Hetherington v Tallenford Pty Ltd
[2013] WASCA 175
•7 AUGUST 2013
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: HETHERINGTON -v- TALLENFORD PTY LTD [2013] WASCA 175
CORAM: PULLIN JA
NEWNES JA
MURPHY JA
HEARD: 22 MAY 2013
DELIVERED : 7 AUGUST 2013
FILE NO/S: CACV 49 of 2012
CACV 51 of 2012
BETWEEN: KENNETH SYDNEY HETHERINGTON
Appellant
AND
TALLENFORD PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :ALLANSON J
Citation :TALLENFORD PTY LTD -v- GILETE G & B CIVIL PTY LTD [2012] WASC 156
File No :CIV 2449 of 2005
Catchwords:
Whether admission on pleadings - Implied terms - Findings based on credibility - Application for leave to appeal on point of practice and procedure
Legislation:
Nil
Result:
Appeal in CACV 49 of 2012 dismissed
Application for leave to appeal and appeal in CACV 51 of 2012 dismissed
Category: B
Representation:
Counsel:
Appellant: Dr P MacMillan
Respondent: Mr P K Walton
Solicitors:
Appellant: Gibson Lyons
Respondent: Jackson McDonald
Case(s) referred to in judgment(s):
Allmark v Mossensons (a firm) [2006] WASCA 127
BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266
Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410
Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337
Commissioner of Taxation v Sara Lee Household and Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520
Dodds v Kennedy [2011] WASCA 32
Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596
Tallenford Pty Ltd v Gilete G & B Civil Pty Ltd [2012] WASC 156
REASONS OF THE COURT: The appellant (Mr Hetherington) gave a guarantee to secure the payment of the goodwill in a transaction in which a company (Gilete) agreed to purchase the business of the respondent (Tallenford). Tallenford, at the time, carried on business as a drainage contractor under the name 'G & B Drainage'. Mr Hetherington was a director of the purchaser, Gilete.
Tallenford sued, amongst others, Mr Hetherington under the guarantee and was successful before Allanson J at first instance: Tallenford Pty Ltd v Gilete G & B Civil Pty Ltd [2012] WASC 156. In appeal CACV 49 of 2012, Mr Hetherington appeals Allanson J's substantive decision. In appeal CACV 51 of 2012, he alleges that the primary judge erred in not allowing certain amendments to be made to his defence after the conclusion of the evidence at the trial.
The background
The background facts as found by the trial judge are not materially in dispute.
On 2 February 2003, Gilete and Tallenford entered into a written agreement by which Gilete agreed to purchase the business of Tallenford. This was described by the judge as the 'Original Contract'. There were terms of the Original Contract to the effect that:
(a)goodwill of $1.3 million was to be paid to Tallenford by Gilete:
(i)over a 24 month period from the date of settlement;
(ii)$200,000 was to be paid within two months of the date of settlement;
(iii)the balance of $1.1 million was to be paid in two‑monthly intervals in amounts calculated in accordance with a certain formula concerning profits, with the final outstanding sum to be paid, in any event, on the 24th month after the date of settlement,
(b)interest was to be paid on outstanding amounts;
(c)the payment of the goodwill was to be secured by, inter alia, directors' guarantees, including by Mr Hetherington;
(d)the purchaser was to undertake a due diligence, to be completed by 14 February 2003, the non‑satisfaction of which (generally speaking) would enable the purchaser to rescind by no later than 14 February 2003; and
(e)it was conditional upon finance approval - the date for approval of finance was extended by subsequent agreement to 7 March 2003.
As to the calculation of the goodwill component of $1.3 million, the judge found the following facts:
[Tallenford] put the business of G & B Drainage on the market through a broker. The broker calculated the goodwill figure by reference to the performance of the business over the preceding three years. Gilete did preliminary due diligence, the report of which is not available. In the second stage of due diligence, Mr Thompson [for Gilete] calculated goodwill based on average earnings over the preceding four years, and reported that 'the goodwill purchase cost of $1.3 million represents 2.73 times average earnings after depreciation and 1.41 times average earnings before depreciation'. He said 'the goodwill purchase at those multiples was reasonable'. Both experts agreed that goodwill in the amount of $1.3 million was fair and reasonable based on [Tallenford's] historical performance [188].
