Il Vizio Corp Pty Ltd v Cashflow Finance Australia Pty Ltd

[2018] NSWCA 122

Court of Appeal

Supreme Court

New South Wales

• Summary available
• Amendment notes

Medium Neutral Citation:	Il Vizio Corp Pty Ltd v Cashflow Finance Australia Pty Ltd [2018] NSWCA 122
Hearing dates:	13 April 2018
Decision date:	08 June 2018
Before:	Meagher JA at [1]; Ward JA at [2]; White JA at [134]
Decision:	(1)   Appeal allowed with costs. (2)   Set aside the judgment and orders made by Sorby ADCJ on 25 October 2017 and in lieu thereof enter judgment for the plaintiff in the sum of $27,394.81. (3)   Direct that the parties forward to each other and to Ward JA’s associate within seven days any brief written submissions as to the costs of the proceedings in the District Court, with a view to this issue being dealt with on the papers.
Catchwords:	APPEALS – challenge to factual findings – failure to make express factual finding of delivery of goods the subject of disputed invoices – requirement to give reasons – inadequacy of reasons for any implicit finding of delivery   APPEALS – task of Court on appeal by way of rehearing – weight of evidence does not permit a factual finding of delivery
Legislation Cited:	Conveyancing Act 1919 (NSW), s 12 District Court Act 1973 (NSW), s 134(1)(b) Evidence Act 1995 (NSW), ss 69(2), 135(a) Sale of Goods Act 1923 (NSW), s 31 Uniform Civil Procedure Rules 2005 (NSW), r 42.35
Cases Cited:	Cashflow Finance Australia Pty Ltd v Il Vizio Corp Pty Ltd (District Court (NSW), R Sorby ADCJ, 25 October 2017, unrep) Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 Devries v Australian National Railways Commission (1993) 177 CLR 472; [1993] HCA 78 Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 In the Matter of Maiden Civil Pty Ltd [2012] NSWSC 1618 Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8 Obeid v Lockley [2018] NSWCA 71 Pickham v Binary Engineering Pty Ltd [2018] NSWCA 105 Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Szeto v Situ [2017] NSWCA 136
Category:	Principal judgment
Parties:	Il Vizio Corp Pty Ltd (Appellant) Cashflow Finance Australia Pty Ltd (Respondent)
Representation:	Counsel: D Pritchard SC with M Klooster (Appellant) C Wood with T Cleary (Respondent)   Solicitors: Spinks Eagle Lawyers (Appellant) Paladin Legal (Respondent)
File Number(s):	CA 2017/342744
Publication restriction:	Nil
Decision under appeal	Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: Unreported Date of Decision: 25 October 2017 Before: R Sorby ADCJ File Number(s): 2016/349684

headnote

[This headnote is not to be read as part of the judgment.]

The respondent, a financier, had acquired from a supplier of goods debts which were alleged to be owing by the appellant (a retailer selling low cost variety goods) to the supplier. The District Court gave judgment in favour of the financier in respect of the debts claimed to be owing for goods allegedly sold and delivered to the appellant, in the amount of $265,660.28 plus costs.

On appeal, the appellant contended that the primary judge erred in finding (at least implicitly) that the goods the subject of 22 disputed invoices were in fact delivered. It had been common ground at the hearing below that an essential element of the respondent’s claim was that it prove that delivery of the goods by the supplier to the appellant had occurred.

The Court (Meagher, Ward, and White JJA) held, allowing the appeal:

As to ground of appeal 1:

The primary judge failed to make any express finding that the goods the subject of the disputed invoices had been delivered to the appellant; the fact that such a finding was not expressly made points to the inadequacy of reasons for any implicit finding to that effect (at [48] per Ward JA, Meagher and White JJA agreeing).

As to ground of appeal 2:

The respondent at trial failed to discharge its onus of establishing that delivery of the goods the subject of the disputed invoices had occurred, and the weight of the evidence did not permit any finding on the balance of probabilities that those goods were ever delivered to the appellant (at [85] per Ward JA, Meagher and White JJA agreeing).

As to grounds of appeal 3, 4, and 5:

In light of the conclusions reached in relation to grounds 1 and 2 it was not necessary to determine these issues.

Judgment

1. MEAGHER JA: I agree with Ward JA.

2. WARD JA: This is an appeal from a decision of the District Court of New South Wales (Cashflow Finance Australia Pty Ltd v Il Vizio Corp Pty Ltd (District Court (NSW), R Sorby ADCJ, 25 October 2017, unrep)), in which judgment was given in favour of a financier (Cashflow Finance Australia Pty Ltd, to which I will refer as Cashflow) in respect of debts claimed to be owing for goods allegedly sold and delivered to the appellant (Il Vizio Corp Pty Ltd, to which I will refer as Il Vizio) during the period from April 2016 to May 2016. The judgment in favour of Cashflow was in the amount of $265,660.28 plus costs. Cashflow was not the supplier of the goods in question. It had acquired the alleged debts from the supplier of the goods (Hometech Imports Pty Ltd, to which I will refer as Hometech) on or about 22 February 2016, in circumstances to which I will refer shortly.

3. At the hearing, there were 26 invoices in dispute. On appeal, Il Vizio contends that the primary judge erred, among other things, in finding (at least implicitly) that the goods the subject of 22 of those 26 invoices were in fact delivered. If its appeal is allowed, Il Vizio asks that the judgment at first instance be set aside and, in lieu thereof, that there be judgment in favour of Cashflow in an amount of $27,394.81 – that amount being conceded by Il Vizio for the purposes of the appeal to have been owing in respect of goods delivered to it by Hometech, plus interest. As that amount is below the threshold for a plaintiff to be entitled to its costs in the District Court, it was foreshadowed that depending on the outcome of this appeal there may be argument about the costs of the District Court proceedings (see r 42.35 of the Uniform Civil Procedure Rules 2005 (NSW)).

Background

4. This appeal is in large measure a challenge to certain factual findings made (or implicitly made) by the primary judge. The background to the dispute between the parties is as follows.

5. Il Vizio is a retailer trading variously as Ronis Variety, Ronis Home, or Ronis Narellan, which sells low cost variety goods. Its business was colloquially described, in submissions, as that of a “$2 shop”. The managing director of Il Vizio is Mr Andrew Scarano. His wife, Mrs Naomi Scarano, was involved in the company’s bookkeeping but did not give evidence in the proceedings.

6. Hometech was an importer and supplier of low cost goods. From time to time it supplied goods to Il Vizio. The sole director and company secretary of Hometech is Mr Simon Tanti. He was not called to give evidence in the proceedings – a circumstance on which Il Vizio places reliance as giving rise to the inference that his evidence would not have assisted Cashflow’s case.

7. Cashflow, as described in the primary judgment at [4], is a provider of invoice financing. Two of its employees – Ms Shannon Stelfox, the National Operations Manager, and Ms Kristy Lazarus, the “Team Leader Operations QLD” – gave evidence in the proceedings.

8. Cashflow entered into an Invoice Finance Facility Deed (the Deed) dated 22 February 2016 with Hometech, in which it described itself as providing “invoice finance facilities” under which it would purchase “Debts”, as defined, created by Hometech selling “Goods” or providing “Services” in the course of its business (see cl 1). It appears that this arrangement superseded an earlier such arrangement between Hometech and an entity named 180 Capital Funding Pty Ltd. Other than as set out below, Il Vizio did not have any dealings with Cashflow in the ordinary course of its retail business.

9. Mr Scarano gave evidence (in his affidavit affirmed 28 April 2017 at [6]) that the usual way in which Il Vizio purchased goods from Hometech was that: Il Vizio would place an order with Hometech (which was usually done by Mr Scarano placing the order on Il Vizio’s behalf); Hometech would raise an invoice, sometimes prior to the delivery of the goods; and the goods would be delivered “and then the invoice would be paid”. He deposed (at [7]) that sometimes Hometech would request that a deposit be paid at the time the order was raised and on occasion Il Vizio would pay a deposit before the receipt of the goods.

10. By facsimile transmission dated 25 February 2016 (with facsimile transmission imprints on the top of page 2 indicating that date, but a stamp on page 1 being dated 26 February 2016), someone from Cashflow’s Finance Credit Department wrote to “Ronis Variety Narellan” advising that Cashflow was “performing a verification on the invoices, for Hometech Imports Pty Ltd as per below”. The document (to which I will refer as the Verification Document) stated that the listed invoices had been “offered” under an Invoice Funding Agreement between Cashflow and Hometech. A table was then set out identifying invoice number, date, and amount in respect of nineteen invoices (some but not all of which were the subject of dispute in the District Court proceedings) and including two blank columns, one headed “Any adjustments and reason”, and the other, “Payment Terms”. The Verification Document requested:

Can you please confirm by signing below and forwarding back, that the abovementioned invoice/s has been completed to your satisfaction. All paperwork attached is correct and will allow for invoice/s and all future invoice/s to be processed when due.

11. The Verification Document stated that it was not a “collection request, simply confirmation of our clients [sic] invoice and paperwork”. The invoices listed had dates ranging between 4 November 2015 and 24 February 2016 and were for amounts that totalled $111,432.56. Relevantly, as against a number of the invoices there was a negative amount (presumably reflecting a credit of that amount against the specified invoice).

12. Mr Scarano completed one or both of the blank columns in relation to nine of the nineteen invoices listed in the table – in one instance to the effect that the invoice had been paid; in other instances nominating a revised amount (sometimes with the words “will pay” and a specified date) or (against certain of the negative, i.e., credit, amounts) stating “Apply to [a specified invoice number]”. He signed the Verification Document in his capacity as director of Il Vizio. Significantly, the signed Verification Document was forwarded to Cashflow as an attachment to an email dated 26 February 2016, in which Mr Scarano stated:

See attached what has been paid and what is being paid and what credits should be applied to the ledger.

