Luxpark Pty Ltd v Esso Australia Limited

[1999] NSWCA 50

CITATION:	LUXPARK PTY LTD v ESSO AUSTRALIA LIMITED [1999] NSWCA 50
FILE NUMBER(S):	CA 40529/97
HEARING DATE(S):	3 March 1999
JUDGMENT DATE:	3 March 1999
PARTIES :	LUXPARK PTY LTD v ESSO AUSTRALIA LIMITED
JUDGMENT OF:	Meagher JA at 20; Handley JA at 2; Powell JA at 21

LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S) :	DC 3090/95
LOWER COURT JUDICIAL OFFICER:	George ADCJ

COUNSEL:	I M Wales SC (Appellant) B J Skinner (Respondent)
SOLICITORS:	Jenkins & Associates Bondi Junction (Appellant) Middletons Moore & Bevins Sydney (Respondent)
CATCHWORDS:	CONTRACT - breach - construction of deed of release - whether release covered all causes of action in statement of claim
CASES CITED:	The Republic of India v India Steamship Company Limited [1993] AC 410 420 421 Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd & Ors (1996) 40 NSWLR 543
DECISION:	Appeal dismissed with costs

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40529/97
DC 3090/95

MEAGHER JA
HANDLEY JA
POWELL JA

Wednesday 3 March 1999

LUXPARK PTY LTD v ESSO AUSTRALIA LIMITED

CONTRACT - breach - construction of deed of release - whether release covered all causes of action in statement of claim
The appellant was a licensee of the respondent under a service station licence agreement. An action for breach of a covenant by the defendant to repair the premises including the petrol tanks in this agreement was commenced in the District Court. The defendant pleaded a release and this defence was upheld. The appeal turned on the construction of the release and whether it covered the causes of action in the statement of claim for breaches of this covenant. The release applied to claims for loss of petrol from leaking petrol tanks, but such claims could only arise from breach of the covenant to repair.
HELD, dismissing the appeal: The release covered the causes of action in the statement of claim for breaches of the service station licence agreement. The Republic of India v India Steamship Company Limited [1993] AC 420 applied.
ORDER

Appeal dismissed with costs.

THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

CA 40529/97
DC 3090/95

MEAGHER JA
HANDLEY JA
POWELL JA

Wednesday 3 March 1999

LUXPARK PTY LTD v ESSO AUSTRALIA LIMITED

JUDGMENT

1 MEAGHER JA: I will ask Justice Handley to deliver the first judgment in this matter.
2 HANDLEY JA: This is an appeal from the judgment of George ADCJ. The appellant was a licensee of Esso Australia Limited under a service station licence agreement executed on 22 March 1989 which came into force on 1 April of that year.
3 The appellant commenced an action in the District Court claiming damages for breach of this agreement. The claim as pleaded was for breach of cl 7.01, a term that the defendant would keep the premises including the fuel storage tanks in good and substantial repair, working order and condition.
4 The breach alleged was the failure to perform this agreement so as to prevent leakage of fuel from the fuel storage tanks. The damages claimed included fuel losses from 23 October 1987 to 31 May 1990, loss of trade and loss of goodwill.
5 The defendant, in its amended grounds of defence, pleaded a release of 31 July 1990. The action came on for hearing in the ordinary way and Mr Wales was in the course of opening the plaintiff's case when counsel for the defendant applied for judgment in its favour based on this release.
6 It is not clear what procedure was thereby invoked but the most beneficial interpretation is that counsel for the defendant sought the separate decision of a question of law under DCR Pt 26 r 5AA which enables an order for the decision of a question of law separately from other questions to be made before, at, or after the trial.
7 The release is in evidence and so far as the material provides:
"IN CONSIDERATION of the payment of Twenty Two Thousand Dollars ($22,000.00) by ESSO AUSTRALIA LTD having an office at 127 Kent Street, Sydney in the State of New South Wales (hereinafter referred to as 'the releasee') I, the Releasor, DO HEREBY RELEASE AND FOREVER DISCHARGE the Releasee, its servants, agents and employees and each of them from all actions, proceedings, suits, claims, demands, damages, losses, costs, charges and expenses of whatsoever kind and howsoever arising out of or in respect of the claim described hereunder which I now have or at any time in the future may have against the Releasee AND I HEREBY ACKNOWLEDGE that the said sum of $22,000.00 is paid by the Releasee without prejudice and without admission of liability on the part of the Releasee or its servants, agents or employees.
DESCRIPTION OF CLAIM

Compensation for product lost in excess of accepted industry loss factor of 0.5% for the period October 1987 to May 1990".

