Marathon Group Pty Ltd v Latrobe Valley Building Services Pty Ltd

[2018] NSWSC 194

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Marathon Group Pty Ltd v Latrobe Valley Building Services Pty Ltd [2018] NSWSC 194

Hearing dates:

6 October 2017

Date of orders:

01 March 2018

Decision date:

01 March 2018

Jurisdiction:

Common Law

Before:

N Adams J

Decision:

(1) The appeal is allowed.

 

(2) The judgment and orders of the Magistrate, dated 1 May 2017, insofar as they pertain to the “overpayment claim”, are set aside.

 

(3) That part of the proceedings being “the overpayment claim” is remitted to the Local Court of New South Wales to be dealt with according to law.

 

(4) The defendant is to pay the plaintiff’s costs.

 (5) The defendant is to be provided with a certificate pursuant to s 6(1) of the Suitors Fund Act 1951 (NSW).

Catchwords:

LOCAL COURT APPEAL – procedural fairness – contractual dispute - whether adequate reasons given by Magistrate

Legislation Cited:

Building and Construction Industry Security of Payment Act 1999 (NSW)
Local Court Act 2007 (NSW), ss 39, 40
Suitor’s Fund Act 1951 (NSW), s 6
Uniform Civil Procedure Rules 2005 (NSW), r 42.1

Cases Cited:

A.V. Jennings Properties Ltd v Kam Civil Pty Ltd [2013] NSWSC 1900
B & L Linings Pty Limited v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187
Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430
Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Ltd (2006) 67 NSWLR 402; [2006] NSWSC 343
Getex Pty Limited v Reed Business Information Pty Limited [2013] NSWSC 1161
Jones v Dunkel (1959) 101 CLR 298
Regency v Nadinic [2018] NSWSC 68
Robinson v Zhang (2005) 158 A Crim R 575; [2005] NSWCA 439
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247
Thaina Town (On Goulburn) Pty Limited v City of Sydney Council (2007) 71 NSWLR 230; [2007] NSWCA 300
Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127; [2004] NSWCA 174

Texts Cited:

JW Carter, E Peden and GJ Tolhurst, Contract Law in Australia (5th ed, 2007, LexisNexis)

Category:

Principal judgment

Parties:

Marathon Group Pty Ltd (Plaintiff)
Latrobe Valley Building Services Pty Ltd (Defendant)

Representation:

Counsel:
Mr D Stewart with Mr A Hopkins (Plaintiff)
Mr D W Robertson (Defendant)

  Solicitors:
Hilliard & Berry Solicitors (Plaintiff)
Oldham Naidoo Lawyers (Defendant)

File Number(s):

2017/158762

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Local Court of NSW

Jurisdiction:

Civil

Date of Decision:

01 May 2017

Before:

M Price LCM

File Number(s):

2016/44751

Judgment

1. The plaintiff, Marathon Group Pty Ltd (“Marathon”), is a company based in Singleton. It operates a business constructing modular buildings including classrooms, storage facilities, factories and warehouses. The defendant, Latrobe Valley Building Services Pty Ltd (“Latrobe”), is a building contractor based near Traralgon in Victoria. It supplies building contract labour. Marathon contracted Latrobe at the end of March 2015 to provide labour services for a project it was undertaking in Traralgon and later in East Sale in Victoria. The agreement between Marathon and Latrobe was an oral agreement.

2. In 2016, Marathon commenced proceedings against Latrobe in the Local Court seeking, relevantly, recovery of an amount of $31,418.18 said to have been overpaid to Latrobe. Latrobe defended the proceedings on the basis that it was entitled to charge the additional amount in dispute as to do so was consistent with the terms of its oral agreement with Marathon.

3. The hearing proceeded before Acting Magistrate Price at the Downing Centre Local Court on 1 February 2017. The evidence was concluded that day and the matter was then stood over for submissions on 27 March 2017. After hearing submissions, his Honour reserved his decision until 1 May 2017, at which time he found in favour of Latrobe.

4. On 26 May 2017, Marathon filed a summons appealing against his Honour’s decision to this Court. The statutory basis for this appeal is to be found in s 39(1) of the Local Court Act 2007 (NSW) which provides as follows:

“A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.”

5. The jurisdiction of this Court to review the decision of Magistrate Price is thus limited to errors which involve a question of law. Ground 2 alleges a failure to provide adequate reasons for “that part of the decision identified by it as the overpayment claim.” I am satisfied that leave is not required for Marathon to rely upon ground 2 as it involves a question of law: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 277-278.

The Evidence

6. The sole director of Marathon at the relevant time was Andrew Bird. He employed Filipe Cruz as his project manager from March until June 2015, at which time he left the company. The principal and director of Latrobe at the relevant time was Andrew Brady. These three men were the only witnesses to give evidence before Magistrate Price. Before turning to the disputed evidence given by these witnesses, I shall briefly set out those facts which are agreed.

7. In about September 2014, Marathon entered into a contract with Thiess on behalf of the Department of Defence for Marathon to construct and install a modular Search and Rescue (SAR) building at the Royal Australian Air Force (RAAF) Base at East Sale in Victoria. Marathon leased a warehouse in Traralgon, which is approximately 55 kilometres from East Sale, where the prefabricated SAR building would be constructed. It was proposed that, after it was constructed, it would be dissembled and transported to the RAAF Base at East Sale where it would be reassembled and installed.

8. On or about 24 March 2015, Mr Cruz, then the Project Manager at Marathon, contacted Mr Brady at Latrobe. He had obtained his telephone number from the Yellow Pages. He spoke with him about “the Traralgon Project”, which involved the construction of the SAR building at Traralgon. There is no dispute that, as a result of that conversation, Marathon agreed to use Latrobe’s labour services at Traralgon at certain rates. What is disputed is whether any agreement was reached in March 2015 as to what the rates would be if Latrobe was also engaged to provide labour services at East Sale.

9. On 26 March 2015, work commenced at Traralgon. The Easter period that year was between 3 and 6 April 2015. There was an onsite conversation on or about 28 March 2015 between Mr Cruz and Mr Brady, the contents of which are disputed.

10. In June 2015, Mr Cruz ceased his employment with Marathon and was replaced by John Bloomfield. John Bloomfield was not called as a witness at the hearing.

11. In mid-July 2015, there were one or more conversations between Mr Bird of Marathon and Mr Brady. Mr Bird engaged the services of Latrobe for work at the East Sales site at this time. In late July 2015, work ceased at Traralgon.

12. On 4 August 2015, work commenced at the RAAF Base at East Sale. Invoices were issued by Latrobe for the work performed which included charges of $55.00 per labour hour rather than $45.00 per hour (which had applied for the work conducted at the leased Traralgon site) and also included two additional hours per worker for travel time to and from the RAAF Base each day. That is, Latrobe charged an extra $10.00 an hour and an extra $110.00 per day for each worker at the East Sale site.

13. In early September 2015, there was a conversation between Mr Bird and Mr Brady concerning the charging of travel time between Traralgon and East Sale. On 1 October 2015, work ceased at the RAAF Base at East Sale.

14. In October 2015, Marathon refused to pay the final two outstanding invoices issued, claiming that Latrobe had been overcharging. Payment was ultimately made by Marathon because of statutory obligations pursuant to a payment claim issued under the Building and Construction Industry Security of Payment Act 1999 (NSW).