If there is anything else you need please come back to us.

13. I interpose at this point to note that Cashflow places weight on the signed Verification Document as giving rise to the inference that the goods the subject of the disputed invoices included in the table in the document (being Invoice Nos. 15293, 15319, 15347, 15361, 15386, 15427, 15455, and 15513) were delivered to Il Vizio. While I accept that such an inference would otherwise have been open from the signing and return by Mr Scarano of the document without any comment having been made in the blank columns (since the request had been to confirm, by signing and forwarding, that the invoice had been “completed” to Il Vizio’s “satisfaction”), such an inference is in my opinion not reasonably open having regard to the content of the email with which the signed Verification Document was returned to Cashflow. That makes clear that what Mr Scarano was purporting to do, in completing and returning the Verification Document, was to identify what had been paid, what was being paid, and what credits should be applied.

14. Mr Scarano’s evidence in relation to the signed Verification Document, when taken to it in cross-examination, was that “I’ve marked the adjustments and what we are paying and what to apply and that’s what I have received and the ones that I’ve left blank I have not received” (T 146.12-13). He denied that he had signed the Verification Document because (all) the invoices there listed had been received and completed to his satisfaction (the effect of the cross-examination at T 146.15-24). Pressed on this, Mr Scarano said that in his handwritten additions to the table he was “outlining what I was paying and, basically, what I was accepting and what I did not mark I did not accept because I had still not received the goods at that stage” (T 146.29-31). The covering email of 26 February 2016, with which Mr Scarano returned the signed Verification Document, supports his evidence in this regard. Furthermore, in at least one instance the evidence makes clear that, as at 26 February 2016, when the Verification Document was returned, goods the subject of a listed invoice had not been delivered – yet Mr Scarano made no comment on the Verification Document in relation to that invoice (see [35] below).

15. Cashflow then issued a statement of account “as of 26 February 2016”, listing all of the invoices the subject of the table referred to above (other than the one against which Mr Scarano had noted “Paid 24/02/16”), without taking any account, it would seem, of the comments that had been noted in the adjustment column of the table against any of the other invoices. Relevantly, this statement of account (although at the top of the account requesting that all payments be remitted to Hometech) included at the footer the following statement:

All existing and future debts owing by you to the abovenamed supplier, are due and payable to Cashflow Finance Australia Pty Ltd (CFA) and not to the supplier or any other entity. Amounts owing by your supplier cannot be set off against amounts owing to CFA without the prior consent of CFA and you must notify CFA immediately if you have such a potential claim or any other claim.

16. A formal notice of assignment dated 23 February 2016 was issued by Hometech in respect of “our existing and future accounts” and, under cover of a letter dated 26 February 2016, was sent by email dated 29 February 2016 from Ms Lazarus to Mr Scarano’s email address. Mr Scarano’s evidence was that he could not recall the date when Il Vizio received notification from Hometech that it was changing its invoice financing facility to Cashflow (see his affidavit at [10]), but the primary judge found that Mr Scarano received the email notifying him of the change in the invoice financing arrangements (see primary judgment at [49]). His Honour drew the inference (from the fact that payments were made in accordance with the instructions given in the correspondence attached to the 29 February 2016 email) that Mr Scarano must have read the correspondence and notice of assignment (see primary judgment at [49]-[50]). The primary judge found that this amounted to express notice of assignment (of the debts owing to Hometech) sent to Il Vizio in accordance with s 12 of the Conveyancing Act 1919 (NSW) (at [51]).

17. In about June 2016, a debt recovery agency became involved in relation to the claimed debts owing to Hometech (see the email of 17 June 2016 from Slater Byrne Recoveries to Il Vizio). By email sent to Mr Tanti on 21 June 2016, Mrs Scarano referred to a call that had been received from Slater Byrne Recoveries and informed Mr Tanti that “[t]here is a major discrepancy with our account”. Mrs Scarano attached a list of invoices (that had apparently been sent to her by the recovery agency) against which she noted Il Vizio’s position. Against a number of invoices Mrs Scarano noted that the items (or some of the items) had not been received or that a credit had been received or should be applied to the invoice and, in one instance, she noted that a deposit had not been paid to the factory and stated that the invoice was void. In respect of four of the invoices, she noted “I do not have this invoice, I have not ordered any more stock”.

18. Relevantly, Mr Tanti’s response that same day in respect of a number of the items (including those where Mrs Scarano had stated that she had not ordered any more stock) was “Simon takes care this”.

19. Senior Counsel for Il Vizio submits that the available inference from this is that Mr Tanti was aware that “dummy invoices” had been raised and that Mr Tanti was going to deal with this (see AT 20.36ff). Whether or not such an inference should be (or should have been) drawn, the exchange of correspondence between Mrs Scarano and Mr Tanti indicates that there was a dispute, relatively contemporaneous to the dates of a number of the disputed invoices, as to whether certain of the goods had been received (or even ordered) and that Mr Tanti did not in these exchanges refute the proposition that goods had not been received or ordered. Counsel for Cashflow maintains that this correspondence should be treated with caution as it was sent after Il Vizio was aware that debt recovery processes were under way (and argues that Mr Tanti may simply have been indicating that he would look into the matter). However, it is clear from Mrs Scarano’s email that this was not a blanket denial of liability – there were some invoices in respect of which Mrs Scarano accepted that amounts were owing. There were also in evidence a number of credit notes dated 6 June 2016 (see [36] below) in respect of invoices disputed in the 21 June 2016 email. (Pausing there, it may be that these are the “attached credits” to which Mr Scarano referred in his subsequent 21 September 2016 email – see [24] below – as having been received “last week”, which, if so, would suggest that the credit notes all dated 6 June 2016 may have been backdated in response to the 21 June 2016 email or otherwise. However, as there was no evidence to enlighten us as to the “attached credits” or when the 6 June 2016 credit notes were received, any such conjecture would be mere speculation). The four credit notes in question totalled around $68,000 (and, as I explain below, for the purposes of the appeal Cashflow accepted that those credit notes are the type of evidence that would cause the Court discomfort with the primary judge’s finding insofar as those four invoices are concerned – see AT 52.30).

20. By email sent 24 June 2016 Mr Scarano advised Slater Byrne that he had contacted Hometech that week and that there were some invoices to amend as well as missing invoices.

21. Mr Scarano’s position, as communicated to Cashflow by email on 4 July 2016 (to which a copy of Mrs Scarano’s email to Mr Tanti was attached), was that he had “since paid” $2,620.00 to Cashflow and that the balance currently due was $1,072.50 with a further $4,658.50 due at the end of July and $9,326.00 due at the end of August. (Mr Scarano did not send to Cashflow a copy of Mr Tanti’s response in relation to the disputed invoices.)

22. On 15 July 2016, a letter of demand was issued by solicitors acting for Cashflow claiming the amount of $143,034.97 for outstanding invoices for goods sold and delivered by Hometech. There was no identification of the relevant invoices there claimed to be outstanding (and it did not accord with the amount listed in the 21 June 2016 emails).

23. On 21 September 2016, Cashflow issued a further letter, notifying Il Vizio of the assignment from Hometech and attaching a statement of account as of that date. That statement of account indicated a balance owing of $265,660.28 and included not only the invoices that had appeared on the earlier statement of account in the Verification Document, but also a further five invoices (to which April/May 2016 dates were attributed) which had been disputed in the email exchanges during June/July 2016 (being Invoices Nos. 15545, 15572, 15599, 15608, and 15620), as well as 11 other invoices (to which July/August 2016 dates were attributed) that Mr Scarano disputes ever having received (and of which there was no copy in evidence). (There was also no copy in evidence of one of the invoices referred to in the Verification Document, so, in all, there was no copy of 12 of the disputed invoices.)

16. By email sent on 21 September 2016 to Cashflow, Mr Scarano sent details of the account that he said needed to be rectified and said that “[a]ll other invoices I do not have and have not ordered or received any more stock”. Reference is also made to “attached credits” that Mr Scarano said had been received “last week” (perhaps a reference to the 6 June 2016 credit notes as suggested above) but that he could not see on Cashflow’s statement and could not reconcile with his account.

17. Cashflow then commenced proceedings in the District Court by statement of claim filed on 22 November 2016, claiming the sum of $265,660.28 as a liquidated debt for goods sold and delivered (plus interest thereon and costs). Il Vizio filed its defence on 14 December 2016, denying liability for the whole amount (part of which is now conceded) and putting Cashflow to proof of its case without raising issues of the kind now raised on the appeal.

18. In January 2017, Il Vizio purchased goods directly from a Chinese exporter. By reference to the item numbers on the respective invoices and the initial addressee (Hometech) of the commercial invoice from the Chinese exporter, those goods appear to be the goods the subject of one of the disputed invoices (Invoice No. 15455) – the purchase of those goods by Il Vizio being as “abandoned cargo”. Il Vizio says the inference should be drawn that Hometech did not pay the Chinese exporter for the goods on arrival. Whether or not that be the case, if (as appears from the invoice references) these are the same goods as those the subject of the Hometech invoice, then it follows that they could not have earlier been delivered by Hometech.

Primary judgment

27. The matter was heard in the District Court (together with a similar matter in relation to a company owned by Mr Scarano’s brother) on 17-21 August 2017 with submissions on 18 September 2017. On 25 October 2017, the primary judge handed down judgment awarding Cashflow the full amount claimed by it.

28. The primary judge proceeded on the basis that it was common ground that Cashflow was required to prove delivery of the goods from Hometech in order to trigger payment and create a debt due to Hometech (see primary judgment at [30]). There was then the question whether there had been an effective assignment of each of the debts to Cashflow as assignee (considered by his Honour from [36]-[51]), culminating in the finding (at [51]) to which I have already referred, to the effect that there was express notice of assignment in accordance with s 12 of the Conveyancing Act).

