McIver Transport Pty Ltd v Byrne
[2000] QSC 448
•8 December 2000
SUPREME COURT OF QUEENSLAND
[2000] QSC 448
File No 5418 of 1998
BETWEEN:
McIVER TRANSPORT PTY LTD
(ACN 009 760 141)
Plaintiff
AND:
LAURENCE MICHAEL BYRNE
First Defendant
AND:
BYRNE TRAILERS (AUSTRALIA) PTY LTD
(ACN 061 260 679)
Second Defendant
AND:
ROADUSER INTERNATIONAL PTY LTD
(ACN 007 224 348)
Third Defendant
MOYNIHAN J – REASONS FOR JUDGMENT
DELIVERED ON: | 8 December 2000 |
HEARING DATE: | 23 November 2000 |
ORDER: | Application dismissed |
CATCHWORDS: | PROCEDURE – QUEENSLAND – PRACTICE UNDER RULES OF THE COURT – STAYING PROCEEDINGS – action for damages for breach of contract – whether proceedings should be stayed because of proceedings in New South Wales – issue estoppel Blair v Curran (1939) 62 CLR 464, followed |
COUNSEL: | Mr PA Keane QC for the plaintiff |
SOLICITORS: | Carter Newell for the plaintiff |
The first and second defendants (there is no need to differentiate between them and they can conveniently be referred to as “Byrne”) seek a stay of the plaintiff’s (“McIver”) action founded on the outcome of proceedings in the Local Court of New South Wales. The third defendant (“Roaduser”) supported McIver’s opposition to a stay.
Byrne’s argument for a stay is, broadly speaking, founded on a proposition that McIver is improperly or impermissably using the current proceedings to litigate matters already determined in the Local Court of New South Wales.
This action is one of a number of proceedings arising out of Byrne’s manufacture and supply to McIver of equipment (trailers and dollies) to carry mine concentrates from BHP’s Cannington Mine near Cloncurry to the rail head.
The terms of the contract between Byrne and McIver are contained in an instrument of 14 May 1997. By its terms Byrne agreed to design, manufacture and sell to McIver twenty-one trailers and four dollies in accordance with the specifications scheduled to the contract and McIver agreed to purchase the equipment. Byrne further agreed that the equipment would be built in accordance with designs approved by Roaduser prior to manufacture. It was also agreed that if Roaduser required variations to the scheduled specifications, the parties would agree on the variation required and the revised specifications would replace those originally scheduled. The contract provided for delivery of specific items of equipment in four batches on specified dates. Roaduser was not a party to the contract.
In this particular action McIver sues Byrne and Roaduser in negligence and breach of contract on the basis that the equipment was:
(i) not designed or manufactured in a reasonably competent manner;
(ii) not fit for the specified purpose;
(iii) not of merchantable quality;
(iv) not safe or sound for use throughout the normal commercial life for the specified purpose; and
(v) designed and/or manufactured negligently by Byrne or Roaduser.
McIver claims some millions of dollars on the basis that Byrne and Roaduser’s breaches of their obligations caused it loss of profits because of the reduction of carrying capacity, the need for repairs of defective equipment, maintenance above that which should have been required and associated matters.
Byrne and Roaduser have exchanged contribution notices in the event of McIver’s success in its claim against one or the other.
As I have said the specified equipment was to be delivered in batches on specific delivery dates. The delivery date specified for the last batch was 1 March 1998. McIver was apparently reluctant to accept the delivery. Prior to this Byrne had modified some of the trailer bins which McIver contended were distorted and cracked. This was apparently due to the defective positioning of the bin rails. There is a question of whether the defects reflected manufacturing deficiencies.
On 8 May 1998, Byrne sued McIver in the Supreme Court of New South Wales in respect of the last batch contending that McIver was obliged to accept the equipment and pay for it. There was no cross claim by McIver and whether one was foreshadowed is contentious. In any event, the action was compromised.
The terms of compromise provided that McIver agreed to accept the equipment and to pay specified instalments by specified times. Byrne agreed, without admission of liability, to rectify at its cost, specific identified items and to reimburse McIver for the cost of rectification already carried out. McIver reserved its rights against Byrne and the parties reserved their rights in relation to interest and costs. The latter issues were subsequently resolved.
On 13 May 1998, Byrne sued McIver in the Local Court of New South Wales for money allegedly owing for modifications carried out to various items of equipment identified in terms of specified invoices.