At the time of sale, Tallenford had underway a number of construction contracts with principals, the work on which would continue beyond the settlement date. These were addressed in cl 7 of the Special Conditions in annexure A to the Original Contract, which contained a typed portion and two handwritten sentences. The typed words read:
Annexure A [of the Special Conditions of the Original Contract] contained two clauses numbered 7. The second cl 7 is that headed 'Directors Guarantors'...
The first appearing cl 7 provided:
It is hereby acknowledged by the Purchaser and Vendor that the business G & B Drainage, the subject of this agreement to purchase, has a number of construction contracts in various stages of completion under the name of Tallenford Pty Ltd as Trustee for G & B Drainage. It is further agreed that at the date of settlement all rights to the balance of the uncompleted construction contracts shall be assigned or subcontracted to [Gilete] as the new owners of G & B Drainage and contract payments be financially adjusted and apportioned to the date of settlement whereby Tallenford Pty Ltd will be paid for works performed up to the date of settlement and [Gilete] shall be paid for works performed after the date of settlement.
The handwritten sentence read:
A valuation certificate shall be prepared for each contract on foot. In the event of a disagreement, a Quantity Surveyor shall be appointed to determine the valuation [13] ‑ [14]. (emphasis added)
On 2 April 2003, a deed of charge was executed by which Gilete charged its assets to secure the amount due to Tallenford. It also contained a guarantee by, relevantly, Mr Hetherington. (We will refer to this deed as the 'Deed of Charge and Guarantee'.)
Settlement occurred on 2 April 2003.
The Original Contract was varied on 11 February 2004 by a deed of variation, on terms recorded by the judge at [16] ‑ [18] of his reasons:
On 11 February 2004, the parties executed a further agreement as a deed of variation (Deed of Variation). Again, Mr Hetherington and [another director] were guarantors. The Deed of Variation recited:
A.By Contract dated 2 February 2003, Gilete agreed to purchase the business known as G & B Drainage from Tallenford.
B.Settlement under the Contract took place on 2 April 2003.
C.Under the Contract, Gilete agreed to pay Goodwill of one million three hundred thousand dollars ($1,300,000) to Tallenford in accordance with the terms of the Contract.
D.As at the date of this Deed, Gilete has paid goodwill of three hundred and seventy four thousand dollars ($374,000.00) leaving a balance outstanding of nine hundred and twenty six thousand dollars ($926,000.00).
E.Gilete and Tallenford have agreed to vary the manner of repayment of the balance of the Goodwill in accordance with this deed.
The operative part of the Deed of Variation contains four clauses, the first of which states:
The parties agree that the balance of Goodwill payable by Gilete to Tallenford (excluding interest) as at the date of this deed is nine hundred and twenty six thousand dollars ($926,000.00).
Clause 2 provided that the balance of goodwill is to be paid in 14 equal monthly instalments. That is, the formula linking the amount of an instalment to the net profit of the business was replaced with a set monthly amount. Clause 3 provided that if Gilete fails to pay any instalment on the due date, the whole of the balance and interest shall become immediately due and payable. Under cl 3(b), the guarantors jointly and severally guaranteed to the plaintiff the repayment of the balance of goodwill and all interest thereon.
The deed of variation was executed by Gilete and, relevantly, Mr Hetherington as guarantor. (We will refer to this as the '2004 Deed of Variation'.)
Gilete defaulted in payment of the goodwill instalments under the 2004 Deed of Variation. Tallenford issued a notice of default dated 23 September 2005 and commenced proceedings against Gilete and, relevantly, Mr Hetherington in December 2005. The unpaid amount as at that date, under the 2004 Deed of Variation, was $597,273.
