Cosmetic Equipment Company Pty Ltd v Forrest - [2008] SASC 144

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
COSMETIC EQUIPMENT COMPANY PTY LTD v FORREST
[2008] SASC 144
Judgment of The Honourable Justice White
29 May 2008
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW - IN GENERAL
EVIDENCE - BURDEN OF PROOF, PRESUMPTIONS, AND WEIGHT AND SUFFICIENCY OF EVIDENCE - GENERALLY - SUFFICIENCY
EVIDENCE - WITNESSES - CROSS-EXAMINATION - WHEN PERMITTED AND IN GENERAL
Appeal against judgment of magistrate dismissing a claim for moneys alleged to be owed under a contract of sale - magistrate found no contract for sale existed - whether defendant's departure from pleaded case at trial led to a denial of procedural fairness - whether breaches of the rule in Browne v Dunn by the defendant at trial led to a denial of procedural fairness - whether magistrate erred in not entering judgment for the plaintiff following his rejection of the defendant's pleaded case - whether magistrate's findings were open on the evidence - whether magistrate erred in allowing the defendant to adduce evidence alleged to be contrary to an admission made in response to a Notice to Admit - whether trial miscarried such that a re-trial should be ordered.
Held: appeal dismissed - plaintiff afforded sufficient opportunity to cross-examine the defendant and her witness - departure by the defendant from her pleaded case did not result in procedural unfairness to the plaintiff - breaches by the defendant of the rule in Browne v Dunn did not result in unfairness such that the trial miscarried - magistrate's findings of fact open on the evidence - no error demonstrated in magistrate's approach to admissions made in response to Notice to Admit - no miscarriage demonstrated - no grounds established for interference with judgment of magistrate.
Magistrates Court (Civil) Rules 1992 (SA) s 76; Butterworths, Cross on Evidence: Australian Edition, vol 1, referred to.
Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1990) 169 CLR 279; Gould v Mount Oxide Mines Ltd (In Liq) (1916) 22 CLR 490; Bulstrode v Trimble [1970] VR 840, applied.
Fox v Percy (2003) 214 CLR 118, distinguished.
Browne v Dunn (1894) 6 R 67; Williams v Australian Telecommunications Commission (1988) 52 SASR 215; Allied Pastoral Holdings Pty Ltd v Federal Commissioner for Taxation (1983) 1 NSWLR 1; Karidis v General Motors-Holdens Pty Ltd [1971] SASR 422; O'Keefe v Australian Trencher Company Pty Ltd (1991) 56 SASR 370, discussed.
Marini v MLH Insurance Brokers Pty Ltd (2004) 237 LSJS 288; Whitlam v Australian Securities and Investments Commission (2003) 57 NSWLR 559; Dare v Pulham (1982) 148 CLR 658; Vines v Australian Securities and Investments Commission (2007) 62 ACSR; Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666; Water Board v Moustakas (1988) 180 CLR 491; Suvaal v Cessnock City Council (2003) 200 ALR 1; Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88; Crosthwaite v City of Elizabeth (1989) 51 SASR 105; Linke v Linke [1995] SASC 5201; Seymour v Australian Broadcasting Commission (1990) 19 NSWLR 219; R v Calides (1983) 34 SASR 355; Zadko v Hilton International [1996] SASC 5478; R v Popescu (1989) 39 A Crim R 137, considered.

COSMETIC EQUIPMENT COMPANY PTY LTD v FORREST
[2008] SASC 144
Magistrates Appeal:

WHITE J: The iPulse i200 System is a portable item of laser equipment used in hair removal and skin treatment in beauty salons.
The appellant (plaintiff) sued the respondent (defendant) in the Magistrates Court for the balance of the contract price said to be due on the sale of an iPulse (the iPulse). It also sought certain declarations as to the ownership of the iPulse. The plaintiff’s claim was that in late June 2005 it had agreed to sell an iPulse to the defendant for a price of $38,500. That purchase price was to be paid in two instalments: an initial instalment of $18,000 and a later instalment of $20,500. The defendant had paid the former but not the latter.
The defendant’s filed defence denied the existence of any contract between the plaintiff and her for the sale and purchase of the iPulse. It asserted that the defendant had purchased the iPulse directly from the wholesale supplier. However, the defendant did not seek to support that defence in her evidence at trial. Instead, she asserted that a joint venture between herself and Ms Tanya Viscariello had purchased the iPulse and had used it for a period of about two and a half months in a business conducted by the joint venture.
The magistrate dismissed the plaintiff’s claim. He accepted, in effect, that the arrangements asserted by the defendant in her evidence had existed. The magistrate found that the iPulse had not been purchased by the plaintiff so that it could have been on-sold to the defendant.
The plaintiff appeals against that decision.
Issues on the Appeal
The plaintiff’s Notice of Appeal is somewhat prolix but not all matters raised in it were pursued. The appellant confined itself to the matters raised in paragraphs 1A to 1E inclusive, 3, 9.1 and 10 of the Amended Notice of Appeal filed on 14 February 2008.
The issues for determination on the appeal are these:
(a)Was there a denial of procedural fairness in that the magistrate made findings based upon the case advanced by the defendant at trial, which case departed from that which she had pleaded? This issue involves the subsidiary question of whether the plaintiff had an opportunity to address the different case advanced by the defendant.
(b)Whether the defendant’s breaches of the rule in Browne v Dunn[1] meant that her case at trial should not have been accepted or, at least, that the trial was procedurally unfair.
(c)Did the magistrate’s rejection of the defendant’s pleaded case have the consequence that judgment should have been entered for the plaintiff?
(d)Did the magistrate make findings which were not open at all on the evidence?
(e)Should this Court, on appeal, set aside findings made by the magistrate which were based, in part, on the magistrate’s assessment of the credibility and reliability of the witnesses at trial?
(f)Should the magistrate have permitted the defendant to depart, in effect, from her response to the plaintiff’s Notice to Admit?
(g)Do the above matters in combination indicate that the trial miscarried or that the magistrate’s decision should be set aside and a new trial ordered?
Was There a Denial of Procedural Fairness?
[1] (1894) 6 R 67.
The Denial of Procedural Fairness Alleged
The plaintiff submitted that it was denied procedural fairness because the magistrate based his findings on matters which had not been pleaded and, it was said, on matters upon which it had not had an opportunity to address in evidence. As part of that submission the plaintiff referred to the failure of the defendant to act on an invitation, made by the magistrate before the closing of addresses at trial, that she amend her pleadings to reflect the evidence concerning the joint venture arrangement.
A Departure from the Pleaded Case : Principles
The role of pleadings in defining the issues for determination at a trial is well established. They serve an important role in ensuring that trials are conducted in a way which is procedurally fair. In Banque Commerciale SA (In Liq) v Akhil Holdings Ltd[2] Mason CJ and Gaudron J said:
The function of pleadings is to state with sufficient clarity the case that must be met … In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness. (Citations omitted)[3]
[2] (1990) 169 CLR 279.
[3] Ibid at 286.
The statement by King CJ in Williams v Australian Telecommunications Commission[4] is to similar effect.