The evidence of Mr Cruz

15. Mr Cruz gave evidence that he was the Project Manager for Marathon from March to June 2015. By the time he gave his evidence, it had been 18 months since he had left Marathon and he did not have the benefit of any of his documents from which to refresh his memory.

16. He recalled that, on or about 24 March 2015, he contacted Mr Brady at Latrobe. He had obtained his telephone number from the Yellow Pages. He spoke with him about “the Traralgon Project”, which involved fabricating some buildings at premises leased at Traralgon. He told Mr Brady that those buildings were later to be transported and erected at the RAAF Base at East Sale. He made no commitment on behalf of Marathon for any works to be done at the RAAF Base by Latrobe because Marathon had contracts with other contractors and he did not know which contractor would be required to perform that work.

17. During this initial conversation, labour rates of $45.00 per hour were quoted. After this conversation, Mr Cruz sought and gained approval of this rate from Mr Bird and an agreement was reached. Mr Cruz denied that there was any discussion at that time in which Mr Brady stated that, if the workers were required at East Sale, they would require an extra $10 an hour and two hours of travel time (one hour each way).

18. Mr Cruz stated that Mr Brady subsequently asked him from time to time about what would be happening “down the track” when the buildings were to be transported to the RAAF Base. Mr Cruz stated that his “standard response” was:

“‘I’m not too sure. That’s too far away. I don’t know yet’, and his words to me were, ‘Well, if you do happen to use us, you know, the guys have got an hour’s extra travel each way; we may have to revisit the rate’, and I just said, ‘Yeah, we can discuss that later, when that time comes’.”

19. It was suggested to Mr Cruz in cross-examination that Mr Brady told him that, if he wanted to use his men at the East Sale project, he would have to pay both an extra $10.00 an hour as well as two hours travel time. Mr Cruz stated:

“No. You’ve already asked me this question. No. His words to me were, ‘If you decide to use us at some stage, we’ll have to revisit the rate because, you know, I have to pay my guys an hour’s travel each way’, and my response to him, ‘Yeah, we’ll discuss that later, if and when we use you.’”

20. Mr Cruz recalled a conversation about paying an additional $10.00 an hour for nightshift because the project was running behind schedule. His recollection was that the rates were $45.00 an hour or $35.00 an hour for apprentices, an extra $10.00 an hour for nightshift and an extra $20.00 an hour over Easter. Mr Cruz did not agree that it was always his intention to have the same contractors work at the East Sale site as had worked at the Traralgon site.

21. Mr Cruz stated that, after he left Marathon, he was telephoned by either Mr Bird or Mr Bloomfield and asked whether he had ever approved any additional travel time for the East Sale work and he said, “most definitely not.” He stated, “…I didn’t agree to anything, I didn’t make any commitment I’d use them, and I just thought that would be the end of it.”

22. Mr Cruz’s evidence was that, at no time did he ever agree to any rates to be charged for the RAAF Base works, nor did he represent that he had the authority to do so. He did not recall Mr Brady suggesting that a written contract be made.

23. Mr Cruz commenced receiving invoices from Latrobe from March 2015 as well as emails from Mr Brady and his wife. It was his responsibility to check the invoices to ensure they married up to the sign-in book. He then emailed the invoices to Marathon’s accounts department for approval and payment. It was not his role to approve payment. He states that he always checked the sign-in register when he was employed by Marathon because he had, on occasion, six or seven different companies working at the site.

24. In late April or early May 2015, Mr Cruz had a conversation with Mr Brady regarding outstanding invoices. Mr Brady told Mr Cruz that if the invoices were not paid he may have to “pull the pin and chase other paying work”. Mr Cruz agreed to follow the issue up with Mr Bird. He told Mr Brady: “He is the owner and signs off on payment, sorry I don’t control that.”

Mr Brady’s evidence

25. Mr Brady’s evidence was that he was contacted by Mr Cruz on 24 March 2015 by telephone. Mr Cruz told him he needed construction works performed at the RAAF base at East Sale. Two or three days later, three employees of Latrobe commenced work at Traralgon. Mr Brady met Mr Cruz at the Traralgon site before Easter. There was a discussion regarding rates as Mr Cruz wanted the workers to work over Easter. Mr Brady gave evidence that he had a face-to-face conversation with Mr Cruz at which time an agreement was reached as to the rates for the work at both Traralgon and East Sale. His evidence was:

“After Phil Cruz and myself had gone through various different rates, because there were a lot of them, our standard rate of 45, apprentices and labourers at 35, nightshift at 55, weekends and public holidays at 65, $55 when we go to the RAAF Base, and one hour travel each way for the RAAF Base, I suggested that we put it all in writing and sign a contract--

…I suggested to Phil ‘Phil, I think we should put this in writing and sign a contract, so we both know exactly where we’re at.’ Phil’s response to that was, there was no need for a contract, as long as our hours matched the sign in sign out register, which was provided by Marathon onsite, he would approve the invoices upon that corresponding and they were to be paid accordingly.”

26. Mr Brady gave evidence that, when Mr Bloomfield took over from Mr Cruz as Project Manager, he reiterated to him the terms agreed by Mr Cruz as follows:

“I said ‘John, as you know, we’re charging $45 an hour for our workers onsite here. Once we go to the RAAF Base, it will be $55 an hour and we’ll be charging travel from Traralgon and back again’, and also went over the rates for apprentices and labourers, which was 35, and, if nightshift was required, it would again be 55, and weekend and public holidays would be 65.”

27. Mr Brady gave evidence that Mr Bloomfield said to him, “Yes, that’s fine. I’ve already discussed it with Phil and we’re happy to go on with what we’ve already agreed to.”

28. When he first sent tax invoices to Marathon in April 2015, Mr Brady forwarded them to Mr Cruz only. He later started copying in more employees of the plaintiff, being Andrew Bird, Sarah, Jon, Ella and Jeremy Bird. After the invoices for the first three weeks of work at Traralgon were rendered, they had not been paid, despite payment being due within seven days. Until that time, he was not aware that the tax invoices needed to be approved by Mr Bird.

29. Mr Brady telephoned Mr Bird and spoke to him about payment of the outstanding invoices. There was ongoing contact between Mr Bird and Mr Brady in May 2015 concerning payment of the invoices.

30. The works at Traralgon were almost completed in mid-July. There was only one employee of Latrobe still working there at that time. Mr Brady again spoke to Mr Bird about payment and was told that the invoices would be paid.

31. Mr Brady gave evidence that, in mid-July 2015, Mr Bird rang him and told him he required more labour for the transport of the buildings to East Sale. Mr Brady agreed to do so and reiterated that he wanted his payment terms to be met. Mr Bird told him he would be paid on time and “he had everything sorted in that regard from now”. There was no discussion of rates at that time.

32. Mr Brady later received a telephone call from Mr Bird asking why his men were signing on an hour earlier and signing off an hour later than when they had in fact arrived and departed. Mr Brady told him that this was to allow for the two-hour travel time and Mr Bird “wasn’t happy with that”. He said he had never agreed to that. Mr Brady told him that it had been agreed with both Mr Cruz and Mr Bloomfield and that it was too late to re-negotiate the terms at that stage. Mr Bird also tried to “talk him out of” the additional $10.00 an hour for the works at the RAAF base. Mr Brady refused because that amount had already been agreed by Mr Cruz. Mr Bird then rang him and told him he had “no option” but to pay the extra $10.00 an hour.