The pleadings
Germane both to the trial and this appeal is a question as to the nature and scope of certain pleaded issues and certain alleged admissions.
The statement of claim
Tallenford's statement of claim filed 16 March 2006:
(a)pleaded the Original Contract, the Deed of Charge and Guarantee, and the 2004 Deed of Variation;
(b)pleaded the payment of certain amounts after the 2004 Deed of Variation which reduced the sum of $926,000 referred to in the 2004 Deed of Variation to $597,273; and
(c)claimed the sum of $597,273, alternatively damages.
Mr Hetherington's defence
By defence and counterclaim dated 27 May 2011, Mr Hetherington:
(a)admitted the Original Contract and the date of settlement, but did not admit the 2004 Deed of Variation (pars 2 and 3);
(b)pleaded the uncompleted construction contracts which were to be assigned to Gilete and defined those contracts as 'the Contracts' (par 6(a));
(c)pleaded that by virtue of an express or an implied term in the Original Contract (par 6(d), (e), (f) and (h)):
(d)a valuation certificate was to be prepared for each of the Contracts and provided by the plaintiff to the first defendant ('Valuation Certificates');
(e)payment of the balance of the goodwill was conditional upon the provision of the Valuation Certificates;
(f)if the Valuation Certificates prepared for each of the Contracts did not support the expected revenue figures provided to the first defendant by the plaintiff for work to be done on the Contracts after settlement, the goodwill figure payable to the plaintiff was to be varied accordingly;
…
(h)a Valuation Certificate was to provide a breakdown of costs incurred and a [sic] revenue claimed on each of the Contracts to the date of handover. (emphasis added)
(d)also pleaded (pars 7 ‑ 13):
7.It was an implied term of the original contract that the Valuation Certificates referred to in paragraph 6b [sic] were to be provided within a reasonable time of settlement.
8.The term pleaded in paragraph 7 is to be implied:
(a)as a matter of law;
(b)because it is reasonable, obvious and necessary to give business efficacy to the original agreement.
9.Notwithstanding request [Tallenford] has failed to provide the Valuation Certificates or any of them to [Gilete].
…
10.By reason of the facts pleaded in paragraph 9 [Tallenford] has repudiated the original contract and [Gilete] has accepted such repudiation.
11.Alternatively to paragraphs 9 and 10 [Tallenford] in failing to provide the Valuation Certificates or any of them to [Gilete] breached the original contract.
12.By reason of the facts pleaded in paragraphs 10 alternatively 11 the first defendant [Gilete] is not liable to the plaintiff [Tallenford] for the goodwill monies claimed.
…
13.Alternatively to paragraph 12 the condition pleaded in paragraph 6(f) has not been fulfilled and the balance of the goodwill monies is as a result not owing. (emphasis added)
(e)pleaded certain alleged representations concerning the Valuation Certificates (pars 14(i), 15(b) ‑ (c) and 20).
It is to be noted that Mr Hetherington did not admit the 2004 Deed of Variation and hence his alleged implied terms related only to the Original Contract, ie, only to the first of the two relevant contracts. As the High Court observed in Commissioner of Taxation v Sara Lee Household and Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 [22]:
When the parties to an existing contract enter into a further contract by which they vary the original contract, then, by hypothesis, they have made two contracts.
Mr Hetherington did not plead that the alleged implied terms formed part of the contractual relationship between the parties if it were found that the parties had executed the 2004 Deed of Variation.
Tallenford's reply
Tallenford pleaded in its reply filed 31 January 2007 the following (par 1(d), 2(b), 3(a), 3(f), 3(g), 4 and 5(c)):
[1(d)]Subject to the matters pleaded below paragraph (d) is admitted, and the plaintiff pleads further as follows:
(i)On a true and correct construction of the original agreement, the expression 'valuation certificate' meant, and was understood to mean, a document commonly described as a 'progress certificate' which was commonly understood in the contracting industry, to mean a document executed by a consultant engineer certifying the extent of the contractual works completed, the extent of variations (if any to the relevant contract) and amounts payable to the contractor in respect thereof, and where relevant, a commentary on any discrepancy between amounts believed by a contractor to be payable and amounts which the said consultant engineer certified as being payable.