The fundamental purpose of pleadings is to provide a structure or framework for the litigation designed to promote a just outcome. Pleadings achieve this purpose by performing two basic functions. The first is to define the issues between the parties thereby providing the basis for the determination of questions as to discovery before trial and admissibility of evidence at trial and of questions as to what the litigation has decided for the purposes of the Rules as to res judicata and issue estoppel. The second function is to give to the parties fair notice of the case to be made against them at trial thereby minimising the risk of injustice resulting from surprise.[5]
[4] (1988) 52 SASR 215.
[5] Ibid at 216. See also Marini v MLH Insurance Brokers Pty Ltd [2004] SASC 400 at [13]; (2004) 237 LSJS 288 at 292 per Besanko J; Whitlam v Australian Securities and Investments Commission [2003] NSWCA 183 at [164]; (2003) 57 NSWLR 559 at 603.
Nevertheless, it is not every departure from the pleaded case which will result in a denial of procedural fairness. There are cases in which the parties disregard the pleadings and choose to fight the case on issues not raised by the pleadings. In Banque Commerciale Brennan J said:
When the pleadings bring the parties to the issue, the court’s function is to determine that issue and to grant relief founded on the pleadings unless the parties are allowed to alter the issues at the trial without amendment of the pleadings … The rule is clearly laid down in the judgment of this Court in Dare v Pulham:
Apart from cases where the parties choose to disregard the pleadings and to fight the case on issues chosen at the trial, the relief which may be granted to a party must be founded on the pleadings … .[6] (Citations omitted) (Emphasis added)
The relevant principle was stated by Isaacs and Rich JJ in Gould v Mount Oxide Mines Ltd (In Liq):[7]
Undoubtedly, as a general rule of fair play, and one resting on the fundamental principle that no man ought to be put to loss without having a proper opportunity of meeting the case against him, pleadings should state with sufficient clearness the case of the party whose averments they are. That is their function. Their function is discharged when the case is presented with reasonable clearness. Any want of clearness can be cured by amendment or particulars. But pleadings are only a means to an end, and if the parties in fighting their legal battles choose to restrict them, or to enlarge them, or to disregard them and meet each other on issues fairly fought out, it is impossible for either of them to hark back to the pleadings and treat them as governing the area of contest.[8] (Emphasis added)
[6] Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1991) 169 CLR 279 at 288.
[7] (1916) 22 CLR 490.
[8] Ibid at 517. See also Dare v Pulham (1982) 148 CLR 658 at 664; Banque Commerciale SA (In Liq) v Akhil Holdings Ltd (1990) 169 CLR 279 at 288 per Brennan J; Vines v Australian Securities and Investments Commission [2007] NSWCA 75 at [42]-[44]; (2007) 62 ACSR 1 at 14-15.
Finally, it has been held that a failure to amend particulars to accord precisely with the facts which have emerged in the course of the evidence does not necessarily preclude a party from seeking a verdict in reliance upon the facts actually established by the evidence.[9] This can only happen of course if the departure from the pleaded case does not involve procedural unfairness.[10]
[9] Dare v Pulham (1982) 148 CLR 658 at 664; Leotta v Public Transport Commission (NSW) (1976) 50 ALJR 666 at 668; Water Board v Moustakas (1988) 180 CLR 491 at 495; Vines v Australian Securities and Investments Commission [2007] NSWCA 75 at [44]-[46]; (2007) 62 ACSR 1 at 14-15.
[10] Suvaal v Cessnock City Council [2003] HCA 41 at [36]-[37]; (2003) 200 ALR 1 at 10.
In applying these principles on the present appeal, three matters in particular are important. First, the circumstances said to constitute the denial of procedural fairness must be proved. Sometimes those circumstances will be apparent from the transcript of the evidence or submissions at the trial or from the trial court’s reasons. Sometimes the parties will agree about what had occurred at first instance and the court will be able to act on that agreed state of affairs. But absent those circumstances, it is incumbent upon the party alleging the denial of procedural fairness to establish, by proper means, the circumstances upon which it relies. This consideration is particularly important in the present case because the plaintiff’s contention was that the magistrate’s assessment of what had occurred between the parties was based upon an “invention” or “frolic” of his own.
Secondly, a decision may not involve a departure from a defendant’s pleaded case if it concerns an issue raised explicitly or implicitly by the plaintiff’s own case. In the present case, as will be seen later, the magistrate rejected evidence adduced by the plaintiff itself on an important issue, namely, that it had purchased the iPulse so as to be able to have sold it to the defendant. This was an issue of fact which the plaintiff had itself introduced into the trial.
Thirdly, in the present case, it was the plaintiff who was seeking relief. The defendant did not seek any relief, instead denying that the plaintiff was entitled to the relief which it sought and, as part of that denial, asserting her own version of the events which had occurred.
Further Background
In 2005 the plaintiff was known as K.O.C. Pty Ltd. It traded under the name of “Cosmetic Solutions”. Its principal business was the conduct of beauty salons.
The trial commenced on 26 March 2007 and continued on the afternoon of the following day. The plaintiff led evidence from two witnesses: Tanya Viscariello and her de facto husband John Viscariello. Mr Viscariello was the sole director of the plaintiff but Ms Viscariello conducted the day to day business of the company. It was Ms Viscariello who had most of the dealings with the defendant.
The defendant commenced her evidence on 27 March 2007 but her cross-examination was not completed that day. The trial was then adjourned to 14 August 2007. The adjournment has a significance to which reference will be made later.
The Evidence of Mr Viscariello
Mr Viscariello’s evidence-in-chief concerning the sale of the iPulse was to the following effect. An iPulse which the plaintiff had purchased for its own purposes was delivered by Mr Moncrieff, the Managing Director of High Tech Laser Australia Pty Ltd (High Tech), to the Norwood salon on 27 June 2005. Ms Viscariello told him that the defendant wished to purchase that iPulse. He then spoke to the defendant himself. The defendant told him that she wished to purchase the iPulse urgently and offered to make a payment directly to High Tech in order to speed things up. He then discussed with the defendant her making an initial payment of $18,000 directly to High Tech, with the balance to be paid on her collection of the iPulse. He told the defendant that he would prepare an invoice in those terms, and did so. He gave it to his wife to give to the defendant. On the plaintiff’s case, an oral contract for the sale and purchase of the iPulse was made in the discussion between Mr Viscariello and the defendant, and the invoice (Exhibit P5) was written evidence of it.
Mr Viscariello identified an email from High Tech to Cosmetic Solutions dated 2 July 2005 (Exhibit P1) as recording the terms of a distribution agreement between the two companies in relation to iPulses. He also identified as business records of Cosmetic Solutions a letter dated 29 June 2005 from High Tech received by Cosmetic Solutions in which, amongst other things, Mr Moncrieff provided an invoice and order for the iPulse which he had delivered on 27 June (Exhibit P2), the order form itself (Exhibit P3) and the tax invoice (Exhibit P4). All of these documents were received by Cosmetic Solutions by facsimile transmission on 30 June 2005. As I understand it, the plaintiff tendered these documents in order to prove its own acquisition of the iPulse. On the plaintiff’s case, they evidenced, in effect, its ability to have entered into the contract with the defendant which it alleged.