33. Mr Brady maintained in cross-examination that, in the very first conversation with Mr Cruz in March, he had raised the issue of the rate increase to $55.00 an hour as well as the two hours travel time. It was put to him in cross-examination that that was not true but he maintained his position.

34. Mr Brady gave evidence that, to the best of his knowledge, Mr Cruz had authority to approve rates because he was the only person from Marathon he had dealt with. He did not hear of Mr Bird until they were half way through the Traralgon job and he was chasing up unpaid invoices. That was the only reason he found out who Mr Bird was. Mr Brady maintained throughout cross-examination that all of the rates were agreed to in the initial conversation with Mr Cruz. He stated that all of the other rates agreed upon were paid except for the travel time. The extra $10.00 for the East Sale job was described by Mr Brady as a “site allowance” and he agreed that Mr Bird was unwilling to pay that amount but said he had no option but to do so.

Mr Bird’s evidence

35. Mr Bird swore two affidavits in the Local Court proceedings. In his second affidavit, he corrected a number of inaccuracies in his first affidavit. When he gave evidence, he made a number of further concessions. The Magistrate made some adverse comments regarding Mr Bird’s evidence. Counsel for Marathon conceded before me that it was open for his Honour to make those findings and they form no part of this appeal. I do not propose to summarise his evidence in any detail apart from what he alleged he discussed with Mr Brady concerning the $10.00 additional rate at the East Sale site and the travel costs.

36. In Mr Bird’s first affidavit, it was deposed that, after having discovered the labour-hire workers were registering their arrival time an hour early and their time of departure an hour late, he telephoned Mr Brady and had a conversation as follows:

“[Mr Bird]:     ‘What’s the go with the extra sign on before and after?’

[Mr] Brady:   ‘That’s the deal I have done with my men to cover the extra travel.’

[Mr Bird]:      ‘That’s not the arrangement I agreed to or that we discussed.’

[Mr] Brady:   ‘Too bad, take it or leave it.’

[Mr Bird]:       ‘I am not happy about this. We will have to work something out.’

[Mr] Brady:    ‘Fine.’”

37. Mr Bird further deposed that, approximately one week later, he telephoned Mr Brady and had a conversation in words to the following effect, after which Mr Bird terminated the call:

“[Mr Bird]:     ‘Have you thought any more about it?’

[Mr] Brady:    ‘Definitely not.’

[Mr Bird]:       ‘This is a terrible way to do business.’

[Mr] Brady:    ‘Bad luck, I am just going to take my men off the site.’”

The Magistrate’s decision

38. The Magistrate delivered a written judgment on 1 May 2017. It is not in the usual format of judgments from the NSW Local Court and appears to have been typed either by or on behalf of his Honour. The judgment does not appear to have been transcribed by the Reporting Services Branch and then revised by his Honour as is the usual practice. Given that the primary complaint on this appeal was as to the adequacy of his Honour’s reasons, I consider it appropriate to extract a number of relevant portions of them, in the same form in which they were provided to the parties and this Court, rather than summarise them. Any typographical errors are in the original. I have, however, added underlining to some of the latter parts of the extracted reasons in order to be able to reference matters relevant to my consideration below.

39. His Honour commenced his reasons by outlining the nature of the claim. After describing Marathon’s opening submission he extracted the following from counsel for Latrobe’s opening submission:

“There really is only one primary issue in dispute between the parties and that is whether it was agreed, either expressly or impliedly or by conduct [that]… [La Trobe] was entitled to charge an additional hours hire for travel to and from the RAAF Base at East Sale”.

40. His Honour then summarised the evidence of Mr Bird. His Honour’s assessment of that evidence plays no part in this appeal. It is relevant, however, to note that his Honour was critical of that evidence. His Honour observed that “Mr. Bird found himself in the embarrassing situation of having to make significant recantations, corrections to portions of his affidavit material and what he had deposed to in Chief.” A significant concession made by Mr Bird noted by the Magistrate was that, contrary to his first-sworn affidavit, Mr Cruz was in fact the person “on the ground dealing with this project and dealing with contractors”.

41. His Honour then proceeded to summarise the evidence of Mr Cruz and Mr Brady as follows:

“A significant aspect of the recollection of Mr. Cruz in regard to his dealings with Mr. Brady is to be gleaned from (Page 52 Lines 20-27) NO, no figure was quoted. What - he did say to me that he was - I think from memory, on two separate occasions during my tenure with Marathon, he quizzed me. What’s happening down the track, when these buildings go to the RAAF base? My standard response was I’m not too sure. That’s too far away. I don’t know yet and his words were, Well if you do happen to do use us, you know, the guys have got an hours extra travel each way, we may have to revisit the rate and I just said Yeah, we can discuss that later, when that time comes.

Consistent with his recollection of these events Mr. Cruz said (Page 53 Line 15) to be honest with you, I wasn’t - sorry I wasn’t that interested. I just said well I didn’t agree to anything, I didn’t make any commitment I’d use them and I just thought that would be the end of it, so.

Explaining the situation at the time Mr. Cruz indicated (Page 55 line 15) When you say dozens how many contractors were you dealing with? Could have had up to, on occasions six or seven different companies.

Mr Cruz may have an understanding of approval as a technicality in relation to payment of invoices adding approved in my mind it was checked (Pg 56 line23) he conceded (Page 57 Line 30 From time to time, you would say to contractors, Yes Marathon is willing to enter into a contract with you to supply labour for X dollars per hour? Not – well it depends how you define contract that yes, I would say we are prepared to engage your services at these rates. Yes correct!

In the same vein candour was shown by this witness in this or these responses; (Page 58 Lines 36-44). When you say RAAF Base you mean when the buildings were at Sale and Andrew Brady’s labour was at sale working at Sale? I have no idea what was agreed to, only the snippets of information I’ve picked up through here, that there’s a dispute of some $10 an hour. How that was structured I don’t know if - I don’t know if the $10 an hour was payable for the time that - was onsite - there was a travel component, one hour each way or just one way - I don’t know.

Important in the overall scheme of these dealings are no less than three matters elicited on (Page 60 comm at 1 - 47). Well, this is the first time I’ve been a project manager Prior to that I’ve been directors or general managers and so forth, so my title was much higher than a project manner so Yes, in my previous roles Yes I had the authority, not in this, not as a project manager. Line 10 to summarise your evidence you agreed that when Mr Brady was engaged you discussed stage 2 of the project at East Sale and what that involved? I gave him an overview Yes. … … …. No his words to me were if you decide to use us at some stage we’ll have to revisit the rate because, you know, I have to pay my guys an Hours travel each way in my response to him was yeah, we’ll discuss that later, if any when you we use you”.

A wealth of documentary material supports the Plaintiff’s case, or cases, and is to be located in the annexures to the various affidavits already in evidence.

So much then for the Plaintiff’s evidence. What of the Defendant’s?

Not unlike the Plaintiffs it is very succinct comprised essentially with the Affidavit of Mr. Andrew Brady and his evidence.

