Gerrard & Anor v Slamar
[2004] WASCA 253 (S)
•16 MARCH 2005
GERRARD & ANOR -v- SLAMAR [2004] WASCA 253 (S)
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASCA 253 (S) | |
| THE FULL COURT (WA) | 16/03/2005 | ||
| Case No: | FUL:117/2002 | 21 APRIL 2004 & 18 FEBRUARY 2005 | |
| Coram: | STEYTLER J EM HEENAN J LE MIERE J | 12/11/04 | |
| 18/02/05 | |||
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Leave to amend grounds of appeal granted Appeal allowed Judgment varied No order as to costs | ||
| B | |||
| PDF Version |
| Parties: | JOHN WILLIAM GERRARD LINDA ROSE GERRARD TROY RUDOLPH HERBERT SLAMAR |
Catchwords: | Appeal Application for leave to amend grounds of appeal after hearing Damages Bailment Improvement of bailed chattel due to actions of bailee Bailor recovering improved value of chattel in claim for damages for destruction of bailed goods while in possession of bailee Obligation of bailor to pay repair charges for the work resulting in improvement in value of chattel Costs Local Court scale |
Legislation: | District Court Act 1969 Local Courts Act, s 17 Rules of the Supreme Court, O 66 r 16 Supreme Court Act 1935 |
Case References: | Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333 Electricity Trust of South Australia v O'Leary (1986) 42 SASR 26 Gerrard & Anor v Slamar [2004] WASCA 253 Green v Sommerville (1979) 141 CLR 594 Greenwood v Bennett [1973] QB 195 Jones v The Queen (1989) 166 CLR 409 McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303 Munro v Wilmott [1949] 1 KB 295 Nash v Barnes [1922] NZLR 303 National Australia Bank Ltd v Bond Brewing Holdings [1991] 1 VLR 386 Re Simms [1934] 1 Ch 1 Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 Tom Hopkins Inc v Wall & Redekopf Realty Inc [1985] 6 WWR 367 University of Woollongong & Ors v Metwally (No 2) (1985) 59 ALJR 481 Water Board v Moustakas (1988) 180 CLR 491 Dearman v Dearman (1908) 7 CLR 549 Steele v Tardiani (1946) 72 CLR 386 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : GERRARD & ANOR -v- SLAMAR [2004] WASCA 253 (S) CORAM : STEYTLER J
- EM HEENAN J
LE MIERE J
DECISION : 18 FEBRUARY 2005 PUBLISHED : 16 MARCH 2005 FILE NO/S : FUL 117 of 2002 BETWEEN : JOHN WILLIAM GERRARD
- LINDA ROSE GERRARD
Appellants (Defendants)
AND
TROY RUDOLPH HERBERT SLAMAR
Respondent (Plaintiff)
Catchwords:
Appeal - Application for leave to amend grounds of appeal after hearing - Damages - Bailment - Improvement of bailed chattel due to actions of bailee - Bailor recovering improved value of chattel in claim for damages for destruction of bailed goods while in possession of bailee - Obligation of bailor to pay repair charges for the work resulting in improvement in value of chattel - Costs - Local Court scale
(Page 2)
Legislation:
District Court Act 1969
Local Courts Act, s 17
Rules of the Supreme Court, O 66 r 16
Supreme Court Act 1935
Result:
Leave to amend grounds of appeal granted
Appeal allowed
Judgment varied
No order as to costs
Category: B
Representation:
Counsel:
Appellants (Defendants) : Mr M T S Rennie
Respondent (Plaintiff) : Mr J C Curthoys
Solicitors:
Appellants (Defendants) : Michael Rennie
Respondent (Plaintiff) : Stables Scott
Case(s) referred to in judgment(s):
Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333
Electricity Trust of South Australia v O'Leary (1986) 42 SASR 26
Gerrard & Anor v Slamar [2004] WASCA 253
Green v Sommerville (1979) 141 CLR 594
Greenwood v Bennett [1973] QB 195
Jones v The Queen (1989) 166 CLR 409
McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303
Munro v Wilmott [1949] 1 KB 295
Nash v Barnes [1922] NZLR 303
National Australia Bank Ltd v Bond Brewing Holdings [1991] 1 VLR 386
(Page 3)
Re Simms [1934] 1 Ch 1
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418
Tom Hopkins Inc v Wall & Redekopf Realty Inc [1985] 6 WWR 367
University of Woollongong & Ors v Metwally (No 2) (1985) 59 ALJR 481
Water Board v Moustakas (1988) 180 CLR 491
Case(s) also cited:
Dearman v Dearman (1908) 7 CLR 549
Steele v Tardiani (1946) 72 CLR 386
(Page 4)
1 STEYTLER J: I have had the advantage of reading the judgment of E M Heenan J. It expresses my own reasons for joining in the orders of the Court which were made on 18 February 2005. There is nothing I wish to add.