Mr Viscariello also said that in July-August 2005 he was involved in another company. This was Cosmetic Co Pty Ltd (Cosmetic Co). There were two shareholders of Cosmetic Co holding equal shares. They were the defendant and J & L Developments Pty Ltd. J & L Developments held its share on trust for a family trust of Mr and Ms Viscariello. The shareholders contemplated that Cosmetic Co would engage in the business of importing cosmetic equipment for sale within Australia. In September 2005 a dispute arose between the parties involved in Cosmetic Co. Mr Viscariello told the defendant that the arrangement involving Cosmetic Co would cease forthwith. Three days later the defendant attended at the plaintiff’s Malvern salon, accompanied by the police, and took the iPulse.
Under cross-examination Mr Viscariello asserted that a distribution agreement between Cosmetic Solutions and High Tech had existed even prior to the 2 July 2005 email from High Tech (Exhibit P1). He said that the purpose of that email was to outline terms upon which Cosmetic Solutions could act as distributor in areas other than South Australia. Mr Viscariello asserted that he had been present for part of the time at the meeting with Mr Moncrieff on 27 June 2005, and he disputed that the defendant had been present at any time while he was there. Mr Viscariello denied that the invoice from Cosmetic Solutions to the defendant was a fabrication and that it purported to evidence an agreement between Cosmetic Solutions and the defendant which had never existed.
The Evidence of Ms Viscariello
Ms Viscariello’s evidence-in-chief about the sale of the iPulse was to the following effect. She met the defendant in April 2005 during a training course in laser hair treatment. The plaintiff was then developing a side-line in the selling of cosmetic equipment. The defendant, who was the proprietor of another beauty salon business, told her that she wished to commence a business using a portable laser and wished to acquire such a laser urgently. Ms Viscariello told the defendant that she could have the iPulse “that was coming”. The implication was that the plaintiff had already ordered an iPulse. She quoted a price of $35,000 plus GST. That price was acceptable to the defendant. Mr Moncrieff, the principal of High Tech, delivered the iPulse to her on 27 June 2005. She told Mr Viscariello that the defendant was going to purchase the iPulse and he prepared a tax invoice in the name of Cosmetic Solutions which was addressed to the defendant. She gave the tax invoice to the defendant along with the bank details of High Tech to enable direct payment of the initial instalment. The defendant then had one day’s training in use of the iPulse at the plaintiff’s salon. Thereafter the defendant used the iPulse from time to time in her own business but generally the iPulse remained at the plaintiff’s Norwood or Malvern salons. In September 2005, while Ms Viscariello was in New Zealand, the defendant attended at the Malvern salon accompanied by the police and took the iPulse.
In cross-examination, Ms Viscariello denied that the defendant had been at the meeting with Mr Moncrieff on 27 June 2005. She denied that there had been discussion of a distribution agreement at that meeting, asserting instead that that discussion had occurred on an earlier occasion. Ms Viscariello claimed that she had been acting on behalf of Cosmetic Solutions in her negotiations with Mr Moncrieff. Although she was uncertain, Ms Viscariello thought that at the conclusion of the meeting on 27 June 2005 she had driven Mr Moncrieff back to the airport.

Ms Viscariello said that the sale of the iPulse to the defendant was the first sale of equipment made by Cosmetic Solutions. She admitted that she had used the iPulse while it had been at the Norwood and Malvern salons, both for the purpose of demonstration to prospective purchasers and for treatment of clients of Cosmetic Solutions. Ms Viscariello stated that the defendant had also borrowed the iPulse for demonstrations.
Ms Viscariello denied that the invoice (Exhibit P5) had been prepared only after the breakdown of the relationship between the defendant and herself.
The plaintiff tendered, against the opposition of the defendant, the defendant’s response to a Notice to Admit which, on its face, appeared to incorporate an acknowledgement that the invoice had been rendered to her. Reference to this response will be made later.
The Evidence of the Defendant
The defendant’s evidence-in-chief was to the following effect. From time to time after February 2005 she had discussed with Ms Viscariello the purchase of a power laser. She and Ms Viscariello wished to be the South Australian distributors of a laser machine. In about April 2005 Ms Viscariello placed an order for the purchase of a laser machine with a company in China. She (the defendant) transferred moneys ($22,700) from her own resources to pay for that machine. However, they later cancelled the order when they found that they could not be the sole South Australian distributor of machines of that kind.
The defendant attended a meeting at the plaintiff’s Norwood salon on 27 June 2005 with Mr Moncrieff and Ms Viscariello. The meeting took from approximately 10.30 am to approximately 4.30 pm. The principal topic of discussion at the meeting was the possible appointment by High Tech of Ms Viscariello and the defendant as its South Australian distributor. The price which would be charged by High Tech was discussed, namely, $19,000 in addition to equipment of $800 providing a total of $19,800. Ms Viscariello attempted to negotiate a lower price but that issue was not resolved by the end of the meeting. Mr Moncrieff brought an iPulse to the meeting and that was left at the salon at the end of the meeting.
The defendant drove Mr Moncrieff to his next appointment in the City of Adelaide. During the journey she said that she agreed to pay $19,800 for the first machine but had told Mr Moncrieff that after they had bought two or three further machines they would wish to negotiate a lower wholesale price.
On 1 July 2005 the defendant made the payment of $19,800 to High Tech’s account. She did not receive an invoice but was told by Mr Moncrieff that he had given the invoice to Ms Viscariello at an Expo in Sydney, which they had all attended. The defendant said that she had not seen, until shortly before the trial, the plaintiff’s tax invoice which Ms Viscariello said she had given to her on or about 1 July 2005.
During July, August and September 2005 the defendant used the iPulse. This involved taking it from time to time from the plaintiff’s salons at Norwood and Malvern. When the arrangements concerning Cosmetic Co broke down in September 2005 Ms Viscariello told the defendant that she could not collect the iPulse. The defendant then enlisted the aid of the police to obtain it from the Malvern salon.
The defendant was cross-examined in some detail. She said that she attended the meeting on 27 June 2005 because Ms Viscariello “had asked me that – she was a teacher and I was a good seller and we should get together to form a business and on-sell iPulse machines to clients”. Ms Viscariello had rung her and said “We have the laser, another contact and I will get him down from Queensland”. The defendant said that at the meeting on 27 June she and Ms Viscariello had to promote themselves as suitable for appointment as High Tech’s distributor:
We had to sell ourselves. It was basically an interview to see if we could go agent for this machine and he was interviewing us to say “How could two ladies have two separate companies and find the time to produce another company, and did we have the time to do that?”.
The defendant also said that during the course of the meeting Mr Moncrieff had shown both Ms Viscariello and herself how the iPulse worked and had explained the equipment and its operator’s manual.
The plaintiff’s counsel put various elements of the plaintiff’s case concerning the meeting on 27 June and of its arrangement with High Tech. The defendant rejected the suggestion that she had not been present at the meeting on 27 June and rejected the suggestion that she first saw the iPulse at the plaintiff’s Norwood salon sometime after 27 June 2005. She also rejected the proposition that she had, in effect, insisted on purchasing the iPulse which the plaintiff had already acquired for its own purposes. Generally, the defendant maintained the account which she had given in evidence-in-chief about the arrangement with High Tech and the purchase by Ms Viscariello and herself jointly of the iPulse.
