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Lym International Pty Ltd v Marcolongo

Lym International Pty Ltd v Marcolongo

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Case Copied 22 September 2011 86 min read

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Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation: Lym International Pty Ltd v Marcolongo [2011] NSWCA 303
Hearing dates: 5 April 2011
Decision date: 22 September 2011
Before: Basten JA at [1]
Campbell JA at [5]
Sackar J at [272]
Decision:
(1) Appeal dismissed.
(2) Appellant to pay costs of the Respondents of the appeal.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
BUILDING AND CONSTRUCTION - s 177 Conveyancing Act 1919 - "duty of care not to do anything on or in relation to land..." - whether developer's decision to use particular support system was "doing something" in relation to land - whether developer's decision to use particular support system was something that "removed the support provided by the supporting land" - whether developer's decision to use particular support system was made without exercising reasonable care - relevance of departure from construction certificate

BUILDING AND CONSTRUCTION - s 109ZJ Environment Planning and Assessment Act 1979 - whether party was a "contributing party" - effect of agreement of all parties that it would not be alleged that, had a person been a party to the action, that person would have been a contributing party

NEGLIGENCE - causation - s 5D Civil Liability Act 2002 - whether failure to warn or advise can only be causative of loss if a warning or notification, if given, would have been acted upon in a way that prevented the loss - whether it is appropriate to attribute liability to someone who puts in place the preconditions that enable another person's negligence to become effective - discussion of the principles governing causation under s 5D

AGENCY - whether one party contracted with another as agent for a third party, or whether that party separately contracted with the other in performance of contractual obligations to the third party

APPEAL - interference with judge's finding of fact - Jones v Dunkel inference - enables tribunal of fact to infer that the evidence of an absent witness, if called, would not have assisted the party who failed to call that witness - missing witness must have been expected to have been called by one party rather than other - inference not available where disputed issue is whether missing witness was agent for the party and no other reason to believe missing witness was in camp of that party

CONTRACTS - construction and interpretation - admissibility and legitimacy of use of evidence of post-contractual conduct - discussion of for what proposition County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 is authority - majority reasons do not have as their ratio…

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: [2011] NSWCA 303
Decision Date: 22 September 2011

CaseChat Overview and Summary

The appeal concerned a dispute between Lym International Pty Ltd (the Developer) and Mr Marcolongo, concerning building and construction issues. The case involved claims relating to the Conveyancing Act 1919 and the Environment Planning and Assessment Act 1979, as well as principles of negligence and agency. The court was required to determine whether the Developer's decision to use a particular support system constituted "doing something" in relation to land, whether it removed support from adjacent land, and whether it was done without reasonable care. Additionally, the court considered whether a party was a "contributing party" under the Environment Planning and Assessment Act and the principles of causation under the Civil Liability Act 2002.

The court also examined issues of agency, specifically whether one party contracted as an agent for a third party or in its own capacity. The admissibility and use of post-contractual conduct for ascertaining the terms of an oral or partly oral agreement were central to the contractual interpretation arguments. This included whether such conduct could be used as an admission by a party to the litigation or by a non-party acting with authority, and the impact of the Evidence Act 1995 on these principles. The court also addressed the availability of the Jones v Dunkel inference in circumstances where the agency of a missing witness was disputed.

The court reasoned that post-contractual conduct could be used to ascertain the terms or subject matter of an agreement that was wholly or partly oral, irrespective of whether that conduct constituted an admission. This principle applied even when the conduct was not an admission, provided it was relevant to determining the terms of the agreement. The court also considered the principles of causation under section 5D of the Civil Liability Act 2002, including whether a failure to warn could be causative of loss only if the warning would have been acted upon to prevent the loss, and the appropriateness of attributing liability to a party who created the preconditions for another's negligence. The appeal was dismissed, and the appellant was ordered to pay the respondents' costs of the appeal.

Orders

Orders of the court

(1) Appeal dismissed.

