Marks & Co Pty Ltd v Kym Scanlon T/A Prestige Mouldings

[2011] SASC 179

Supreme Court of South Australia

(Magistrates Appeals: Civil)

MARKS & CO PTY LTD v KYM SCANLON T/A PRESTIGE MOULDINGS

[2011] SASC 179

Judgment of The Honourable Justice Kelly (ex tempore)

10 October 2011

MAGISTRATES - APPEALS AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT

PROCEDURE - INFERIOR COURTS - SOUTH AUSTRALIA - MAGISTRATES COURT

EVIDENCE - COURSE OF EVIDENCE AND ADDRESSES - COURSE OF EVIDENCE - RE-OPENING CASE AND RECALLING WITNESSES - BY COURT

Appeal against Magistrate's dismissal of a claim for breach of contract - whether the Magistrate erred not allowing the appellant to re-open its case to present further evidence - the Magistrate expressed concerns about the evidence presented and invited the appellant to produce further evidence - appellant closed its case without producing anything further and then sought to re-open its case at the end of the trial - two day trial - application to re-open made on day two of the trial - appellant sought to tender material important to the appellant’s case - application to re-open was refused - Magistrate dismissed the claim on the basis that the appellant failed to produce adequate evidence to support its claim.

Held: appeal allowed - orders of the Magistrate set aside - Magistrate erred in not allowing the appellant to re-open its case to present further evidence and then dismiss the claim on the basis that the appellant failed to produce the critical evidence which the appellant by its application to re-open had sought to tender - matter remitted to Adelaide Magistrates Court for hearing and determination by another magistrate.

Onesteel Trading Pty Ltd v Ewing Internation Limited Partnership & Ors [2010] SASC 297; Australasian Meat Industry Employees' Union (WA Branch); ex parte Ferguson (1986) 67 ALR 491, considered.

MARKS & CO PTY LTD v KYM SCANLON T/A PRESTIGE MOULDINGS
[2011] SASC 179

Magistrates Appeal:   Civil

1. KELLY J (ex tempore)     Marks & Co Pty Ltd, the plaintiff, the appellant on this appeal, claimed an amount of $17,785.30 plus costs against Kym Scanlon trading as Prestige Mouldings, the defendant, and the respondent on this appeal, for breach of contract. After a trial which went for a day and approximately one hour in the Magistrates Court, the learned Magistrate delivered an ex tempore decision dismissing the appellant’s claim.

2. The appellant has appealed on a number of grounds; however, the critical grounds of appeal relate to the refusal by the Magistrate on the second day of the trial to allow the appellant to re-open its case to present further evidence. There are other grounds of appeal which relate to the weight the Magistrate placed on certain aspects of the evidence; however, the principal grounds of appeal all relate to the ruling refusing permission to the appellant to re-open the case to present further evidence.

3. The appellant is a manufacturer and wholesale supplier of picture frames. The respondent is a manufacturer of picture frame mouldings and, to some extent, picture frames. The respondent manufactured frames for on-supply by the appellant to a business known as Portrait Place for a number of years. The key dispute between the parties was whether certain picture frames supplied by the respondent to the appellant in late 2008 or early 2009 were the colour which the respondent originally agreed to supply pursuant to an oral contract which had been made in or around 2006.

4. The trial was listed for two days to commence on 19 May 2011. During the first day of the trial it became apparent that the Magistrate was troubled by the fact that the appellant did not produce the original sample, or at least an example of a frame manufactured by the respondent in accordance with the original specification described as the colour ‘distressed walnut’.

5. The managing director of the appellant company, Mr Egerton, did produce a frame, P1, at the trial, said to be an example of the appropriate colour; however, it emerged during the trial that P1 was not manufactured by the respondent. Nevertheless, Mr Egerton, the sole witness for the appellant, maintained that P1 was an example of the colour that the respondent originally agreed to supply. P1 in fact was an example of a frame manufactured by the appellant’s current supplier who replaced the respondent in 2009.