2 EM HEENAN J: When the appeal in this case - Gerrard & Anor v Slamar [2004] WASCA 253 was allowed in part by this Court on 12 November 2004 the Court stood over that part of the appeal which challenged the dismissal of the appellants' counterclaim in the District Court. The circumstances which led to that order are set out in [42] - [53] of the earlier reasons of this Court.
3 Subsequently, in December 2004, the appellants applied by motion for leave to amend their notice and grounds of appeal, in the manner set out below and for leave to have the hearing of the appeal re-listed to deal with that motion and with the appeal against the dismissal of their counterclaim which had been stood over.
4 The amendments sought by the appellants to their notice and grounds of appeal were twofold. First, the appellants sought additional orders on their appeal as follows:
"(d) alternatively, if the respondent's claim is not dismissed, there be judgment on the Appellants' counterclaim against the Respondent in the sum of $7,711.87 together with interest thereon at the rate of 8% per annum from 9 September 1994 to 12 September 1997 at the rate of 6% per annum from 13 September 1997 to the date of judgment; and
(e) the Respondent do pay the Appellants' costs of the trial or alternatively the costs of the counterclaim."
5 In further support of the additional orders sought on the appeal, the appellants sought to include the following additional ground of appeal, namely:
"7. The learned Judge erred in law in dismissing the Appellants' counterclaim for the balance outstanding on the cost of repairs to the truck on account of the Plaintiff's success in his claim for damages.
The Learned Judge should have found that the Respondent should pay the Appellants the sum of $7,701
(Page 5)
- (plus interest thereon) being the balance outstanding on the cost of repairs to the truck.
- (a) The Respondent being entitled to the tortious measure of damages, the Learned Judge should have put the Respondent in the position that he would have been in had the Appellants not been negligent, namely, owning a truck capable of earning income and having an obligation to pay the Appellants for the work and parts supplied.
(b) Alternatively, having awarded the Respondent damages assessed on the pre-accident, post-repair value of the truck less its salvage value, the Learned Judge should have allowed the Appellants the cost of putting the truck in its pre-accident condition."
6 The respondent opposed the application for leave to amend the notice and grounds of appeal as sought on the basis that it was made late, indeed after submissions on the appeal and cross-appeal had been concluded and after the reasons of the Court for judgment (on issues other than the appellants' counterclaim) had been delivered. In further support of that submission, the respondent contended that to permit the proposed amendment would mean that additional evidence may be required and that the respondent had been prejudiced by being deprived of the opportunity to consider and address this proposed amended ground of appeal before and at the hearing of the appeal in April last. The respondent further submitted that the amendment sought should not be granted because it was bound to fail.
7 The respondent submitted that the appellants had not sought, by their notice of appeal, judgment on their counterclaim in the event that their appeal against the finding of liability was dismissed and that this point could not be raised for the first time upon the appeal, even more so at this late stage after the hearing of an appeal, when it could possibly have been met by calling evidence below - Water Board v Moustakas (1988) 180 CLR 491 at 497. Further, in this respect, the respondent submitted that the appellants had not squarely raised this issue for consideration by the court in the original notice of appeal or at the hearing of the appeal and that, therefore, the court's power to deal with a novel point, even if it
(Page 6)
- could not have been met by further evidence at trial, should not be exercised and that the present situation could be distinguished from that examined by the court in National Australia Bank Ltd v Bond Brewing Holdings [1991] 1 VLR 386 at 591 - 594 and Jones v The Queen (1989) 166 CLR 409 at 411, and 415 - 416. In this respect the respondent submitted that the appellants were bound by the conduct of their case at the hearing of the appeal - University of Woollongong & Ors v Metwally (No 2) (1985) 59 ALJR 481 at 483.
8 As these objections all involved an examination of the merits of the proposed amended ground of appeal and a consideration of whether or not the respondent would be deprived of any opportunity to address the proposed ground of appeal or might have been able to counter it by adducing further evidence at the trial, it was appropriate to consider both the merits of the application for leave to amend and the appeal against the dismissal of the counterclaim together.
