GE Commercial Corporation (Australia) Pty Limited v Mastersport Motor Racing Developments Pty Limited & 1 Ors

[2006] NSWSC 1223

CITATION:	GE Commercial Corporation (Australia) Pty Limited v Mastersport Motor Racing Developments Pty Limited & 1 Ors [2006] NSWSC 1223
HEARING DATE(S):	15/11/2006
JUDGMENT DATE :	17 November 2006
JUDGMENT OF:	Associate Justice Malpass
DECISION:	The summons is dismissed. The plaintiff is to pay the costs of the proceedings.
CATCHWORDS:	Undisclosed principal - rental agreement - claim for payment of arrears and interest - procedure for hearing of claims in Small Claims Division - application to call oral evidence rejected by Assessor - admissions made in the pleadings concerning principal and agency agreement - limitations with respect to suing - allegations of denial of natural justice - second judgment
PARTIES:	GE Commercial Corporation (Australia) Pty Limited (Pl) Mastersport Motor Racing Developments Pty Limited & 1 Ors (1st Def) Stephen Richard McIver (2nd Def)
FILE NUMBER(S):	SC 10915/06
COUNSEL:	Mr R Scruby (Pl) Mr G Drake (1st & 2nd Defs)
SOLICITORS:	Kemp Strang (Pl) Searle & Associates Lawyers (1st & 2nd Defs)
LOWER COURT JURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	7059/05
LOWER COURT JUDICIAL OFFICER :	Assessor G Roberts
LOWER COURT DATE OF DECISION:	30/01/06
LOWER COURT MEDIUM NEUTRAL CITATION:	GE Commercial Corporation (Australia) P/L v Mastersport Motor Racing Developments P/L and Stephen McIver

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE MALPASS

17 November 2006

10915/06 GE Commercial Corporation (Australia) Pty Limited v Mastersport Motor Racing Developments Pty Limited & 1 Ors

JUDGMENT

1 His Honour: In June 1999, the defendants entered into a rental agreement with Rental Management Pty Ltd (Rental Management) . The first defendant was described therein as the “Renter”. The second defendant was the “Guarantor”. Rental Management was described as the “owner”.

2 The rental agreement contained, inter alia, the following terms and conditions:-

“2.1 You are responsible for obtaining the Goods and having them delivered, installed, constructed and put in good working order immediately upon the Goods becoming available for delivery.
2.2 You acknowledge that you alone are responsible for examining the Goods before accepting them and for satisfying yourself about them including: (a) their compliance with their description: (b) their condition, suitability and fitness for your purposes: and (c) the validity of any manufacturer’s, dealer’s or supplier’s warranties or guarantees.
….
3.2 Your obligation to pay instalments of Rental and any other amount will continue notwithstanding that the Goods are not completely and properly delivered and installed or do not operate as represented or warranted by the vendor of the occurrence of any defect or breakdown in the Goods or the Goods are unsatisfactory for any reason whatsoever.
….
4.6 You agree: (a) to the Owner entering into this Agreement as agent for any other person (whether disclosed or otherwise) and you agree to the Owner receiving any payment whatsoever in connection with the Owner entering into this Agreement as agent for any other person (whether disclosed or otherwise): and (b) to the fact that such other person may have or acquires the property in the goods.”

3 The rental agreement was part of a transaction which involved, inter alia, the subject goods being supplied by Sharp Office Products and the plaintiff being the undisclosed principal of Rental Management.

4 The goods comprised three items. In respect of one of the items, the goods supplied were defective. In respect of another of the items, what was supplied was not what should have been supplied pursuant to the contract (a printer HP 1175C). A promised replacement never eventuated.

5 The term of the rental was sixty months and the first defendant was obliged to pay fixed monthly payments of $249.00.

6 The first defendant made payments for some years. Following a lengthy period of dissatisfaction, the first defendant ceased making payments under the rental agreement (in about February 2003). This took place about twelve months subsequent to the expiry of the rental term. The difficulties confronting the first defendant are recorded in an affidavit sworn by its directors.