The first component of Mr. Brady’s evidence is to be gleaned from (Pg 65 Lines 40-50) concerning his initial contact with Marathon. He had this to say I was in Wagga Wagga New South Wales. Phil Cruz called me He introduced himself as Phil Cruz from Marathon site supervisor. They were to be building a search and rescue building in a big shed in Traralgon, which was to be disassembled and transported to the East Sale RAAF Base. Phil Cruz asked me if our company would be interested in providing labour hire services to Marathon and I said yes, we would. Then we started discussing rates. And our standard rate for the Traralgon site was $45 per hour plus GST and when we were to move onsite, to the East Sale RAAF Base, it was to be $55.00 per hour plus GST and we were to be paid travel from Traralgon and back again. Phil agreed with our terms and conditions… … …Phil said to me he was happy with that he’d like three of our carpenters to start in Traralgon as soon as possible which I said we could arrange. So I rang one of my workers Nick Sartori and we organised a start date a couple of days after that.

Mr. Brady had a further discussion with Mr. Cruz concerning rates, specifically a nightshift rate over the Easter period and said to Phil How about $10 extra nightshift, which worked out to be 55 and Phil said Yes, he’d agree with that and that was fine.

Mr. Brady’s recollection was (Page 67 line 35 onwards) After Phil Cruz and myself had gone through the various different rates, because there were a lot of them, a standard rate of 45, apprentices and labourers at 35, nightshift at 55, weekends and public holidays at 65, $55 when we go to the RAAF Base, and one hour travel each way for the RAAF Base I suggested that we put it all in writing and sign a contract. I suggested to Phil ‘Phil we should put this in writing and sign a contract so we both know exactly where we’re at. Phil’s response to that was, there was no need for a contract, as long as our hours match the sign in sign out register, which was provided by Marathon on site, he would approve the invoices upon that corresponding and they would be paid accordingly.

More tellingly when referring to his dealings with Mr. Cruz successor Mr. John Bloomfield he said John as you know we’re charging $45 an hour for our workers onsite here. Once we go to the RAAF Base it will be $55 per hour and we’ll be charging travel from Traralgon and back again and also went over the rates for apprentices and labourers which was 35, and, if nightshift was required. It would again be 55 and week-ends and public holidays would be 65… … …John Bloomfield said Yes, that’s fine. I’ve already discussed it with Phil and we’re happy to go on with what we’ve already agreed to.

Mr. Brady recalled speaking with Mr. Bird of the Plaintiff company in these terms We’re all ready to move to the next stage of the job, which was transporting the buildings from Traralgon to the East Sale RAFF Base and he requires more labour from us and we’d ramp that up again in terms of the same way we did it with the start of the job; start off with a few blokes..

When Mr. Bird of Marathon expressed concern at the hour’s travel he, Mr Bird indicated he wasn’t happy with that he wasn’t happy with it.

Quite obviously Mr. Brady of La Trobe considered that the two work sites Traralgon and East Sale were always part of the job in his view “It was going to happen at some stage” a reference to their continuing engagement on the second phase or re-assembly at the East Sale site.”

(italics in original)

42. His Honour then went on to refer to the evidence relevant to the question of whether Mr Cruz had authority to bind Marathon, an issue not forming any part of this appeal.

43. His Honour then summarised counsel’s submissions. Relevantly to this appeal, his Honour summarised Marathon’s submissions as follows: that the court would prefer the account of the plaintiff’s witnesses; that the evidence cannot establish that Mr Cruz ever agreed to that travel time; that the evidence cannot establish that there was a conversation between Mr Bloomfield and Mr Bird regarding rates (it would be “pure conjecture” to suggest that Mr Bloomfield approved the invoices); that no adverse inference can be drawn by the court for the failure of the plaintiff to call Mr Bloomfield; and that any dispute between the witnesses’ recollections should be found in favour of Marathon’s witnesses.

44. His Honour summarised the defendant’s submissions as being that any resolution of a contested or disputed account ought to be determined on the defendant’s “witnesses”. He noted the submission that Mr Cruz’s account can only be of “limited assistance” and that Mr Bird’s recollection can only be “second-hand”. His Honour then noted the following:

“The Defendants submissions span some twenty (20) pages, covering the two components or aspects of the Plaintiff’s claim or claims.

There is an invitation in paras 30 through to 57 for the court to make express findings of fact on the full range of relevant surrounding circumstances.”

45. His Honour then proceeded to make his findings under a heading “Court Findings”. It was accepted by the parties that his Honour made no findings prior to that part of his judgement. The reasons up to this point concerned a summary of the evidence, albeit, with some comments about the witnesses and submissions. The first significant finding his Honour made was as follows:

“This court has little difficulty in finding that at an on-site meeting La Trobe indicated the differing rates of remuneration that would apply to Taralga and, if successful, later at East Sale. The basis of engagement was determined on the basis of what was put by Mr. Brady and what was indicated by Mr. Cruz.”

(underlining added)

46. His Honour then went on to deal with the question of whether Mr Cruz had authority to bind Marathon and was satisfied that he did. His Honour then noted:

“The Taralga component was completed or essentially completed and the project ‘flowed on’ to East Sale. The defendant company provided its services, essentially labour and commenced rendering invoices.

Preparatory to that occurring the court accepts that La Trobe made overtures as to the associated component or the East Sale aspect and on the evidence received neither a definitive nor affirmative response as to the aspects touching the continuation of works at East Sale, nevertheless their services, labour were continuing to be used at East Sale and accounts, invoices raised accordingly.

This court would have to find that Mr. Cruz was the only person from Marathon whom Mr. Brady spoke to or dealt with during the initial time that La Trobe was supplying labour at least until May 2015 when Mr. Brady of La Trobe was following up late or unpaid invoices and referred by Mr. Cruz to Mr. Bird.

The evidence is all one way in that Mr. Cruz continued his dealings with Mr. Brady of La Trobe and that situation prevailed until Mr. Cruz resigned or accepted another employment opportunity in mid-June 2015.

Again there is no issue that Marathon was paying invoices rendered by La Trobe and inferentially it can be concluded that Marathon was aware that Mr. Cruz had contracted La Trobe and secondly that Marathon was aware of, and approved of, the terms of the basis of contracting.

As to their being only one or two distinct and separate contracts this court can comfortably find that the initial discussions centred on Taralga but expressly indicated a pricing regime or charge that would apply when works moved the 55 K’s to East Sale. At the earliest juncture La Trobe had made known to Mr. Cruz a charge out rate or hourly rate at Sale would differ from the terms applicable at Taralga.

There is little doubt Marathon paid some of the earlier travel claims and then a protest lodged consistent, in one view, with the belief that no contractual arrangements had been so entered into. The Defendants would dismiss this view pointing to what it termed a cash strapped Company unwilling or unable to pay its debts.

There is no doubt that the subsequent payment of the claims was under protest thus grounding the claim of overpayment or recovery of over payments.”

