992 LOWER COURT
JUDICIAL OFFICER :R Gentle LCM
COUNSEL : P R Glissan (appellant)
M Hodges (solicitor for respondent)SOLICITORS: Mr John Cunningham (appellant)
Mark Hodges (respondent)CATCHWORDS: LOCAL COURT - Civil Claim - stated case LEGISLATION CITED: Limitation Act 1969
Local Courts (Civil Claims) RulesCASES CITED: Dare v Pulham (1982) 148 CLR 658
Polymedia Presentations Pty Ltd Weaver (Grove J unreported 13 December 1996)DECISION: See pars 12 and 19. Further contention may yet be argued.
THE SUPREME COURT
HIDDEN J
OF NEW SOUTH WALES
COMMON LAW DIVISION
Wednesday, 21 June 200010618 of 1999 American Foods Pty Ltd v Robert Bruce Beson
Reasons for judgment
1 HIS HONOUR: This is an appeal by way of stated case from the decision of a Local Court magistrate in a civil claim. It is convenient to refer to the parties in this Court as the appellant and the respondent. The history of the proceedings in the Local Court is as confused as it is protracted. I shall recount only as much of it as is necessary to determine the appeal.
2 At the relevant time the respondent, Robert Bruce Beson, was a director of the appellant, American Foods Pty Ltd. In late 1987 he travelled to America in connection with the company’s business. He was accompanied by his wife and children. While in that country, he used an American Express card to pay for expenses totalling in excess of $17,000.
3 On 8 September 1992 American Express International Inc commenced proceedings in the Local Court against the respondent to recover that amount. The respondent filed a defence to that claim. In addition, on 24 October 1994 he filed a third party notice seeking from the appellant contribution towards, or indemnity for, any judgment which American Express might recover against him. However, before the proceedings came on for hearing, the claim against him by American Express was settled.
4 The third party proceedings were pursued, and in the course of them several further procedural steps were taken which it will be necessary to examine. It is from the learned magistrate’s decision in those proceedings that this appeal is brought.
5 The third party notice to which I have referred alleged that on or about 23 December 1987 the appellant agreed to be liable for the expenses incurred by the respondent, his wife and children in travelling to America, and to reimburse the respondent for those expenses. On 8 November 1994 the appellant filed a defence to the third party claim, denying any such agreement. Commencing in February 1996, the hearing continued from time to time over the ensuing two years. It was not until 12 March 1998 that his Worship gave judgment.
6 On 21 February 1997, by leave, the respondent filed an amended third party notice. That document maintained a claim based upon the alleged agreement of 23 December 1987, but added an alternative claim for reimbursement said to arise from a provision in the appellant’s Memorandum and Articles of Association. At about this time the appellant parted company with its legal representatives, and it remained unrepresented throughout the rest of the proceedings in the Local Court. On 20 March 1997 it filed a defence to the amended third party notice, traversing both claims. On 26 May 1997 it sought leave to file an amended defence, including a defence under the Limitation Act 1969. The fate of that application for leave and the ambit of the defence under the Limitation Act are matters which I must determine in this appeal and I shall return to them.
7 In his judgment of 12 March 1988 the learned magistrate found for the respondent, substantially on the basis of the original claim. He found that the appellant had authorised the respondent’s trip to America for the purpose of its business, and at its expense, and that it had approved in advance all travelling and other expenses properly incurred by the respondent for that purpose. However, he also found that that approval did not extend to expenses relating to the respondent’s wife and children. Excluding those expenses, and certain other items which were found not to be connected with the appellant’s business, his Worship determined that the respondent was entitled to a verdict for a little over $12,000.
The appeal
8 It was contended in this Court that the learned magistrate had fallen into error in four respects. Firstly, it was said that the respondent was given judgment upon the basis of an agreement which was not pleaded in the amended third party notice. The agreement alleged was that the appellant was to cover the expenses of the respondent, his wife and children. No other agreement was pleaded. Notwithstanding this, his Worship found an agreement in respect of the respondent but not his wife and children.
9 In this Court the appellant was represented by Mr Paul Glissan of counsel, and it should be understood that neither he nor his instructing solicitor were involved in the Local Court proceedings at any stage. On the other hand, Mr Mark Hodges, solicitor, who appeared in this Court for the respondent also represented him in the court below. The course which the hearing before the magistrate took is not always easy to determine from such transcript as has been supplied to me, and in this regard I have found Mr Hodges’ personal knowledge of the conduct of the case helpful.