7 The rental agreement was brought to an end. In or about April 2005, the plaintiff made demand for payment of arrears and interest (concerning a period from March 2003 to May 2004). It was then that the defendants became aware of the plaintiff. The plaintiff brought proceedings in the Small Claims Division of the Local Court to recover, inter alia, the arrears (which were said to be in the sum of $2,913.48).

8 The Statement of Claim sued the first defendant as the principal debtor and the second defendant as guarantor.

9 It contained, inter alia, the following allegation:-

“2. Pursuant to a principal and agency agreement between Rental Management Pty Ltd ACN 008 288 257 ( ‘RM’ ) and the plaintiff, RM entered into an Agreement with the first defendant on behalf of the plaintiff ( ‘the Agreement’ )”

10 The defendants are based in Queensland. Solicitors in Queensland were instructed to prepare Notice of Grounds of Defence. The allegations made in paragraph 2 of the Liquidated Statement of Claim and the allegations of guarantee were admitted. The former admission may be found in paragraph 2 of the defence (the admission). The substantial matter put in issue by the defence (the main defence) was as follows:-

“3. The Defendant denies paragraph 3 on the basis that the contract of rental as entered into between the Defendant and Plaintiff was done so at the request of the Plaintiff’s agent. The rental contract was over a computer and computer equipment which was defective and which the Plaintiff and or the Plaintiff’s agent has refused to fix. At no stage has the computer equipment as sold to the Defendant complied with the requirements of the Defendant.”

11 The dispute went to hearing. It was heard by an Assessor. The plaintiff was represented by a solicitor (Mr Wong). Mrs McIver (a director) appeared in person on behalf of the defendants. It appears that the hearing may have taken in excess of two hours of time.

12 The procedure for the hearing of actions in the Small Claims Division is governed by a Practice Note. I shall briefly mention some of the matters provided for therein. There is no right to call witnesses to give evidence. Where a direction as to the attendance of witnesses has not been given, the action is to be heard and determined upon the written statements exchanged between the parties and other relevant documentation or material. The option of a ‘formal hearing’ is no longer available in the Division (see Practice Note 2 of 2005).

13 In this case, presumably no direction was given and the parties proceeded to a hearing on the exchanged statements. There was a transcript of what took place during the hearing.

14 The Assessor heard argument from the parties and exchanges took place between him and them.

15 At an early stage in the hearing, the transcript records that the Assessor observed that the main concern of the defendants was that the products were defective. However, he also expressed a need to point out that there was no evidence of a principal and agency agreement between Rental Management and the plaintiff and no evidence that the defendants were ever aware of it (the agency matters).

16 Mr Wong was called upon to address on the agency matters. Mr Wong informed the Assessor of the admission. The Assessor then expressed concern as to whether or not it comprised an admission of an agency agreement with the plaintiff.

17 Rather than then stand his ground and proceed with his reliance on the admission, Mr Wong responded as follows [T 4.12–14]:-

WONG: “Sure, I apologise that we weren’t able to put on a statement in relation to the principal agency agreement. I do have a representative of GE here.”

18 This has been treated as an application to call oral evidence. The Assessor appears to have regarded it as such and rejected the application.

19 It appears from the transcript and what has been said in this Court, that the proposed witness was a Mr Perry. In the transcript he is referred to as a representative of the plaintiff. Counsel for the plaintiff has told this Court that he was an employee of the plaintiff. No further information as to his status has been made available. What evidence he might have given has never been identified.

20 The principal and agency arrangements are the subject of a number of documents (the bundle of documents). They are exhibited to an affidavit sworn by Phillip Noel Parker (the solicitor for the plaintiff) on 24 August 2006.

21 The bundle of documents were not part of the witness statement material relied on in the Local Court. It is said that this was because of the admissions made in the pleadings. This Court has been told that the bundle of documents was not at Court at the time of the hearing before the Assessor.