8 The trial Judge upheld this defence and entered judgment for the defendant. The appeal is from this decision.
9 The question presented to this Court is a question of the construction of the release. The only surrounding circumstances which can be considered for this purpose are the licence agreement itself and the facts opened by Mr Wales to the trial Judge which must be taken to have been admitted for the purposes of the legal argument on the effect of the deed.
10 These facts were that on 30 May 1990 the defendant commenced work at the service station for the removal of the defective fuel tanks, that this work continued for a period of "several weeks", that new tanks were installed, and thereafter for a period of some two months the plaintiff experienced a significant drop in earnings compared with the period before the removal of the tanks but eventually the business recovered to its former level.
11 Since the release is dated 21 July 1990 it is reasonably clear that all the fuel losses for which the action was brought had already occurred. The total interruption of the plaintiff's service station fuel supply business had also occurred and the plaintiff had resumed trading and was experiencing the recovery referred to in Mr Wales' opening, although probably this was not yet complete.
12 The operative provision of the release extends to all actions, damages, etc "of whatsoever kind and howsoever arising out of or in respect of the claim described" in the schedule to the release.
13 That was a claim for loss of product during the period in question. It was in truth a claim for breach of cl 7.01 of the licence agreement leading to that loss. No other term has been suggested which could have supported either the claim referred to in the release or the claim in the statement of claim.
14 Once the legal nature of the claim is understood as being for breach of cl 7.01 of the licence agreement it seems to me the effect of the release is reasonably clear.
15 I have referred to the breach of cl 7.01 but since it is a covenant to repair and keep repaired the claim was in truth for daily breaches of that clause during the relevant period. In other words, there were a large number of breaches subsumed within the claim referred to in the release and the statement of claim.
16 Understood in this way the release covers all actions in respect of claims for breach of cl 7.01 for the period from October 1987 to May 1990. The loss referred to in the release was loss of product and consequential losses were not referred to. Nevertheless in my judgment this does not alter the nature of the claim in respect of which the release operated.
17 General support for this approach to the construction of the release is to be obtained from The Republic of India v IndiaSteamship Company Limited [1993] AC 410, 420 and 421 which establishes that a claim for breach of contract gives rise to a single cause of action for all breaches which have the same temporal basis and substratum of fact.
18 As at presently advised I do not think that anything said in Macquarie Bank Ltd v National Mutual Life Association of Australia Ltd & Ors (1996) 40 NSWLR 543 cuts across this analysis. In this case there is but a single term that is said to have been breached and the breach or breaches are of the same kind.
19 In my judgment therefore the release covers the whole of the causes of action in the statement of claim and I would propose that the appeal be dismissed with costs.
20 MEAGHER JA: I agree, in my opinion the present release covers all actions based on any breach in terms which results in loss of product.
21 POWELL JA: Such difficulties as have troubled me in relation to this matter arise out of the somewhat irregular procedure that was adopted and which led to the trial judge giving the judgment and making the orders which he did.
22 This was said to have been an application for summary judgment. Such a procedure under the District Court Rules involves an application before trial and based on evidence. (See Pt 11A r 3 of the District Court Rules.) No such application can be made at the trial. On the contrary, the application that may be made at trial is, either, an application for what is the modern-day version of a non-suit (see Pt 26 r 7 of the District Court Rules), or an application for a verdict (see Pt 26 r 8 of the District Court Rules), but the former application may be made only after the close of the plaintiff's case and the latter may only be made after the conclusion of the evidence in the beginning party's case in chief or after the conclusion of all the evidence of all relevant parties.
23 When I first read the materials in the appeal book it seemed to me that it was at least arguable that the release, which is not an elegant document, was intended to apply to part only of the damages claim by the appellant. However, as it now appears from what has passed between the Bench and counsel appearing today, that the parties proceeded on the basis that the learned trial judge was entitled to treat the matters opened by Mr Wales, who appeared at trial for the appellant, as having been proven for the purpose of the application, and as it appears that all of the breaches of cl 7 upon which the appellant would have wished to rely had occurred prior to the execution of the deed of release, it seems to me that the view taken by his Honour, with which view Meagher JA and Handley JA agree, was the correct one.
24 Reluctantly - because I have a great deal of sympathy for the appellant - I agree that the appeal should be dismissed with costs.
25 MEAGHER JA: The order of the Court is the appeal is dismissed with costs.

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