9 As set out in our earlier reasons, the respondent succeeded at trial in recovering damages for the loss of his "Louisville" prime mover when it was irreparably damaged on 8 September 1994 while in the possession of the appellant undergoing repairs. The value of the respondent's motor vehicle at the date of its loss was found to be $32,000 which, once the salvage value of the wrecked vehicle of $13,000 was deducted, left the respondent with a loss of $19,000 plus interest. The learned trial Judge had included a further component of damages of $10,000 plus interest for the loss of the use of the truck for a period of three months after its destruction. It was this latter component of damages for loss of use and interest which was set aside by the judgment of this Court of 12 November 2004. The result then was to reduce the respondent's damages plus interest to the amount of $27,673.37 ($19,000 damages + $8,673.37 interest).
10 When the respondent's vehicle was irreparably damaged on 8 September 1994 the repairs which the appellant had been engaged to perform had almost entirely been completed for the vehicle was then being driven on the roadway en route to a dyno tune performance in order to check that the repairs had been satisfactorily completed and that the vehicle was ready to be delivered to the respondent. The destruction of the vehicle was due to a failure in the steering mechanism resulting from a negligent omission of the appellants to assemble the steering mechanism fully and to connect it properly. In that sense, therefore, the repairs had not been entirely completed because the vehicle had not properly been re-assembled and if the defect had been detected a small amount of
(Page 7)
- additional work by the appellants to connect up the steering mechanism properly would have been needed but all the implications in the evidence and in the submissions from the parties were to the effect that the work involved to complete that task should have been relatively short and simple.
11 By the judgment given after trial, the respondent succeeded in recovering damages for the loss of the vehicle (since reduced by the order of this Court of 12 November 2004) and the appellants failed to recover any part of their counterclaim of $7,711.87 plus interest, being the fees they charged for carrying out the repair work to the vehicle involving the reconditioning and servicing of the engine. As set out in [12] of the reasons of this Court of 12 November 2004:
" ... the learned trial Judge concluded that the value of the prime mover at the date of its destruction included and reflected the work which had been undertaken by the appellants in overhauling and reconditioning the engine. It was his Honour's finding that the $32,000 figure for the value of the truck at that date included 'the parts supplied by each of the parties and the added value supplied by the appellants' [defendants'] labour'. In those circumstances the respondent had the benefit of the work which he had instructed the appellants to perform on the vehicle, from the manner in which the learned trial Judge treated the vehicle as being worth $32,000 in full working order at the date of the accident."
- See also the reasons for decision of the learned trial Judge at [63].
12 His Honour also found (at [80]) that had the appellants not been liable to the respondent in damages for the loss of the vehicle, he would have allowed the counterclaim. Both these findings necessarily imply that most, if not all, of the repair work which the appellants had agreed to perform had been completed, save for the omission to reconnect the steering mechanism correctly. More significantly, the findings involve the conclusion that the $32,000 attributed by the respondent to the value of the truck at the time of the loss represented its value as a vehicle in full working order and ready for use at that date.
13 At common law the measure of damages to which a claimant it entitled for the loss of his goods is normally their market value at the time and place of the loss - Electricity Trust of South Australia v O'Leary (1986) 42 SASR 26; Tom Hopkins Inc v Wall & Redekopf Realty Inc [1985] 6 WWR 367 and Re Simms [1934] 1 Ch 1. In the case of a chattel
(Page 8)
- or chattels used for commercial purposes, in certain circumstances the loss of the special value of the chattel to the claimant or loss of profits directly flowing from the loss of the use of the chattel may also be recoverable but, as explained in our earlier reasons, the claim for additional damages under this heading failed in this case for lack of proof.
14 In certain situations, including this case, the value of the claimant's goods or chattels may be increased by improvements to them effected by the defendant during the period when the defendant had possession of those goods or chattels. In such a situation the claimant will generally not be entitled to recover the increase in value to the goods or chattels which is attributable to improvements made to them by the defendant or by some third party: Nash v Barnes [1922] NZLR 303 per Salmond J at 311 and Greenwood v Bennett [1973] QB 195. This is the case, even where the increase in value is due to improvements which add additional parts or components to the chattel which pass to the owner by way of accession, although, in such a case, where the claimant seeks specific restitution of the improved chattel instead of damages he may be required to contribute to the value of the improvements effected by that process of accession - see, generally, McKeown v Cavalier Yachts Pty Ltd (1988) 13 NSWLR 303 per Young J at 309 - 312. In those cases where the claimant is seeking damages for the loss or destruction of his chattel, when in possession of the defendant but where its value has been improved by work carried out by the defendant, the claimant will be restricted to damages to the value of the chattel as it stood without the benefit of the improvements. In a case such as the present, this would be the value of the Louisville prime mover in its broken down condition, partially dismantled, as it was when delivered to the appellants.