22 Originally, the material provided by the witness statements concerning the rental agreement was restricted to a copy of the terms and conditions thereof. It was illegible. At some later stage during the hearing, the Assessor was provided with a blown-up copy of the rental agreement.

23 Prior to retiring to consider his decision, the Assessor expressed his thinking on the agency questions. He referred to the “… two limitations on an undisclosed principal suing” [T10.12-13]. The limitations have been otherwise described elsewhere in his judgment (as “criteria”, “requirements” and “limbs”).

24 Mr Wong was given the opportunity to further address on the matters of the limitations.

25 He made the following submission [T10.51-54]:-

WONG: “I can’t find it at the moment, but I know there is a provision in the rental agreement that states that this rental agreement can be based on any principal of Rental Management”

26 The provision that he had in mind was term and condition 4.6. It appears that Mr Wong did not thereafter locate the relevant provision and, as a consequence, the attention of the Assessor was not drawn to it.

27 What may be seen as a further application to call Mr Perry was made [T11]. Again, the Assessor appears to have rejected such a further attempt to call oral evidence.

28 The Assessor took a short adjournment. He returned and delivered an oral judgment (the first judgment). In his judgment, he found for the defendant and pronounced a verdict and judgment in their favour. In so doing, he addressed two issues; the first was the agency matters. He was of the view that the plaintiff failed on both limitations because of lack of evidence. The judgment does not contain any express reference to either the admission or term and condition 4.6.

29 The second issue concerned the main defence (it has been referred to as, inter alia, the “printer situation”). As I read the judgment, it appears to me that he has made a finding of breach (the printer “was never provided”). Again, he referred to a lack of evidence from the plaintiff. He did not expressly mention any term and condition of the rental agreement.

30 The Assessor then proceeded to deal at some length with the question of costs. He took a further short adjournment to consider that matter. Following his return to the bench, Mr Wong again raised the matter of the admission.

31 The transcript records the following [T21.1-11]:-

ASSESSOR: “So what do you want to say about that now Mr Wong? I’m quite happy, so you want to say, you’re alleging they’ve admitted the agency agreement, is that what you’re saying?
WONG: That’s correct, yes.
ASSESSOR: Well just stay there and I’ll clear the decks. What do you want to say about the printer?
WONG: Nothing about the printer, sir, I’m just---“

And at [T21.33-44]

ASSESSOR “okay, just give me a minute then and I’ll do that for you. Folks, it’s a very technical point, Mr Wong is saying that your, the defence your solicitors drew up, admit that it’s an agency agreement. My concern was, and I thought I expressed it, but I respect Mr Wong on that. My concern was, that the fact that an agency agreement is admitted does not necessarily automatically cover all the requirements that I set out that the law says you’ve got to show to be able to sue on that agreement, you see. But I will go, in fairness to Mr Wong and his client, I’ll just go and sit down and think this through for a second. What time is your flight out of there by the way?”

32 The Assessor then took another short adjournment. Upon his return, he delivered, what might be described as, another oral judgment (the second judgment). In the second judgment, he appears to have had a fresh look at the agency matters in the light of the further submissions made by Mr Wong concerning the admission. His reconsideration did not bring about any change in the ultimate result. The only change revealed by what he said was a concession that the admission may satisfy the first limitation. He then adverted to what he described as an additional problem for the plaintiff. This was a reference to the main defence.

33 Towards the end of the second judgment he observed, inter alia, as follows [T23.8-14]:-

“But that admission, if it can be interpreted in the way Mr Wong wants, and I concede it could be I probably need to hear some further law on it perhaps, but it could be. That still won’t get them over the second limb they need to prove and it won’t get them over the printer situation that I’ve tried to painstakingly outline, okay?”

34 On 24 February 2006, the plaintiff filed a summons in this Court. It purports to bring an appeal against the Assessors decision. The statement of grounds attached thereto identifies seven grounds of appeal.

