Australian Document Exchange Pty Ltd (ACN 000 817 621) v Judith Anne Bell t/as Envirofriend Steam Cleaning Service

[2000] NSWCA 306

CITATION:	Australian Document Exchange Pty Ltd (ACN 000 817 621) v Judith Anne Bell t/as Envirofriend Steam Cleaning Service [2000] NSWCA 306
FILE NUMBER(S):	CA 40148/99
HEARING DATE(S):	26 October 2000
JUDGMENT DATE:	26 October 2000
PARTIES :	Australian Document Exchange Pty Ltd (ACN 000 817 621) (Appellant) Judith Anne Bell t/as Envirofriend Steam Cleaning Service (Respondent)
JUDGMENT OF:	Stein JA at 1; Heydon JA at 32; Davies AJA at 33

LOWER COURT JURISDICTION :	District Court
LOWER COURT FILE NUMBER(S) :	DC 9999/97
LOWER COURT JUDICIAL OFFICER :	Seery ADCJ

COUNSEL:	R E Dubler (Appellant) A Radojev (Respondent)
SOLICITORS:	Deacons Graham & James (Appellant) Ennis, Smith & Bradbury (Respondent)
CATCHWORDS:	CONTRACT - damages - whether payment made pursuant to agreement made at compulsory conference - whether payment to be credited against damages - ND
DECISION:	Appeal allowed with costs; Respondent to receive a certificate under the Suitors' Fund Act if otherwise entitled; The Judgment and Verdict of Seery ADCJ be set aside and in substitution therefor, a verdict be entered for the appellant (defendant) with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40148/99
DC 9999/97
STEIN JA
HEYDON JA
DAVIES AJA

Thursday, 26 October 2000

AUSTRALIAN DOCUMENT EXCHANGE PTY LTD (ACN 000 817 621) v Judith Anne BELL (t/as ENVIROFRIEND STEAM CLEANING SERVICE)
JUDGMENT

1    STEIN JA: This is an appeal from a judgment and verdict entered by Seery ADCJ for the respondent, Ms Judith Anne Bell, against the appellant, the Australian Document Exchange Pty Ltd, in the sum of $20,800. 2    On 21 June 1999 the court granted leave to appeal limited to certain grounds. In particular, the appellant was not given leave to appeal against the finding of his Honour that there was a contract between the appellant and the respondent, upon which the respondent sued for damages for breach by the appellant. 3    The grounds of appeal were limited to:

1. Whether the parties had reached an agreement to settle their dispute at a compulsory conference in the Industrial Commission?

2. His Honour’s exclusion of certain evidence relating to the conference proceedings.

3. Whether the respondent ratified the settlement agreement allegedly entered into on her behalf by Mr Purcell at the conference?

4. Whether, in any event, moneys paid by the appellant to the respondent should be taken into account in assessing the respondent’s damages?

5. Whether there was any adequate evidence (or reasons given by his Honour) to ground an award of $10,000 in relation to the purchase of vehicles and equipment to be used under the contract.

6. The findings by his Honour of breaches of the Trade Practices Act 1974 without giving adequate reasons.

4    His Honour found that in November 1994 the appellant and the respondent entered into a contract for DX line haulage services between Batemans Bay and Sydney. This involved the carriage of letters and parcels by motor vehicle. The arrangement was that Mr Noel Purcell, the de facto husband of the respondent, would be the driver under the contract. He was employed by the respondent in her business, Envirofriend Steam Cleaning Service. According to the respondent (and Mr Purcell) the arrangement was for ‘tax purposes’. 5    His Honour found that the appellant had breached the contract by prematurely terminating it. It appears that his Honour accepted that it was an implied term in the contract that it may be determined on the giving of reasonable notice. With regard to damages, his Honour found that the respondent made a nett profit of $900 per month under the contract and that 12 months would have been a reasonable period of time for the giving of notice to terminate the contract. Accordingly, 12 months loss of profits amounted to $10,800. 6    The respondent also claimed the sum of $25,258 for moneys expended on the purchase of vehicles and equipment for the business. His Honour accepted that the termination of the contract had caused some loss to the respondent, which he assessed at $10,000. 7    His Honour went on to find that the appellant had breached various sections of the Trade Practices Act but did not award any damages under s 82 because the respondent had no additional damage under the Act to that which he assessed at common law.