(underlining added)

47. His Honour then dealt briefly with a discrete claim of overcharging not relevant to this appeal. His Honour then concluded in these terms:

“Mr. Cruz invited interest in the project from a number of sources through Yellow pages. He represented himself to be the project manager on behalf of Marathon. Mr. Brady was appraised of the scope of the works at an on- site inspection or appraisal and this court has no difficulty in accepting that the Sale aspect or component figured in that appraisal and discussion. This court readily accepts that the pricing was two-fold both so far as it related to Taralga and later at Sale. That is differing rates applicable to Taralga and at Sale. Equally Mr. Cruz acknowledged that in so far as he distinguished Taralga from Sale he responded to the effect Not now later when pressed as to the successful tendered to carry on or continue the works, the 55 K distant at East Sale.

Mr. Bloomfield’s involvement can add little other than on the version available to this court he acquiesced in the early arrangement with Phil, that is Mr. Cruz.

Whether either had actual or ostensible authority to formally contract, the facts are essentially one way that he/they were on the ground conducted all relevant discussions, negotiations and at least on the part of Mr. Cruz held himself out to approve contentious or disputed invoices or claims more particularly touching the Easter Holiday break period.

There will then be

VERDI CT IN FAVOUR OF THE DEFENANT COMPANY.”

(underlining added)

The Grounds of Appeal

48. Two grounds of appeal are identified in the summons as follows:

Ground 1:   The Court below erred in law in finding with respect to the overpayment claim, that the engagement between the plaintiff and the defendant as determined on the basis of what was put by Mr Brady and was indicated by Mr Cruz, constituted a contractual term pursuant to which the defendant was entitled to charge the plaintiff for travel time.

Ground 2:   In the alternate, the Court below erred in law by failing to give adequate reasons for that part of the decision identified by it as the overpayment claim.

The plaintiff’s submissions

49. Counsel for the plaintiff focussed his submissions on the inadequacy of the Magistrate’s reasons. He submitted that, it follows from the fact that Marathon lost, that the Magistrate was satisfied that Latrobe was entitled to charge the additional travel time. But the Magistrate did not decide between the competing versions in circumstances where it was critical to do so. His Honour did not explain why he preferred Mr Brady over Mr Cruz, which was fundamental concerning the overpayment claim. In fact, the Magistrate appeared to favour Mr Cruz’s evidence over Mr Brady’s evidence at various points in his reasons without making any express findings in that regard.

50. Counsel for the plaintiff also pointed to the fact that his Honour made no express finding as to whether there was a contractual term whereby Latrobe was entitled to charge Marathon the additional travel time. Nor did he identify whether any such a term was express or implied or by conduct. It was submitted that the basis for his Honour’s conclusion is entirely unknown to Marathon.

51. No issue was taken with his Honour’s findings that Mr Cruz had the authority to bind Marathon. The only part of the reasons said to be opaque was why the Magistrate preferred the evidence of Mr Brady to that of Mr Cruz. Furthermore, it was said that his Honour did not set out any reasons as to how the Magistrate applied the law to the facts.

52. It was submitted that it is insufficient for Latrobe to submit that it must be inferred that the Magistrate preferred Mr Cruz to Mr Brady given the result. His Honour appears to have accepted both versions.

53. It was further submitted that what Mr Brady believed was agreed to was not relevant; the court was called upon to determine objectively what the agreement was: see JW Carter, E Peden and GJ Tolhurst, Contract Law in Australia (5th ed, 2007, LexisNexis) at [3.06], and the cases cited therein.

The defendant’s submissions

54. Counsel for the defendant did not concede that the issue before the Local Court was one of credibility. Counsel for the defendant noted that, in his written submissions in the Local Court, he did not submit that Mr Cruz was lying. On the contrary, it was submitted that Mr Cruz appeared to be making a genuine effort to recall the evidence but was disadvantaged in giving his evidence as he had left Marathon 18 months earlier. It was submitted in the Local Court that his evidence would be of “limited assistance”. It was also submitted to the Magistrate that a Jones v Dunkel (1959) 101 CLR 298 (“Jones v Dunkel”) inference should be drawn for the failure of Marathon to call Mr Bloomfield as a witness.

55. It was submitted that, the only conflict as between the evidence of Mr Brady and Mr Cruz as to their initial conversations, was whether anything was finally agreed at that time. The two men were in agreement that the issue of what would be charged at East Sale if Latrobe workers were to be engaged was raised.

56. It was conceded that there is no evidence that the topic was revisited as between Mr Cruz and Mr Brady but it was submitted there was no need for this to occur. In any event, it was revisited with Mr Bloomfield. Latrobe also relied upon the fact that when Mr Bird telephoned Mr Brady in September 2015 to complain about the extra travel time being charged, he did not say it could not be charged. He simply said he was not happy about it but he “left it hanging.” Thereafter, the labour continued to be provided and invoices rendered.

57. It was submitted that it was only in late October when an outstanding amount was due that Marathon asserted that it had never agreed to the travel time and indicated it would withhold about $40,000.00 in travel time.

58. Latrobe relied upon six findings by his Honour as constituting sufficient reasons in this matter, as follows:

1. Mr Brady and Mr Cruz negotiated in about March 2015 as to the engagement to supply labour to Marathon. Mr Bird had no involvement in any of these negotiations.

2. The initial discussions between Mr Brady and Mr Cruz centred on the first stage of the project at Traralgon but the second stage of the project was also discussed from the outset at which time Mr Brady indicated that a different pricing regime or charge would apply when the project moved to East Sale.

3. Mr Cruz had at least ostensible authority on behalf of Marathon to seek the services of Latrobe and negotiate remuneration.

4. The services of Latrobe continued to be retained by Marathon for the second stage of the project.

5. Latrobe provided labour for the second stage of the project and rendered invoices which included the new charges as well as the two hours travel time.

6. On the basis of these findings, his Honour found that Marathon had contracted Latrobe to provide labour services on both stages of the project and that Marathon was aware of and approved those terms.

59. It was accepted that the Magistrate did not make any findings as to whether Mr Cruz agreed to the rates offered by Mr Brady in the 28 March 2015 conversation but it was submitted that was not fatal because Latrobe’s case in the Local Court was that the issue in dispute between the parties was whether it was agreed, “either expressly or impliedly or by conduct”. He relied upon Marathon’s conduct in initially paying for the full amounts.

59. In the Local Court, Latrobe argued that the terms of the agreement were to be considered taking into account “the full range of relevant surrounding circumstances”. Those circumstances were not confined to the oral conversations between Mr Brady and Mr Cruz but also between Mr Brady and Mr Bloomfiled (who was not called as a witness). The fact is that the invoices were initially paid and Mr Bird did not raise the issue of travel time until September 2015 and then did not raise it again, even though invoices continued to be rendered, including those amounts for travel time.

60. It was submitted that it was open for the Magistrate to find that that there had been a tacit agreement between the parties and that, viewed objectively, Latrobe was entitled to charge the additional travel time. It was noted that the plaintiff’s evidence comes to a halt by the end of June 2015. Mr Cruz was no longer working there and the Magistrate found Mr Bird to be unreliable. Therefore, there is no evidence as to the terms of the agreement thereafter relied upon by Marathon.

61. It was submitted that what the Magistrate found was that there had been an offer by Latrobe of the terms for the second stage of the project. When Mr Bird requested that Latrobe do the work on the second stage that was an acceptance of the offer made to Mr Cruz because Marathon was bound by that knowledge. Marathon was then bound to accept those conditions after Latrobe started doing the work it was contracted to do.