…
(ii)From a progress certificate, a party was reasonably able to calculate the extent to which a particular contract had been performed, the extent of further work to be performed in respect thereof, any monies payable in respect of work already completed, and monies reasonably expected to have to be paid by a principal on the assumption that those further works would be carried out to completion.
(iii)The consultant engineer was in each case engaged by the principal or owner in respect of a relevant contract and not the plaintiff- to supervise the relevant works.
…
[2(b)]As and when progress certificates were issued by the said superintendent and to the extent they were made available to [Tallenford]; they were also made available to [Gilete]. The plaintiff in any event had no authority nor control over the time of their issue, they being documents created and issued by the said superintendent of the relevant works.
…
[3(a)]No requests for progress certificates were made at any time prior to (as best the plaintiff can recall) November or December 2003.
…
[3(f)]Clause 7 of the original contract provided that in the event of disagreement as to the content or accuracy of a 'valuation certificate' (sic - progress certificate - refer paragraph [1(d)] above) a quantity surveyor shall be appointed to determine the 'valuation'.
[3(g)]On [a] true and correct construction of the contract and in particular clause 7 thereof, a reference to 'valuation' was meant, and was understood to mean, the value of the outstanding work to be performed in respect of the Contracts and that the value thereof was reasonably capable of ascertainment from the progress certificates. The plaintiff further refers to sub paragraphs [1(d)](i) and (ii) hereof.
…
4.Each and every allegation in paragraphs 10 and 11 of the defence is denied.
…
[5(c)]Under the deed of variation, it specifically was recited that [Gilete] had agreed to pay $1,300,000 to [Tallenford] for goodwill; that of that sum, $374,000 had been paid towards goodwill; and providing for the manner of payment of the balance, as more fully and completely pleaded in paragraph 9 of the Statement of Claim which is repeated. (emphasis added)
The grounds of appeal - CACV 49 of 2012
By Ground A, Mr Hetherington alleges, in effect, that the judge erred in law in finding that there was an issue between the parties as to whether Tallenford would provide Valuation Certificates of the kind found by the judge in that:
(a)Tallenford had, in effect, admitted as much in par 1(d) of its reply; and
(b)in particular, Tallenford had admitted that it would provide a 'Valuation Certificate' for each uncompleted contract 'referring to matters including the costs of materials and labour to enable the fair adjustment of payments contemplated in cl 7 of annexure A'.
By Ground B, Mr Hetherington alleges, in effect, that the judge erred in law and in fact in finding that his contractual defence had not been made out in that:
(a)Tallenford had 'admitted such liability on the pleadings';
(b)there was no issue between the parties that Tallenford had not provided 'Valuation Certificates' of the nature found by the judge to Gilete; and
(c)such a breach meant that the guarantee should not be construed as extending to 'any liability arising under the Original Contract' or pursuant to the 2004 Deed of Variation, or, alternatively, that the guarantee was discharged.
By Ground C, Mr Hetherington alleges, in effect, that the judge erred in finding that:
(a)the provision of the Valuation Certificates was 'contractually unrelated to the total goodwill figure'; and
(b)the implied terms pleaded in pars 6(d), (e), (f) and (h) of the defence and counterclaim had not been established.
By Ground D, it is alleged that the judge erred in:
(a)finding that the 'second' and 'fifth' representations had not been established; and
(b)failing to find that Tallenford had thereby engaged in misleading or deceptive conduct and was disentitled from relying on the guarantee.
Ground E alleges that the judge erred in law and fact in finding that the 'first' and 'third' representations were not made out when he should have found that they were, and that they constituted misleading or deceptive conduct as a result of which Mr Hetherington is relieved from any liability under the guarantee.
Tallenford's notice of contention
By notice of contention, Tallenford contends that the judge's decision should be upheld on the further ground that Mr Hetherington is estopped by the 2004 Deed of Variation from denying that as at 11 February 2004, the balance outstanding in respect of the goodwill was the sum of $926,000.
