Ferryboat Pty Ltd v Gray
[1999] TASSC 126
•22 November 1999
[1999] TASSC 126
CITATION: Ferryboat Pty Ltd v Gray [1999] TASSC 126
PARTIES: FERRYBOAT PTY LTD
v
GRAY, Alan
TITLE OF COURT: SUPREME COURT OF TASMANIA
JURISDICTION: ORIGINAL
FILE NO/S: 298/1997
DELIVERED ON: 22 November 1999
DELIVERED AT: Hobart
HEARING DATES: 6, 11 October 1999
JUDGMENT OF: Underwood J
CATCHWORDS:
Contract - General contractual principles - Discharge, breach and defences to actions for breach - Repudiation and non-performance - Repudiation - Anticipatory breach - What constitutes such breach and repudiation.
Freeth v Burr (1874) 9 LRCP 208; Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401, followed.
Aust Dig Contracts [131]
Procedure - Miscellaneous procedural matters - Money counts - Money had and received - General principles - General - Total failure of consideration.
David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353, applied.
Aust Dig Procedure [788]
REPRESENTATION:
Counsel:
Plaintiff: S B McElwaine
Defendant: C N Dockray
Solicitors:
Plaintiff: S B McElwaine
Defendant: C N Dockray
Judgment Number: [1999] TASSC 126
Number of Paragraphs: 48
Serial No 126/1999
File No 298/1997
FERRYBOAT PTY LTD v ALAN GRAY
REASONS FOR JUDGMENT UNDERWOOD J
22 November 1999
The claim
David Walter Bell is an abalone diver. He is a director and shareholder of the plaintiff company. At all material times the plaintiff employed Mr Bell and a deck hand. The plaintiff also provided other services to facilitate Mr Bell's fishing operations, but as Mr Bell was at all relevant times the "alter ego" of the plaintiff, his words and acts being those of the plaintiff, no distinction between him and the plaintiff is drawn in these reasons for judgment.
Between about July 1992 and August 1995, the plaintiff employed the defendant as a deck hand. The plaintiff claims from the defendant the repayment of moneys that he alleges he advanced to the defendant at the end of 1994 for deck hand work to be performed, but which was not performed by the time the defendant left the plaintiff's employment. The amount claimed is $16,463.70. In essence, the claim is for money had and received or unjust enrichment. The defendant denies that he was unjustly enriched and claims that all the moneys paid to him, or to his use by the plaintiff, were for wages due and owing to him. Ascertainment of the terms of the contract of employment lie at the heart of this dispute.
Abalone diving licences and quotas
In order to understand the relationship between the plaintiff and the defendant, it is necessary to know something about the licensing of divers and the imposition of quotas on the quantity of abalone that divers can catch. Although it is lawful to catch abalone virtually all year round, legislation prohibits the taking of abalone without a licence. In addition, there is a limit on the quantity of abalone that may be taken by a licensed diver. This is known as a quota and is expressed in units.
Prior to about 1994, the quota was attached to the diving licence. In about 1994, the legislation changed and two licences were issued. One, a diving licence, permitted the taking of abalone and the other, a quota licence, prescribed the quota or weight of abalone that could be taken. Diving licences can only be held by natural persons. The plaintiff's diving licence and, subsequently, his quota licence, permitted the taking of 28 units or 16.8 tonnes of abalone. Only a person holding a diving licence was permitted to catch any part of a quota. At the time of the events relevant to this litigation, it was possible for the holder of a diving licence and a quota licence, to transfer up to 12 units of the quota to another holder of a diving licence. Thus, as well as catching their own quota, divers could catch some of the quota belonging to other licence holders if the units were transferred to them.
By way of contractual obligations, Tasmanian Sea Foods Pty Ltd and A B L Pharm Pty Ltd, had an interest in the plaintiff's quota licence. Tasmanian Sea Foods Pty Ltd had a 25 per cent interest and A B L Pharm Pty Ltd had a 50 per cent interest. By virtue of these contractual arrangements, the plaintiff was obliged to catch the whole of his quota each year and to sell it to Tasmanian Sea Foods Pty Ltd. Pursuant to a term of the contract, the plaintiff signed a blank transfer licence form and gave it to Tasmanian Sea Foods Pty Ltd. Although the contractual arrangements were not spelled out in detail, it seems that if the plaintiff breached certain provisions of the contractual arrangements, in particular the clause that required the plaintiff to catch the whole of his quota in each year, Tasmanian Sea Foods Pty Ltd was entitled to give the plaintiff 60 days' notice of cancellation of the contract and thereafter transfer its interest in the quota to another diver. I refer to these arrangements because an important fact in the background against which the plaintiff and the defendant entered into their contract of employment was that the quota was a valuable commercial asset and it was unthinkable in the abalone fishing industry that the annual quota would not be caught.