Grounds 1, 2 and 3

8    As to the first ground of appeal, his Honour found that the respondent was never represented by Mr Purcell at the compulsory conference because she was not a union member. It followed, according to his Honour, that there never was an agreement by the respondent to accept a sum of money in satisfaction of any rights that she may have had under the contract for its premature termination. 9    It appears that on 1 May 1997 the appellant wrote letters to four contractors, including ‘Noel Purcell, Envirofriend’, purporting to terminate their services as of 30 May 1997 and offering a 4 week ex-gratia payment as a termination package. It seems that there were four other contractors involved who were from Dubbo, Wagga Wagga, Port Macquarie and Werris Creek. 10    Solicitors acting on behalf of the respondent and Mr Purcell wrote to the appellant rejecting the offer contained in the letter of 1 May 1997 and threatened legal proceedings. 11    Thereafter the drivers (including Mr Purcell) commenced industrial action by attempting to picket or blockade the appellant’s Sydney premises. As a result of action by the union, an industrial advocate, Mr Peter Rochfort, notified a dispute to the Industrial Commission on behalf of the appellant on 28 May 1997. The parties to the notification were the appellant, the Transport Workers Union of Australia (NSW Branch) and the contract carriers listed in the schedule. These were four in number, being the same persons to whom the letters of 1 May 1997 was addressed by the appellant. One of them was ‘Noel Purcell, Envirofriend Steam Cleaning Services’. The schedule did not include reference to Mr Vella of Werris Creek, who was not a union member. 12    The transcript of the compulsory conference before Peterson J on 28 May 1997 was before the District Court at the trial. It was noted that Mr R Mayell and Mr N Purcell appeared for the Union. The 8 pages of transcript reveal a discussion between the parties and his Honour about the dispute and its possible resolution. From the last page it is apparent that the conference adjourned into a private conference between the parties. Thereafter the parties returned to Peterson J and indicated that the dispute was all but settled. 13    On that same day, 29 May 1997, the appellant paid the sum of $14,185.81 into the respondent’s bank account. On 12 June 1997 the appellant wrote to Mr Purcell and to the respondent enclosing a number of documents. These included a reference ‘as agreed’ for Mr Purcell; a Deed of Release, to be signed and returned; details of the ‘Final Payment’ and a copy of a bank receipt relating to the payment of $14,185.81. The Deed of Release was never signed by Mr Purcell or the respondent. The details of the final payment sheet comprised three components. First, a payment for work up to 30 May 1997 of $3,086.56. Second, a telephone allowance of $24 and lastly, the sum of $11,075.25 for ‘Service Component (as agreed)’. 14    On 9 December 1997, the respondent issued a Statement of Claim in the District Court against the appellant seeking damages for breach of contract and breaches of the Trade Practices Act. 15    It is the submission on behalf of the appellant by Mr Dubler that there was an agreement reached at the compulsory conference on 28 May 1997 between the appellant and Mr Purcell, as agent for the respondent, that she would accept the sum of $14,185.81 in exchange for any rights she might have under the contract relating to the appellant’s termination of it. 16    As I have mentioned, his Honour accepted Mr Purcell’s evidence that he did not represent the respondent at the conference and that he could not do so because she was not a union member. His part in the conference was to represent the union drivers. The finding is difficult to reconcile with the respondent’s evidence that her de facto husband, Mr Purcell, was acting on her behalf at the compulsory conference, see for example Black AB 39 and 42. The respondent also accepted that, as a result of the negotiations in the Industrial Commission, an amount of approximately $14,000 was deposited into her bank account by the appellant. However, she said that she did not accept that money as damages for the appellant’s breach of contract. It was, she said ‘part of our pay’. 17    Unfortunately, his Honour does not appear to deal with this evidence and its possible inconsistency with Mr Purcell’s. Moreover, his Honour clearly accepted the evidence of both the respondent and Mr Purcell, whom he said were making an honest attempt to give accurate evidence. To the contrary, he was not impressed by the evidence of Mr Whitney, the principal witness for the appellant. 18    There is some difficulty in determining precisely the answer to this ground of appeal but, because of our view on the issues of damages involved in the appeal, it is unnecessary to determine. The same may be said in relation to grounds 2 and 3 which the appellant concedes really run with ground 1.

Ground 4

19    This brings me to the fourth ground of appeal which maintains that his Honour was in error in not giving credit to the appellant for the moneys it paid to the respondent, when he assessed the damages to which she was entitled. 20    In giving reasons for judgment on this issue his Honour said:

I am also of the view that this figure [$10,800 for damages for loss of profits] is reasonable even though the plaintiff has already received $10,000 from the defendant subsequent to the industrial dispute, and despite the fact that such payment was a gratuitous payment on the part of Ausdoc and not subject to any agreement between the parties.

