L H Markwell Pty Ltd v L a and D E Fitzgerald Pty Ltd
[2000] QDC 219
•12 May 2000
DISTRICT COURT OF QUEENSLAND
CITATION: L H Markwell P/L v L A & D E Fitzgerald P/L [2000] QDC 219 PARTIES: L H MARKWELL PTY .LTD
(ACN 010 232 630) Respondent/Plaintiff
and
L A & D E FITZGERALD PTY LTD
(ACN 068 518 249) Applicant/DefendantFILE NO/S: D2689 of 1998 DIVISION: PROCEEDING: Chambers juridiction ORIGINATING COURT: Brisbane DELIVERED ON: 12 May 2000 DELIVERED AT: Brisbane HEARING DATE: 8 May 2000 JUDGE: Forde DCJ ORDER: Action dismissed CATCHWORDS: Stay of action – r.171 UCPR – issue estoppel – Small Debts Court – Brazier v Skipton Rock Co. Ltd (1962) 1 All ER 955, R v McKay Exp Cassaniti (1993) 2 QdR 95, Mondel v Steel 8 M&W 858, Port of Melbourne Authority vAnshun Pty Ltd (1980) 147 CLR 589, Henriksens RederiAIB v. THZ Rolimpex [1974] QB 233, Dey v. Victorian RailwaysCommissioner 78 CLR 62, Jackson v. Gold Smith (1950) 81 CLR 446. COUNSEL: Ms. K. Buxton for Applicant
Mr. R. Anderson for RespondentSOLICITORS: McCullough Robertson Lawyers for the Applicant
Baker Johnson Lawyers for the Respondent
This is an Application on behalf of L.A. & D.E. Fitzgerald Pty Ltd (hereinafter referred to as the applicant) for the following orders:
“1.That this action be stayed, or alternatively, struck out (pursuant to r.171 of the Uniform Civil Procedure Rules) on the basis that:
(a) The facts in issue between the parties in relation to the work identified in paragraphs 2, 6, 7 and 8 of the Plaint (“the works”) were the subject of judicial determination by Mr Mellors SM in the Magistrates court at Roma on 25 September 1996 (“the decision”).
(b) In the decision, Mr Mellors SM determined, inter alia, that LA & DE Fitzgerald Pty Ltd, the defendant in these proceedings, carried out the works competently.
(c) The plaintiff is estopped by the decision from alleging that the works were undertaken negligently.
2. That the plaintiff pay the defendant’s costs of and incidental to this action, including the costs of this application, to be accrued (sic).
3. Such further or other orders or directions as to the Court seems appropriate.”
In this application, being Plaint No. 2689 of 1998, LA Markwell Pty Ltd is the plaintiff, hereinafter referred to as the respondent. The applicant/defendant, L A & D E Fitzgerald Pty Ltd (hereinafter referred to as the applicant), sued the respondent in the Small Debts jurisdiction. It was heard by a Stipendiary Magistrate at Roma and a decision was given on 26 September 1996. The applicant in that action sought moneys owing for work and labour done in relation to a rock trencher. The findings by the Magistrate are set out in his reasons being Exhibit “LAF15”.
The findings included:
(a) that the applicant was entitled to the moneys owing
(b) that the work was done in a competent manner and
(c) that the appropriate defendant was Mr. Markwell. He is the principal of the respondent company.
It should be noted that the learned Magistrate refused leave to Mr Markwell to file affidavits in his defence as his witnesses were not available for cross-examination. Also, the applicant was not provided with copies. In those circumstances the learned Magistrate refused Mr Markwell the right to use that material. That was a decision made in the exercise of his discretion and no appeal was lodged.
In affidavit material which was in fact filed by Mr Markwell in that case, he alleges that the respondent company was the appropriate defendant and not himself. As mentioned, an adverse finding was made against him in that respect.
Mr Markwell further referred to a report by Rexroth which was detailed in a letter from the respondent company and dated 13 December 1995; see para.2 of Mr Markwell’s affidavit. When one looks at the letter being Exhibit “LAF4” the following recommendations were made by Rexroth:
“1. Shaker pump rotation be changed back to that supplied.