The contract of employment
The plaintiff described abalone diving as "fickle". The fish were caught off both the East and the West Coast of the State. The plaintiff said, and I accept, that he could catch his 16.8 tonne quota in about 30 - 50 diving days. The West Coast provided the best fishing grounds, but the weather often prevented diving in that area. In addition to the days actually diving, time was taken up driving to and from the site where the boat was launched and repairing and maintaining the equipment. The weather dictated on which days it was possible to go diving. Accordingly, divers and deck hands had to be ready to go fishing on short notice.
The plaintiff gave undisputed evidence that it was the practice in the abalone fishing industry to calculate the remuneration of deck hands by reference to the quantity of fish caught. The evidence was that deck hands were paid by reference to either a percentage of the price paid by the processor for the catch, or by reference to a sum of money per kilogram of abalone caught. It was common ground that the defendant was paid upon the basis of a certain amount per kilogram of abalone and not upon a percentage of the price paid by the processor. The amount varied during the time the plaintiff and the defendant worked together. It was also common ground that the plaintiff paid the defendant irregular amounts on an irregular basis, usually after landing a substantial catch. Appropriate taxation instalments were paid to the Commissioner of Taxation and a final reconciliation was made at the end of each financial year.
Fundamental to the plaintiff's case is the proposition that it was a term of the contract of employment that the defendant would be paid only for the fish that the plaintiff actually caught. Fundamental to the defendant's case is the proposition that the agreement was that each year he was to be paid a sum calculated by multiplying the plaintiff's quota of 16.8 tonnes by an agreed rate per kilogram of abalone, irrespective of whether the 16.8 tonnes of fish were caught or not.
The undisputed evidence was that in mid-1992, the plaintiff's then deck hand went to Perth, Western Australia and the plaintiff asked the defendant to work for him. The defendant agreed. The plaintiff said that it was agreed between him and the defendant that the latter would work as a deck hand for $1.20 per kilogram of abalone. The defendant said that when he started work for the plaintiff in 1992, the plaintiff said to him, "I was to catch 16.8 tonne of abalone times $1.65 per kilogram and any other fish on top of that would be negotiable." He then corrected himself and said that he thought that the rate was then $1.20 per kilogram and added "but it was always 16.8 tonne quota, win, lose or draw." The defendant later explained that the expression "win, lose or draw" meant "if he didn't catch the fish I still got paid." I did not understand that piece of evidence to be any more than an explanation of an expression not used by the plaintiff, but used by the defendant to encapsulate what he claims the plaintiff said to him. The reference to "fish on top of that" was a reference to fish from another diver's quota. In cross-examination the defendant retracted this aspect of his evidence-in-chief. This is what he was asked and answered:
"Well you weren't engaged on the basis of 16.8 t in that year [1992] were you? ... Well it was only two months to go as you would understand and I was helping Mr Bell out.
And you, the basis of your employment then was that you'd be paid for the actual amount of abalone landed? ... In 1992.
Yes? ... Well I don't think we talked about it because he was very rushed to get a deck hand and I put me hand up to help him out cause he needed to get the fish caught. I don't think anything was said at all.
Well in December 1992 he asked you if you would work for him again in 1993 didn't he? ... Yes.
And you negotiated the higher rate of $1.50 per kilogram? ... That's right."
I do not accept that when he was first engaged in 1992 the plaintiff said anything to the effect that the defendant would be paid at a rate per kilogram multiplied by 16.8 tonnes. The defendant conceded as much in his cross examination. At that time, neither party was sure if the defendant would become the plaintiff's permanent deck hand. Further, at that time, the plaintiff had caught some of his quota for that year and accordingly, it is highly improbable that the plaintiff would have said anything other than the defendant would be paid at the rate of $1.20 per kilogram. Accordingly, I find that it was a term of the contract of employment made in 1992, that the defendant would be paid only for the fish that the plaintiff caught whilst the defendant was working for him as a deck hand, calculated at the rate of $1.20 per kilogram.