McIver had filed a defence on 11 June 1998 claiming the work involved the rectification of faulty workmanship. There was also an issue about authority but that is irrelevant for present purposes.
On 15 May 2000, Byrne obtained judgment for the outstanding amount of its claim on the basis that there had been an oral variation of the terms of the instrument of 14 May 1997 which bound McIver, and that Byrne had satisfied the terms of the variation. The faults complained of by McIver were found to be due to the design as modified by Roaduser, not a fault in the manufacturing process by Byrne. These are the proceedings on which this application is founded.
In the meantime, McIver had commenced these proceedings in this Court on 16 June 1998. It may be noted that McIver’s defence in the Local Court action did not plead the matters forming the basis of its claim in this Court.
On 19 June 1998, McIver prepared an application to the Local Court seeking to have Byrne’s proceedings in that court stayed under s 20 of the Service and Execution of Process Act 1992 (Cth). An affidavit sworn in support of the application contended that there was insufficient connection with the Local Court (Sydney) in which the proceedings had been commenced. It was further contended that McIver wished to counterclaim in excess of the jurisdictional limit of the Local Court, that the Queensland Supreme Court was the more appropriate forum, and the proceedings in this Court involved the same facts and circumstances as did the Local Court proceedings.
The application in the Local Court for a stay was heard on 15 January 1999. It was unsuccessful and an appeal was dismissed as incompetent.
On 12 October 1998, Byrne brought an application in this Court for a stay of these proceedings. In the course of dismissing the application on 20 November 1998, Atkinson J concluded:
“There is no possibility of conflicting judgments, no adjudicating on the merits has previously being given and it was not unreasonable for [McIver] not to raise the subject matter of its present claim as a defence or cross-claim in the proceedings in New South Wales”.
On 27 August 1999, McIver’s application to the Supreme Court of New South Wales to transfer the Local Court proceedings to the New South Wales Supreme Court and for them then to be cross vested to this Court was refused.
In opposing the application, Byrne’s counsel submitted that the Local Court proceedings were a discreet claim and that McIver’s defence did not raise the matters the subject of the Queensland proceedings. The New South Wales Supreme Court essentially upheld those submissions. It found that the Local Court proceedings gave rise to “discrete legal issues”. The issues did not “seem ... to overlap the issues raised” in this Court. The proceedings in the Local Court involved “a limited and distinct issue” likely to be resolved “in a one day hearing before the Local Court”.
In the event, the proceedings in the Local Court did not conclude in a day. On 31 January 2000, Byrne closed its case and the matter was adjourned to 15 February. When it resumed, McIver’s counsel informed the Magistrate that as a consequence of the course of the January hearing, McIver wished to subpoena officers of Roaduser. Byrne opposed the adjournment. In the course of granting it, the Magistrate said that Roaduser was:
“. . . mentioned in the contract should have been apparent to the parties who know the case, and the history of the matter but [Roaduser] are not expressly referred to in the pleadings [Roaduser’s] involvement has assumed significance as the evidence has emerged during the hearing”.
The hearing resumed on 18 April 2000 which Roaduser’s officers gave evidence under subpoena. As I stated earlier, judgment was given for Byrne on 15 May 2000.
It was submitted for Byrne that it was not now open to McIver in the Queensland proceedings to contend that Byrne negligently manufactured and supplied equipment not designed and/or failed to manufacture it in a reasonably competent manner. It was furthermore contended that, notwithstanding that it was not a party to the New South Wales Local Court proceeding, Roaduser could not now assert in these proceedings that Byrne could be liable to contribute for any loss or damage McIver suffered for faulty design under the contract of 14 May 1997.
McIver and Roaduser submitted, citing Walton v Gardiner (1993) 177 CLR 378 at 392, that Byrne’s application should be dismissed as an abuse of process or that Byrne was estopped from pursuing it. This was founded on a submission that Byrne was seeking to relitigate issues disposed of by the New South Wales Supreme Court on 27 August 1999 which I referred to earlier. There is considerable merit in the submission that the application reagitates issues dealt with on 27 August 1997. I prefer, however, to defer whether that gives rise to an estoppel or to a discretion.