Consideration

63. Marathon relies upon two grounds of appeal. Under ground 1, Marathon seeks to challenge the Magistrate’s fact-finding as to the terms of an oral contract. It was conceded at the commencement of the hearing of this appeal that ground 1 involves a question of mixed law and fact rather than a question of law within s 39(1) of the Local Court Act. Although leave can be sought to commence an appeal based on a question of mixed law and fact under s 40(1) of the Local Court Act, this appeal was brought under s 39(1) of that Act.

64. A further difficulty with the plaintiff’s first ground of appeal is that it alleges error in the learned Magistrate’s finding that an oral agreement was reached when Mr Brady disclosed to Mr Cruz in March 2015 what the terms of engagement would be in the event that Latrobe was engaged at East Sale. It was contended that an offer of terms without any agreement was insufficient to establish an agreement in those terms and thus error is established. The problem with this ground of appeal is that it is not entirely clear to me that this was in fact a finding made by his Honour, although it may well have been. On that basis, I propose to first consider Marathon’s complaint under the second ground - that his Honour’s reasons are inadequate.

65. The principles in relation to the requirement that reasons be provided for any decision are well established. Clearly, the question of adequacy will depend upon the nature of the case. In Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 (“Soulemezis v Dudley (Holdings)”), McHugh JA observed at 279 that the provision of reasons is important to the judicial process because:

"...it enables the parties to see the extent to which their arguments have been understood and accepted as well as the basis of the judge's decision.”

66. His Honour went on to observe (at 278-279):

"...a judicial decision must be a reasoned decision arrived at by finding the relevant facts and then applying the relevant rules or principles. A decision which is made arbitrarily cannot be a judicial decision; for the hallmark of a judicial decision is the quality of rationality”.

67. In Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430, Mason P put the principle as follows at 431:

“...there is a miscarriage where what is and is not disclosed involves a breach of the principle that justice must not only be done but must be seen to be done. The relevant legal principles are discussed in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 especially at 280B-C and 281B-C and in Mifsud v Campbell (1991) 21 NSWLR 725.”

68. In Mifsud v Campbell (1991) 21 NSWLR 725, Samuels JA, with whom Clarke JA and Hope AJA agreed, observed at 728D:

“… in my opinion, it is an incident of judicial duty for the judge to consider all the evidence in the case. It is plainly unnecessary for a judge to refer to all the evidence led in the proceedings or to indicate which of it is accepted or rejected. The extent of the duty to record the evidence given and the findings made depend, as the duty to give reasons does, upon the circumstances of the individual case”.

69. His Honour went on to observe at 728E:

“…. for a judge to ignore evidence critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the judge……may promote a sense of grievance in the adversary and create a litigant who is not only “disappointed” but “disturbed” — to use the words which appear in the New Zealand case of Connell v Auckland City Council [1977] 1 NZLR 630 at 634. It tends to deny both the fact and the appearance of justice having been done”.

70. In Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127; [2004] NSWCA 174, Ipp JA, with whom Bryson JA and Stein AJA agreed, referred to these decisions then went on to state the following at [58]-[59]:

“In Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377 which was followed in Moylan v The Nutrasweet Company [2000] NSWCA 337, Henry LJ said (at 381-382) in regard to the general duty of a judge to give reasons for his or her decision (particularly in relation to expert evidence):

‘The duty is a function of due process, and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties especially the losing party should be left in no doubt why they have won or lost. This is especially so since without reasons the losing party will not know … whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case. The second is that a requirement to give reasons concentrates the mind; if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not.’

It is, of course, well settled that a judge does not need to refer to all the evidence in the proceedings or to indicate which of the evidence is accepted or rejected. The extent of the duty to give reasons depends upon the circumstances of the individual case: Mifsud v Campbell (1991) 21 NSWLR 725 at 728 (per Samuels JA, with whom Clarke JA and Hope A-JA agreed). But it is not for nothing that in some bilingual countries the judgment of the court is given in the language of the unsuccessful party. The proper administration of justice requires reasons to be given in a form, firstly, that will enable the losing party to understand properly the grounds upon which the case was lost, and, secondly, that will not, effectively, frustrate the losing party's right of appeal: Public Service Board of NSW v Osmond (1986) 159 CLR 656 at 666–667.”

71. I have also had regard to the observations of Beech-Jones J in A.V. Jennings Properties Ltd v Kam Civil Pty Ltd [2013] NSWSC 1900 (“A.V. Jennings”), where his Honour considered (at [21]-[26]) the scope of the requirement of Magistrates to provide reasons where the only avenue of appeal from such a decision is on a question of law. His Honour cited the judgment of McHugh JA in Soulemezis v Dudley (Holdings) at 281 as follows:

“In a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is in no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of law or mixed fact and law. If no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. If, for example, the only issue before a court is whether the plaintiff sustained injury by falling over, a simple finding that he fell or sustained injury would be enough, if the decision turns simply on the plaintiff’s credibility. But if, in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff’s case, such a simple finding would not be enough.”

72. In A.V. Jennings, Beech-Jones J was satisfied (at [51]) that the Magistrate was not required, in relation to a “bare, albeit critical, finding of fact”, to expressly address the evidence of a particular witness if the basis for the ultimate finding was otherwise clearly explained in the judgment.

73. With these principles firmly in mind, the starting point is to identify the specific complaint made by Marathon. There is no complaint made as to the adequacy of his Honour’s reasons concerning the discrete question of whether Mr Cruz had authority to bind Marathon, nor as to his Honour’s finding there was only one contract between the parties, rather than two. This latter argument had fallen away by the time of closing submissions in the Local Court in any event. Similarly, no complaint is made concerning his Honour’s reasons for rejecting the additional claim in the Local Court for over-charging in the amount of $2,420.45.

74. Marathon’s complaint is directed to the adequacy of his Honour’s reasons for finding that it was a term of the agreement between Marathon and Latrobe that two extra hours of travel time could be charged each day for the work done at East Sale. Both parties agreed below, and his Honour clearly recognised in his reasons (see above at [39]), that this was the primary issue in dispute in the Local Court.

75. In seeking to establish that there had been no agreement that travel time could be charged, Marathon relied heavily upon the evidence of Mr Cruz, who was adamant that no such agreement was ever reached. Latrobe, on the other hand, argued that an agreement could be inferred from a number of circumstances, being: the conversation between Mr Brady and Mr Bloomfield; the time sheets recording the extra travel time; the related invoices being initially paid; and the fact that, after Mr Bird complained to Mr Brady about the travel time in September 2015, the issue was not raised again until the project was completed, at which time Mr Bird refused to pay the outstanding invoices. It would be expected that the reasons would address, even in the briefest of terms, whether these arguments were accepted, whether they were rejected, or whether his Honour considered it unnecessary to resolve them.

76. The reasons do not address Marathon’s central argument, which turned on the Magistrate either accepting or rejecting Mr Cruz’s evidence over that of Mr Brady. Mr Cruz was quite insistent throughout his evidence that, at no stage, did he ever indicate to Mr Brady that Marathon agreed to additional terms regarding the extra travel time, whereas Mr Brady insisted that there was a definite agreement reached. There was a significant factual dispute as between these two witnesses on the question of whether any relevant agreement had been reached between them. Although his Honour summarised the competing evidence (see above at [41]), he did not then go on to make any findings in relation to which version he accepted.