The plaintiff said, and I accept, that the defendant turned out to be a satisfactory deck hand. About eight weeks after the defendant started working for him, the plaintiff offered him continued employment as his deck hand in 1993. I accept the plaintiff's evidence that the defendant said he would take up this offer of work, provided the remuneration was increased from $1.20 per kilogram to $1.50 per kilogram, effective immediately. This was agreed. According to the plaintiff, nothing was said about the defendant being paid in 1993 for the whole of his quota of 16.8 tonnes, whether it was caught or not. The defendant said that as well as agreeing to pay at the rate of $1.50 per kilogram, the plaintiff "said that I would be paid 16.8 tonnes times the going rate."
I do not accept the defendant's evidence that the plaintiff said that to him towards the end of 1992. Generally speaking, the plaintiff was a careful witness who appeared to have a good memory for events and was able to supply particulars of relevant matters. On the other hand, the defendant was shown to have a poor memory and spoke mostly in generalities. As I have noted, he conceded that his evidence-in-chief was wrong in a fundamental respect. As will be seen, in a number of respects, the defendant's evidence did not coincide with documentary evidence and was contrary to the probabilities in a number of instances.
I accept that the defendant anticipated earning 16.8 tonnes times the agreed rate in 1993 because, as I have said, absent good cause, it would have been unthinkable that the plaintiff would not have harvested his full quota. I also accept that in 1993 the defendant did earn income equal to the agreed rate per kilogram multiplied by 16.8 tonnes because the plaintiff caught that quantity of fish in that year. However, it is inherently unlikely that the plaintiff and defendant would have agreed that pay would be calculated on the basis of a rate per kilo unless the total amount payable depended upon the weight of fish caught. If had been agreed that the defendant's pay over a period of 12 months would be $1.50 multiplied by 16,800, the parties would have agreed that the annual pay was $25,200. Further, despite the defendant's claim that the plaintiff agreed to pay him whether the fish were caught or not because he was on call to go fishing when required, it seems to me inherently unlikely that the plaintiff would enter into an agreement to pay the defendant whether he worked or not. The unlikelihood of all this is increased by the undisputed evidence that the practice in the industry was to pay deck hands by reference to the quantity of fish caught, either as a percentage of the value of the catch, or a rate per kilogram. The defendant's claim in this respect, involves the proposition that over a period of 12 months commencing on 1 January 1993 he would be paid $25,200 regardless of how much work he did provided he remained on call to work when required. Unambiguous evidence would be required to make out that proposition. Finally, the defendant accepted that when he left the plaintiff's employment in August 1995, his only entitlement then was to payment for fish caught up to the time his employment terminated. This, of course, was in accordance with the terms of his contract of employment in 1992.
It was common ground that in 1993, the parties agreed to increase the rate from $1.50 per kilogram to $1.65 per kilogram. A considerable body of evidence was directed to other terms of the contract of employment, such as whether the defendant was required to be ready to work for the plaintiff at any time on call, whether the defendant was a casual or permanent employee of the plaintiff and whether the defendant was free to work for others when not required to work for the plaintiff. None of that evidence really assists in the determination of whether it was a term of the contract of employment that the defendant would be paid for 16.8 tonnes of fish at an agreed rate, whether that quantity of fish was caught or not. The evidence made it clear that the relationship between the plaintiff and the defendant was a casual and flexible one. The working days were determined by the weather conditions. The defendant did not suggest that the plaintiff made unreasonable and arbitrary demands upon his time. I accept the plaintiff's evidence when he said that he was "very flexible with [his] workmates, and if they actually requested time off, then [he] would make allowances and determine not to work while they were unavailable".
The accident in 1994
The defendant worked for the plaintiff throughout 1993. The full quota was caught and the defendant was paid at the rate agreed. The working arrangement continued without interruption into 1994. Towards the end of winter in 1994, after a long spell away from diving, the plaintiff and the defendant were in the boat off Eddystone Point. In the rough conditions, the plaintiff fell and cracked two ribs. At the time of the accident, the plaintiff still had to catch 14.1 tonnes of his quota. He was off work for about six to eight weeks. He became concerned that he may not be able to catch the whole quota by the end of the year. He discussed this position with those parties who had an interest in his quota licence and it was agreed that rather than risk not catching the whole quota, the plaintiff should transfer some of the units to other divers who would catch the abalone at a price to be agreed. In total, 9.978 tonnes were assigned and caught by others.