McIver did not plead any cause of action in its defence to Byrne’s action. In my view there is not sufficient identity between the facts on which Byrne’s success in the Local Court were founded and those relied on in this action. The cause of action litigated before the Local Court was Byrne’s claim of an oral variation of the term of the contract of 14 May 1997 which entitled it to payment of a liquidated amount for specific work. In terms of the facts in issue, other considerations aside, that is far more narrowly based than what is in issue in the action. It therefore in my view cannot be said that the causes of action upon which McIver sues in this Court became merged in the Local Court judgment: Blair v Curran (1939) 62 CLR 464.
The principles of issue estoppel were laid down by Dixon J in Blair v Curran ante at 531:
“The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion . . . .
Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue-estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the rights established”.
See also Yates Property Corporation Pty Ltd v Boland [2000] FCA 1106, (Unreported, Goldberg J, 9 August 2000); Ramsay v Pigram (1968) 118 CLR 271 at 276; Brewer v Brewer (1953) 88 CLR 1; O’Brien v Tanning Research Laboratories Inc (1988) 84 ALR 221, per Kirby P at 243, with whom McHugh JA agreed; per Mahoney JA (diss) at 257-8.
Moreover:
“Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very title to rights give rise to no preclusion”.
Blair v Curran ante at 532 per Dixon J; Yates ante at 92 per Goldberg J.
In LH Markwell Pty Ltd v LA and D Fitzgerald [2000] QCA 288 (Unreported, McPherson and Thomas JJA and Mullins J, 8 August 2000) particulars of negligence pleaded in the District Court had been dealt with by a Magistrate at an earlier proceeding and it had been concluded that the plaintiff had carried out the work competently. Notwithstanding this, the defendant in the Magistrates Court was permitted to pursue the issues as plaintiff before the District Court.
The “legally indispensable” facts sustaining the Local Court decision were that there was a variation of the terms of the instrument of 14 May 1997 and that Byrne had satisfied the terms of that entitlement so as to be entitled to the payment of the sums sued for. The question of design fault in the Local Government Court was, at best, collateral to the facts “forming the very title to rights”. They are not issues in the Queensland proceedings. The submissions made by Byrne’s counsel in resisting McIver’s application to have the Local Government Court proceedings transferred to this Court were correct.
Byrne has submitted against Roaduser that the Local Court proceeding gave rise to estoppels between it and Roaduser as to liability on matters ultimately in issue in these proceedings and which cannot now be contested by McIver in the Queensland action.
It is pointed out on Roaduser’s behalf that if this contention is correct, McIver will be left to pursue its claim against Roaduser and Roaduser will be prevented from denying liability and seeking contribution from Byrne, notwithstanding that it was not a party to any of the New South Wales proceedings. In my view the submission is in any event not sustainable.
In submitting that Roaduser was bound notwithstanding that it was not a party to the Local Court proceedings, Byrne relied on an extract from the speech of Lord Simmons in Chandu Lal Agarwilla v Khalilur Rahaman (1949) LR 77 Ind App 27 at 30. In Chandu, the entity it sought to bind had been sued, but had not entered an appearance. On a narrow view of it, the passage relied on is referring to a party to the proceedings as distinct from an entity in a general sense.
In the earlier Privy Counsel decision of Munni Bidi v Tibloki Nath (1931) 58 LR Ind App 158 at 165 three conditions must be satisfied:
(i) there must be a conflict of interest between the defendants concerned;
(ii) it must be necessary to decide the conflict in order to give the plaintiff the relief claimed; and,
(iii) the questions between the defendants must have been judicially decided.
See also Taylor v Ansett Transport Industries Ltd (1987) 18 FLR 342 at 358 where Fisher J said:
“... issue estoppel can only be raised by or applied against the parties who were in ‘controversy’ at the time when the issue was first determined, either in their favour or adversely to them. If a party was not involved in the litigation on that issue, either because it was not an issue between him and another party to the proceedings or because he was not a party at all ... at the time of the resolution, then he is not affected by nor can he raise an estoppel. Likewise his presence initially or subsequently cannot effect the rights of other parties to raise or rely upon issue estoppel as between themselves”.
As I understand it, Byrne did not rely on an estoppel of the kind contemplated in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 16.
As I have said Roaduser’s involvement in the Local Court proceedings was not as a party. Two of its officers gave evidence on subpoena at the adjourned hearing. I am not persuaded that is sufficient, all else being equal, to extend the principles of issue estoppel between defendants to Roaduser.
The considerations being those canvassed, I dismiss the application.
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