Anderson v Buckley
[2006] TASSC 38
•29 May 2006
[2006] TASSC 38
CITATION: Anderson v Buckley [2006] TASSC 38
PARTIES: ANDERSON, Alan William
ANDERSON, Anne Sutherland
Trading as Caltex West Beach
v
BUCKLEY, Michael William
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: APPELLATE
FILE NO/S: LCA 7/2005
DELIVERED ON: 29 May 2006
DELIVERED AT: HOBART
HEARING DATE: 26 April 2006
JUDGMENT OF: Tennent J
CATCHWORDS:
Appeal and New Trial – Practice and procedure – Tasmania – Powers of court – Generally – Incorrect information provided to magistrate resulting in error in order.
Aust Dig Appeal and New Trial [388]
Procedure – Judgments and orders – Interest on judgments – Time from which interest runs – Entitlement to interest on long service leave.
Aust Dig Procedure [498]
Procedure – Costs – General rule – Costs follow the event.
Aust Dig Procedure [553]
REPRESENTATION:
Counsel:
Appellants: In Person
Respondent: G N McLean
Solicitors:
Appellants: In person
Respondent: McLean McKenzie & Topfer
Judgment Number: [2006] TASSC
Number of paragraphs: 35
Serial No 38/2006
File No LCA 7/2005
ALAN WILLIAM ANDERSON & ANNE SUTHERLAND ANDERSON
TRADING AS CALTEX WEST BEACH v MICHAEL WILLIAM BUCKLEY
REASONS FOR JUDGMENT TENNENT J
29 May 2006
The respondent to this appeal obtained a judgment on 14 September 2005 from a magistrate for an amount of $8,260 following a defended hearing. His claim related to a long service leave entitlement he said accrued as a consequence of his employment with the appellants.
On the same day the respondent's counsel made an application for costs. The appellants were present but unrepresented, and the application for costs was adjourned for a week. The transcript records that the learned magistrate had a discussion with Mr Anderson about costs and that he then adjourned the matter to 20 September to hear further submissions. The learned magistrate commented at the time that costs would usually follow the event.
On 20 September 2005, the appellants did not appear in court. The learned magistrate said:
"Well on the last occasion, this matter was listed before me last week um Mr McLean made an application for costs after I gave my decision. Ah the defendants indicated they opposed that and I adjourned it until today for argument. In my view um in this particular case, considering the defendants haven't even bothered to turn up, um costs will follow the event."
Grounds of appeal
The appellants then lodged a notice of appeal. The judgment amount included a component for long service leave and interest. The appeal raised three basic issues. These were:
-that the calculation which underpinned the amount ordered for long service leave was wrong and hence the amount ordered was wrong;
-that the appellants should not have had to pay interest beyond 15 December 2004 because they had tendered to the respondent the correct, or substantially correct, amount owed then; and
-they should not have had to pay costs because it had been unnecessary for the respondent to seek legal advice.
Background facts
The appellants purchased a service station business in 1993 from people by the name of Johnstone. The respondent had been employed by that previous owner and was then employed by the appellants. At the time of the sale of the business, the respondent was not legally entitled to pro rata long service leave. He only became entitled thereafter if the period of service with the former owner and the appellants was deemed continuous for the purpose of the relevant legislation.
The learned magistrate found that it was. As a consequence of that finding, the liability to pay long service leave, even though the respondent did not physically work for the appellants over the whole time it accrued, fell on the appellants.
First basis of appeal
At the commencement of the hearing of the appeal, counsel for the respondent conceded that the appeal must succeed in relation to this first issue. That concession arose out of the following.
The respondent pleaded in par5 of his claim that "In or about October 2000 the Claimant became entitled to 13 weeks long service leave". He then pleaded in par7 that "Pursuant to section 8(b)(i)(1) of the Award, the Claimant became entitled to payment of long service leave of $7001 …".
The appellants, by their defence, did not dispute either of these facts. What they did dispute was their liability to pay the whole of the amount. They maintained their responsibility was only to pay part of it. The learned magistrate was told that there was no dispute about the figure of $7,001 and he proceeded on that basis.
At the hearing of this appeal, the parties agreed that it was put to the learned magistrate that that figure of $7,001 was not in dispute and that it was the liability to pay which was in issue. They also agreed that that figure was wrong, but that the learned magistrate was not told that. It was agreed that the respondent's actual gross entitlement was $5,829.20 or $1,171.80 less than the figure put to the lower court.
Second basis of appeal
This related to interest on the amount awarded for long service leave.