The Evidence of Mr Moncrieff
The defendant led evidence from Mr Moncrieff. He said that he had first had contact with Ms Viscariello on 20 June 2005, and had first met her on 27 June 2005. On that day he came to Adelaide expecting to have a meeting with Ms Viscariello and the defendant. The meeting between the three of them took place at the plaintiff’s Norwood salon. The matters discussed at the meeting were the use of an iPulse, the sale of iPulses generally and Mr Moncrieff’s requirements in order for Ms Viscariello and the defendant to be appointed as distributors. At the conclusion of the meeting, there was agreement in principle that High Tech would appoint “them” as its distributor and that Mr Moncrieff would, in due course, document the terms which he proposed for the distributorship. Mr Moncrieff said that his “impression” was that Ms Viscariello and the defendant “were forming a joint venture or a company of some kind that they would be doing together as an equipment company wanting to sell this kind of equipment”. Mr Moncrieff was not asked what it was that gave rise to that “impression” or what had been said by either Ms Viscariello or the defendant on that topic. During the course of the meeting, he showed Ms Viscariello and the defendant the iPulse which he had brought with him and showed them how to use it. His evidence-in-chief did not include any detail about the price at which High Tech would supply iPulses to the joint venture. At the conclusion of the meeting the defendant drove Mr Moncrieff to his next appointment. During the course of the trip they discussed the price of $19,000 plus GST (a total of $20,900) as the price at which he was prepared to supply iPulses to the joint venture. This was higher than the price discussed at the meeting. He did, however, propose to the defendant that he would offer the first two machines (including the machine which he had brought with him and left at the Norwood salon) at a lower price.
On 2 July 2005 Mr Moncrieff sent an email to the email address of Cosmetic Solutions. It commenced: “Hi Tanya”, and included the statement “[t]hank you for meeting with me last Monday, it was great to meet you both”. The email set out the terms upon which High Tech proposed appointing Cosmetic Solutions as a sole distributor in South Australia and as a non-exclusive distributor in other areas. Mr Moncrieff said that his reference to meeting “you both” was a reference to Ms Viscariello and the defendant. Mr Moncrieff was not asked to explain his reference in the email to Cosmetic Solutions but said that he had issued the invoice for the iPulse left on 27 June 2005 to Cosmetic Solutions because the “impression” he had been given was that “until Cosmetic Co was operational” High Tech should invoice Cosmetic Solutions for any transaction. Other evidence suggested that thereafter and until the relationship breakdown between Ms Viscariello and the defendant, High Tech had invoiced Cosmetic Co (and not Cosmetic Solutions) in relation to transactions between the two companies.
In his cross-examination, Mr Moncrieff confirmed, in substance, the evidence which he had given in-chief.
The Magistrate’s Findings
The magistrate accepted, in substance, the evidence of the defendant and of Mr Moncrieff. He found that in early to mid 2005 Ms Viscariello and the defendant had discussed forming a joint venture to obtain sole distributorship rights for the retail sale of laser machines. After attempting to do this initially in relation to a machine acquired from a Chinese company, Ms Viscariello had identified High Tech as a possible supplier. After the meeting on 27 June 2005 Mr Moncrieff made an agreement with Ms Viscariello on behalf of Cosmetic Solutions and the defendant for them to have exclusive distributorship rights for the iPulse in South Australia for a period of three months. The defendant paid the sum of $19,800 which was the agreed price for the iPulse which Mr Moncrieff had left at the Norwood salon after the meeting on 27 June. Both Ms Viscariello and the defendant had used it from time to time in demonstrations to prospective purchasers of an iPulse. Cosmetic Co was formed to be the vehicle of the joint venture.
The magistrate specifically rejected significant aspects of the evidence of Mr Viscariello and of Ms Viscariello. In particular, he rejected the plaintiff’s evidence that it had purchased the iPulse before on-selling it to the defendant. This finding was fatal to the plaintiff’s claims. The magistrate held:
I refute the evidence of John Viscariello and Tanya Viscariello that the Ipulse in question was purchased by the plaintiff company and then on-sold to the defendant. I prefer and accept the evidence of Moncrieff. When Moncrieff came to Adelaide, he met with both Tanya and the defendant and he brought with him the Ipulse in question and that an arrangement was struck whereby Tanya, on behalf of Cosmetic Solutions, and the defendant, jointly, would be the South Australian distributors for High Tech’s Ipulse machine for some three months.
As at June/July 2005 there was no independent contractual arrangement with the Viscariellos, or Cosmetic Solutions as alleged. The Ipulse in question was not purchased by Cosmetic Solutions as alleged by the Viscariellos. The invoices were issued in the name of Cosmetic Solutions by High Tech for mere convenience because Cosmetic Co was not yet incorporated. The Ipulse was the property of the partnership between Cosmetic Solutions and the defendant and/or the property of Cosmetic Co and was not the sole property of the plaintiff as alleged.
There were, in effect, two closely connected, but separate, aspects to the magistrate’s conclusion. The magistrate rejected the plaintiff’s evidence of events. That was sufficient for the plaintiff’s claim to fail. In addition, the magistrate found that the circumstances to which the defendant and Mr Moncrieff had testified did exist. That was a finding of fact which the magistrate was entitled to use in determining the plaintiff’s claim. In a sense, it was also a determination of a “claim” made in the defendant’s evidence and which had not been pleaded, but, subject to procedural farness, that did not preclude its use as a significant finding of fact which was fatal to the plaintiff’s claim.
Did the Departure from the Pleaded Case Involve Procedural Unfairness?
The material available to this Court as to the manner of the conduct of the trial is limited. There is a transcript of the evidence, but no transcript of the final submissions nor of any arguments which occurred during the course of the trial.
The plaintiff relied on the fact that the defendant had not applied to amend her defence so as to have it reflect the evidence adduced at the trial. The magistrate had invited the defendant to apply to amend and she had not done so. There was an implication in the plaintiff’s submissions that the magistrate had acted in a way which was contrary to the mutually accepted basis upon which the final submissions had been made to him. Alternatively, it was implied that the defendant’s declining of the invitation to apply to amend was understood by all to be an adherence to her pleaded case in preference to the position revealed by her evidence.
During the course of the hearing of the appeal, I informed counsel, on three separate occasions, that I was not prepared, in the absence of a mutually agreed position, to conclude that there had been a denial of procedural fairness by relying on assertions from the bar table about the course of events which had not been transcribed in the trial transcript. I informed counsel that I expected these matters to be proved in the proper way. In addition, I adjourned the hearing before the commencement of the defendant’s submission for the purpose, amongst other things, of giving counsel the opportunity to see if an agreed position with respect to the course of submissions before the magistrate could be reached. After that adjournment I was told that counsel were agreed that “before the close of the addresses at the trial the …. magistrate invited the [defendant] to amend [her] pleadings to reflect the issue now characterised and found by the … magistrate as the joint venture issue and that that invitation was declined”. That was the extent of the agreement. Neither party sought to tender evidence about the course of the final submissions.