29. The primary judge considered the issue as to delivery from [52] of his reasons, noting the submission for Cashflow that each invoice issued by Hometech required Il Vizio to document any short or damaged deliveries on the consignment notice or invoice, and also noting that the invoices expressly stated that there could be “no claim after seven days”. His Honour (incorrectly – as evident from the chronology above – at least in relation to the invoices disputed in the 21 June 2016 emails in relation to short delivery or non-delivery) said that there was no evidence that any claim or complaint had been made to Cashflow about unsatisfactory deliveries generally or specifically in relation to any of the following invoices: Invoice Nos. 15293, 15319, 15386, 15347, 15736, 15427, 15455, 15599, 15361, 15545, 15572, 15608, and 15620.

30. His Honour accepted the submission for Cashflow that Il Vizio was not entitled to any credit against its liability to Cashflow (see judgment at [53]): first, because from at least 25 February 2016 Il Vizio was on notice that no future credit could be deducted from the debt to Hometech (at [54]); second, because Il Vizio was on notice of the assignment and must have realised that any issue with invoices and payment and credit could only be raised with Cashflow (at [54]); and, third, because the invoices expressly stated that there could be no claims after seven days and there was no evidence that any event of damaged deliveries had been documented on the consignment notes or invoices (at [55]).

31. Then, at [59], the primary judge said:

I am satisfied on the balance of probabilities that Mr Andrew Scorano [sic] of Il Vizio did receive an express notice of assignment. I am also satisfied that Il Vizio received all invoices, including those from 15750 and is not entitled to various credits it is claiming ascontrary [sic] to the notice given as to credits set out earlier and outside the time provided on invoices to raise such issues, including denying such goods were delivered despite no complaint to Cashflow when invoices were issued to them.

32. His Honour proceeded to find for Cashflow and against Il Vizio in the sum claimed.

Appeal

33. By amended notice of appeal (leave having been granted for the filing of this amended notice of appeal at the hearing of the appeal), Il Vizio challenges the primary judge’s decision on the following grounds (omitting ground 6, which was not pressed, and correcting the numbering of the grounds):

1.   Having acknowledged at [30] that it was common ground between the parties that the Respondent had to prove delivery of goods to trigger payment, the learned judge erred in failing to make a finding that the goods the subject of all 26 Tax Invoices were in fact delivered or, alternatively, failed to give any reasons or adequate reasons for finding (if such a finding was made) that the goods the subject of all 26 Tax Invoices were in fact delivered.

2.   If a finding that delivery of the goods the subject of all 26 Tax Invoices was made, the learned judge erred in finding delivery and:

2.1   In failing to accept the evidence of Andrew Richard Scorano [sic] with respect to:

(a)   Non-delivery of any goods the subject of 21 Tax Invoice being Invoice Nos. 15347, 15361, 15386, 15427, 15455, 15545, 15572, 15599, 15607, 15620, 15750, 15751, 15752, 15753, 15772, 15776, 15777, 15778, 15791, 15792 and 15793 totalling $245,652.66;

(b)   Non-receipt of 12 Tax Invoices being Invoice Nos. 15347, 15750, 15751, 15752, 15753, 15772, 15776, 15777, 15778, 15791, 15792 and 15793 totalling $136,582.26, being part of the 21 Tax Invoices referred to in (a) above; and

(c)   Only partial delivery of goods the subject of one Tax Invoice being No. 15293 in the amount of $2,083.07.

2.2   In failing to give sufficient weight to the objective evidence establishing non-delivery or partial-delivery, such as 5 credit notes raised by Hometech Pty Ltd [sic] in relation to 4 Tax Invoices, a handwritten credit note prepared by the Appellant with respect to 1 Tax Invoice and one payment made by the Appellant to, and receipt of goods directly from, the importer of the goods.

Particulars

(a)   Tax Invoice Nos. 15361, 15386, 15599, 15608 totalling $68,056.52 (credit notes issued by supplier)

(b)   Tax Invoice No 15455 in the amount of $4,554.00 (goods purchased directly from importer)

(c)   Tax Invoice No 15293 in the amount of $2,083.07 (handwritten credit note referring to partial delivery)

2.3   In finding delivery took place in circumstances where there was no evidence, or alternatively insufficient evidence, to support such a finding in respect to any goods the subject of 12 Tax Invoices relied on by the Respondent, being part of the 19 Tax Invoices referred to in 2.1(a) above.

Particulars

(a)   Tax Invoice Nos. 15347, 15750, 15751, 15752, 15753, 15772, 15776, 15777, 15778, 15791, 15792 and 15793 totalling $136,582.26 were not in evidence.

3.   The learned judge erred in admitting into evidence (Transcript 1/25.5) the spreadsheet setting out the 26 Tax Invoices, which included 12 Tax Invoices totalling $136,582.26 referred to in paragraph 2(a) above which were not in evidence and further, in giving any weight to the spreadsheet.

4.   The learned judge erred:

4.1   In concluding at [55] and [59] that there was a term of the agreement between the Appellant and Hometech Pty Ltd [sic] that the Appellant must dispute delivery within 7 days of an invoice being rendered (the Delivery Condition).

4.2   In concluding at [55] and [59] that there was a term of the agreement between the Appellant and Hometech Pty Ltd [sic] that the Appellant could not claim credit against any credit notes raised by Hometech Pty Ltd [sic] (the Credit Condition).

Particulars

(a)   The existence of the Delivery Condition and/or its term and effect was not put to Andrew Scorano [sic] in cross-examination and was raised for the first time in closing submissions.

(b)   The only cause of action pleaded was an assignment to the Respondent of debts allegedly due and payable by the Appellant to Hometech Pty Ltd [sic].

(c)   The existence and terms of any agreement between the Appellant and Hometech Pty Ltd [sic] (including the Credit Condition and Delivery Condition), were not pleaded.

(d)   The learned judge erred in considering post contractual conduct as between the Appellant and Hometech Pty Ltd [sic] to ascertain the terms of any agreement between those parties.

5.   The learned judge erred in concluding that there was an effective assignment at law of all the debts the subject of the 26 Tax Invoices for goods sold and allegedly delivered by Hometech Pty Ltd [sic] to the Appellant.

Il Vizio’s position in relation to the particular invoices

34. In a schedule to the submissions filed by Il Vizio on appeal, Il Vizio’s position in relation to the 26 invoices the subject of the judgment against it is summarised.

35. In respect of the following four invoices (items 2, 8, 14, and 15 in the schedule), Il Vizio concedes that the goods were delivered and admits liability for the invoiced amounts:

• Invoice No. 15319 dated 11 January 2016 ($9,322.50);

• Invoice No. 15513 dated 22 February 2016 ($5,060.00) (I note that this invoice was the only one in respect of which there was a delivery note in evidence and that this delivery note evidences receipt of the goods on 1 March 2016, after the Verification Document returned by Mr Scarano on 26 February 2018 – the significance of which is that invoice 15513 is one against which the column was left blank in the Verification Document);

• Invoice No. 15650 dated 23 May 2016 ($2,000.00); and

• Invoice No. 15674 dated 30 June 2016 ($1,542.05).

36. In respect of the following six invoices (items 1, 4, 5, 7, 11, and 12 in the schedule), Il Vizio maintains that there is objective evidence of non-delivery (in the form of credit notes issued by Hometech; evidence in one instance that the goods were abandoned by Hometech; or evidence in the form of a facsimile transmission as to short delivery):

• Invoice No. 15293 dated 5 March 2016 ($2,083.07) – a handwritten document prepared by Il Vizio, recording goods not delivered and seeking a credit in this amount, which was said to have been faxed to Hometech; Mr Tanti’s response was “did not receive fax”;

• Invoice No. 15361 dated 21 January 2016 ($7,458.00) – an invoice dated 6 June 2016 noting a credit in this amount referable to this invoice was in evidence;

• Invoice No. 15386 dated 2 January 2016 ($17,008.16) – again, an invoice dated 6 June 2016 containing a full credit for the amount of this invoice was in evidence;

• Invoice No. 15455 dated 1 February 2016 ($4,554.00) – this relates to hessian dog mattresses, which Mrs Scarano notified Mr Tanti had not been received and which were the subject of a “Simon takes care this” notation, which items were later acquired as abandoned cargo;

• Invoice No. 15599 dated 13 April 2016 ($25,275.36) – a credit note was issued in the amount of this invoice on 6 June 2016 and Mrs Scarano notified Mr Tanti on 21 June 2016 that she did not have the invoice and had not ordered any more stock, to which the response was “Simon takes care this”; and

• Invoice No. 15608 dated 19 April 2016 ($18,315.00) – similarly, a credit note dated 6 June 2016 was issued in this amount; Mrs Scarano’s email to Mr Tanti stated that she did not have this invoice and had not ordered any more stock, and was met with the response “Simon takes care this”.

37. In respect of another 12 invoices (items 3 and 16-26 in the schedule), there is no copy of the invoice in evidence. Of those, Il Vizio concedes that goods were received in respect of one (Invoice No. 15347 dated 15 January 2016) in May 2016, but says that it had raised complaint as to the amount invoiced and Mr Tanti had responded “Simon takes care this” (the amount conceded being $7,326.00 of the claimed $9,768.00). The balance of these invoices (being Invoices Nos. 15772, 15750, 15751, 15752, 15753, 15776, 15777, 15778, 15791, 15792, and 15793), some of which are consecutively numbered, are identified by reference to various dates in July 2016 and August 2016 and total $126,814.26.