35 There is no appeal on the ground of error of law or error of fact from decisions made in the Small Claims Division. In this case, no question of jurisdiction was agitated. The grounds agitated were restricted to allegations of denial of natural justice. Counsel for the plaintiff has relied on a written outline of submissions and oral argument. The submissions reduced the area of attack made against the decision (the refusal of the two applications to call Mr Perry). Despite the smallness of the amount in issue, the hearing of the appeal occupied three hours.

36 The plaintiff adopts the position that the admission was a complete answer to what has been referred to as the agency matters and which were described by the Assessor as, inter alia, the limitations. If that be the case, the plaintiff did not need to adduce any further evidence (either orally or by documentation) in respect of them. It needs to be observed that the plaintiff had chosen to go to trial without placing the bundle of documents in evidence and to rely on the admission in lieu thereof.

37 In rejecting applications to call oral evidence, the Assessor was complying with the Practice Note. Leaving that matter aside, I am not persuaded that Mr Perry could have given any probative evidence on the matter.

38 In my view, even leaving aside the procedures prescribed for hearings in the Small Claims Division, not only was evidence from him not required, it has not been shown that any evidence that he might have been called to give could have possibly assisted the plaintiff.

39 The relevant evidence was to be found in the bundle of documents (which the plaintiff did not seek to tender). The plaintiff had the opportunity to make them part of the witness statement material. Surprisingly, the documents were not in Court or available for the purposes of the hearing. No application for adjournment was made, to enable them to be brought to Court.

40 What is natural justice is a flexible concept. There has to be a fair trial. What is required will vary from case to case. Each case will probably turn on its own particular facts.

41 I am not satisfied that the refusal to allow Mr Perry to give evidence gave rise to any denial of natural justice. Further, even if a different view were taken on that matter, I am not satisfied that it would have deprived the plaintiff of the possibility of a successful outcome. It may be added that the plaintiff’s case ultimately failed because the Assessor upheld the main defence.

42 What has been said disposes of this appeal. However, in deference to Counsel, I shall briefly refer to some other matters that arose during submissions.

43 There has been a little debate on the question of whether the Assessor was functus officio and therefore not empowered to proceed to further hear Mr Wong and deliver the second judgment. These matters were not fully argued and need not be determined in this case. In my view, these matters are irrelevant and otherwise of no consequence

44 On one view, the willingness to further hear Mr Wong and to further consider his submissions demonstrates no more than that the Assessor was seeking to do his best to give the plaintiff a fair hearing. The second judgment conveys the views formed following his consideration of the further submissions on the admission and the agency matters. Perhaps it may be said that it adds clarification to what he had earlier said on the main defence issue.

45 The second judgment brought about no change in the result of the case. If there was any earlier doubt, it would have removed any misunderstanding that the plaintiff had failed both on the issues of the agency matters and the main defence.

46 It may be that the Assessor did not have the admission in mind when he delivered the first judgment. However, during the course of earlier argument he had given it consideration and had expressed tentative views concerning it. The agency matters were not raised by the pleadings. In reaching a decision on them, the Assessor did deal with matters which had not been placed in issue by the parties. However, he was engaged in an informal hearing process involving a litigant in person. The plaintiff was in a position to deal with the matters and had the opportunity to do so. It may be that he has erred in his dealing with these matters. Be that as it may, any error does not assist the plaintiff in the present case.

47 The claim ultimately failed because of the Assessor’s findings of breach in respect of the “printer situation” and of his view that the main defence was an answer to the plaintiff’s claim.

48 It may be that in dealing with the main defence there was further error. Again, any such error does not give the plaintiff a remedy in this case.

49 Other matters were argued (including questions concerning the guarantee). In light of what has been said, these matters can be put aside.

50 The plaintiff bears the onus of satisfying the Court of an entitlement to relief. In my view, the plaintiff has failed to discharge that onus.

51 The summons is dismissed. The plaintiff is to pay the costs of the proceedings. Exhibits may be returned.

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