Generally, the transcript of evidence seems to suggest that the trial was conducted on the basis that the plaintiff’s asserted acquisition of the iPulse was an important fact in issue at the trial. All witnesses at the trial gave evidence on this topic. The magistrate’s enquiry of the defendant as to whether she proposed to amend her defence so as to accord with the evidence which she had adduced at the trial does indicate, at the very least, that he was alert to the difference between the defendant’s pleading and her evidence. However, apart from the terms of the agreed fact, this Court has no other information about the circumstances of the magistrate’s invitation. It is not clear, for example, whether this was a matter which the magistrate raised of his own volition after the parties had, in effect, completed their submissions. It is not clear whether the plaintiff submitted that the court could not make a finding which favoured the defendant, other than a finding which accorded with her pleaded case (and there was of course no evidence to support that pleaded case). It is not known what, if any, submissions were made to the magistrate about the use to which he could make of the oral evidence of the defendant and Mr Moncrieff in assessing whether the plaintiff had proved its case. In other words, the fact agreed by the parties on appeal does not seem to contradict the inference that the trial was conducted on the basis that an important issue to be determined by the magistrate was whether or not the plaintiff had ever acquired the iPulse so as to be able to on-sell it.
Even if I am wrong in my understanding of the way in which the trial proceeded, there remains the consideration that the issue upon which the plaintiff ultimately failed was an issue which arose out of the plaintiff’s own claim and its own evidence. That was the issue of whether the plaintiff had ever acquired the iPulse in question at all. The plaintiff must have recognised that this was an important issue of fact in relation to its claim. That recognition appears to provide the explanation for the plaintiff tendering, as part of its case, Exhibits P2 to P4 inclusive. The plaintiff did have the opportunity to, and did, cross-examine both the defendant and Mr Moncrieff in relation to its claim that it had purchased the iPulse from High Tech. It can be said that the plaintiff’s witnesses were not cross-examined on key aspects of the defence case which emerged from the evidence of the defendant and Mr Moncrieff. The significance of this is best considered later in relation to the rule in Browne v Dunn.
An issue related to that of whether the plaintiff had purchased the iPulse was that of whether High Tech had appointed the plaintiff to be a distributor of iPulses in South Australia. The plaintiff led evidence on that topic as well with a view to establishing that it had been appointed as distributor even before the 27 June meeting. The plaintiff tendered the email from High Tech to Cosmetic Solutions dated 2 July 2005 (Exhibit P1). On its face, that email was an initial proposal for the terms of a distribution agreement. It does not contain anything which suggests that it was a proposal for a continuation, or an enlargement, of an existing distribution agreement. However, Mr Viscariello said that his wife commenced negotiations with Mr Moncrieff in April or May 2005 and claimed that there had been a distribution agreement between the plaintiff and High Tech even before the plaintiff received High Tech’s email of 2 July 2005. Ms Viscariello said that the email recorded things which she had been discussing “over previous months”; that she already had an “arrangement” in place with High Tech at the time when the defendant first spoke to her about acquiring an iPulse; and that when the email of 2 July 2005 was received there was already an agreement in place by which the plaintiff was the exclusive distributor of iPulses in South Australia. The plaintiff’s evidence on this topic was not borne out by the terms of Exhibit P1 itself, and was contradicted by Mr Moncrieff. He said that he had first spoken to Ms Viscariello on or about 20 June 2005 and that it was at the meeting on 27 June 2005 when he discussed distribution arrangements. The plaintiff was able to, and did, cross-examine Mr Moncrieff about this topic.
I am satisfied that on critical issues of fact raised by, or arising from, the plaintiff’s own claim, and from the plaintiff’s own evidence, it did have the opportunity of adducing evidence, cross-examining Mr Moncrieff and making submissions to the magistrate. These were critical issues of fact upon which the plaintiff’s evidence was rejected. The magistrate accepted Mr Moncrieff’s evidence as reliable and “refuted” the evidence of the Viscariellos that the iPulse had been purchased by the plaintiff and then on-sold to the defendant. Subject to the significance to be attached to the breaches by the defendant of the rule in Browne v Dunn, I am not satisfied that the magistrate’s findings on these issues involved procedural unfairness.
The Rule in Browne v Dunn
The rule in Browne v Dunn is a rule directed towards achieving procedural fairness.[11] It was stated by Hunt J in Allied Pastoral Holdings Pty Ltd v Federal Commission for Taxation[12] in the following terms:
[11] (1894) 6 R 67.
[12] (1983) 1 NSWLR 1.
It has in my experience always been a rule of professional practice that, unless notice has already clearly been given of the cross-examiner’s intention to rely upon such matters, it is necessary to put to an opponent’s witness in cross-examination the nature of the case upon which it is proposed to rely in contradiction of his evidence, particularly where that case relies upon inferences to be drawn from other evidence in the proceedings. Such a rule of practice is necessary both to give the witness the opportunity to deal with that other evidence, or the inferences to be drawn from it, and to allow the other party the opportunity to call evidence either to corroborate that explanation or to contradict the inference sought to be drawn.[13]
As the authors of Cross on Evidence point out, the rule may have a different operation when a party is on notice that its witness’ version is in contest. That notice may come from the pleadings, or some other pre-trial document, or from the other side’s evidence or from the other side’s opening or from the general manner in which the case is conducted.[14] The possible consequences of a breach of the rule in Browne v Dunn are various. Much depends upon the circumstances. A failure to comply with the rule does not necessarily mean that a trial judge is precluded from accepting the evidence upon which the other parties’ witnesses have not been tested. In Bulstrode v Trimble[15] Newton J said:
… The mere fact that one party has succeeded upon an issue of fact without giving to witnesses for the other party, who gave evidence against him on that issue, an opportunity in cross-examination of explaining their evidence, will certainly not always be a reason for setting the decision aside on appeal; all the circumstances must be taken into account, so as to see whether the conduct of the trial was in fact unfair to the appellant … .[16]
This passage was cited with approval by Olsson J in Crosthwaite v City of Elizabeth.[17] Account must be taken of the opportunity which the wronged party has had to address the case belatedly raised by the opponent. This may include the opportunity to re-open its case[18] or to call rebuttal evidence.[19] The reasons of Bray CJ in Karidis v General Motors-Holdens[20] provide a clear illustration:
The principle [in Browne v Dunn] merely illustrates an obvious rule of justice and I do not desire to weaken it in any way, but it is necessary to look at the reason underlying it rather than the exact words in which it may from time to time have been expressed. It seems to me that under contemporary practice, when the calling of witnesses in rebuttal is very common, the occasions for the intervention of courts of appeal on this ground may be less frequent. The reason for the principle is obviously that the witness ought to have the opportunity to give what explanation he can of the matter in question and that he should not be disbelieved, nor should adverse inferences be drawn against him, because of other evidence relating to the topic on which he has been unable to comment.
In the present case no application was made to call the appellant or Dr Chick in rebuttal after the films had been proved by Mrs Lock. If such an application had been made and refused, or if for any reason it was impracticable for either witness to be called in rebuttal, the matter would stand differently. But there is no reason to suppose that such an application would not have been granted or that the witnesses were not available. Indeed, it is more advantageous, generally speaking, to the witness if he can give his explanation at a later stage, after he has heard the evidence against him and has had opportunities for due deliberation, than if the question is sprung upon him without warning during cross-examination.[21]
Counsel for the plaintiff acknowledged on the appeal that it had been open to the plaintiff to apply to re-open its case.