38. The final category of invoice (items 6, 9, 10, and 13 in the schedule) is comprised of the following invoices:

• Invoice No. 15427 dated 18 January 2016 ($4,950.00) – in respect of which Mrs Scarano said that this was a “Baskets deposit” that had not been paid to the factory, maintaining the invoice was void;

• Invoice No. 15545 dated 7 March 2016 ($24,607.88) – in respect of which Mrs Scarano said that the clothing was not received as the order was cancelled;

• Invoice No. 15572 dated 21 March 2016 ($6,000.00) – in respect of which Mrs Scarano’s response was, “I do not have this invoice, I have not ordered any more stock”; and

• Invoice No. 15620 dated 28 April 2016 ($902.00) – in respect of which again, Mrs Scarano’s response was, “I do not have this invoice, I have not ordered any more stock”.

39. Pausing here, there is some disconformity between the position taken by Il Vizio in its correspondence with Hometech and Cashflow in June 2016 and September 2016 and the position to which Mr Scarano deposed in the proceedings in relation to Invoice Nos. 15319 and 15347 (both of which relate to “egg chairs”).

40. In the June 2016 correspondence with Hometech and then copied to Cashflow, Mrs Scarano stated that the egg chairs were not received in respect of Invoice No. 15319 (dated 11 January 2016 in the amount of $9,322.50) but that in respect of Invoice No. 15347 (dated 15 January 2016 in the amount of $9,768.00), some egg chairs had been received in May 2016 (30 black and 30 white) but the invoice total should be $7,326.00 and the invoice should be dated May 2016. Mr Tanti responded the same day, “Simon takes care this” in respect of both of these invoices. A similar statement is made by Mr Scarano in correspondence with Cashflow in September 2016 in respect of these two invoices (although the date of the receipt of the egg chairs in relation to Invoice No. 15347 is changed, for some unknown reason, from May 2016 to June 2016, as is the proposed correct date for the invoice).

41. However, in Mr Scarano’s affidavit affirmed 28 April 2017, Mr Scarano deposes that the egg chairs the subject of Invoice No. 15347 had never been received (at [12(f)]) and he ascribes the partial delivery of only 60 egg chairs to Invoice No. 15319 (at [12(b)]).

42. The schedule to Il Vizio’s submissions on appeal (and the calculation of interest handed up in relation to admitted deliveries) concedes that the full amount is owing for Invoice No. 15319 and that a partial amount of $7,326.00 is owing for Invoice No. 15347.

43. There was no explanation for this disconformity. It might be inferred that there had been a mix-up in relation to the particular invoices, both of which related to egg chairs; but whether any such mix-up occurred at the time of the June 2016 or September 2016 correspondence or at the time of Mr Scarano’s affidavit is not known. Il Vizio did not resile from the concession made on appeal that a sum totalling $16,648.50 was payable for the two invoices combined (contrary to its initial position in the correspondence to the effect that only $7,326.00 was payable in respect of those two invoices combined) and I have proceeded on the basis that the concession reflected in the schedule to its submissions is maintained.

44. Cashflow points to Invoice No. 15347 (in respect of which it was unable to produce either a copy of the invoice or a delivery docket for the goods referred to in the invoice) and says that the evidence of Mr Scarano that this invoice was for “egg chairs” indicates that Mr Scarano had seen the invoice. It is further noted by Cashflow that the email of 21 June 2016 acknowledged receipt of a large portion of the goods the subject of the invoice. Cashflow submits this is evidence of Mr Scarano’s untruthfulness. Suffice it at this stage to say that the apparent confusion between Invoice Nos. 15319 and 15347 between June 2016 or September 2016 and the time of Mr Scarano’s affidavit may go some way to explaining how Mr Scarano might have thought that the relevant invoices related to egg chairs.

45. The pre-judgment interest payable (calculated up to 26 October 2017) on the amount ($25,250.55) admitted by Il Vizio to be payable in respect of the invoiced claim is $2,144.26; making a total amount (including interest to that date) of $27,394.81, for which Il Vizio accepts it would be appropriate for judgment to be entered against it.

Grounds of Appeal 1-2 – finding as to delivery of goods

46. These two grounds may broadly be grouped together. The complaints made by Il Vizio are that his Honour failed to make a finding that the goods the subject of all 26 invoices were in fact delivered or, alternatively, failed to give any or any adequate reasons for such a finding (ground 1); and that, if such a finding was made, his Honour erred in the making of that finding in relation to various of the invoices (ground 2).

47. The significance of such a finding (if made) lies in the fact that (as was not disputed on appeal and as noted at [28] above) it seems to have been common ground at the hearing that an essential element of Cashflow’s claim was that it prove that delivery of the goods by Hometech to Il Vizio had occurred (see T 180.43; primary judgment at [30]).

Ground 1

48. The first of the complaints on this issue can be quickly disposed of – there was no express finding that the goods the subject of the disputed invoices had been delivered to Il Vizio. Cashflow maintains that the relevant finding of fact that the goods were delivered is to be found at [59] of the primary judgment (which I have extracted above at [31]). I cannot accept that submission. At [59], the primary judge was dealing with notification of the assignment of debt and receipt of invoices, and the finding as to the goods was that Il Vizio was not entitled to deny delivery – not the delivery in fact had occurred. While Senior Counsel for Il Vizio ultimately appeared to accept that such a finding could probably be said to be implicit in the finding of receipt of invoices (see AT 39.13), the fact that such a finding was not expressly made points to the inadequacy of reasons for any such finding.

49. The requirement for reasons articulating the essential ground or grounds upon which a decision rests is well known (see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per McHugh JA, as his Honour then was, at 280; Pollard v RRR Corporation Pty Ltd [2009] NSWCA 110 at [58] per McColl JA, Ipp JA and Bryson AJA agreeing).

50. As Il Vizio submits, the findings by the primary judge that Il Vizio was on notice of the assignment to Cashflow; that no future credit could be deducted from the debt to Hometech; that any issue with invoices and payment and credit could only be raised through Cashflow (see [54]); and that Il Vizio was not entitled to claim credits contrary to the notice of assignment and outside the time provided on the invoices to raise such issues (see [59]), do not establish delivery of the goods. Nor does the finding (at [55]) that there was no evidence that Il Vizio had made a claim within seven days or documented any damaged deliveries on the consignment note or invoice, or the observation (incorrectly made at [59]) that Il Vizio had made no complaint to Cashflow when invoices were issued to it.

48. Il Vizio’s complaint is that there was no discussion, analysis or consideration in the reasons given by his Honour of various matters relevant to the question of delivery, including: the objective evidence supporting Il Vizio’s contention of partial or non-delivery; the evidence of Mr Scarano on issues other than completing and returning the Verification Document issued by Cashflow on 26 February 2016 and receiving the notice of assignment on 29 February 2016 (Il Vizio referring in this regard to Mr Scarano’s affidavit affirmed 28 April 2017 at [6]ff, the email correspondence of June 2016, and to the transcript below at T 148.18-39, T 153.24-49); and the paucity of evidence adduced by Cashflow on the question of delivery. That complaint is well-founded in my opinion.

49. Against this, Cashflow’s argument, in essence, is that the finding that II Vizio received all invoices, despite Mr Scarano’s denial that this was so (including all invoices from Invoice No. 15750 to Invoice No. 15793) (for which finding, I interpose to note, his Honour also gave no reasons) means that the primary judge must have rejected any denials of delivery of goods and must have accepted that the Verification Document was an admission that the invoices described on that document had been received and completed; and hence that the goods the subject of those invoices had been delivered. However, to reason – from a finding of receipt of invoices – that goods were in fact delivered involves a conflation between receipt of invoices and receipt of goods. And the Verification Document, for the reasons adverted to earlier, is not an unequivocal admission of delivery of goods; nor is any such admission consistent with the delivery note in respect of the 22 February 2016 invoice against which there was no comment in the Verification Document.

50. Emphasis was placed by Cashflow on the fact that the primary judge found Mr Scarano to be an unsatisfactory witness and did not believe him (referring to the finding that Mr Scarano did receive the email notifying him of the assignment in the context where Mr Scarano had denied receiving express notice of the assignment but had paid some invoices to Cashflow – see T 131.25-44). However, contrary to Cashflow’s submissions, there was no adverse credit finding. The primary judge did not expressly conclude that Mr Scarano was not a witness of truth. Neither the rejection of Mr Scarano’s evidence as to receipt of notification of the assignment nor the fact that his Honour “did not accept the full weight” of Mr Scarano’s oral evidence on other matters, necessarily involves any finding of dishonesty and none was expressly made by the primary judge.

Determination as to ground 1

54. Cashflow’s submission that there was nothing incomplete or unsatisfactory about the reasoning process in relation to the critical issue as to whether the goods had been delivered cannot be accepted.

55. Ground 1 is made good.

Ground 2

56. As to ground 2, ultimately the position of Il Vizio, as I understand it, is that on the evidence before the primary judge a finding of delivery could not have been made (AT 38.41). Il Vizio contends that the primary judge erred in the rejection of the evidence of Il Vizio as to non-delivery (see AT 38.42) and submits that, weighing the evidence in assessing the plaintiff’s claim, it should be held that Cashflow did not establish that the goods the subject of the disputed invoices were delivered (see AT 39.15ff).

Evidence relied upon by Il Vizio in relation to non-delivery

57. Il Vizio places weight on the following as being objective evidence of non-delivery: the credit notes that had been issued by Hometech in relation to particular invoices; the 21 June 2016 email from Mrs Scarano to Mr Tanti and Mr Tanti’s response thereto; and the documentary evidence as to the purchase of the abandoned cargo in January 2017.