The judge's findings on the meaning of 'Valuation Certificates'
The judge, in effect, rejected Tallenford's contention that 'Valuation Certificates' were intended to be progress certificates: [141] ‑ [144].
He noted that under cl 7 of the Special Conditions 'the parties agreed that payments under the [uncompleted] Contracts would be adjusted and apportioned to the date of settlement. The apparent intent of the preparation of valuation certificates in the context of cl 7, is to facilitate the fair assignment of rights under the Contracts': [144]. His Honour then found that, on the proper construction of cl 7 in the Original Contract:
[V]aluation certificates were intended to provide a valuation of the [uncompleted] Contracts, by reference to matters including the costs of materials and labour, to enable the fair adjustment of payments contemplated in cl 7 of annexure A [144].
His Honour also noted that the Original Contract did not specify who was to prepare the Valuation Certificates, or that anyone was to provide them, and that by selling the business, Tallenford had passed over to Gilete the books and records of the business of G & B Drainage: [145]. The judge said, in effect, that on the proper construction of the Original Contract:
[T]he intent of cl 7 is that the parties (if they could agree) were to jointly prepare the certificates; alternatively (and, with [a director of Tallenford] continuing to work for the business, it is effectively the same thing) they were to be prepared by the business of G & B Drainage. There is nothing in the Original Contract that supports the defendant's position that the plaintiff was to prepare them or to provide them [145].
The judge noted at [146] that, having regard to the way that Mr Hetherington had pleaded and presented his case, it was unnecessary to determine whether Tallenford had met its obligations to cooperate to enable valuations to be prepared, in accordance with the implied term in Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 144 CLR 596, 607.
His Honour also rejected the contention by Mr Hetherington that the Valuation Certificates were designed to support the $1.3 million goodwill payment [147]. His Honour observed that it was not contended that the Valuation Certificates were relevant to the calculation of goodwill payments in accordance with the formula for profitability, prior to the 2004 Deed of Variation [148]. His Honour concluded:
The provision for valuation certificates was added to cl 7. The financial adjustments to be made pursuant to cl 7 may be facilitated by a breakdown of costs incurred and revenue claimed on the Contracts up to settlement, and so valuation certificates may have a role in the process required by this clause. But this has nothing to do with the vendor finance provided for goodwill. Nor does the Original Contract link valuation certificates and expected revenue figures [149].
The effect of the judge's finding, as we understand it, is as follows. If, for example, revenue was collected on an uncompleted project after the settlement date, consideration could be given to how much revenue was earned with reference to costs incurred before the settlement date and costs incurred after the settlement date and an appropriate adjustment could then be made between vendor and purchaser.
Disposition CACV 49 of 2012
Ground A has no merit. There was no admission as alleged. Paragraph 1(d) of Tallenford's reply was expressed '[s]ubject to the matters pleaded below'. The effect of Tallenford's reply was that:
(a)the 'Valuation Certificates' in cl 7 were progress certificates;
(b)progress certificates were prepared and issued by the principal's superintendent or consultant engineer and Tallenford had no authority or control over them;
(c)as and when such progress certificates were issued to Tallenford, they would also be made available to Gilete; and
(d)the progress certificates would:
(i)certify the extent of the works completed;
(ii)certify the extent of any variations to the construction contract;
(iii)certify the amounts payable to the contractor by the principal; and
(iv)provide a commentary on any discrepancy between the amounts claimed by the contractor and the amounts certified by the superintendent.
There was plainly no admission that Tallenford would prepare and supply Valuation Certificates of the kind which the judge said was contemplated by cl 7 properly construed. Ground A ought to be dismissed. Counsel for the appellant said that if that ground failed, then that would be the end of the appeal (ts 2). Nevertheless, these reasons deal with the other grounds as though counsel had not made that statement.