The appellants submitted that on 15 December 2004 they tendered to the respondent a bank cheque for $4,641.42. The respondent refused to accept the cheque, saying it was not enough. The appellants submitted that the cheque represented the gross amount due to the respondent for his long service leave entitlement, less a deduction for tax which they were obliged by law to withhold and pay to the Australian Taxation Office. The amount, they argued, was more than the net amount after tax to which the respondent was actually entitled. In par1 of their notice of appeal, they set out some calculations to demonstrate this. There was no evidence led at trial about taxation liabilities and no concession from the respondent that the calculations in the notice of appeal were correct.
What underpins this argument is really what the appellants intended by the offer made to the respondent by that cheque. If it is accepted that the offer made by the appellants was as they now categorise it, then there may be merit in their appeal in relation to interest.
The letter said to have accompanied the cheque to the respondent, but of which he had no recollection, was said to say the following:
"Please find enclosed a bank cheque for the uncontested amount of $4641.42 owed for your time with us."
The cheque was tendered to the respondent on 15 December 2004, two days before the respondent's claim for a gross amount of $7,001 was lodged with the court. I believe I can infer from the material before me, because there is clear reference to pre-court negotiations, that the appellants were aware of the gross amount at that time being claimed, which they appear to have accepted.
The respondent contends that:
-at the hearing of this matter in the lower court, the appellants' position throughout was that they were not liable to pay the whole of the respondent's long service leave entitlement, whatever the figure was;
- the tender of 15 December 2004 was never intended to be a net after tax offer;
-it was not until the notice of appeal that the appellants suggested the amount tendered on 15 December was a net after tax figure and that the offer of $4,641.42 represented an offer of that amount plus tax.
In support of this contention, counsel for the respondent referred me to the notes attached to the appellants' defence of the claim. In that, the appellants had made reference to arrangements as between the respondent and Mrs Johnstone, the person from whom they had bought the service station business. Notes 2, 3, 5 and 7 of that defence provided:
"Note 2: The terms of employment for Mr Buckley (and others) was clearly 'without ongoing liability' which was achieved when Mr Buckley made an agreement with Mrs Johnstone (previous employer) that she invest his (and others) long service leave Pro Rata entitlement into a trust account. Mr Buckley was very happy with this arrangement, and he (and Mrs Johnstone) would not discuss particulars of the arrangement with us.
Note 3: We believe that although continuation of service was not broken – continuation of payment was. It is fact that Mr Buckley had, on his own accord, allowed Mrs Johnstone to invest his pre-earned Long Service Leave entitlement. Therefore he had received and accepted his payment for the duration of his employment with Mrs Johnstone, and we are not responsible for this portion of the payment.
Note 5: The amount owed by us was $4641.42, which included a 'top up' of the rate paid into trust by Mrs Johnstone.
Note 7: Over the last few months we have always said what we would do, and we have done just that, which is offer to pay Michael what we owe him from employment with us. But we have no ability to pay the large amounts mentioned, as the funds simply do not exist."
The letter the appellants said was sent to the respondent with their tendered cheque was attached to that defence when it was filed with the court.
The fact of the matter was that at the time of the sale of the business by Johnstone to the appellants, the respondent had no entitlement to pro rata long service leave and Johnstone had no obligation to provide for anything. Further, the suggested arrangement between Johnstone and the respondent whereby it was said Mrs Johnstone had put aside monies for the respondent and he had agreed to that being invested, was not conceded by him at the hearing, and no evidence, apart from the assertions made by the appellants, was produced as to its existence. As a consequence of the learned magistrate's finding, the entirety of the obligation fell on the appellants.
There can be no argument that the respondent was entitled to interest on whatever amount was determined as his long service leave entitlement. The only issue on this appeal is the period in respect of which that interest was ordered. The only reasonable interpretation of the appellants' offer of $4,641.42 to the respondent in December 2004, when regard is had to the notes to their defence and the manner in which they conducted their case before the learned magistrate, was that they only ever regarded themselves obligated to pay a proportion of the long service leave. They believed the rest of any entitlement was the responsibility of the respondent's previous employer and was covered by his arrangement with them. Their offer reflected that belief in the circumstances that the parties faced at the time, namely a claim for a gross amount of $7,001. That the December 2004 offer may now, with hindsight and knowledge that the actual gross long service leave entitlement is less, appear to represent almost the net after tax amount which was the whole entitlement, is coincidental.
In those circumstances there is no substance to this basis for the appeal.