Quite apart from this consideration, it does not follow that the evidence about which the witness of the plaintiff was not cross-examined must be accepted as the basis for findings of fact.[22] That evidence is one piece of evidence which must be considered by the trial court along with all the other evidence. The fact that the witness was not cross-examined about a relevant matter is one factor to be taken into account by the trial court in the assessment of the witness’ evidence.[23] An important consideration is whether or not the witnesses whose evidence is sought to be contradicted were given an opportunity, before the evidence closed, to address the matter.[24] It is always the duty of a trial court to determine a case on the whole of the evidence.[25]
[13] Ibid at 16.
[14] Cross on Evidence Australian Edition [17445]. See also Raben Footwear Pty Ltd v Polygram Records Inc (1997) 75 FCR 88 at [102].
[15] (1970) VR 840.
[16] Ibid at 847.
[17] (1989) 51 SASR 105 at 111. See also Linke v Linke [1995] SASC 5201 at [32]-[33].
[18] Bulstrode v Trimble, supra at 847; Allied Pastoral Holdings Pty Ltd, supra at 23; Seymour v Australian Broadcasting Commission (1990) 19 NSWLR 219 at 236.
[19] Crosthwaite v City of Elizabeth, supra at 111; R v Popescu (1989) 39 A Crim R 137 at 140-41.
[20] [1971] SASR 422.
[21] Ibid at 425-26.
[22] Seymour v Australian Broadcasting Commission (1977) 19 NSWLR 219 at 225.
[23] See Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 1 NSWLR 1 at 26; Crosthwaite v City of Elizabeth (1989) 51 SASR 105 at 109-10.
[24] Allied Pastoral Holdings Pty Ltd v Federal Commissioner of Taxation (1983) 1 NSWLR 1 at 23.
[25] Zadko v Hilton International [1996] SASC 5478 at [47].
Breaches of the Rule in Browne v Dunn

In my opinion, the presentation of the defendant’s case at trial did involve breaches of the rule in Browne v Dunn. Counsel for the defendant (who was not counsel on the appeal) did not put a number of significant aspects of the defendant’s case to the plaintiff’s witnesses. Although it was put to both Mr and Ms Viscariello that the defendant has been present at the meeting with Mr Moncrieff on 27 June 2005, it was not put to either (and in particular to Ms Viscariello) that the discussion concerned both Ms Viscariello and the defendant being appointed the agent of High Tech in relation to iPulses; it was not put that at that meeting Mr Moncrieff proposed a price of $19,800 (inclusive of GST) for each iPulse but that Ms Viscariello had attempted to negotiate a lower price; it was not put to Ms Viscariello that the defendant had reported to her the effect of her conversation with Mr Moncrieff when driving him to his next appointment after the meeting; it was not put that the email of 2 July 2005 (Exhibit P1) was understood by the Viscariellos to be terms proposed by Mr Moncrieff for the distributorship agreement with Ms Viscariello and the defendant; it was not put to Ms Viscariello that she had requested the defendant’s attendance at the meeting on 27 June 2005; and, although it was put to Mr Viscariello that the invoice (Exhibit P5) was a fabrication, it was not put to him that he had not had the discussion with the defendant in relation to that invoice to which he had deposed. Although peripheral aspects of the cross-examination of Mr and Ms Viscariello touched upon the joint venture arrangement to which the defendant referred in her evidence, the existence of that arrangement was not put fairly and squarely to either Mr or Ms Viscariello in the course of their cross-examinations. The plaintiff’s submissions identified other breaches of the rule. Some related to matters which were more incidental. Those which I have identified appear to be the departures from the rule in Browne v Dunn which are significant for present purposes.
However, the omission of the defendant’s then counsel to cross-examine about these matters does not, by itself, indicate that unfairness requiring the judgment to be set aside did occur. The transcript of evidence at trial shows that no objection was made to the plaintiff giving evidence on matters which had not been put to the plaintiff’s witnesses in cross-examination. This may not be significant as, even had objection been taken, it is likely to have been overruled.[26] More significantly, by reason of the adjournment from 27 March 2007 to 14 August 2007 partway through the defendant’s cross-examination, the plaintiff did have the opportunity to reflect calmly on the implications of the defendant’s evidence and to investigate the matters which she had raised before it completed the cross-examination. The plaintiff took advantage of that opportunity. It obtained a transcript of the evidence given by the defendant. Its solicitors provided a copy of that transcript to Mr Moncrieff and asked him to confirm in writing whether or not he agreed with the defendant’s evidence and to confirm whether or not he would be travelling to Adelaide to give evidence when the trial resumed on 14 August. The letter went on:
If it is the case that the defendant has made arrangements for you to travel to Adelaide and give evidence for the resumption of the trial then we advise that we will want to interview your Mr Moncrieff about the evidence that he will give and of any documents that he proposes to tender and rely upon at the trial.
If it is the case that the defendant does not intend to have your Mr Moncrieff attend at the resumption of the trial then we are instructed to inform you that our client will not be calling Mr Moncrieff to give evidence at the trial as it is content to rely upon High Tech’s response to the Summons to Witness.
[26] Crosthwaite v City of Elizabeth (1989) 51 SASR 105 at 109-10.
The reference to the summons to witness was a reference to a subpoena to produce documents which had been served upon, and answered by, High Tech prior to the trial. The evidence did not disclose what, if anything, was done by the solicitors to follow up the request made of Mr Moncrieff. The letter shows however that the plaintiff and its solicitors made strategic decisions as to the way in which the defendant’s evidence should be addressed.
Next, the plaintiff was aware of the assertions made by the defendant before the evidence in the case was closed. It was open to the plaintiff to seek permission to adduce rebuttal evidence. In the circumstances of the case, an application to adduce rebuttal evidence could hardly have been refused. Both Mr and Ms Viscariello are Adelaide residents and there is no reason to suppose that there would have been any difficulties in the availability of either to give instructions or to give rebuttal evidence at the resumption of the trial. It seems that a positive decision was made not to adduce rebuttal evidence. On the appeal, when it was put to counsel for the plaintiff that the magistrate would almost certainly have allowed an application by it to call rebuttal evidence he replied:
Your Honour may say that, and I accept it in that sense, but what I am declaring is that the appellant chose to take the position that the matters raised by Mr Moncrieff had never been pleaded, had never been put to any witness, they had not been led from Ms Forrest prior to the adjournment, they only came out through Mr Moncrieff.
In all of the these circumstances, my opinion is that, while it is unfortunate that the breaches of the rule in Browne v Dunn occurred, and such breaches are not to be condoned, it should not be concluded that they require the magistrate’s decision to be set aside on grounds of procedural unfairness.
The Significance of the Rejection of the Defendant’s Pleaded Case
It is plain that the magistrate also rejected the defendant’s pleaded case. The plaintiff submitted that the consequence of that rejection was that judgment should then have been entered for the plaintiff.