10 The difficulty with this first contention is that, from the outset, the case appears to have been conducted on the basis that the claim for expenses for the respondent’s wife and children was severable. The grounds of defence, both in their original and amended forms, were drawn accordingly. It appears that some of the oral evidence was directed to that issue, including a consideration of the extent to which the claim should be reduced if the expenses for the wife and children were found not to have been properly incurred. The matter was addressed in final submissions to the magistrate.
11 Part 26, rule 1 of the Local Courts (Civil Claims) Rules provides:
1. The court may, at any stage of any proceedings, on the application of any party, give such judgment or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim extending to that judgment or order in any originating process.
This appears to be in conformity with the modern approach at common law to pleadings and particulars, and the recognition that a judgment might be founded upon evidence which departs from them: Dare v Pulham (1982) 148 CLR 658 at 664.
12 This is not a case where a decision was based upon a matter which had not been litigated between the parties: cf Polymedia Presentations Pty Ltd v Weaver (Grove J, unreported 13 December 1996). The appellant can hardly be heard to complain when the decision was arrived at on evidence before his Worship and accorded with the manner in which the case was conducted. The first contention fails.
13 The second and third contentions are related. It is said that his Worship did not deal with the application for leave to rely upon the Limitation Act in the amended defence of 26 May 1997, or that he failed to consider and determine that ground of defence, in either event denying the appellant natural justice. Further, it is said that the ground of defence must have succeeded, so that the appellant is entitled to judgment in its favour.
14 The respondent’s answer to this is that the defence under the LimitationAct was pleaded only in respect of the alternative claim in the amended third party notice based upon the Memorandum and Articles of Association. His Worship did not decide that claim, as he gave judgment to the respondent on the basis of the original claim arising from the agreement of 23 December 1987. Accordingly, he did not determine the application for leave to rely upon the Limitation Act because there was no need to do so.
15 The paragraph of the amended defence raising the Limitation Act was expressed to be “as to the defendant’s amended Statement of Claim filed in Court on 21 February 1997”. It is clear that “the defendant” referred to is the present respondent and the “Statement of Claim” is the amended third party notice. Mr Glissan argued that the defence was drawn so as to embrace both the original and the alternative claims in that third party notice. He took me to passages in the transcript which suggest that his Worship and the parties were treating the two claims as effectively one cause of action. It is clear that his Worship did not expressly deal with the application to rely on the defence. However, Mr Glissan referred me to other passages of the transcript which are somewhat ambiguous, but which could convey that his Worship had granted that leave on the basis that the merit of the defence would be argued in due course.
16 The difficulty which the appellant faces is that the stated case asserts that judgment was given on the basis of the original claim and that his Worship did not determine the application for leave to file the defence. This is consistent with the respondent’s view of the matter and it is here, in particular, that I have been assisted by Mr Hodges’ first-hand knowledge of what occurred.
17 He explained that in the ambiguous passages of transcript to which I have referred his Worship was deferring to later in the hearing the question whether leave to rely upon the Limitation Act should be granted, not whether the defence was made out. Ultimately, he did not determine the question of leave because it was unnecessary. I received in evidence copies of written submissions furnished by the parties in the Local Court: the appellant’s submissions on an application that the third party notice be struck out and the final submissions of both parties at the close of the evidence. Obviously, the strike-out motion did not succeed but, again, it does not appear that his Worship made any formal order disposing of it.
18 It is sufficiently clear from those written submissions, including the appellant’s submissions in reply to the final submissions of the respondent, that the appellant raised the Limitation Act only in defence of the alternative claim based on the Memorandum and Articles. This may well be because it was sought to add that claim at such a late stage. Certainly, it is significant that no submission was addressed to the dates relevant to establishing the defence in relation to the original claim based on the agreement of December 1987: in particular, the date of the alleged breach.
19 Although the amended defence appears to have been drawn by someone with legal knowledge, I am mindful of the fact that the appellant was unrepresented at this stage of the proceedings in the Local Court. If a defence under the Limitation Act had been pursued in respect of the original claim in the third party notice, it may well have succeeded. However, once again, I must determine this appeal in the light of the manner in which the case was conducted. The second and third contentions also fail.
20 The fourth contention challenges that part of his Worship’s judgment dealing with the reduction of the amount claimed by the respondent after excluding expenses referable to his wife and children. It was accepted by the parties that this could not be argued without my being supplied with the entire transcript of the proceedings in the Local Court, which is voluminous and would be quite expensive. The matter was left on the basis that I would decide the first three contentions, because the appellant would not need to pursue the fourth contention if it succeeded on any of those. As it has not, the appellant must now decide what course it wishes to take. I shall not make any formal order disposing of the appeal at this stage.**********
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