The plaintiff said that he told the defendant that he was going to assign some of his quota before he did so, but the defendant denied that he knew anything about it at all. It is inherently unlikely that the defendant did not know about the assignment of these units. The evidence showed that the abalone divers were a relatively small group of people who frequently worked at the same time in remote spots. The evidence was that the community socialised together after the working day. The defendant acknowledged that he received no money from the plaintiff during the time the plaintiff was off work after his accident, but claimed it was of no concern of his whether the plaintiff was going to catch his quota, "because I had a contract with him, 16.8 tonnes times $1.65".
The request for money
The plaintiff said that in December 1994, he and the defendant, together with a number of other divers, were fishing at Granville Harbour on the West Coast. The plaintiff said that the defendant approached him and said that he "couldn't afford not to be paid for the abalone that [the other divers were catching]". The plaintiff said that he told the defendant that he could not afford to pay him, as well as the other divers to catch his abalone. The plaintiff then said that he put the proposition to the defendant that he would pay him as if none of the units had been assigned, provided that in future years, the defendant would work for him to make up the lost income, ie, to catch 9.978 tonnes from another quota licence or licences without being paid for that work. According to the plaintiff, the defendant agreed to this proposition. This is the foundation for the plaintiff's claim, but the defendant totally denied that there was any such conversation, or any conversation like it between him and the defendant.
It was common ground that at about this time the plaintiff gave the defendant a cheque for $10,000 and it is also common ground that at a final reconciliation made in June the following year, the defendant was paid upon the basis of 16.8 tonnes times $1.65 per kilogram. The defendant claims that this was in accordance with the terms of his contract of employment. The plaintiff claims that this was in accordance with the agreement made with the defendant at Granville Harbour in December 1994.
Subsequent events
It was common ground that the plaintiff and the defendant continued working together in 1995. The plaintiff said that in accordance with his practice, he calculated the amount due to the defendant for the financial year ended June 1995. He recorded the information in his computer. A printout was tendered in evidence, P11. It provided:
"Summary of wages to 18-6-95
Quota caught from 1-6-94 to 31-12-94 14100kg (actual abs caught 4122kg)
1-1-95 to 18-6-95 7825kg
21925kg @ $1.65/kg = $36176.25grossless tax 8975.40
$17200.85nett
Payments already made:-
9-12-94
17-1-95
14-3-95
8-5-95$10,000.00
$8900.00
$1,000.00
$2000.00
$21900.00- Less $5000 cash advance and $659 for wet suit = Cheque for $3241
nett owing
less already paid
less cash advance
less reg
balance owing$27200.85
-$21900.00
$5300.85
$2200.00
$3100.85
$115.00$2985.85"
The defendant did not dispute the accuracy of the figures set out in P11. As to whether the defendant knew that he had been paid the correct amount over the year, he said that he "trusted [the plaintiff]". He said that the plaintiff did pay for a wetsuit and a regulator ("reg") on his behalf. On the plaintiff's case, the significant entry is "(actual abs caught 4122kg)". The plaintiff contends that this corroborates the making of the agreement that he says was made with the defendant at Granville Harbour the previous December. The entry "(actual abs caught 4122kg)" is not corroboration of the plaintiff's account of the conversation with the defendant in December, as he is the author of both pieces of evidence, but it is consistent with the plaintiff's account and inconsistent with the defendant's account.
The plaintiff said that in June 1995, he gave the defendant a copy of P11, his group certificate for the financial year about to end, and a cheque for $2,985.85. He said that he discussed the document with the defendant who agreed it was correct. The plaintiff's financial records show that a cheque for $2,985.85 was drawn and debited against his bank account on 19 June 1995. In his evidence-in-chief, the defendant said that he did not see a copy of P11 until after these proceedings had been commenced. In cross-examination, he re-affirmed this evidence and said that he was certain that the plaintiff did not give him a copy of it in 1995 because he "probably would have disputed it, perhaps". As the cross-examination progressed it became quite clear that the defendant's evidence with respect to his receipt of this document and his knowledge of its contents was completely incorrect. He was shown a copy of P11 which bears a note in his own hand, addressed to his then solicitor:
"Ian, received this from David Bell 18-6-95. Clearly showing I worked for David in 1995? I actually worked for David to August in 1995 but didn't receive group cert in 95-96 tax (I didn't notice)."