15 There are, however, situations where, despite this primary rule, the claimant will be entitled to recover, as damages, the value of his chattel increased as that was by improvements effected by the defendant. So, in Munro v Wilmott [1949] 1 KB 295 the plaintiff's motor vehicle had been left in the possession of the defendant for repairs and repainting. After the work had been completed and when the defendant had been unable to contact the car owner, the defendant wrongly sold the vehicle. When the defendant was found liable to the original owner in damages, in both detinue and conversion, it was held that he was entitled to deduct from the value of the car at the date of the judgment his expenditure in repairing and repainting it because, otherwise, the plaintiff owner would profit from the improvements which had been effected - see "Clerk & Lindsell on Torts", 18th ed (2000), par 14-105 and Greenwood v Bennett (supra).
(Page 9)
16 In the present case the respondent sought to recover the value of the Louisville truck at $32,000 - less salvage - on the footing that $32,000 represented the value of the vehicle in full working order. As noted, the learned trial Judge found that to be the case. At the trial the respondent put forward a valuation of the vehicle on that basis as an agreed valuation upon that footing. An examination of the transcript at the trial revealed that counsel for the appellants (defendants) had argued that an alternative valuation propounded by his clients for a lower value on the basis of the vehicle in its non-working condition at the time it had been delivered for engine reconditioning should have been preferred. Nevertheless, for reasons which are not entirely clear, that alternative basis for valuation propounded by the appellants was not pursued and it was certainly not adopted by the learned trial Judge. Damages were assessed on the footing that the value of the vehicle had been enhanced by the repair work carried out by the appellants. What was the extent of this enhancement in value was not put in issue at the trial and therefore, naturally, was not the subject of any finding by the learned trial Judge. It may have been more or less than the amount charged for the repairs but even if it had been less than the cost of repairs that does not, in our view, alter the result in this case.
17 The respondent could, of course, have sought damages for the value of the Louisville prime mover in its condition at the date it was delivered to the appellants for repair and, on the findings made by the learned trial Judge and confirmed by the judgment of this Court of 12 November 2004, he would have succeeded in this respect. Had that been the respondent's approach then no payment for any work done under the contract for the repair and reconditioning of the motor would have been due to the appellants because their contract had not been fully completed and they were unable to return the bailed chattel in an undamaged condition to the owner. However, where the respondent owner elected to claim the improved value of the chattel which he had left for repair, he became liable to pay the agreed charges for the repair work or, failing agreement upon the charges, a reasonable fee for the repairs. At the trial there was no dispute about the amount charged by the appellants for repairing and reconditioning the motor of the Louisville prime mover. That circumstance, together with the learned trial Judge's finding that, but for the destruction of the vehicle, he would have allowed the counterclaim for the repairs in the amount charged, indicates that the $7,711.87 charged for the repairs was either accepted or regarded as a reasonable fee for the work done. There was no other evidence at the trial about the cost of the repair work but the case had proceeded to trial on the footing that the
(Page 10)
- appellants' counterclaim for these repair costs was in issue (see defence to counterclaim at 1 AB 16).
18 Consequently, the determination of the appellants' counterclaim, including the assessment of the quantum of the counterclaim, was a matter of law for decision by the learned trial Judge upon evidence at the trial which was not contested. To recapitulate, the evidence of the value of the prime mover on 8 September 1994, the date it was damaged, including the effect of the work undertaken by the appellants showed it to be worth $32,000. The value of the prime mover in its non-working and dismantled condition when first delivered to the appellants for repair was not established at the trial, but was said to be less. The respondent sought and recovered damages on the footing that the value of his motor vehicle at the time of destruction was $32,000. There was no dispute that the amount of $7,711.87 had been charged by the appellants for the reconditioning and engine overhaul work; no suggestion that that was an excessive charge; and a finding by the learned trial Judge that, but for destruction of the vehicle, the repair charge claimed would have been payable by the respondent. The respondent was on notice before and at the trial of the action that the appellant was seeking to recover the repair charges.
19 In these circumstances we do not see how the respondent could be prejudiced by this Court granting the appellants leave to amend their notice and grounds of appeal as sought, even at this late stage of the appeal. Had this proposed ground of appeal been included in the notice of appeal when the appeal was first instituted, or if it had been the subject of an application for leave to amend at or before the hearing of the appeal in April 2004, I do not see how any objection to the proposed amendment could then have been sustained. All the evidence necessary for the resolution of the appeal, including resolution upon this additional ground, had been received at the trial where that issue had been in contest.