Credit notes

58. As to the credit notes, Il Vizio emphasises that it does not (and did not) rely on these as giving rise to a credit as against Cashflow. Rather, it submits that, in circumstances where Cashflow had no personal knowledge about whether delivery had taken place (referring in this regard T 42.24-36; T 53.14-31) and where it can reasonably be inferred that Hometech was responsible for delivery, the issue of credit notes by Hometech is persuasive evidence corroborating Il Vizio’s contention that delivery of goods had not occurred. Counsel for Cashflow conceded on the appeal that the credit notes were very significant contemporaneous documents (AT 49.18) and accepted that they represented contemporaneous evidence inconsistent with his Honour’s findings as to delivery.

June 2016 emails

59. As to the second of the matters relied upon by Il Vizio as objective evidence of non-delivery (the June 2016 emails which on their face indicate a dispute as to delivery of at least some of the invoiced goods), Cashflow argues that the weight to be placed on this correspondence is diminished, first, by the fact that Mrs Scarano (who it says was within Il Vizio’s “camp”) did not give evidence in the proceedings and, second, on the basis that Mrs Scarano’s email was “self-evidently sent after an approach by debt collectors, rather than being a contemporaneous record of non-delivery sent on or around the date of delivery of the goods” (see Cashflow’s written submissions at [27]). Cashflow maintains that it would have been reasonable to expect Mrs Scarano to be called by II Vizio to give evidence (she apparently having first-hand knowledge of matters relating to delivery). From my reading of the transcript and submissions in the proceedings below, it does not appear that the primary judge was asked to draw any such Jones v Dunkel inference (on the principles in Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8) at the hearing.

60. As to the email response from Mr Tanti, it is submitted by Cashflow that this was sent some months after the goods were delivered and in the context of debt recovery action; and that it goes no higher than, in one case, denying that a facsimile transmission was received, as alleged by II Vizio, and elsewhere stating that “Simon takes care this”. It is submitted that neither of those responses indicates that the goods were not delivered; and that, given that Mr Tanti’s email was sent only a matter of hours after Mrs Scarano’s initial email, it is likely that what Mr Tanti was there saying was that he would look into the matter. Cashflow submits that Mr Tanti’s response cannot be said to compel the rejection of Cashflow’s evidence about delivery (as to which see from [79] below).

Purchase of the abandoned goods

61. As to the purchase of the abandoned goods, it is submitted by Il Vizio that the documents demonstrate that the goods the subject of Invoice No. 15455 were purchased by it from Keepro International in January 2017 as abandoned cargo and that the findings made by the primary judge are inconsistent with the exchange that took place during the trial and the oral evidence provided by Mr Scarano (referring to T 152).

62. Cashflow argues to the contrary that, in light of the findings that each of the invoices had been received by II Vizio and that there was no evidence of any contemporaneous dispute as to non-delivery, the primary judge must have found that the goods that were purchased as abandoned goods were not the same as those that were invoiced by Hometech.

63. Cashflow contends that there is no evidence that the goods the subject of Invoice No. 15455 were bought as abandoned goods from Keepro International on 16 January 2017. It is submitted that, at their highest, the documents indicate that certain items were shipped from Zhejiang Dongyuan Import and Export Company in China to Hometech in Melbourne in November 2015 and that five months later II Vizio was invoiced for some items of the same type, but in entirely different quantities. (Thus it is submitted for Cashflow that his Honour was not in error in not accepting that the documents identified displaced his finding that the goods the subject of Invoice No. 15455 were delivered.)

Evidence relied upon by Cashflow as to delivery of the goods

64. At the hearing, Cashflow relied on the evidence adduced from Ms Stelfox and Ms Lazarus in support of the conclusion that the goods were delivered, as well as inferences that it argued should be drawn from the Verification Document and monthly statements issued to Il Vizio.

Evidence of Ms Stelfox and Ms Lazarus

65. As to the affidavit evidence of Ms Stelfox and Ms Lazarus, Il Vizio points to the language used (at [8] in each), being that Hometech “supplied” goods to Il Vizio. Il Vizio argues that there is a distinction (which Cashflow maintains is not a relevant distinction) between ‘supply’ and ‘delivery’. Il Vizio points out that neither witness gave evidence of matters such as: what goods were delivered by reference to any of the 26 invoices; how or when the goods were delivered; when invoices were rendered and whether the invoices were delivered with the goods or at some other time.

66. In relation to Ms Stelfox, Il Vizio notes her evidence in cross-examination to the effect that she had no direct knowledge as to whether delivery took place; that the only way she obtained any knowledge regarding delivery was through delivery documents and verifications that were carried out on selected invoices; that the verification process was entirely random and comprised 20% of Hometech’s entire customer base of at least 20 customers, perhaps more, only one of which was Il Vizio; and that her only dealings with Hometech were with Mr Tanti (see T 40.12-20; T 42.9-36; T 46.35-47.5; and T 52.45-53.28).

67. Cashflow accepts that Ms Stelfox was in a primarily managerial role, and says that her evidence makes it clear that Ms Lazarus was more directly involved with II Vizio. In particular, Cashflow points to the fact that Ms Stelfox in cross-examination identified that: she directly managed Ms Lazarus as at the date of the trial, and was the manager of Ms Lazarus’ direct manager as at 29 February 2016; that Ms Lazarus was the person who prepared various documents relating directly to the amount due and payable by II Vizio, including a Cashflow record identifying invoices and amounts payable by II Vizio; that Ms Lazarus was directly in contact with Mr Scarano regarding whether invoices were fulfilled, including sending a letter to Mr Scarano requesting that he verify that invoices had been fulfilled; that verifications were carried out by her staff, and that those “verifications” were “mostly to make sure that they’ve received their deliveries” (T 58.7-8), where “they’ve” included II Vizio; and that Cashflow was getting positive verifications relating to II Vizio.

68. As to Ms Lazarus (who was not cross-examined), Cashflow points to her evidence to the effect that: Il Vizio had signed the Verification Document (to which I refer in due course); that goods were supplied to Il Vizio; and that the Payment History Document (which is the subject of ground 3 of the grounds of appeal) identified the invoices the subject of the debt assignment. It is submitted by Cashflow that, particularly where Ms Lazarus’ evidence was uncontested, it was open to the primary judge to rely on that evidence in reaching a finding that the relevant goods were delivered.

69. In this regard, Il Vizio accepts that Ms Lazarus was not required for cross-examination but emphasises that her affidavit makes clear that she has no direct knowledge of the matters to which she deposed (noting that she does not work for Hometech and does not state that she has access to the books and records of Hometech). Il Vizio maintains that Ms Lazarus’ evidence had only limited weight, and argues that Mr Tanti’s response to Mrs Scarano’s 21 June 2016 email is the best available evidence and is consistent with the allegations made by II Vizio.

Verification Document

70. Cashflow places weight on the Verification Document (referred to in the primary judgment at [57]) as giving rise to the inference that the invoices listed therein against which no comment was noted were invoices that had been completed by the delivery of the goods. Cashflow argues that Mr Scarano’s oral evidence that this was not a confirmation of delivery was rejected by the primary judge.

71. While Il Vizio seemed to accept that Mr Scarano’s failure to dispute receipt of certain of the invoices listed in the Verification Document is a matter from which an inference might arguably be drawn that there was no dispute at that time as to delivery of the goods in those invoices, in my opinion the reasonableness of any such inference would need to be assessed in the context of the email with which the Verification Document was returned to Cashflow (which to my mind makes clear that Mr Scarano was not there purporting to verify any items against which no comment had been made).

Il Vizio’s failure to make claims or complaints within seven days

72. Cashflow’s position is that the lack of evidence of II Vizio documenting any event of damaged deliveries within (or close to) the time frame provided for on the invoices is a matter that supports, or is relevant to, a finding that the goods were in fact delivered.

73. Il Vizio submits that the failure to make a claim within seven days is not relevant to those of the disputed invoices which did not contain the relevant statement (Invoice Nos. 15293 and 15455) or of which there was no copy in evidence (Invoice Nos. 15347 and 15750 to 15793) and, further, that failure to make such a claim would only be relevant in circumstances where there was short delivery as opposed to non-delivery. Moreover, Il Vizio argues that this does not take into account the fact that during the relevant period (from 29 February 2016, when notice of assignment was sent, to 4 July 2016, when Il Vizio complained to Cashflow) only eight invoices were purportedly issued (none of which led to a complaint of short delivery). II Vizio also points to the complaints made on 26 February 2016, 21 June 2016, 4 July 2016, and 21 September 2016.

Monthly statements

74. Cashflow argues that there was further evidence (not referred to by the primary judge) supportive of a finding that the goods were delivered, namely the statements that were rendered to Il Vizio every month (see its submissions at trial at [26]-[29]). Cashflow accepts that the statements issued to Il Vizio were addressed to its former (not then current) store, but submitted at trial that the Court could comfortably accept that any mail addressed to the former store would have been delivered (see submissions at [28]). Cashflow argues that it would have been open to the primary judge to infer (though no such finding was made) that the documents were received and that, if those documents were received, then Il Vizio would have been on notice each month of the sum due and payable, as well as on notice of the assignment of any further debts each month. It is submitted that the failure, in response to those notices, to assert that goods were not delivered would again be indicative of satisfactory delivery.

75. As to the monthly statements, Il Vizio points out that they did not contain any statement that complaints must be made within seven days. It is submitted that, even if it were to be found that II Vizio received monthly statements, the content and form of those statements cannot establish delivery of the goods the subject of the invoices referred to in those statements; nor can any adverse inference be drawn that no complaint was made if the statements were received, on the basis that there was an ongoing process regarding disputed invoices that started on 26 February 2016 and was still being resolved as at 21 September 2016.

Jones v Dunkel inference in relation to failure of Cashflow to call Mr Tanti to give evidence

76. There was no evidence from Mr Tanti. Il Vizio submits that the onus was on Cashflow to call Mr Tanti in circumstances where it bore the onus to establish delivery and it had the contractual ability to compel Mr Tanti to provide evidence.