77. His Honour stated that “the basis of engagement was determined on the basis of what was put by Mr Brady and what was indicated by Mr. Cruz.” With respect to his Honour, it is not entirely clear to me what this statement means. Does this sentence reflect, as Marathon contended, that his Honour found that it was sufficient for an agreement to be reached if the matter had been discussed, even though Mr Cruz did not agree to what Mr Brady “put” to him? This construction was the basis for ground 1. Or, did his Honour make a finding that Mr Brady offered those terms and that the telephone call from Mr Bird in mid-July 2015, engaging the services of La Trobe for the East Sale work (in which no rates were discussed), was an agreement to the terms earlier suggested to (but not accepted by) Mr Cruz? Did his Honour make a positive finding that it was not necessary for him to form a view as to which version of this conversation was accepted because of other findings he made? This was the meaning of the sentence advanced by Latrobe. The difficulty with this latter construction is that other findings of his Honour point in different directions on this issue, an issue I address below.

78. His Honour expressly accepted that Latrobe “made overtures” concerning the East Sale component and “on the evidence received neither a definitive nor affirmative response”. His Honour stated that “this court has no difficulty in accepting that the Sale aspect or component figured in [the initial] appraisal and discussion”. No doubt the reason that his Honour had “no difficulty” accepting this is because it was not disputed by Marathon that Mr Brady had suggested to Mr Cruz at any early stage that if Latrobe workers were engaged at East Sale different rates would apply. Mr Cruz accepted this. The dispute was as to whether there was ever any agreement made between Mr Cruz and Mr Brady on this issue. Stating that his Honour accepted that the subject was raised does not address what happened after that.

79. Similarly, his Honour “readily accept[ed]” that the “pricing was two-fold both so far as it related to Taralga and later at Sale.” Again, it is unclear whether his Honour means that he readily accepted that Mr Brady suggested those rates or whether they were agreed upon. His Honour immediately follows this finding by stating that “Equally Mr. Cruz acknowledged that in so far as he distinguished Taralga from Sale he responded to the effect Not now later when pressed as to the successful tendered to carry on or continue the works, the 55 K distant at East Sale.” This latter statement suggests that his Honour accepted Mr Cruz’s evidence and was not satisfied any agreement was reached as between Mr Cruz and Mr Brady.

80. His Honour earlier stated that, “inferentially”, it could be concluded that “Marathon was aware of, and approved, the terms of the basis of contracting”. Given where this statement appears in his Honour’s reasons, it is to be presumed that his Honour is referring to the period of time when Mr Cruz was still employed by Marathon. The evidence is that Mr Cruz checked and approved the invoices when he was working at Marathon. There was no dispute on the evidence that Marathon “approved the terms and basis of contracting” for the work done at Traralgon. The real question is what happened after Mr Cruz left the employ of Marathon.

81. His Honour did, at times, describe the evidence of Mr Cruz in favourable terms by, for example, stating that he gave his evidence with “candour”. Nowhere does his Honour reject any of the evidence of either Mr Cruz or Mr Brady. On the contrary, his Honour appears to have accepted Mr Cruz’s evidence that he would say “[n]ot now later” when Mr Brady raised the subject of the applicable rates at the East Sale site. If his Honour accepted the evidence of Mr Cruz that no agreement was reached between Mr Cruz (on behalf of Marathon) and Mr Brady, then his Honour might have found in favour of Latrobe if he was satisfied that there had been agreement by conduct on the part of Mr Bird in initially paying the invoices. The difficulty is that his Honour made no finding in relation to this issue either. Nor was there any evidence from Mr Cruz to the effect that, if the services of La Trobe were in fact engaged for the East Sale work, the rates would be as suggested by Mr Brady.

82. Latrobe’s defence in the Local Court relied heavily on the fact that Marathon initially paid some of the invoices charging the higher amount before Mr Bird telephoned Mr Brady in September 2015 to complain about the over-charging. His Honour’s “finding” was that the protest lodged by Marathon about this was “in one view” consistent with the belief that “no contractual arrangements had been so entered into.” His Honour then noted that Latrobe would “dismiss” this argument. His Honour then made no finding on this issue beyond stating that there was “no doubt that the subsequent payment of the claims was under protest” suggesting that, if anything, his Honour was satisfied there was no acquiescence on the part of Marathon.

83. The observations by his Honour that Mr Bird’s protest concerning the invoices was consistent with his belief that no contractual arrangements had been entered into regarding the additional travel time also reflects the evidence before his Honour that the invoices did not stipulate anywhere on them that an additional two hours travel time was being charged. Rather, the workers were simply told to sign on an hour earlier than they had actually arrived at work and to sign off an hour later. In this way, it would not have been readily apparent to any person authorising the payment of the invoices that it was a term of the agreement that two hours additional travel time was being paid. It is to be noted that the evidence was that payment was only ultimately made by Marathon because of statutory obligations pursuant to a payment claim issued under the Building and Construction Industry Security of Payment Act 1999 (NSW).

84. Another material dispute between the parties in the Local Court was whether his Honour would draw a Jones v Dunkel inference from the fact that Mr Bloomfield was not called as a witness for Marathon. Latrobe had invited his Honour to do so which was resisted by Marathon. His Honour did not draw any such inference. Instead, his Honour found that Mr Bloomfield’s involvement could “add little” to the matter “other than on the version available to this court he acquiesced in the early arrangement with… Mr Cruz.” It is not apparent what “arrangement” his Honour is referring to. It is pertinent to note that the only evidence regarding Mr Bloomfield was the hearsay evidence from Mr Brady extracted in his Honour’s reasons that, when Mr Brady suggested what the rates at East Sale would be, John Bloomfield said “Yes, that’s fine. I’ve already discussed it with Phil and we’re happy to go on with what we’ve already agreed to.”

85. If the Magistrate accepted the hearsay evidence of Mr Brady as to what Mr Bloomfield told him this would have meant rejecting Mr Cruz’s evidence. Prior to his Honour’s statement that Mr Bloomfield’s evidence could add “little” to the matter “other than on the version available to this court he acquiesced in the early arrangement”, his Honour already appears to have found that he accepted Mr Cruz’s evidence regarding “Not now later”, such that his Honour was not satisfied that there was any “agreement” between Mr Cruz (on behalf of Marathon) and Mr Brady. If this is the case, it is not entirely clear what it is his Honour found that Mr Bloomfield acquiesced to.

86. Overall, it is not apparent from his Honour’s reasons the basis upon which he found in favour of Latrobe. Latrobe contended that the reasons disclose that his Honour found that an oral contract was formed having regard to a combination of factors, including the initial conversation between Mr Brady and Mr Cruz, as well as the initial payment of the invoices. Although this might be the case, it is inconsistent with the passages I have just identified. It might equally be the case that his Honour was not satisfied that any agreement had been reached at all but when Latrobe started charging a higher amount and the invoices were paid there was acceptance of that amount by Marathon which led to agreement by conduct. Again, this is inconsistent with his Honour’s observations that complaint was made by Mr Bird and the payments were made under protest. His Honour simply made no finding that he was satisfied that, when the invoices were initially paid, that constituted acceptance of the terms by Marathon.