20 The resolution of the additional proposed ground of appeal involves the application of settled principles of law to established facts and, therefore, the situation is within the category of cases where amendment on appeal, or even after the initial hearing of an appeal, may be permitted - Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 439 and Green v Sommerville (1979) 141 CLR 594 per Mason J at 608. If leave to amend is not granted then the inevitable result will be that the respondent will have recovered damages for the value of the Louisville prime mover in its condition, improved by the work done by the appellants, without giving credit of any kind for the value of the work done. It is not for this Court
(Page 11)
- to approve a result where it has been demonstrated that the respondent would obtain excessive damages.
21 It was for these reasons, therefore, that at the conclusion of the hearing on 18 February that I agreed that leave to amend the notice of appeal and grounds of appeal sought by the appellants should be granted and that the appellants' appeal from the dismissal of their counterclaim should be allowed.
Interest
22 In deciding to allow this aspect of the appeal on 18 February the Court also concluded that the appellants should be entitled to recover interest upon the counterclaim, from the date upon which the appellants first submitted an account for the repair charges until the date of the judgment after trial in the District Court, at the rates applying during that period as declared under s 32 of the Supreme Court Act 1935. The parties thereupon accepted that such interest should accrue for the period from 1 January 1997 until judgment. The applicable rates of interest during that period are 8 per cent per annum simple interest from 1 January 1997 until 12 September 1997, and thereafter 6 per cent per annum simple interest until judgment on 18 July 2002.
Costs
23 Having announced that the appeal against the dismissal of the appellants' counterclaim would be allowed and orders in these terms would be made, the Court then received submissions from the parties about the order or orders which should be made regarding the costs of the appeal and cross-appeal.
24 The final result of the litigation between the parties is that the respondent's damages have been reduced from $42,238.30 to $27,673.37 and that the appellants have succeeded in obtaining judgment on their counterclaim for $7,711.87, plus interest, for the period from 1 January 1997 until 18 July 2002. Against this, the appellants have failed in their appeal against the finding of the learned trial Judge that they were liable in damages to the respondent for the loss by destruction of his Louisville prime mover. In such circumstances, the case might ordinarily be regarded as calling for an order that the appellants should recover part, but not all, of their costs of the appeal and that the respondent should be entitled to part, but not all, of his costs of opposing the appeal.
(Page 12)
25 At this point, however, counsel for the appellants produced to the Court a "Calderbank offer" (Calderbank v Calderbank [1976] Fam 93; [1975] 3 All ER 333) which had been made after the institution of the appeal and which proposed a resolution of the appeal proceedings on terms which appeared, in broad terms, to be more favourable to the respondent than the result which has occurred after the appeal has been fully and finally determined. In this process, the appellants have also established that the respondent's claim, as finally upheld, even without taking into account the appellants' counterclaim which has now been allowed, is for an amount which has at all times been within the jurisdiction of the Local Court of Western Australia. Consequently, by reason of the effects of s 86 of the Local Courts Act 1904, s 64 and s 74 of the District Court of Western Australia Act 1969 and RSC O 66 r 16, r 17, the costs recoverable shall not be greater than the claimant could have recovered had the action been brought in a Local Court unless the Judge certifies. We consider, that as a matter of general discretion, there should be no order for costs on this appeal or cross-appeal.
26 At the completion of the hearing on 18 February orders were, accordingly, made that:
1. the appellants have leave to amend the notice and grounds of appeal in terms of their minute dated December 2004;
2. ground 7 of the amended ground of appeal is allowed and the order of the learned trial Judge dismissing the appellants' counterclaim is set aside, and in lieu thereof it is ordered that the respondent pays to the appellants the sum of $7,771 plus interest on that sum from 1 January 1997 until judgment at the rate of 8 per cent per annum up until 12 September 1997, and 6 per cent per annum thereafter until the date of the judgment; and
3. there be no order as to the costs of the appeal, including the costs of the further hearing on 18 February 2005.
27 On that occasion, while delivering brief reasons for that decision, the Court announced that detailed reasons would be published in due course. These are my considered reasons for agreeing in the decision of the Court to make those orders.
(Page 13)
28 LE MIERE J: I have read the reasons for judgment of EM Heenan J. It expresses my own reasons for joining in the orders of the Court which were made on 18 February 2005.
0
10
4