I reject the defendant's evidence that he did not see P11 until after these proceedings began and find that the defendant was given a copy of it on 18 June 1995. I find that the plaintiff discussed its contents with the defendant, as he said in his evidence, and I find that the defendant understood the reference to "(actual abs caught 4122kg)" as a reference to the weight of abalone caught by the plaintiff during the relevant period. There would be no point in the plaintiff making that reference on P11 unless it had some significance and the only evidence of its significance was the plaintiff's evidence of the conversation at Granville Harbour the previous December.
According to the plaintiff, in about mid-1995, he heard rumours that the defendant was trying to buy a diver's licence. He said that he spoke to the defendant about it on more than one occasion, but the defendant denied the truth of the rumours. The plaintiff said that finally the defendant admitted that he was looking for a licence. The plaintiff said that he then asked the defendant about the agreement they had made and the defendant said, "yes, we'll have to talk about that".
It was common ground that the defendant did acquire a diver's licence and did leave the plaintiff's employ in August 1995. The defendant agreed that in about July, the plaintiff asked him if he was looking for licence. He said that he told the plaintiff that he had always been looking for a licence. The defendant denied that anything was said about any agreement made between the two of them the previous year and he denied that he had said, "we'll have to talk about that" or anything like it.
The plaintiff said that in 1995 he only caught his quota, but the following year he caught 14 tonnes in excess of his quota. The plaintiff said that some time "in the last three years", he approached the defendant and referred to the agreement that they had made. He said that when he did so, the defendant said, "Oh, I will have to help you catch some fish". The plaintiff said he responded, "Look, I can catch my own fish and I think there's a couple of ways we could sort this out but I'm not going to volunteer anything, you should go away and come up with something".
The plaintiff said that nothing happened as a result of that conversation, so he instructed his then solicitor to write a letter of demand to the defendant.
The defendant said that in December 1996, there was a conversation between him and the plaintiff outside the plaintiff's home. He said that the plaintiff asked him about the money and he responded, "what money?" He added that he "thought that there might have been a couple of hundred dollars or something like that that was owing." The defendant said that the plaintiff told him that he owed him $16,463. The defendant said he was "shocked", said no more and walked off.
If there had been no arrangement between the plaintiff and the defendant in December 1994 as described by the plaintiff in his evidence, and if the plaintiff had never previously claimed that the defendant owed him money, it is inherently unlikely that when told he owed $16,463, the defendant would have walked off without asking upon what basis it was claimed that that sum of money was owing, for on the defendant's case, there was no possible basis upon which he could have owed that sum of money or anything like it.
I was pressed by both sides in the case to have regard to various entries made by the plaintiff in his cheque butts and summary of payments made to the defendant to assist determination of the issue of whether or not there was an agreement made in December as described by the plaintiff. However, I find those entries of little assistance. The plaintiff's system of book keeping was somewhat haphazard and casual, and I do not feel able to draw any inference from entries marked "wages" or "advance" and the like, because it does not appear that the plaintiff attached any significance to the words he used to make the entries, other than, of course, to record that they were payments made to the defendant.
The plaintiff's evidence was clearly more reliable than that given by the defendant. Further, for the reasons given, the probabilities are overwhelming that it was a term of the contract of employment that the defendant would only be paid with respect to fish that the plaintiff caught at the agreed rate in 1994 of $1.65 per kilogram. It follows that the plaintiff would not have paid the defendant the amount he did pay him for the financial year ended June 1995, unless he had entered into the agreement that he said he entered into with the defendant at Granville Harbour in December 1994. This conclusion is, as I have said, supported by the entry on P11. However, the defendant called two abalone divers to give evidence in support of his case. The first, Mr Lisson, was the assignee of some of the plaintiff's units. The evidence established that the units were assigned in November 1994 and that Mr Lisson caught the fish between 2 and 13 December that year. Mr Lisson recalled discussing the price he would charge the plaintiff to catch the abalone and said:
"… I do clearly recollect um, the discussion in relation to the price and a comment made by Mr Bell that the sum that he wanted to offer of $4 per kg was in his eyes, a little bit less than what he would like to have paid, but that he felt obligated to pay his deck hand and accordingly he felt that $4 was a comfortable price."