(2) Appellant to pay costs of the Respondents of the appeal.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

If being an admission were the only route through which post-contractual conduct could be available as an aid to finding the terms of a contract not wholly in writing, there would be limitations on the use to which that conduct could be put. Conduct relied on as an admission is evidence against the party to litigation on whose behalf the admission is made, but it is not evidence against any other party to the litigation unless that other party consents: s 83 Evidence Act . Sometimes that could limit the use that could be made of post-contractual conduct, in determining, as against a person who had not made the admission, what the terms of the contract were. Further, it is not possible to prove, on the basis that it is an admission, conduct of someone, who is not a party to the litigation in which that proof is sought to be made or acting with the authority of such a party (s 87). (It is unnecessary to discuss whether the Evidence Act permits an admission to be made by a privy of a party.) However, subject to a problem to which I will turn in the next few paragraphs, those limitations do not apply in the present case. Here QBE seeks to use the conduct of the Developer in paying the insurance premium and the second versions of invoices 6 and 7 as relevant subsequent conduct. QBE contends that that is conduct capable of being an admission by the Developer that it was the other party to the contract under which MSP did the sheet-piling work. As well, the Developer seeks to use the evidence concerning MSP sending the first version of the invoices to Mr Young and his payment of the first five of them against QBE, to prove that Mr Young was not the Developer's agent. It contends that that evidence can be admissible against QBE (standing in the shoes of MSP) insofar as it is an admission by MSP about who were the parties to the contract. The Developer contends that, as it was MSP who composed and sent the invoices, that conduct amounts to an admission that it was Mr Young who was the other party to the contract. Thus, it contends, the conduct is a permissible source for ascertaining the terms of an agreement to which MSP was a party, by reason of being an admission by MSP. The topic of these putative admissions is the identity of the party other than MSP to a contract that undoubtedly existed for the performance of the sheet piling work. That a particular person is party to a contract is a matter of mixed fact and law. Under the common law, Mahoney JA in Grey v Australian Motorists & General Insurance Co Pty Ltd[1976] 1 NSWLR 669 at 684-5 held that a party-witness can be asked in court to admit a conclusion depending on a legal standard (whether particular debts had been sold), and referred to authority supporting the view that there can be an admission of a matter of mixed fact and law. Glass JA at 675-6 reached an opposite conclusion, while Samuels JA expressed no opinion on that topic. The Developer also contends that the statement of the judge in [201(c)] that "an inappropriate and ineffective system was allowed to be used" was not justified on the evidence.

Decision

Reasons for decision

SACKAR J

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Established by: SACKAR J

Full text does not contain this section.

Medium Neutral Citation:	Lym International Pty Ltd v Marcolongo [2011] NSWCA 303
Hearing dates:	5 April 2011
Decision date:	22 September 2011
Before:	Basten JA at [1] Campbell JA at [5] Sackar J at [272]
Decision:	(1) Appeal dismissed. (2) Appellant to pay costs of the Respondents of the appeal. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	BUILDING AND CONSTRUCTION - s 177 Conveyancing Act 1919 - "duty of care not to do anything on or in relation to land..." - whether developer's decision to use particular support system was "doing something" in relation to land - whether developer's decision to use particular support system was something that "removed the support provided by the supporting land" - whether developer's decision to use particular support system was made without exercising reasonable care - relevance of departure from construction certificate BUILDING AND CONSTRUCTION - s 109ZJ Environment Planning and Assessment Act 1979 - whether party was a "contributing party" - effect of agreement of all parties that it would not be alleged that, had a person been a party to the action, that person would have been a contributing party NEGLIGENCE - causation - s 5D Civil Liability Act 2002 - whether failure to warn or advise can only be causative of loss if a warning or notification, if given, would have been acted upon in a way that prevented the loss - whether it is appropriate to attribute liability to someone who puts in place the preconditions that enable another person's negligence to become effective - discussion of the principles governing causation under s 5D AGENCY - whether one party contracted with another as agent for a third party, or whether that party separately contracted with the other in performance of contractual obligations to the third party APPEAL - interference with judge's finding of fact - Jones v Dunkel inference - enables tribunal of fact to infer that the evidence of an absent witness, if called, would not have assisted the party who failed to call that witness - missing witness must have been expected to have been called by one party rather than other - inference not available where disputed issue is whether missing witness was agent for the party and no other reason to believe missing witness was in camp of that party CONTRACTS - construction and interpretation - admissibility and legitimacy of use of evidence of post-contractual conduct - discussion of for what proposition County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 is authority - majority reasons do not have as their ratio…