Ground B accepts as correct the judge's construction that the purpose of the Valuation Certificates was to facilitate the adjustment between the parties of contract payments by principals for the purposes of cl 7. The judge also found that, on the proper construction of the Original Contract, this required the parties 'jointly' to prepare the certificates, or for the 'business of G & B Drainage', ie, Gilete after settlement of the sale, to prepare the Valuation Certificates. These findings are not challenged, except to the extent of the challenge in Ground A. As Ground A fails, it provides no foundation for Ground B.
Ground B accordingly has no merit.
For the same reasons, Ground C has no merit insofar as it alleges that the judge erred in finding that the Original Contract did not contain implied terms to the effect that Tallenford was obliged to prepare and supply Valuation Certificates to Gilete. Insofar as Ground C alleges that the judge should have found implied terms to the effect that the provision of Valuation Certificates conditioned the payment of goodwill, Mr Hetherington, in his submissions, does no more than refer to evidence of oral negotiations prior to entering into the Original Contract. In this regard, his contentions ought to be rejected for two reasons. First, no attempt is made to explain how those oral representations could be admissible on the question of the implication of the term in an agreement which was wholly written. In particular, there was no attempt to demonstrate that the oral communications were anything other than evidence of subjective intentions and expectations, and thereby inadmissible: see Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337, 349 ‑ 353. Secondly, it was not contended in this appeal that the alleged implied terms satisfied the tests set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266, approved by the High Court in Codelfa Construction v State Rail Authority (347) and Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410, 422, 441. Indeed, in the court below, the judge made findings as to why the tests in BP Refinery v Shire of Hastings were not satisfied [152] ‑ [156]. Those findings are not addressed by Mr Hetherington in his appeal. For example, at [155] his Honour said, and the finding is unchallenged:
The terms are not obvious and capable of clear expression. In particular, it is not apparent how the total goodwill figure was to be varied, depending on whether the valuation certificates 'supported' expected revenue figures. In particular, it is not clear how the actual and expected revenue on a small number of continuing contracts was to affect the goodwill amount.
We would dismiss Ground C.
Grounds D and E relate to Mr Hetherington's case on misleading or deceptive conduct. They concern the alleged 'first', 'second', 'third' and 'fifth' representations.
The 'first' alleged representation was to the effect that Tallenford had represented that it expected to achieve a gross profit margin of approximately 28%, alternatively, a good profit margin, on the work to be completed pursuant to the uncompleted contracts. It was said to be 'implied' from the matters pleaded in par 14 of the defence, including from information provided orally by Mr Chaffey, a director of Tallenford, to Mr Hetherington and Mr Thompson (another director of Gilete), in or about December 2002 to January 2003. The 'second' alleged representation was to the effect that Tallenford would, after settlement of the Original Contract, provide Valuation Certificates which specified costs on partially completed contracts at settlement. The representation was said to be a term of the Original Contract and also made orally by Mr Chaffey on behalf of Tallenford in the period December 2002 to January 2003. The 'third' alleged representation was to the effect that the Valuation Certificates would support a goodwill payment of $1.3 million. The representation was said to be derived from oral communications by Mr Chaffey in the period December 2002 to January 2003. The 'fifth' alleged representation was to the effect that the Valuation Certificates would be provided by Tallenford to Gilete, and was said to arise from the second representation and from the failure of Tallenford to inform Gilete that it did not intend to provide such Valuation Certificates.
At the outset, it is to be noted that the judge did not accept as reliable Mr Hetherington's evidence concerning the disputed oral representations. The matters relied upon by his Honour for not accepting Mr Hetherington's evidence were set out in detail at [87] ‑ [99] of his Honour's reasons, and included the following findings, none of which is challenged:
(a)the alleged conversations, although said to be important to Mr Hetherington, had been omitted from his first witness statement;
(b)Mr Hetherington was a diligent note‑taker, yet had taken no note of the disputed conversations;
(c)the alleged conversations occurred over eight years earlier and, in respect of other matters going back to that time, Mr Hetherington frankly admitted that he had no independent recollection of what was said;
(d)the alleged conversations were inconsistent with the parties' subsequent conduct;
(e)Mr Hetherington put a 'gloss' on conversations that he could not accurately recall; and
(f)Mr Hetherington gave unsatisfactory evidence about an alleged 'secret' deal when the matter was not secret at all.