Mr Lisson said that this discussion took place at the Margate Marina in mid-November 1994. In cross-examination, he said he was not asked to recall this discussion until late 1997, nearly three years after the event, when the defendant approached him and told him about the dispute between him and the plaintiff. Mr Lisson was closely cross-examined about this conversation with the plaintiff, but remained confident that the plaintiff had spoken of an obligation that he had to his deck hand.
The plaintiff recalled discussing the assignment of some of his quota with Mr Lisson, but had no recollection of saying anything at all about an obligation to the defendant.
The second witness to be called on behalf of the defendant was Mr Simpson. He also caught some of the plaintiff's quota at the end of 1994. He said that he entered into an agreement on about 5 December 1994 to catch some of the plaintiff's fish at the rate of $5 per kilogram. He said:
"Well, we just discussed a rate and I said $5 because I had been aware that he had offered that to another diver and I wasn't certainly going to go below that price. That was what we agreed on, on the day.
And was any mention made about Mr Gray during the discussion? … I was assured that Mr Gray was still going to be paid his deck hand wage."
He said that he was unable to remember the precise words of the conversation, but he was definitely assured that [the defendant] was to be paid. In cross-examination, Mr Simpson agreed that it was difficult for him to remember the words of his conversation with the plaintiff. He said that the plaintiff might well have said to him, words to the effect, that he need not worry about the defendant because he had made an arrangement with him to be paid for this year. The only evidence of the date of the alleged December agreement came from the plaintiff. He said that he thought it was made on the trip before he paid the cheque for $10,000. Entries in the plaintiff's books fix the date of the cheque as 9 December 1994. The evidence of the date of the agreement is imprecise but must have been some time fairly shortly before 9 December 1994. I am unable to find whether it was before or after the discussion between the plaintiff and Mr Simpson. In the light of Mr Simpson's evidence that the plaintiff may have said that he had made an arrangement with the defendant, and in the light of the fact that the plaintiff's discussion with Mr Simpson might have been after the time the plaintiff said that he made the agreement with the defendant, Mr Simpson's evidence is equally consistent with the defendant's version of events and the plaintiff's version of events.
I accept Mr Lisson's evidence. Although a considerable period elapsed between the time of the conversation and him being asked to recall it, he gave his evidence with clarity and although he is a friend of the defendant, there is no reason to suggest that his evidence was affected by that friendship. Mr Lisson was unable to recall the conversation verbatim but he was clear that the plaintiff used the word "obligation" in reference to paying the defendant and for that reason, he was only able to offer Mr Lisson a modest price for catching the abalone. I am clearly of the view that this evidence is not sufficient to weaken the overwhelming preponderance of all the other evidence to which I have referred, that the contract of employment only required the plaintiff to pay the defendant with respect to fish the plaintiff actually caught. In saying that I am mindful that the plaintiff carries the onus of proof. Careful study of Mr Lisson's evidence does not lead to the conclusion that what the plaintiff told him amounted to an admission or statement that the plaintiff was obliged by the terms of the contract of employment to pay the defendant with respect to his quota of abalone regardless of whether he caught all the fish or not. Given that in ordinary circumstances viz, there had been no accident late in the year, and given that it was common contemplation was that the plaintiff would catch his full quota of 16.8 tonnes, it may well have been that the plaintiff felt that he was under some, albeit non contractual, obligation to see that the defendant did not go short of money. He may well have said to Mr Lisson that he felt obligated to his deck hand, or even that he was obligated to his deck hand, but to construe Mr Lisson's evidence as evidence of an admission by the plaintiff that he had agreed to pay the defendant 16.8 tonnes times $1.65 per kilogram, regardless of fish caught, is to ignore the overwhelming force of the other evidence to which I have referred.
Accordingly, I find that in December 1994, the plaintiff and the defendant entered into an agreement as described by the plaintiff in his evidence and that the defendant has not carried out the work that he agreed to perform.