72. His Honour’s reasons do not disclose that any of Latrobe’s submissions on this issue were accepted. His Honour placed little reliance on the hearsay evidence regarding Mr Bloomfield, noted that the time sheets were paid only until complaint was made about the additional travel time, and not thereafter, and that the payments were made under protest. These observations by his Honour are inconsistent with Latrobe’s position that there had been acquiescence on the part of Marathon and that a contract could be inferred by conduct.

73. This appeal is concerned with whether Marathon has established that his Honour’s reasons were inadequate. That is a question of law. This appeal is not concerned with the merits of the decision. It is to be accepted that it was open to his Honour to have found in favour of Latrobe. It is also to be accepted that it was open to his Honour to have found in favour of Marathon. But Marathon was the losing party in the Local Court. It was entitled to understand properly the grounds upon which it was unsuccessful in it claim. The fact that significant time was spent at the hearing of this appeal attempting to identify what findings were made by his Honour lends further support for the proposition that his Honour’s reasons do not adequately disclose why it was that Marathon was unsuccessful.

74. In approaching this ground of appeal, I have made full allowance for the demands on a Magistrate in a busy Local Court. As Johnson J observed in Director of Public Prosecutions (NSW) v Illawarra Cashmart Pty Ltd (2006) 67 NSWLR 402; [2006] NSWSC 343 at [15] (albeit in the context of the hearing of criminal charges):

“Before turning to his Honour's reasons for dismissing the subject charges, it

is appropriate to bear in mind that his Honour's reasons constitute an unedited and unpunctuated record of ex tempore remarks in a busy Magistrate's Court: Acuthan v Coates (1986) 6 NSWLR 472 at 479A, 485C-D. Such a judgment should not be picked over and appropriate allowance should be given to the pressures under which magistrates are placed by the volume of cases coming before them: Neighbourhood Association DP295386 v Forgeron [2005] NSWCA 150 at [15]; Colosimo v Director of Public Prosecutions (2005) 64 NSWLR 645 at 655 [36].”

90. The difficulty with the application of this principle to the present matter is that these reasons were not delivered ex tempore; his Honour reserved his decision for six weeks and then delivered his reasons in a typed judgment.

91. For these reasons, I am satisfied that ground 2 has been established. Putting to one side the question of leave, I am not satisfied that ground 1 could be established in any event because the reasons do not permit me to accept the premise of Marathon’s argument in support of that ground. That is, it is not clear to me that his Honour’s finding that “the basis of engagement was determined on the basis of what was put by Mr Brady and what was indicated by Mr Cruz” meant that his Honour was satisfied that this was sufficient to amount to an agreement. Accordingly, I do not propose to consider the question of leave to rely upon ground 1.

92. I propose to allow the appeal. As for the appropriate orders, the orders sought in the summons were that I would allow the appeal and make the following consequential orders:

1. Set aside the judgment of the court below “with respect to that part of the decision identified by it as the overpayment claim”.

2. Judgment for the plaintiff against the defendant in the sum of $31,418.18.

3. Interest.

4. The defendant to pay the plaintiff’s costs.

93. Section 41 of the Local Court Act provides:

“The Supreme Court may determine an appeal made under section 39 (1) or 40:

(a) by varying the terms of the judgment or order, or

(b) by setting aside the judgment or order, or

(c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court’s directions, or

(d) by dismissing the appeal.”

94. It was submitted on behalf of Latrobe that, if I upheld ground 2, I would not remit the matter to the Local Court for a further hearing because there has been no miscarriage of justice. It was submitted on behalf of Latrobe that there are sufficient factual findings in the Magistrate’s decision for this court to finally determine the matter on its merits.

95. On behalf of Marathon, it was submitted that if ground 1 was established, this court could finally determine the matter but it was conceded that if only ground 2 was upheld then the appropriate order would be remittal to the Local Court for a re-hearing.

96. I have recently considered the scope of this court’s powers under s 41(1) of the Local Court Act in Regency v Nadinic [2018] NSWSC 68 at [87]-[93] and those principles are applicable here. I have had regard to the observations of Spiegelman CJ in Thaina Town (On Goulburn) Pty Limited v City of Sydney Council (2007) 7 1 NSWLR 230; [2007] NSWCA 300 at [103] and Basten JA in B & L Linings Pty Limited v Chief Commissioner of State Revenue (2008) 74 NSWLR 481; [2008] NSWCA 187 at [149]-[150]. In Getex Pty Limited v Reed Business Information Pty Limited [2013] NSWSC 1161 (“Getex”), Bellew J relied upon these decisions and observed at [100]:

“The provisions of s 39 of the LCA confer a right of appeal upon a party only on a question of law. The powers of the court, on the hearing of the appeal, are set out in s 41. In the circumstances of the present case, and consistent with the decision in B and L Linings (above), those provisions cannot be read as conferring a power upon me to review the merits of the case, or to otherwise expand the scope of the appeal which is conferred by s 39, so as to allow me to make a series of new findings of fact over and above those made by the Magistrate”.

97. In Getex, Bellew J concluded that he could not determine the matter because it would have required him to make new findings of fact. Similarly, I am satisfied that I could only make the orders sought by Marathon in this appeal if I was satisfied that to do so would not require me to make new findings of fact. This also applies to Latrobe’s submission that I could find in favour of Latrobe on the merits. As is disclosed in my consideration of ground 2 above, I am satisfied that a number of factual findings were required to be made by his Honour which were not, and some of these factual findings involved matters of credit. Accordingly, the only appropriate orders I can make are under s 41(1)(c) of the Local Court Act, setting aside the judgment and remitting the matter to the Local Court for determination.

98. Marathon has been successful. The usual order would be that costs follow the event “unless it appears to the court that some other order should be made as to the whole or any part of the costs”: Uniform Civil Procedure Rules 2005 (NSW) r 42.1. It was not submitted in Latrobe’s written submissions that some other order ought to be made and I propose to order that Latrobe pay the costs of this appeal.

99. It also seems to me that this would be an appropriate matter in which I would exercise my discretion under s 6 of the Suitor’s Fund Act 1951 (NSW) to grant a certificate in favour of Latrobe. The requirements of s 6 are here satisfied. The appeal has been upheld on a question of law. In Robinson v Zhang (2005) 158 A Crim R 575; [2005] NSWCA 439, Basten JA observed at [38] that, “[w]here the power is available, a certificate is usually granted as a matter of course, in the absence of particular considerations which would warrant withholding a certificate in the exercise of the Court’s discretion.” No such considerations arise in this case.

ORDERS

100. I make the following orders:

1. The appeal is allowed.

2. The judgment and orders of the Magistrate, dated 1 May 2017, insofar as they pertain to the “overpayment claim”, are set aside.

3. That part of the proceedings being “the overpayment claim” is remitted to the Local Court of New South Wales to be dealt with according to law.

4. The defendant to pay the plaintiff’s costs.

5. The defendant is to be provided with a certificate pursuant to s 6(1) of the Suitors Fund Act 1951 (NSW).

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Amendments

05 March 2018 - Coversheet amendment - "Price LCM" changed to "M Price LCM"

Decision last updated: 05 March 2018