Third basis for appeal
The appellants submitted that they should not be required to pay the costs of the proceedings in the lower court because, by reason of the course of negotiations which were earlier being undertaken through the Department of Employment, Industrial Relations and Training, the respondent had no need to go to a lawyer. This was more so, they said, because part of the respondent's then claim included one for holiday loading to which he was not entitled.
The appellants were also aggrieved by the fact they perceived the only reason the magistrate had ordered costs against them was that they did not appear on 20 September when costs were ordered. The appellants asserted at the hearing of this appeal that the learned magistrate spoke very softly and I infer they suggest they did not hear him say the date to which the argument about costs was adjourned. I do not accept that as a reasonable argument. The appellants had no difficulty before me in apparently hearing the proceedings. In any event, had they not heard what the learned magistrate had said, they could have asked him to repeat it. The transcript records no such request. There is also no indication the fact of the appellant's non-appearance necessarily impacted on the learned magistrate's decision.
The appellants also submitted that costs were increased by reason of the fact that another magistrate, whom I infer was initially tasked to hear the matter in the lower court, disqualified himself. Passing reference entirely unsupported by any fact as to this being due to some close connection between the magistrate and the respondent was made. If indeed that magistrate did know the respondent, it was entirely appropriate for him to disqualify himself. However, it does not follow that the appellants should have no obligation to pay costs.
The decision of the learned magistrate as to costs was that costs should follow the event. That was entirely appropriate. The hearing before him dealt principally with an issue of law and principle. The findings on those issues wholly favoured the respondent. Those findings have not been challenged. While it has since become apparent that the learned magistrate was misled as to the figures to which he should apply those principles, the underlying findings remain sound.
In those circumstances there is no demonstrated error in his ruling as to costs.
Conclusions
The appeal must succeed in part because the amounts ordered by the learned magistrate were wrong.
The findings made by the learned magistrate resulted in a judgment in the amount of $8,260 which represented the long service leave of $7,001, plus interest of $1,259, that being interest on the sum of $7,001 at 10 per cent for the period 28 November 2003 to 14 September 2005. Insofar as that judgment is concerned, it must be set aside.
As to the order for costs made on 20 September 2005, the appeal insofar as it relates to that must be dismissed.
Consequential orders
Both parties wish this matter to be finalised by this Court if possible, without its having to be sent back to the lower court. Counsel for the respondent tendered to the Court, with the appellant's consent, a copy of a letter sent by him to the appellants dated 14 November 2005. By that letter it was conceded that the correct gross long service leave entitlement was $5,829.20 as set out in the appellant's notice of appeal. By the same letter the solicitors for the respondent set out terms upon which they proposed the appeal be settled. Those terms were obviously not accepted by the appellants.
The taxation element of any payment clearly needs to be taken into account in any terms of judgment. However, I have no evidence nor any agreed fact as to the taxation liability on the agreed long service leave payment.
In those circumstances, I propose the following consequential orders. These accord with the findings I have made that the orders as to the principal sum and interest to be paid are set aside, that the appellants have an obligation to pay interest in terms of the learned magistrate's ruling subject to the calculations being correct, and the order relating to costs is to stand.
Proposed orders
That judgment be entered in favour of the respondent against the appellants as follows:
1That the appellants pay to the respondent in satisfaction of his claim for long service leave, the sum of $5,829.20.
2That the obligation of the appellants, pursuant to order 1, be satisfied by their paying to the Australian Taxation Office and the solicitors for the respondent, such amounts which in total equal $5,829.20 and represent:
-to the Australian Taxation Office such amount as is equal to the tax which the appellants would be required in the normal course of the making of such a long service leave payment to withhold in respect of such payment and pay to the Australian Taxation Office, and
-the balance to the solicitors for the respondent.
3That the appellants pay to the respondent interest on the sum of $5,829.20 at the rate of 10 per cent from 28 November 2003 to the date of payment of the amounts required to be paid pursuant to order 2 herein.
4That there be liberty to apply in relation to the calculation of the relevant amounts provided for in orders 2 and 3 herein in the event the parties are unable to agree them.
5That the appellants pay the costs of and incidental to this appeal from 14 November 2005.
There has been an application that I certify that this matter required the attendance of counsel. I do not so certify. The proposed order for costs reflects that an offer to compromise the appeal was made on 14 November 2005.
Interim orders
1 That the judgment of the learned magistrate Mr T Hill entered 14 September 2005 be set aside.
2That the appeal, insofar as it relates to the order for costs made 20 September 2005, be dismissed.
3That the parties have liberty to apply within 30 days as to the terms of the proposed orders above.
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