The law
Analysis of the conversation that I have found took place between the plaintiff and the defendant at Granville Harbour in December 1994, discloses that a contract was entered into between the plaintiff and the defendant. The essential terms of the contract were that in consideration of the plaintiff paying the defendant $1.65 per kilogram for fish which the plaintiff was authorised by his quota licence to take in the calendar year ended December 1994, but which in fact were taken by other divers during that year, the defendant would work for the plaintiff as his deck hand, without payment, at some time in the future, to enable the plaintiff to catch an equivalent quantity of fish from another person's quota licence.
The plaintiff has discharged his obligation under the agreement, but the defendant has performed no part of his obligation. By taking up a diver's licence and resigning from the plaintiff's employ in August 1995, the defendant committed an anticipatory breach of the contract and repudiated it. The act of resignation and taking up a diver's licence amounted "to an intimation of an intention to abandon and all together to refuse performance of the contract", per Freeth v Burr (1874) 9 LRCP 208 at 213. See also Universal Cargo Carriers Corporation v Citati [1957] 2 QB 401 at 437.
The defendant's repudiation of the contract was accepted by the plaintiff when he accepted the defendant's resignation from his employment and asked him, in effect, what he proposed to do about the agreement that they had made.
On behalf of the plaintiff, Mr McElwaine submitted the plaintiff was entitled to the return of his money upon the basis that there had been a total failure of consideration. On behalf of the defendant, Mr Dockray did not contend to the contrary in the event that the findings of fact were as I have made them.
In the context of restitution for total failure of consideration, the High Court said in David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353 at 382:
"In this context, consideration means the matter considered in forming the decision to do the act, 'the state of affairs contemplated as the basis or reason for the payment'."
In the present case, the benefit bargained for was work as a deck hand to enable the plaintiff to catch a determinable weight of abalone. No part of that bargain was delivered, cf Baltic Shipping Co v Dillon (1993) 176 CLR 344.
Accordingly, the plaintiff is entitled to restitution on the basis of a total failure of consideration of the contract made with the defendant in December 1994.
Mr McElwaine also submitted that the plaintiff was entitled to an order upon the basis that to permit the defendant to keep the benefit of the contract without performing any part of it, would amount to unconscionable conduct attracting the intervention of equity and the imposition of a constructive trust upon the money paid, see Muschinski v Dodds (1985) 160 CLR 583, Baumgartner v Baumgartner (1987) 164 CLR 137, esp at 149. There is considerable substance in this submission but having regard to the findings I have made with respect to the plaintiff's entitlement upon the basis of a total failure of consideration, it is unnecessary to entertain it.
The amount for which judgment should be entered
The plaintiff claims interest on any sum that the defendant is ordered to pay. The writ in these proceedings was issued on 24 September 1997. By letter dated 29 April 1997, the plaintiff's then solicitor wrote a letter of demand to the defendant. The letter concluded:
"Notice is also given pursuant to the Supreme Court Civil Procedure Act that interest will be claimed on the amount due from the date of this demand for payment."
The Supreme Court Civil Procedure Act 1932, s34(1)(b) provides for the payment of interest at the rate specified in the Rules of Court, O47, r16 from the time when demand for payment was made in writing. The prescribed rate of interest is 10 per cent and, accordingly, the plaintiff is entitled to recover interest on any judgment sum at that rate from 29 April 1997 until the date judgment is entered.
There is a difficulty about calculating the judgment sum. The defendant does not dispute that 9,978 kilograms of the plaintiff's quota for 1994 was caught by other divers. At $1.65 per kilogram, this amounts to $16,463.70, the amount claimed by the plaintiff in the statement of claim. The difficulty is that not all that money was paid to the defendant. Some presently unascertained part of that sum was paid to the Deputy Commissioner of Taxation on behalf of the defendant. That money may be recoverable from the Deputy Commissioner of Taxation but by whom is unclear. At the conclusion of the hearing, counsel agreed that if I determined that the plaintiff was entitled to recover from the defendant, I should give them an opportunity to be heard further before fixing the final sum.
It is ordered that there be judgment for the plaintiff against the defendant for an amount to be ascertained after further submissions, together with interest on that amount at the rate of 10 per cent per annum from 29 April 1997 to the date of judgment.
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