2.The damage done to the shaker pump due to incorrect assembly by you, should be repaired and the hydraulic oil tank should be inspected for foreign metal from the damaged pump.
3.That the shaker pump should have its own suction line from the pump to the hydraulic oil tank.
4.That the pump suction line for the other pump (conveyor pump) be reinstated as it was originally.
5. That the conveyor pump filter and mounting be replaced.
6. That the shaker screen circuit has its own filter.
7.That the configuration of hoses and fittings be changed so as to be the same as the circuit recommended by Rexroth.
8.That hoses have fittings changed so that incorrect connection is avoided.
9.That quick couplings be removed as they are not suitable for vibration applications.
10. That the relief valve be set at 2000 psi.
11. That the by pass valve be fitted across shaker motor.
12.That a suction screen be fitted to shaker pump section line at hydraulic tank.
13. Remove foreign metal from tank, wash out and replace oil.“
When one looks at the particulars of negligence in paragraph 8, there is a close similarity to the matters raised in Ex. “LAF4”. In other words, I am satisfied that the substance of those particulars of negligence were before the learned Magistrate. The applicant provided detailed answers in Exhibit “LAF10” to the allegations raised in (Ex. “LAF4”). The fact that no detailed findings were made by him on each of those matters or that the respondent was prevented from producing further material is not relevant on the present application as it could have been the subject of an appeal at the appropriate time. It is noted the oral evidence before the learned Magistrate took some 8 hours. The only basis upon which the respondent could succeed in the present case is if it were established that the work was carried out in a negligent manner. It is argued by Mr Anderson for the respondent that a finding of competence does not mean that the learned Magistrate dealt with the question of negligence. If work is carried out in a competent manner, it would be impossible to argue that the work was done negligently. Negligence simply means want of care, the habit of not doing one’s duty. In Brazier v Skipton Rock Co Ltd (1962) 1 All ER 955 at 957 Winn J said:
“I am not prepared to hold either that competent means the most competent person available to the owners of the quarry or their manager, or that it means that he shall be so competent that he never makes a mistake. In my judgment, it means a man, who on a fair assessment of the requirements of the task, the factors involved, the problems to be studied and the degree of risk danger implicit, can fairly, as well as reasonably, be regarded by the manager, and in fact is regarded at the time by the manger, as competent to perform such an inspection.”
The applicant did not only carry out the work but it was said by the Magistrate that it was done “competently” in the context of that case. To that extent, there is an issue estoppel between Mr. Markwell and the applicant and which in my view, establishes a finding of no negligence: Port of Melbourne Authority v Ashun (1980) 147 CLR 589 at 597; see also Blair v Curran (1939) 62 CLR 464 at 532.
In the course of argument, the question was raised by Counsel for the respondent that it was factually difficult to know what the learned Magistrate was dealing with in the Small Debts Court. The reference to the available documents before the Small Debts Court and the pleadings in the present case show that he was dealing with similar matters. There is no transcript. It was pointed out however, that the respondent would have been prevented from pleading a cross-action whether by way of settle for counterclaim in the Small Debts jurisdiction. See Rule 89A of the Magistrate Court Rules. That in my view did not prevent those matters being raised by way of a defence to the claim for moneys owning: see R v McKay; Ex parteCassaniti (1993) 2 QdR 95 at 98-99. Exhibit “LAF4” shows that the cost of fixing the screen was $3,550.71. The amount claimed by the applicant was $4,800.69. In R v McKay, there was some doubt as to what evidence was before the learned Magistrate in the first instance. In that case, the respondent was not ready to proceed and the learned Magistrate declined to admit certain evidence. On appeal, it was held that the Magistrate could not have confidently made a ruling as to what was properly the subject of the suit or counterclaim and what was properly a matter of abatement or defence falling within the ruling Mondel v Steel (1841) 8 M & W 858. That case was different to the present case as this court is not sitting on appeal from the decision of the learned Magistrate at Roma.