77. At the hearing, Cashflow submitted to the primary judge that there was no requirement to call Mr Tanti as the onus of establishing delivery had been met (there referring, it seems, to the Verification Document as an acknowledgement that certain of the invoices were due and payable (see T 162.40ff)).

78. Il Vizio argues that the primary judge failed to draw a Jones v Dunkel inference, in circumstances where: Cashflow was aware that delivery of goods was a central issue in the proceedings (referring in this regard to the statement of claim at [6]-[9], and the defence at [6]-[9]); Cashflow had the onus to establish delivery with respect to the goods the subject of each invoice; Mr Tanti had direct personal knowledge as to whether, when and how delivery took place and was obliged to make available books and records and to attend to give evidence under the terms of the Deed (see cl 16.1); and Cashflow could have called Mr Tanti to give evidence (as conceded in cross-examination by Ms Stelfox, see T 50.11-14) and provided no explanation as to why it had not done so. (Although there was a reference in the transcript of the trial suggesting that Mr Tanti owed a significant sum of money to Cashflow (T 123), the transcript suggests that that may not have related to a personal debt owed by Mr Tanti, as opposed to a debt owed by some entity with which Mr Tanti was associated).

Determination as to ground 2

79. It is not disputed that Cashflow bore the onus of establishing that the goods the subject of the disputed invoices had been delivered. Cashflow argued, however, that the issue of delivery was a matter in the particular knowledge of II Vizio such that even “slight” evidence from Cashflow shifted the evidentiary onus to II Vizio. In that regard, however, the failure of Cashflow to call evidence from Mr Tanti must be taken into account. It was accepted that it had been open to Cashflow to adduce evidence from him as to his account of what had occurred (and to explain the response by him to the June email and the issue of the credit notes). It did not do so. A Jones v Dunkel inference should in my view be drawn that his evidence would not have assisted Cashflow’s case. (By contrast I would not draw such an inference in relation to Mrs Scarano, whose evidence would have been cumulative to that of Mr Scarano on the issue of non-delivery – and I note that Mr Scarano was copied into the relevant June email correspondence at the time.)

80. The task of this Court when hearing an appeal by way of rehearing is clear (see Robinson Helicopter Company Inc v McDermott [2016] HCA 22; (2016) 90 ALJR 679 at [43]; cited most recently in Pickham v Binary Engineering Pty Ltd [2018] NSWCA 105 at [39]; and see Szeto v Situ [2017] NSWCA 136 at [25]-[26]; also cited in Pickham v Binary Engineering Pty Ltd at [41]). There must be a “real review” of the evidence given at first instance and the reasons for judgment to determine whether there has been an error of fact or law and, if the primary judge has erred in fact, the appellate court is required to make its own findings of fact and to formulate its own reasoning based on those findings. Findings of fact that are dependent to any substantial degree on the credibility of the witness must stand unless it can be shown that the primary judge has failed to use or palpably misused his or her advantage as the trial judge or has acted on evidence that is inconsistent with incontrovertibly established facts or which is glaringly improbable (see the oft-cited Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 and Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479; [1993] HCA 78).

81. In the present case, there was no direct evidence from anyone at Hometech (relevantly, Mr Tanti) as to delivery of the goods the subject of the invoices in dispute – nor were there any copies of invoices or delivery dockets in evidence for 11 of the disputed invoices (see [37] above). The evidence from Ms Stelfox and Ms Lazarus went no further than evidence as to what their business records (based presumably on information provided to Cashflow by Hometech) disclosed as to the invoices – they had no personal knowledge of delivery of goods and had no dealings with Il Vizio at the time the goods the subject of the disputed invoices were allegedly delivered. It is thus not necessary to enter into the debate as to the semantic difference between “supply” and “delivery” and its relevance in the present context. Cashflow’s evidence on this aspect of the case was quite properly conceded to be slight (see AT 52.40). Its case thus rested on the inferences (if any) that could be drawn from the Verification Document on the one hand and the issuance of monthly statements (the receipt of which was disputed by Mr Scarano) on the other.

79. In my opinion, the signature and return by Mr Scarano of the Verification Document did not give rise to an inference that delivery of the goods the subject of those of the disputed invoices listed in that document had occurred (and it must be remembered that a large number of the disputed invoices – comprising the bulk of the monetary value of the claim – were not listed in that document at all); nor was it an acknowledgement or admission of delivery or of liability to make payment of certain of the invoices (as had been submitted to the primary judge). This is because the email with which the Verification Document was returned to Cashflow made clear that Mr Scarano was only there purporting to address what amounts had been paid or were being paid or in respect of which credits were being claimed. Mr Scarano’s description, at the time, of what the Verification Document represented indicates that invoices against which no notation was made were invoices that he was not in a position there to deal with (one might well think because the goods had not yet been delivered and so the question of payment had not arisen). It is apparent (particularly having regard to the lack of any notation in respect of the invoice in respect of which goods were only later delivered) that Mr Scarano was not there confirming delivery of goods in respect of the disputed invoices. Moreover, any inference that might have been drawn in Cashflow’s favour from the Verification Document could certainly not assist Cashflow to establish delivery of goods in relation to the disputed invoices that were not listed in the document and of which there was no copy in evidence.

80. As to the monthly statements, apart from the difficulty that they were addressed to the wrong store (and there was a dispute as to whether they had been received by Il Vizio in the first place), again the issue of those statements could not of itself establish delivery – at most there might be an inference drawn from the fact that there was no complaint raised about the July/August 2016 invoices as they appeared on those monthly statements (totalling some $126,814.26). However, in the context where Il Vizio had already raised issues as to what it saw as a “major discrepancy” in its account back in June 2016 and then responded immediately to the statement of account dated 21 September 2016 disputing various of the invoices, the strength of any such inference must be weak.

81. Balanced against this is the objective evidence of Il Vizio’s June 2016 complaint as to various of the invoices and Mr Tanti’s response thereto and of the issue of credit notes. That evidence supports the assertion by Il Vizio that some of the invoices related to stock that had not been ordered or received; and the evidence of the one instance where “abandoned cargo” with documentation referring to the same Hometech invoice number as that in the relevant disputed invoice had been purchased at a time after that at which (on Cashflow’s case) the stock should already have been delivered to Il Vizio.

82. Cashflow’s positive case on the issue of delivery was not made out on the evidence. The weight of the contemporaneous evidence does not permit a finding on the balance of probabilities that the goods the subject of the now disputed invoices were ever delivered to Il Vizio. It is therefore not necessary to consider the credit-worthiness or otherwise of Mr Scarano. Cashflow failed to establish its case. Ground 2 is thus made good.

Ground of Appeal 3 – admission of business record

86. This ground of appeal raises an issue as to the admission into evidence, over objection by Il Vizio, of a document forming part of what was described by Ms Stelfox as “the Company’s record of invoices and delivery dockets which formed part of the Debt Assignment as provided to [Cashflow]” (see her affidavit sworn 8 August 2017 at [10]). In Ms Stelfox’s affidavit, a reference to “the Company” is a reference to Hometech (see at [3]). The same document was exhibited to Ms Lazarus’ affidavit. The document (to which I will refer as the Payment History Document) was admitted into evidence as a business record.

87. The primary judge noted (at [58]) that this was a company record of Cashflow identifying the payment history of Il Vizio from 1 February 2016 to 8 August 2017 which indicated the balance outstanding of $265,660.28. It had been put to the primary judge that this was an extract of a business record existing on the systems of Cashflow (see T 24.40) and his Honour appears to have admitted it “for the present time” on the basis that he would hear submissions in due course as to the exact nature of the document (see T 25.5).

88. The complaint by Il Vizio is that the Payment History Document should not have been admitted as a business record of Cashflow for three reasons.

89. First, Il Vizio submits that there was no evidence as to the provenance of the Payment History Document nor any evidence that it formed part of Cashflow’s records, such evidence being necessary to establish that the document is a business record of Cashflow (referring to In the Matter of Maiden Civil Pty Ltd [2012] NSWSC 1618 at [24]) (and see the argument at T 24.5).

90. Second, Il Vizio submits that the Payment History Document was clearly prepared for the purposes of the proceedings (see the argument at T 24.28-30). (Cashflow argues that the contention that this document was prepared in contemplation of litigation is based only on the date of printing and because it identifies a balance amount identical to that sought in the pleadings. It maintains that this simply reflects the process of extraction of the document.)

91. Third – though Il Vizio accepts this was not put to the primary judge – it is submitted that the Payment History Document should have been excluded under s 135(a) of the Evidence Act 1995 (NSW) as being unfairly prejudicial, since Il Vizio was not provided with 12 of the invoices to which it referred and is not aware (nor could it be aware) of the nature and quantity of the goods specified therein. Hence, Il Vizio says it was deprived of the opportunity of making inquiries as to whether those goods were received; and it points out that Cashflow did not adduce evidence in relation to those matters, nor did it provide a copy of the invoices.

92. Even if the Payment History Document was properly admitted into evidence, Il Vizio maintains that the primary judge erred in giving any weight to it on the basis that: it could only be a business record of Cashflow not Hometech; it went no higher than establishing that invoices were issued (as distinct from whether goods the subject of the invoices were delivered); although the Payment History Document indicates that invoices may have been posted that evidence is not sufficient to establish the matters ordinarily required to establish service by post; the content and form of the Payment History Document could not be used reasonably to infer that the goods were in fact delivered – that being a matter within the control of Hometech not Cashflow; Mr Scarano’s unchallenged evidence was that invoices would be sent prior to the goods arriving (referring to T 135.15-20, T 153.37-46); and no other evidence was adduced from which it could reasonably be inferred that the Payment History Document is evidence of delivery.

