Linfox v Ellul - [2004] NSWSC 276

CITATION: Linfox v Ellul & Ors [2004] NSWSC 276

HEARING DATE(S): 24, 25, 26 February, 2, 3, 4 March 2004

JUDGMENT DATE:
8 April 2004

JURISDICTION:
Common Law Division

JUDGMENT OF: Studdert J

DECISION: (1) Verdict and judgment for the plaintiff against the first and third defendants, in the sum of $257,856, inclusive of interest. (2) Verdict and judgment for the plaintiff against the second defendant, in the sum of $9900. (3) Verdict and judgment for the plaintiff on each of the cross claims brought against it by the first defendant and the third defendant. (4) On the cross claim by the third defendant against the first defendant, I publish my findings and the reasons for them, and invite the parties to this cross claim to agree upon appropriate short minutes of orders. The matter will be relisted on a date to be arranged with my associate either to make orders pursuant to such minutes or, in the absence of agreement, to hear submissions as to orders then sought by the third defendant. (5) At the request of the parties, costs are reserved, and the matter may be relisted on a date to be arranged with my associate, either to make orders pursuant to short minutes then consented to, or, in the absence of agreement, to hear submissions as to appropriate orders as to costs.

LEGISLATION CITED: Partnership Act, ss 10, 12

CASES CITED: Australian Broadcasting Commission v Australian Performing Right Association (1972) 129 CLR 99
Biscayne Partners Pty Limited v Valance Corporation Pty Limited [2003] NSWSC 874
BP Refinery (Western Port) Pty Limited v Shire of Hastings (1977) 180 CLR 266
Briginshaw v Briginshaw (1938) 30 CLR 336
Gray v Motor Accidents Commission (1998) 196 CLR 1
Harris v Digital Pulse Pty Limited (2003) 56 NSWLR 298
Hide and Skin Trading Pty Limited v Oceanic Meat Traders Limited (1990) 20 NSWLR 310
Lindley & Banks on Partnership, 18th ed., 20-13
National Commercial Banking Corporation of Australia Limited v Batty (1986) 65 ALR 385
Walker & Ors v European Electronics Pty Limited (1990) 23 NSWLR 1

PARTIES :
Linfox Transport (Australia) Pty Limited (Plaintiff)
Philip Ellul (First Defendant)
William Cassar (Second Defendant)
Diana Ellul (Third Defendant)

FILE NUMBER(S): SC 10540/01

COUNSEL: A. Moses/A. Metcalfe (Plaintiff)
P. Little (First Defendant)
In person (Second Defendant)
L. Tyndall (Third Defendant)

SOLICITORS: Corrs Chambers Westgarth (Plaintiff)
Geoffrey Edwards & Co. (First Defendant)
Home Wilkinson Lowry (Third Defendant)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

STUDDERT J

Thursday 8 April 2004

10540/01 LINFOX TRANSPORT (AUSTRALIA) PTY LIMITED v PHILIP ELLUL & ORS
JUDGMENT

1 HIS HONOUR: Linfox Transport (Australia) Pty Limited sues Philip Ellul, William Cassar and Diana Ellul on a number of bases. The plaintiff is in the transport industry and undertook contractual obligations for Carlton and United Breweries Limited (CUB). Those obligations involved, inter alia, the transporting of supplies of liquor from warehouses leased by CUB at Clyde and at Mascot. The plaintiff had operational responsibilities at those…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2004] NSWSC 276
Decision Date: 8 April 2004

CaseChat Overview and Summary

Linfox Transport (Australia) Pty Limited sued Philip Ellul, William Cassar, and Diana Ellul over the theft of liquor from their warehouses. The court had to decide whether the defendants were liable for the theft under the terms of their contract with Linfox and whether there were any other legal grounds for their liability. The court also had to consider the defendants' cross-claims against Linfox for termination fees and non-competition fees, as well as the third defendant's claim against the first defendant for indemnity.

The court found that the first and third defendants were liable for the theft of liquor worth $179,900 and the second defendant was liable for the theft of liquor worth $9900. The court held that the defendants were liable under the terms of their contract with Linfox, which included an indemnity clause and a clause requiring them to reimburse Linfox for any unaccounted liquor. The court also found that there were implied terms in the contract that the defendants would not steal or be party to the stealing of liquor and that they would act in good faith and honestly. The court rejected the plaintiff's alternative claim for breach of fiduciary duty, as exemplary damages are not recoverable for breach of contract.

The court found that the termination of the contract by Linfox was valid and did not entitle the defendants to termination fees or non-competition fees. The court held that the termination was justified by the defendants' serious breach of contract and their dishonesty, which warranted summary termination. The court also found that the third defendant was not entitled to indemnity from the first defendant, as she was not involved in or aware of the first defendant's criminal activity.

The court awarded judgment to the plaintiff against the first and third defendants for $257,856, inclusive of interest, and against the second defendant for $9900. The court also dismissed the defendants' cross-claims against the plaintiff and published its findings and reasons on the third defendant's cross-claim against the first defendant, inviting the parties to agree on appropriate orders. Costs were reserved and may be ordered at a later date.

Orders