6. The appellant tendered another frame, P4, which was produced by the respondent but which the appellant claimed was the wrong colour. The position at trial was that the respondent confirmed that P1 was not manufactured by him, nor was it the colour he had originally agreed to supply. The respondent’s evidence was that P4 was the colour he originally agreed to supply. The respondent claimed that no complaint had ever been made about the colour of the impugned batch of frames and no request was ever put to the respondent to supply replacement frames. All which occurred was that the appellant made a unilateral request or demand, more accurately, for the cost of the frames after allegedly receiving a complaint from a customer. The respondent, Mr Scanlon, denied ever receiving a phone call from Mr Egerton in or about early 2009 complaining about the problem.

7. During the course of the proceedings on 19 May 2011, the Magistrate expressed concerns about the failure by the appellant to produce either the original sample or an example which was said to be in accordance with the original sample agreed to be supplied by the respondent. At the close of the appellant’s case further concerns were expressed by the Magistrate and the appellant’s counsel was invited to take instructions. This all occurred on the first day of the trial.

8. The appellant chose to press on and the Magistrate then heard submissions from both the appellant’s and the respondent’s counsel after the respondent had presented its case. The next morning, as a result apparently of a search overnight at its premises, the appellant sought to re-open its case and produce a frame which it said was manufactured by the respondent to the correct specification. The explanation given was that the frame had been found in the office of one of the employee’s of the appellant and apparently the appellant had not previously been aware of this.

9. The learned Magistrate refused permission to the appellant to re-open its case after argument and I note that the respondent objected to the re-opening of the case at the Magistrates Court. In his reasons for refusing permission to the appellant to re-open its case, the Magistrate commented that the appellant had demonstrated a serious lack of endeavour in producing the frame and that had the appellant prepared the matter with due diligence the frame could have been produced before that late stage of the trial.

10. In the Magistrate’s view, to allow the appellant to re-open the case would have given rise to an adjournment and further arguments about the probity and provenance, presumably, of the frame produced. The Magistrate refused to re-open therefore on the basis that the appellant had not acted diligently by producing the frame the day before.

11. On 1 July 2011 the Magistrate delivered judgment on the main claim. In his reasons for dismissing the appellant’s claim the learned Magistrate found that the failure by the appellant to produce either the original sample or a sample said to be in accordance with the original agreement was a critical defect in the appellant’s case. His Honour said:

    The difficulty with this evidence in my respectful view is obvious and fundamental to the plaintiff’s case.  The plaintiff does not produce the sample originally supplied by PP, nor even for that matter had a sample of what the defendant had in fact been supplying for years and had been accepted by the plaintiff and, more importantly, accepted in turn by PP without demur as according to the sample agreed.

12. The Magistrate then proceeded to determine the claim adverse to the appellant on the basis of the evidence he had heard which included the two frames tendered, P1 and P4.

13. He preferred the evidence of the respondent on the basis that the respondent was likely to have been attentive to the colour of the frame required as it was essential to his business and ongoing work with the appellant; second, the respondent was intimately involved in achieving the colour-matching; third, the respondent could rely on a long history of satisfactory performance in correct colour-matching over a protracted period of time, involving many thousands of frames; and fourth, the Magistrate accepted the respondent’s evidence that the respondent had used the same method of manufacturing colour-matching throughout the whole period, including the period when the impugned batch was manufactured.

14. He therefore accepted the respondent’s opinion that the colour of the frames which he agreed to supply was the colour of P4. He then commented that the appellant had failed to prove to the requisite degree that P1 is a sample of the colour that the respondent contractually agreed to supply.

15. The respondent’s position on appeal is that the appellant should be bound by the forensic decision it made to press on with its case even after the Magistrate expressed his concern about the absence of evidence of any samples of a colour said to be produced by the respondent in accordance with the agreement.