I do not accept this submission. It involves a reversal of the onus of proof which was at all times on the plaintiff. The magistrate was required to consider whether that onus had been discharged by a consideration of all the evidence admitted in the trial. The rejection of the defendant’s pleaded case did not relieve the magistrate from discharging that responsibility.[27] It is apparent that the magistrate did not regard the evidence upon which the plaintiff relied as reliable. He was not bound, despite regarding that evidence as unreliable, to find nevertheless for the plaintiff.
[27] Cf R v Calides (1983) 34 SASR 355.
Whether the Magistrate’s Findings were Open on the Evidence
The plaintiff submitted that the magistrate had misunderstood Mr Moncrieff’s evidence. It submitted that that evidence did not support the conclusion that the iPulse in question had been sold to the joint venture of Ms Viscariello and the defendant, only that there was to be a distribution agreement under which iPulses may in the future be sold by the joint venture. Counsel submitted that Mr Moncrieff’s evidence did not contradict the plaintiff’s evidence that the iPulse delivered on 27 June 2005 was sold by High Tech to the plaintiff.
Counsel relied upon exhibit P8, a letter from High Tech dated 23 March 2007 from High Tech and signed on behalf of Mr Moncrieff. This letter was provided in response to the subpoena to produce documents addressed to High Tech. The letter said:
We confirm the following:
(1)The only i200 hair removal system (“iPulse”) in particular item code HTLAi200 sold by High Tech Laser Australia Pty Ltd (“High Tech”) in South Australia in the period up to 30 Sept 2005 was to Cosmetic Solutions. We enclose a copy of the documents relevant to that first sale and purchase of the iPulse from High Tech by Cosmetic Solutions in July 2005.
(2)That at no time prior to 30 Sept 2005 did High Tech ever invoice an iPulse and in particular the iPulse item code HTLAi200 unit or equivalent hair removal system or any other ancillary items or associated equipment to the defendant, Amanda Anne Forrest personally. Accordingly High Tech has no documents of the type specified in paragraphs 1 and 1.1 in the summons to witness, issued by the magistrate’s court of SA, Holden Hill Registry dated 19 March 2007. (Emphasis added)
Counsel relied on the words emphasised in the first paragraph as indicating a recognition by High Tech that the iPulse delivered on 27 June 2005 had been sold to Cosmetic Solutions. However, when cross-examined about this letter Mr Moncrieff distinguished between Cosmetic Solutions and Cosmetic Co. He thought that it was Cosmetic Co with which High Tech had been dealing. That was consistent with the evidence which he had given earlier to the effect that he was dealing with both Ms Viscariello and the defendant. In any event, counsel’s submission is not borne out by other evidence from Mr Moncrieff. It is clear from his evidence that, with the exception of price, Mr Moncrieff did not distinguish at all between the arrangements concerning the iPulse delivered on 27 June 2005, on the one hand, and further units to be purchased by the joint venture under the distribution agreement, on the other.
Counsel next referred to the magistrate’s finding that the invoices had been issued in the name of Cosmetic Solutions by High Tech for convenience because Cosmetic Co was not at that time incorporated. By consent, the plaintiff tendered on the appeal an ASIC record showing that Cosmetic Co had been incorporated on 24 June 2005. The magistrate’s finding was therefore incorrect in this aspect. However, this is a minor error and it is difficult to see that much turns on it. 24 June 2005 was the Friday immediately preceding the Monday meeting with Mr Moncrieff. As Cosmetic Co was incorporated only on that day, it is highly unlikely that as at 27 June 2005 it had a bank account, books, an operating address or a telephone number which could have been used in the course of the discussions with Mr Moncrieff. Further, it is not clear whether either Ms Viscariello or the defendant were, at that time, aware of its incorporation. It would have been convenient for Ms Viscariello and the defendant to have used Cosmetic Solutions as an agent in these circumstances.
The plaintiff identified other matters which it was said were not supported by the evidence. However, I regard those as so minor as not to require separate discussion.
The Challenge to the Magistrate’s Findings
The plaintiff’s submissions on appeal recognised the conventional appellate restraint in interfering with findings of fact which depend to a substantial degree on the trial court’s assessment of the credibility of witnesses. It was submitted nevertheless that this Court should intervene because the magistrate should not have acted on evidence which was inconsistent with facts “incontrovertibly established” by the evidence or which was “glaringly improbable”.[28]
[28] Fox v Percy [2003] HCA 22 at [29], [66]; (2003) 214 CLR 118 at 128, 139.
Most of the “facts” upon which the plaintiff relied in support of this submission and which were said to be incontrovertible, were the documents emanating from High Tech (Exhibits P1 – P4 inclusive) and the invoice (Exhibit P5) said to have been handed by Ms Viscariello to the defendant on or about 1 July 2005. Contrary to the plaintiff’s submission, the incontrovertibility of the facts to be derived from these documents depended upon an acceptance of the plaintiff’s submissions about the effect of those documents, ie, of the very matters in issue. On their face, the Exhibits P2 to P4 inclusive did suggest that the iPulse had been sold by High Tech to Cosmetic Solutions, ie, to the plaintiff. However, that effect was not incontrovertibly established. It was in fact controverted by Mr Moncrieff’s evidence explaining that he considered that he was dealing with both Ms Viscariello and the defendant, and explaining that he had addressed the documentation to Cosmetic Solutions for convenience because of his understanding that the company by which they would conduct the distributorship had not yet been established.
Further, on my reading of the evidence a characterisation of the magistrate’s findings as “glaringly improbable” is not appropriate. Those findings accorded with the evidence of Mr Moncrieff, a witness who was, in effect, independent of both parties and whose evidence the magistrate accepted. They are consistent with the evidence which the magistrate had about the involvement of both the defendant and the Viscariello interests in Cosmetic Co. There were in addition a number of features of the evidence of Mr and Ms Viscariello which seem improbable. Both Mr and Ms Viscariello said that the defendant wished to acquire an iPulse urgently. Mr Viscariello said that the arrangement for the defendant to make a payment direct to High Tech was volunteered by her in order to speed things up. Yet it was common ground that the iPulse had already been delivered to Adelaide on 27 June 2005. Its delivery was not contingent upon payment first having been received by High Tech. Further, the defendant’s subsequent conduct tends to belie the urgency. She did not collect the iPulse immediately but instead left it, for the most part, at the plaintiff’s Norwood and Malvern salons. She took it from time to time to demonstrate it to prospective purchasers. Even when her moneys paid to the Chinese supplier were reimbursed, she did not use those moneys to pay the second instalment said by the plaintiff to be owing by her.
The implication in Ms Viscariello’s evidence that an iPulse had already been ordered even before 27 June 2005 was contradicted by the Order Form (Exhibit P3) bearing the date 28 June 2005 and facsimiled to the plaintiff by High Tech on 30 June 2005. Exhibit P1 suggests that the price in that order was not settled until at least 30 June 2005.
The evidence of both Mr and Ms Viscariello that a distribution agreement was in place even before the plaintiff’s receipt of the email of 2 July 2005 (Exhibit P1) was implausible. It is not only not borne out by the terms of that email but is contradicted by it. There is the incongruity of the plaintiff paying out the moneys belonging to the defendant which it held in its account at a time when it says that the defendant was indebted to it. Mr Viscariello’s claim that there were two iPulses in the Norwood salon on 27 June 2005 was not supported by any other evidence. Finally, there is the incongruity that the amount in fact paid by the defendant to High Tech did not match the sum of $18,000 which Mr Viscariello says he discussed with the defendant and which was provided for in the tax invoice said to have been handed to her at the same time that the defendant was given High Tech’s bank details.