SUPPLEMENTARY SUBMISSIONS
Counsel for the respondent submitted in relation to abatement whether it was raised in the Small Debts Court:
“(a) it does not arise on the pleadings;
(b) it cannot be conclusively inferred from correspondence executed prior to the Small Debts Court proceedings, or from the other material relied upon in this Court; and
(c) it cannot be excluded that what could have been argued – a matter raised on the pleadings in this Court – was that the Respondent suffered loss consequential to the applicant’s breach: a matter that would not have been open to ventilation in the Small Debts Court as it is available not as a Mondel v Steel type defence, but as a set-off.
The Plaint in the present case claims economic loss as follows:-
(a) Loss of $1.00 per metre for screenings at 19,000
metres $19,000.00
(b) Loss of trenching income due to Civil Gas Pty
Ltd reducing the hourly rate from $258.00 to
$205.00 per hour at 187.5 hours totalling $9,937.50
(c) Further loss of trenching income as a result of Civil
Gas reducing he hourly rate from $258.00 to $230.00
at 52.75 hours totalling $1,477.00
(d) Wages paid by the Plaintiff to employees relating
to time spent by the employees attempting to rectify
the trencher totalling $531.00
Total $30,945.00
Items (a) (b) (c) could be categorised as consequential loss arising out of the defective work or delay. As these could only have been raised by way of set-off or counter-claim, then the Small Debts Court had no jurisdiction to hear those matters: Mondel v Steel Part B at 870-872; Henriksens Rederi A/B v T.H.Z Rolimpex [1974] QB 233, 248; R v McKay op. cit 100.
For that reason, the respondent should not be prevented from claiming such losses in this Court if negligence be established. However, the issue of defective work which was raised in the lower Court, cannot now be raised in this Court. See para. 14 (d) and 16 of Plaint.
ESTOPPEL
Counsel for the respondent submits that any estoppel would not be res judicata but an issue estoppel. The distinction is discussed in Port of Melbourne Authority v Ashun at 597. That submission is accepted for the purposes of this judgment. Of course the respondent does not accept there is any estoppel.
There has been a finding by the learned Stipendiary Magistrate consistent with no negligence or breach of contract between the applicant and Mr Markwell or the respondent. Notwithstanding, Mr. Markwell argued that the respondent was liable. Therefore, the respondent is bound by that finding: Port of Melbourne Authority op.cit; Jackson v. Gold Smith (1950) 81 CLR 446 at 466. It is clear that Mr. Markwell was a privy in so far as the respondent was concerned: A Dictionary of Modern Legal Usage by Garner, 1987, p.435. Mr. Markwell certainly had an interest in the action. He was the principal of the respondent company and failed in his attempt to “hide behind the corporate veil”. Although the matter is not pleaded it is raised on the affidavit material in the present application and I apply rule 5 UCPR in that respect. In any event, the respondent has submitted that the application ought to have been brought before the defence was filed.
Once it is established that there was no breach of duty by the applicant in carrying out the repairs, it matters not that the claim was not available by way of set-off in the Small Debts Court. The respondent may prove its damages in this court but would fail on its claim for negligence based upon the estoppel argument. The claim is no obviously untenable that it cannot succeed: Dey v. Victorian Railways Commission (1949) 78 CLR 62 at 91.
One other matter raised in argument by the Counsel for the respondent was that the appropriate plaintiff may be Mr Markwell. Counsel for the applicant said that no point would be taken about the company being the appropriate plaintiff as it had its rights to pursue if in fact it were the undisclosed principal at the material time.
Therefore it is not necessary to substitute Mr Markwell as the plaintiff as the point is not being taken by the applicant.
Costs before Her Honour Judge O’Sullivan on 5 April 2000.
On the file the following endorsement appears:
“Adjourned to the registry. Her Honour did not hear the matter (Baker Johnson requested Judge to disqualify herself). Matter not heard on the principle application or costs. Costs sought by applicant.”
In the transcript the following appears “Matter not heard, on the principle application or costs” (T7.55). The costs were not reserved. I do not intend to make any order. Even if there were power to do so, on the facts presented, it would be appropriate to make no order as to costs. The applicant ought to have preserved its position on costs or sought out another judge by contacting the Chief Judge. The respondent on the other hand ought to have raised the question at an earlier point.
Orders.
1. The Plaint is struck out.
2. The respondent to pay the applicant’s costs of the action and this application to be assessed.
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