21    It may be observed that his Honour referred to the receipt of the sum of $10,000 and not $14,185 by the respondent. The reason for this appears from the transcript of evidence of Mr Purcell. Mr Purcell explained that of the sum of $14,000 odd placed into the respondent’s bank account, around $4,000 was for the work performed under the contract for the fortnight up to 28 May 1997. The balance, around $10,000, was that which was agreed to by the other drivers at the conference and also paid to non-union members at the insistence of the appellant. 22    His Honour then intervened in the cross-examination saying that the relevant amount paid in respect of the post termination date was therefore $10,000. Counsel then appearing for the appellant seemed to accept this as a correct interpretation of the situation. 23    The document of the appellant detailing how the final payment of $14,185.81 was made up tends to confirm this approach. It shows that $3,086.56 was paid for work up to 30 May 1997, the date of termination of the contract. As mentioned earlier, the document then contains a reference to ‘service component (as agreed)’ of $11,075.25. 24    What is apparent is that the respondent received the sum of $11,075.25 over and above payments received under the contract to 30 May 1997 when it was terminated. Accordingly, the sum of $11,075.25 must have been paid for or towards any compensation that the respondent may be entitled for the early termination of the contract by the appellant. In my opinion, credit must be given to the appellant for this sum when assessing any damages for breach of contract to which the respondent is entitled. 25    It is plain that his Honour did not do this. His Honour calculated the entitlement of the respondent to damages on the basis of 12 months loss of profit, which period he found to be a reasonable period for the giving of notice to terminate. His Honour found that a figure of $900 per month nett profit was appropriate and awarded $10,800 for one year’s loss of profit. His Honour arrived at this figure by reference to the respondent’s taxation returns. 26    In my opinion the appellant was entitled to the credit, whether it be for $11,075 or $10,000. However, the former figure is the more appropriate one, being a precise calculation rather than Mr Purcell’s estimate given in evidence. The sum more than cancels out the award of $10,800. If credit is not given, there is double recovery. It cannot be suggested that the payment was intended as a gift.

Ground 5

27    The next ground of appeal concerns his Honour’s award of $10,000 referable to the vehicles and equipment purchased in order to perform the contract. In this regard his Honour said:

In addition to a claim for loss of profits, the plaintiff claims for amounts expended in the purchase of vehicles and equipment totalling $25,258.00. Oral evidence was given by Noel Purcell as to the cost of various items in a very imprecise way and unsupported by any documentation. In attempting to do the best I can in assessing what might be the loss suffered by the plaintiff in such purchases, I take into account the fact that the vehicles and equipment have been used for approximately four years and probably have very little value if sold on the open market. Undoubtedly this has caused some loss to the plaintiff and I assess damage under this head in the sum of $10,000.00.

28    I have difficulty in understanding this statement. The respondent claimed $25,258 for the cost of vehicles and equipment. They had been used for the 2 1/2 years that the contract was afoot and it should be noted that his Honour was in error in referring to 4 years in the quotation above. One vehicle was acquired before the contract commenced. The items were not disposed of at the end of the contract. Any depreciation in value over the period the contract ran would more than likely be taken into account in the payments made under the contract over that time and the evidence appears to support this analysis. 29    As his Honour observed, there was no acceptable evidence of the claim of $25,258. The only relevant evidence was from Mr Purcell, which his Honour described as ‘very imprecise’ and ‘unsupported by any documentation’. His Honour was prepared, it seems, to make a stab in the dark. I do not see that the state of the evidence entitled him to do so. The respondent carried an onus to prove her entitlement to damages and she failed to make out a case for damages for the price of the purchase of vehicles and equipment or their depreciation. In any event, I have real difficulty in understanding how she would be entitled to damages under this head. It is fair to say that counsel for the respondent did not really attempt to support this aspect of his Honour’s award.

Ground 6

30    I turn therefore to the last ground concerning his Honour’s finding of breaches of the Trade Practices Act. His Honour gave no reasons for these findings, probably because he saw it as academic in that it would have added no damages to the award for breach of contract. Indeed, his Honour said so specifically. I agree with the submission of counsel for the appellant that since the existence of the contract and its breach is not challenged and no Notice of Contention has been filed suggesting any different damages for any statutory breach, the issue raised may be irrelevant. In the submissions made on behalf of the respondent by Mr Radojev, it is suggested that if his Honour erred in the award of damages for breaches of contract, the matter ought be remitted to the District Court to determine damage for breach of the Trade Practices Act. In light of my findings about the appellant’s entitlement to the credit of $11,075 and the respondent’s failure to prove any entitlement to damage otherwise for breach of contract, such an order would be futile if not mischievous.

Orders

31    In my opinion, the following orders should be made:

1. Appeal allowed with costs.

2. Respondent to receive a certificate under the Suitors’ Fund Act if otherwise entitled.

3. The Judgment and Verdict of Seery ADCJ be set aside and in substitution therefor, a verdict be entered for the appellant (defendant) with costs.

32    HEYDON JA: I agree with Stein JA. 33    DAVIES AJA: I agree with Stein JA. 34    STEIN JA: Accordingly, the orders of the court are as I have just announced.

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