16. I was referred to the principles which apply when an application to introduce fresh evidence is made by a party to litigation. In Onesteel Trading Pty Ltd v Ewing International Limited Partnership & Ors[1] Anderson J referred to a number of authorities, including the case of Australasian Meat Industry Employees’ Union (WA Branch); Ex parte Ferguson,[2] and in particular a passage of Toohey J which seems apposite to this case, where he said:[3]

    In situations where a hearing has concluded but judgment has been reserved and not delivered, it has been said that fresh evidence should be admitted only when it is so material that the interests of justice require it; the evidence if believed would most probably affect the result; the evidence could not by reasonable diligence have been discovered before; and perhaps that no prejudice would ensue to the other party by reason of the introduction of the evidence so late …

    [1]    Onesteel Trading Pty Ltd v Ewing InternationalLimited Partnership & Ors [2010] SASC 297.

    [2]    Australasian Meat Industry Employees’ Union (WA Branch); Ex parte Ferguson (1986) 67 ALR 491.

    [3]    Australasian Meat Industry Employees’ Union (WA Branch); Ex parte Ferguson (1986) 67 ALR 491 at 493-494.

17. Here however, unlike the facts in Onesteel, the fresh evidence had it been permitted, may well have caused the Magistrate to reach a different conclusion or at the very least, to have determined the claim on a different basis than he did. In this regard I note that two of the respondents additional arguments concerning the failure by the appellant to mitigate its loss and the fact that at no stage was the respondent ever requested to supply replacement frames were not matters dealt with by the learned Magistrate.

18. I acknowledge that it does appear that the appellant did not act with due diligence in unearthing the frame, which it now seeks to tender; further, that its provenance may well be in dispute if there is to be a retrial. However, even a cursory examination of the three frames, P1, P4 and what I will call ‘the found frame’, in court this morning does nothing to dispel my concern that its tender at the trial may well have resulted in the Magistrate reaching a different conclusion.

19. The evident facts seems to be that when the appellant closed its case on the afternoon of 19 May 2011 at about 3.15 pm, the appellant did not realise that it was still in possession of a frame manufactured or said to be manufactured by the respondent. The defence case commenced at 3.45 pm and both counsel addressed by 4.32 pm that day, which was the time when the court adjourned. The next morning when the court resumed at 10.37 am, it was time for the appellant to reply. Instead of a reply, the application to re-open was made and the appellant indicated that it also sought an adjournment to prepare an affidavit in support of the application.

20. The applications were refused by the Magistrate who ruled that morning. The matter was thereafter adjourned off to 1 July when the matter was completed. However, the point is that the whole trial appears to have been completed by 11.00 am on 20 May 2011 but for some residual argument. This was well inside the two day timeframe allocated for the trial.

21. The appellant has already paid to the respondent the costs of the trial awarded against it in favour of the respondent. Those costs included indemnity costs for the second day of the trial. I bear in mind that this is a summary jurisdiction where cases are not always presented with the same degree of preparation, care and skill which might be expected and even demanded in more complex cases in higher jurisdictions. It is wholly regrettable that there should be a second trial on a claim for such a modest amount, however, I have reached the conclusion that the appellant has a legitimate grievance.

22. The Magistrate unquestionably determined this matter at least to a material degree on the basis of the absence of what he perceived to be relevant evidence. That evidence, assuming its provenance is proven, is now available. Had the application been acceded to in the court below, in all probability, the trial could still have been concluded within the allocated timeframe. It is difficult to understand why any adjournment would have been needed.

23. In that regard, I note that the respondent who is an experienced manufacturer, is likely to be able to determine fairly promptly whether the frame now sought to be produced is one he made. In any event an order for costs would have been sufficient to meet any complaint on the respondent’s part, on account of any required adjournment or extended trial.

24. For these reasons I conclude that the evidence sought to be led by the appellant was material.  Its absence was remarked on three times by the Magistrate, and ultimately the fact that the appellant did not produce a frame said to be manufactured by the respondent was a very important determining factor in the conclusion reached by the Magistrate.

25. In the circumstances of this case I consider that the justice of the matter calls for a re-trial. In the light of these reasons, I make the following orders:

    1The orders of the magistrate are set aside.

    2The matter is remitted to the Adelaide Magistrates Court for hearing and determination before a different magistrate.

    3Each party to bear their own costs of and incidental to the appeal.