93. Cashflow argues that in circumstances where both Ms Stelfox and Ms Lazarus gave affidavit evidence as to their access to the books and records of Cashflow, identified that they each have operational roles within Cashflow, and identified the Payment History Document as “the Plaintiff’s Payment History Report”, and where neither was cross-examined on her evidence with respect to the Payment History Document, it was open to the primary judge to conclude that it was part of the records kept by Cashflow as part of its business and to draw inferences from the form and context of the document. (II Vizio challenges the proposition that Ms Stelfox was not cross-examined about the Payment History Document. It refers to the transcript at T 41.39-49 and says that Ms Stelfox’s evidence went no higher than that the document was prepared by Ms Lazarus.)

94. Cashflow points out that it was not in dispute in the proceedings that it is a financier, who provides invoice financing. It submits that the Payment History Document (identifying invoices, invoice dates, invoice amounts, dates the amounts were posted to the account, and any payments) is in the usual format of documents extracted from bookkeeping software and that the inference could readily be drawn that it reflected part of the transactional records that one would expect a financier to possess and that such an inference was also available to meet the requirements of s 69(2) of the Evidence Act.

95. II Vizio maintains that no evidence was adduced by either Ms Stelfox or Ms Lazarus that the Payment History Document formed part of the records of Cashflow, being an essential matter to establish that it is a business record. Further, it is submitted that even if the Payment History Document is a business record, it is not a business record of Hometech and cannot be used to prove delivery of goods the subject of the disputed invoices.

No need for determination as to ground 3

96. In light of the conclusions reached in relation to grounds 1 and 2 it is not necessary to determine this issue. Suffice it to note that the same information contained in the impugned “business record” appears to have been admitted, without objection, in the form of a document headed “Cashflow Finance Australia Pty Ltd Payment History Report” that was annexed to Ms Stelfox’s affidavit (Annexure F).

97. Whether or not the impugned document should have been admitted as a business record of Cashflow, it is apparent that what it records is information obtained from Hometech as to invoices asserted by Hometech to be outstanding. It does not establish that the goods the subject of those invoices were delivered to Il Vizio. Nor is it apparent that the primary judge relied on it for any such finding. His Honour (at [58]) simply referred to it as a “company record of Cashflow identifying the payment history” of Il Vizio from 1 February 2016 to 8 August 2017, and said that it “indicated” the balance outstanding.

Ground of Appeal 4 – terms of the relevant agreement

98. Challenge is made to the conclusion of the primary judge (at [55] and [59] of the primary judgment) as to the “no claims after seven days” term, insofar as his Honour concluded that there was a term of the agreement between Il Vizio and Hometech that required Il Vizio to notify Hometech within seven days of an invoice being rendered of any event of damaged deliveries (see [55]) or otherwise of any complaint as to non-delivery (see [59]). Again, in light of the conclusion reached in relation to grounds 1 and 2, it is not necessary to consider this issue in any detail.

99. Il Vizio points out that no contractual claim was brought by Cashflow against Il Vizio, the only cause of action pleaded being an assignment to Cashflow of the debts allegedly due and payable by Il Vizio to Hometech. It submits that, other than as to when the obligation to pay arose as between Il Vizio and Hometech, no provisions of the agreement between Il Vizio and Hometech are relevant in circumstances where Cashflow seeks to enforce the debts as assignee. Il Vizio also complains that this issue was not pleaded; was not raised in opening addresses; and was not put to Mr Scarano in cross-examination. Further, it is submitted that if a claim needed to be made within seven days, then it is unclear whether such a claim should be made to Hometech, to Cashflow or to Cashflow’s predecessor (180 Capital Funding Pty Ltd).

100. Cashflow submits that his Honour took into account the stipulations in the transactional documents, and the consequence of the assignment, in arriving at findings of fact; and did not err in so doing. Cashflow submits that the primary judge did not make any finding that there was any contractual term (as to lack of an entitlement to claim a credit or as to the obligation to dispute delivery within seven days of an invoice being rendered); rather, it says, the primary judge was observing that II Vizio was on notice of the assignment of debts from at least 25 February 2016 (a matter not the subject of appeal) and was aware that any credits to that debt must be made through Cashflow (an observation or finding that it is submitted was open on the evidence).

101. It is further submitted that the primary judge was not here impliedly finding a contractual obligation; rather, that his Honour was “merely stating the obvious impact of assignment of debts – that is, once assigned, and notice given, they became the property of Cashflow, and any dealings with respect to those debts could only be through Cashflow” (respondent’s written submissions at [45]). Similarly, it is submitted that there was no finding that there was a contractual obligation with respect to the requirement to dispute delivery within seven days, the primary judge simply identifying that the invoices contained a term that II Vizio was to document any event of damaged deliveries on the consignment note or invoice within seven days and taking account of the absence of any such evidence as a factor relevant to the question of delivery.

No need for determination as to ground 4

102. The critical issue was as to whether there had been delivery of the goods the subject of the disputed invoices. I do not read his Honour’s reasons as purporting to make findings as to any unpleaded contractual claim by Cashflow against Il Vizio. Rather, I read his Honour’s reasons as relying on the absence of dispute as to delivery as supporting the (implicit) conclusion that there had been delivery of the goods in question. It is not necessary further to deal with this ground of appeal.

Ground of Appeal 5 – efficacy of the assignment

103. The final ground of appeal challenges the finding that there was an effective assignment at law of all the debts the subject of the 26 invoices. Il Vizio does not dispute the finding by the primary judge that Mr Scarano had notice of the assignment. However, it argues that Cashflow was still required to establish that it had complied with the matters prescribed by the Deed for the assignment of each of the debts and that the goods the subject of each invoice had in fact been delivered (see Sale of Goods Act 1923 (NSW) s 31).

104. I do not propose here to set out the relevant provisions of the Deed; rather, simply to summarise the submissions made in relation to this ground (because it is not necessary to determine it in light of the conclusions reached earlier in these reasons). The simple contention made for Il Vizio (see AT 5.28) is that, in respect of any debts other than those existing at the “Commencement Date”, there was no evidence that those debts had been transferred to Cashflow in accordance with the terms of the Deed. Senior Counsel for Il Vizio accepted that, once the process of presentation of debt envisaged by the Deed had been attended to and Cashflow had elected to accept the debts then the position would be otherwise.

105. Il Vizio maintains that Cashflow cannot establish that each debt has been assigned under the Deed for three reasons.

106. First, Il Vizio argues that there was no evidence to establish the Commencement Date (as defined in cl 57), there being no evidence of the Commencement Notice referred to in the definition of Commencement Date nor any evidence as to the terms of the Commencement Notice and/or if and when one was issued. Il Vizio argues that, although there is some evidence that Cashflow has made payments under the Deed to Hometech, there is no evidence that establishes the amount of each payment or when any payment was made. It is submitted that the Court cannot determine whether Hometech is required to take further action in order for there to be an effective transfer of each debt to Cashflow under the Deed.

107. Second, Il Vizio argues that, for all debts that came into existence after the Commencement Date which Cashflow now seeks to recover, Cashflow must establish: delivery of the goods the subject of the invoice; that Hometech provided the requisite information under the Deed to Cashflow about the debt; that Cashflow then made a payment to Hometech for that particular debt; that Cashflow has not received payment from the End User Debtor for that particular debt; and that Hometech had not received payment from Il Vizio for the debt.

108. Third, Il Vizio submits that, where there is no evidence of the dealings between Cashflow and Hometech (in particular, what information and/or moneys passed between them at what time and for what debts), Cashflow cannot establish that each of the matters required to establish the transfer of post-Commencement Date debts occurred after the Commencement Date.

109. Cashflow submits that (it having expressly pleaded that there was an assignment of debt pursuant to the Deed), if II Vizio wished to contend that there was some failure in the operation of the Deed, it needed to have pleaded that alleged failure or at least opened its case to make that contention clear. It is submitted that, had that occurred, it would have been open to Cashflow to lead further evidence, or indeed, to seek leave to join Hometech to the proceedings. Cashflow says that II Vizio did not plead or raise the point, nor did it put any factual matter affecting the enforceability of the Deed to any witness and that it was not until closing arguments that this proposition was raised. In that context, it is said that II Vizio cannot properly raise this ground of appeal.

110. As to the three matters put forward as supporting II Vizio’s submission that Cashflow cannot establish that each debt has been assigned, it is submitted for Cashflow that none of these matters has any impact upon the findings made or judgment given by the primary judge.

111. As to the first matter (the Commencement Date) it is submitted that the finding with respect to the commencement of the Deed was at [8] of the primary judgment, where his Honour found that the Deed dealt with all debts up to the date of the Deed (being 22 February 2016), and provided a mechanism for the assignment of debts as they arose in the future. It is submitted that the finding that Hometech continued to owe Cashflow $580,075.13 was available on the evidence and was further supported by the fact that on 23 February 2016 Mr Tanti, the director of Hometech, executed a Notice of Assignment to be sent to II Vizio. It is submitted that, provided those amounts remained payable, Cashflow was entitled to sue for them against any debts assigned to it, irrespective of whether finance was provided for the debts the subject of those later invoices. Cashflow accepts that, upon notice of the assignment being given to II Vizio, any payment by II Vizio to Hometech would not have discharged the debt. However it says that, absent payment to Hometech prior to notice, notice is not a prerequisite to enforcement

112. It is further submitted that II Vizio’s submission misapprehends the relationship between the provision of future finance and the collection of assigned debts. Cashflow argues that for it to collect debts of II Vizio the debt need only have been assigned, and points out that II Vizio has conceded that it was on notice of the assignment of all of the relevant debts (including from Hometech). Cashflow argues that the assignment is not dependent on further finance being provided with respect to each individual invoice because all debts were assigned to Cashflow. It says that that assignment is not dependent on the terms of the Deed specified by II Vizio (at [36] of its written submissions). In particular, reference is made to cl 4.1, which expressly states that “[t]his clause does not affect clause 3.1 or 3.2 of this Facility Deed”. Cashflow argues that those clauses are not relevant to the assignment of the debts – rather, that the assignment is effected by cll 3.1 and 3.2. It is submitted that as II Vizio acknowledges payments were made, so the Commencement Date condition has been met, and the assignment was effective.