These unchallenged findings are sufficient to justify the judge not accepting Mr Hetherington's evidence. Moreover, his Honour found that insofar as Mr Hetherington alleged oral representations linking the Valuation Certificates with the payment of goodwill, his evidence was inconsistent with the Original Contract and the 2004 Deed of Variation. His Honour said:
Mr Hetherington maintained that cl 1 of the contract contains a mechanism for the payment of goodwill based on the valuation certificates. That is inconsistent with the text of the agreement: cl 1 is a quite straightforward vendor finance clause … Even at the time when the parties executed the Deed of Variation, there was no link between the amount to be paid for goodwill and the performance of the business since Gilete took it over, or the performance of the Contracts. The parties agreed only to vary how the balance was to be paid [95].
If and insofar as Mr Hetherington challenges these findings at [95] of his Honour's reasons (and it is far from clear that he does), the challenge must be rejected. The judge was plainly correct.
The alleged second and fifth representations are also inconsistent with the finding at [145] (which has not been successfully challenged) that the Valuation Certificates were to be provided 'jointly', or by the 'business of G & B Drainage', ie, by Gilete after settlement.
Further, the judge provided specific reasons as to why he rejected Mr Hetherington's case in relation to the first and third representations [175] ‑ [186]. One was the finding that Mr Hetherington's evidence as to the alleged oral communications was unreliable [177], [179] and [185]. For the reasons indicated earlier, that finding was plainly open. The other reasons included findings at [180] ‑ [181] which are not the subject of challenge in this appeal.
Accordingly, Grounds D and E ought to be dismissed.
The appeal should be dismissed. It is unnecessary to deal with the notice of contention.
Appeal CACV 51 of 2012
Counsel for the appellant said that this appeal 'only has relevance if the pleading aspect is found in favour of the appellant' (ts 6). If that is a reference to ground A in the other appeal, then this appeal must be dismissed. However, the following reasons demonstrate that there is no merit in this appeal, even absent the statement by counsel.
In this appeal, Mr Hetherington originally contended that the judge's discretion miscarried in dismissing Mr Hetherington's application to amend the particulars to par 6 and to par 15, and to amend par 20 of Mr Hetherington's defence and counterclaim, in that he failed to take into account that, although the application was made after the close of evidence, the 'amendments brought the pleading into line with the evidence', including evidence in the form of pre‑trial witness statements.
At the hearing of the appeal, counsel for Mr Hetherington confined the issue to the particulars to par 15. Counsel also said that the issues in this appeal also depended in part on the success in appeal CACV 49 of 2012 - which for the reasons indicated above should be dismissed.
The decision under challenge is an interlocutory decision for which leave is required. It was common ground that the grant of leave involves the exercise of a broad discretion, but ordinarily the court must be satisfied that the decision below was wrong or attended with sufficient doubt to justify a grant of leave, and that substantial injustice would be done if the decision remained unreversed: Allmark v Mossensons (a firm) [2006] WASCA 127 [26]. Moreover, it is a decision concerning practice and procedure, in respect of which special restraint is to be exercised by an appellate court: Dodds v Kennedy [2011] WASCA 32 [5] and the cases there cited.
Mr Hetherington's fundamental contention is that the primary judge failed to take into account a relevant consideration, namely, that the proposed amendments merely reflected the evidence at the trial, including pre‑trial witness statements. Mr Hetherington's contention is incorrect. The judge expressly adverted to this consideration in his reasons (BB 96 ‑ 98). It is not alleged that the primary judge otherwise erred in relation to the considerations which he took into account in dismissing the application to amend. There is no reason to doubt the correctness of his Honour's decision. Accordingly, the application for leave to appeal, and this appeal, must be dismissed.
2
8
1