On my review of the evidence, I do not regard the magistrate’s findings as being contrary to matters which were incontrovertibly established or as being glaringly improbable.
It is true that the magistrate’s reasons do not address all of the various submissions which were apparently put by the parties. The magistrate instead engaged in a summary of the evidence of the four witnesses and then expressed conclusions derived very much from his assessment of the credibility and reliability of those witnesses. It would have been preferable if the magistrate had addressed the principal matters put in the submissions to him. But it was not suggested that the magistrate’s reasons were inadequate. It is apparent from the magistrate’s comments in his summary of the evidence of Mr and Ms Viscariello that he had reservations about the reliability of their evidence. On my review of the evidence, I am not satisfied that the magistrate erred in reaching that conclusion.
The Defendant’s Response to the Notice to Admit
The plaintiff submitted that the magistrate had erred in allowing the defendant to adduce evidence which was contrary to an admission she had made in response to a Notice to Admit, and had erred further in not acting on that admission.
By a Notice to Admit served on the defendant under r 76 of the Magistrates Court (Civil) Rules 1992 (SA) the plaintiff sought an admission, amongst other things, of the fact that “in or about July 2005 the plaintiff rendered a Tax Invoice to the defendant in the sum of $38,500 including the GST which Tax Invoice recorded the terms and conditions of the Agreement”. The response to that request was in the following terms:
Admits the fact in paragraph 11 as to the rendering of an account but says there was no agreement between herself and the Plaintiff.
The plaintiff contended that the defendant was bound by the admission that it had rendered the invoice (Exhibit P5) to her and should not have been permitted to deny in oral evidence her receipt of that invoice. Rule 76(3) of the Magistrates Court (Civil) Rules provides as follows:
a)A party may by notice in writing to any other party, request that party to admit facts or the authenticity or admissibility of a relevant document specified in the notice. A copy of this Sub-rule must be served with the notice.
(b)If and to the extent that the other party fails by notice in writing to object (including detailed reasons for the objection) to the facts or documents specified in the notice within 21 days of the service of the notice, the contents of the notice will be taken to be admitted upon proof of service of the request to admit.
(c)At the trial of an action the Court may admit evidence contrary to any such admission.
Sub-paragraph (c) provides that at the trial of an action the court may admit evidence contrary to “any such admission”. There is an ambiguity in that expression. Is it a reference to a deemed admission pursuant to sub-paragraph (b) only? Alternatively, is it a reference to any admission to a notice to admit, whether made expressly or arising from the operation of subparagraph (b)? I am inclined to the view that the latter is the preferable construction. It is more in keeping with the flexible procedures contemplated by the Magistrates Court (Civil) Rules. However, the parties’ submissions did not address this issue in any detail. That being so, I consider it undesirable to express a concluded view. If the rule does permit evidence contrary to an admission to be led, then the appellant’s complaint falls away. But even if the rule does not, on its own terms contemplate contrary evidence, that does not mean that the magistrate erred in the circumstances of this case.
The magistrate’s reasons do not refer to the Notice to Admit and its response at all. The plaintiff tendered the Notice to Admit and the Response only after the conclusion of the evidence of both Mr and Ms Viscariello. The transcript shows that they were then admitted de bene esse but does not indicate why the documents were admitted on that basis. The defendant’s counsel had put to Mr Viscariello that the invoice was a fabrication. It is not clear whether objection was taken during the course of the evidence to the defendant giving evidence which was inconsistent with an admission that the invoice had been rendered.
Ordinarily a party is bound by a formal admission. However, that is not an inflexible rule. As was pointed out by King CJ in O’Keefe v Australian Trencher Company Pty Ltd[29] some degree of flexibility is required when there is a disconformity between facts as pleaded and the evidence. Much depends upon the course of the trial and the parties’ conduct at trial.
[29] (1991) 56 SASR 370 at 377.
In the present case there are features which would have justified the magistrate in attaching little, if any, significance to the admission upon which the plaintiff relied and, in particular, in not regarding it as an admission that the defendant had, in June or July 2005, physically received the plaintiff’s invoice. In the first place, there is a seeming inconsistency in the defendant’s response to paragraph 11 of the Notice to Admit. It is difficult to understand why the defendant would have admitted that the invoice was rendered in the sense of having been actually physically delivered to her while at the same time denying the existence of the agreement which the invoice was said to evidence. Further, the defendant’s response to the Notice to Admit elsewhere twice specifically denied the authenticity of the invoice. It is difficult to reconcile the defendant’s admission that the invoice had been rendered to her with those denials. The inconsistency between these two positions suggests that the defendant may have misunderstood the word “rendered” and that she was not intending to admit at all that the invoice had actually been handed to her.

It is surprising that the defendant did not seek permission to withdraw the admission. That is what one would have expected to occur. However, in the circumstances of the manner in which the trial was conducted and the matters to which I have referred above, I consider that the magistrate was entitled to attach little weight to the defendant’s response to the Notice to Admit. In particular he was entitled to regard the response as not indicating that the invoice had been physically delivered to the defendant. It would have been preferable for the magistrate to have dealt with this matter explicitly in his reasons but I do not consider that the failure to do so requires intervention by this Court.
The Plaintiff’s Complaints in Combination
Finally the plaintiff submitted that the matters which I have referred to above should be considered in combination. It submitted that when considered in that way it showed that the trial had miscarried so significantly that a re-trial should be ordered.
There is force in the plaintiff’s submissions that there were deficiencies in the way in which the defendant conducted her case. I have referred earlier to the breaches of the rule in Browne v Dunn. It can also be said fairly that the defendant’s evidence-in-chief did not touch on many relevant matters. In many respects the matters of which the plaintiff now complains arise from the manner in which the defendant conducted the trial at first instance.
With these matters in mind, I have reviewed the whole of the trial transcript and the evidence. In the result, I am not satisfied that the deficiencies which occurred at the trial require a setting aside of the magistrate’s judgment. I am influenced to that conclusion by the fact that a critical issue upon which the plaintiff was on notice, namely, whether it had ever acquired the iPulse so as to be able to sell it to the defendant was one which the plaintiff addressed fully in its own case and upon which the plaintiff had adequate notice before cross-examining Mr Moncrieff. Further, the transcript of Mr Moncrieff’s evidence does not, on its face, raise doubts about his reliability or suggest that the magistrate should have had reservations about accepting his evidence.
Before leaving the matter, I note that on the appeal the plaintiff made a submission to the effect that when the defendant took the iPulse from its Malvern salon, a form of deemed retail sale occurred so that the defendant became obliged, at that time, to pay the full retail price to it for the iPulse. It is not necessary to address this submission in detail. It does not appear to have been raised at first instance. I am not in any event satisfied that some form of deemed retail sale occurred at that time. Even if it had, there would be a question as to whether the retail price was due to Cosmetic Co and not to the plaintiff.
For the reasons outlined above, the appeal is dismissed.