103. Cashflow argues that cl 31.4 of the Deed is consistent with this interpretation in that it provides that if the Deed has ended and all liabilities from Hometech to Cashflow have been satisfied, any remaining Transferred Debts will be sold back to Hometech for $10. It is said that this indicates that the debts arising under invoices could have been assigned beyond the amount financed, and there is not a necessary link between a debt being financed and a debt being assigned.

104. Cashflow thus submits that it is clear that the facility was on foot and that moneys had been paid to Hometech; it says that it does not matter whether it has identified the Commencement Date; that it made no difference to the existence of the debt collectible from II Vizio; and that this is not a matter which Cashflow had separately to prove.

105. As to the second matter advanced by Il Vizio on this issue (namely, as to the matters that II Vizio says Cashflow must prove where a debt arose after the Commencement Date), Cashflow argues that those are not matters relevant to the question of the assignment of those debts, save for the question of delivery. It says that the assignment becomes enforceable at law upon notice being given. Similarly, as to the third submission advanced by Il Vizio in this regard, Cashflow says that it does not give rise to any error on the part of the primary judge.

No need for determination as to ground 5

116. Given the conclusion reached as to grounds 1 and 2, it is not necessary to determine Il Vizio’s challenge to the finding that there was an effective assignment at law of all the debts the subject of the 26 invoices. Senior Counsel for Il Vizio made clear in submissions that the primary challenge on the appeal, from II Vizio’s perspective, was to the factual findings of delivery of the goods the subject of the 22 disputed invoices (see AT 5.41).

117. In regard to ground 5, I make only the following brief comments.

118. First, there is doubt as to whether Il Vizio could properly raise this ground of appeal. It is a fundamental principle that, in the ordinary course, an appellant should not be permitted to raise for the first time on appeal a point not taken in the proceedings below (see Coulton v Holcombe (1986) 162 CLR 1 at 7-8; [1986] HCA 33; recently reiterated in Obeid v Lockley [2018] NSWCA 71 at [152] per Bathurst CJ (Beazley P agreeing); [213]-[221] per Leeming JA).

119. Although the present case is not one in which the appellant now seeks to raise a point not put at all below, Il Vizio does seek in ground 5 to raise points which were only put to the primary judge at a very late stage. Cashflow accepts that the matters the subject of ground 5 were (eventually) put to the primary judge – and in that sense, the principle in Coulton v Holcombe is not strictly applicable. However, the effect of Cashflow’s submission is that these matters were raised so late at trial that an analogous unfairness arises in Il Vizio being permitted to raise them on appeal.

120. Despite Cashflow expressly pleading that there was an assignment of debts pursuant to the Deed (see Statement of Claim filed 22 November 2016 at [2]-[5]), Il Vizio responded to those pleadings (in its Defence filed 14 December 2016) only by way of non-admission, having filed what might be described as a ‘bare’ defence.

121. Il Vizio opened its case at trial on the basis that in order to prove that there had been an effective assignment at law of the debts upon which Cashflow was suing, Cashflow needed to establish that Il Vizio had received written notification of the assignment of the debts (see T 9.30ff). Importantly, Counsel for Il Vizio submitted that proving that there had been an effective assignment at law turned “entirely on whether or not [Il Vizio] received written notice of the assignment” (T 11.8-10).

122. Nothing further was said in opening about the effectiveness of the assignment of debts pursuant to the Deed. The premise of Il Vizio’s opening submissions was that there were two hurdles for Cashflow to overcome: first, it needed to show that Il Vizio had received notice that the debts had been assigned at law; and, second, it needed to show that the goods the subject of the relevant invoices had been delivered.

123. Counsel for Il Vizio did not put any factual matter relating to the effectiveness of the assignment (beyond the question of notification) to any witness during the course of the hearing from 17 to 21 August 2017. The position by the close of the evidence was illustrated by the primary judge’s comment at the end of the fifth day (T 157.24-26):

I don’t even know why [the finance agreement between Cashflow and Hometech] was put [in evidence]. There’s never been any doubt about the relationship between Hometech and Cashflow.

124. It appears that the first time any of the matters now agitated in ground 5 was raised at trial was in Il Vizio’s written closing submissions dated 8 September 2017, which came after both parties’ cases had been closed and at a time when the only remaining aspect of the hearing was that of closing submissions (heard on 18 September 2017).

125. Il Vizio’s conduct of the trial below – in failing to plead these matters, in omitting to put to any witness any of the factual matters now raised by ground 5, and in narrowing its case in opening in a manner completely inconsistent with the position adopted in closing – no doubt put Cashflow in a difficult situation (particularly given the likely complexity attendant on joining Hometech (by then in liquidation) to the proceedings at the end of the hearing, and in raising at that stage any argument as to assignment in equity, which may have necessitated transfer of the proceedings to the Supreme Court).

126. Nonetheless, Cashflow could presumably have sought leave on the final day of the hearing to reopen its case in order to adduce evidence to meet Il Vizio’s new arguments and/or seek leave to join Hometech (the assignor) (albeit by then in liquidation – see T 10.18) as a party to the proceedings. It did not do so.

127. Second, and assuming that Il Vizio could now properly raise ground 5, Cashflow’s submissions that non-delivery cannot invalidate the assignment of existing debts or future rights, and that Il Vizio has misapprehended the relationship between the provision of future finance (from Cashflow to Hometech) and the collection of assigned debts, have some force. Cashflow submits that where it is plain that the Deed was on foot, and where Il Vizio has conceded that it was on notice of the assignment of all the relevant debts and accepted that the requirements of s 12 of the Conveyancing Act were satisfied, no further steps were required to effect the assignment at law of the debts; but that in any event the assignment would have been effective in equity (AT 56.35). It accepted that such a submission would have raised the question of joinder of Hometech and the jurisdiction of the District Court to deal with the claim (see s 134(1)(b) of the District Court Act 1973 (NSW)) (though that was not pleaded below) (see AT 56.40). It is, however, unnecessary to explore these issues any further.

128. Finally, Il Vizio’s arguments on ground 5 appear to be incompatible with the relief that it seeks on this appeal, being a judgment in Cashflow’s favour in an amount of about $27,000. That amount reflects debts admitted to be owing to Cashflow in respect of certain invoices, and this admission necessarily depends on an acceptance that the debts were validly assigned from Hometech to Cashflow.

129. In those circumstances, I say nothing further about ground 5 of the grounds of appeal.

Conclusion

130. For the above reasons, I am of the view that grounds of appeal 1 and 2 have been made out. There was some debate at the hearing of the appeal as to whether, in the event that the appeal were to be allowed, the matter should be remitted to the District Court or whether judgment should now be entered for the admitted amount and the proceedings thus disposed of without any further hearing.

131. Senior Counsel for Il Vizio argued for the latter course, emphasising that of the disputed invoices, some $68,000 were the subject of credit notes and an even larger amount was comprised by invoices of which there was no copy in evidence. The submission for Cashflow was that if the appeal were to succeed the matter should be remitted at the “price” of an order for payment of the amount now conceded by Il Vizio, but that there should be no partial remitter (say, to exclude the amounts the subject of the credit notes). Cashflow’s position was that it would be open to it on a rehearing properly to prepare a factual inquiry about the matters in dispute (including as to the credit notes) and to issue subpoenas and the like (AT 57.50). It was said that there could be a heightened focus on matters such as the Verification Document (T 58.14). Such a course was opposed by Il Vizio on the basis that Cashflow had had its opportunity to adduce evidence of the alleged deliveries of goods and had failed to discharge its onus in that regard.

132. Had the evidence before this Court been such as to permit a reasonably available inference (based on the Verification Document and/or failure to respond to the monthly statements issued by Cashflow) that there had been delivery of the goods (such as to leave open the prospect that the ultimate determination of the dispute on a remittal might turn on issues of credit), then I would have concluded that it was necessary to remit the matter. As it is, I accept the submission for Il Vizio that the evidence before the primary judge was not such as to permit the conclusion to be drawn, on the balance of probabilities, that the goods the subject of the disputed invoices had in fact been delivered. Cashflow’s witnesses had no direct knowledge of delivery; there was no evidence from Mr Tanti (as to which, I would draw an inference adverse to Cashflow for the reasons which Il Vizio advanced); I do not accept that there was an inference reasonably open to be drawn based on the Verification Document; nor would I draw such an inference from the issue of two monthly statements that were unaccompanied by copies of the relevant invoices; and the evidence of the credit notes pointed squarely towards an acceptance by Hometech that at least some of the goods had not been delivered. Thus Cashflow’s positive case fails on the evidence adduced by it at the trial, without the need to assess the credit of Mr Scarano (and irrespective of the absence of any evidence of Mrs Scarano).

133. The orders I propose are as follows:

1. Appeal allowed with costs.

2. Set aside the judgment and orders made by Sorby ADCJ on 25 October 2017 and in lieu thereof enter judgment for the plaintiff in the sum of $27,394.81.

3. Direct that the parties forward to each other and to Ward JA’s associate within seven days any brief written submissions as to the costs of the proceedings in the District Court, with a view to this issue being dealt with on the papers.

134. WHITE JA: I agree with Ward JA and with the orders her Honour proposes.

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Amendments

08 June 2018 - Amendment to Headnote

Decision last updated: 08 June 2018