NICHOLS v AMERS PTY LTD ACN 112 055 366 (No. 2) (Civil Dispute)
[2020] ACAT 79
•6 October 2020
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
NICHOLS v AMERS PTY LTD ACN 112 055 366 (No. 2) (Civil Dispute) [2020] ACAT 79
XD 1123/2019
Catchwords: CIVIL DISPUTE – breach of contract – duty to mitigate losses – evidence necessary to satisfy duty to mitigate – respondent’s duty to show available avenues of mitigation
Cases cited:Banco de Portugal v Waterlow and Sons Ltd [1932] AC 452
Fallon v Johnson [2018] VSC 273
Karacominakis v Big Country Development Pty Ltd [2000] NSWCA 313
Lloyds and Scottish Finance v Modern Cars and Caravans [1966] 1 QB 764
Nichols v Amer Pty Ltd ACN 112 055 366 [2020] ACAT 23
Payzu Ltd v Saunders [1919] 2 KB 581
Simonius Vischer & Co v Holt [1979] 2 NSWLR 322
TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd [1963] HCA 57
Wenkart v Pittman (1999) 46 NSWLR 502
List of
Texts/Papers cited: Peter Gillies and Niloufer Selvadurai, Law of Contract (Federation Press, 2009)
Tribunal: Senior Member A Anforth
Date of Orders: 6 October 2020
Date of Reasons for Decision: 6 October 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL XD 1123/2019
BETWEEN:
CHRISTINE MARY NICHOLS
Applicant
AND:
AMERS PTY LTD ACN 112 055 366
Respondent
TRIBUNAL: Senior Member A Anforth
DATE:6 October 2020
ORDER
The Tribunal orders that:
The respondent is to pay the applicant the sum of $25,572.50 on or before 30 October 2020.
………………………………..
Senior Member A Anforth
REASONS FOR DECISION
This is a resumption of Nichols v Amer Pty Ltd ACN 112 055 366 [2020] ACAT 23. The present decision adopts but does not repeat all the history, evidence and findings of fact recited in that decisions.
In Nichols v Amer Pty Ltd ACN 112 055 366 [2020] ACAT 23 the tribunal found that the respondent was liable to pay the applicant damages for breach of their taxi licence plate contract. The matter was reserved for submissions on whether, and if so, to what extent, the conduct of the applicant satisfied her duty to mitigate her losses.
In short, the lease of the plates was for two years from 22 October 2018. The respondent declared its intention to end the lease agreement on 19 March 2019, being within the fixed term of the lease, and offered to return the plates to the applicant. The applicant instructed the respondent to return the plates to Access Canberra which is what occurred. The plates remained at Access Canberra for the balance of the fixed term.
There was a factual dispute over the actions taken by the applicant to use the plates, whether by further lease, sale or self-use. The applicant asserts that she made various inquiries of those in the industry including All Green Cabs and Aerial Cabs, without success. She said that the advent of Uber and the release of more plates by the ACT Government had largely destroyed the market for her plates. The respondent denies that any such efforts were made by the applicant and denies the alleged untimely advent of Uber and the release of additional plates had adversely affected the market.
The hearing was resumed by telephone on 17 August 2020. The applicant remained self-represented. Mr Amer and Mr Goldsmith (solicitor) appeared for the respondent. Both parties had filed written submissions, but the applicant advised that she had deliberately not opened and read the respondent’s submissions. Each party orally put their case and had the opportunity to ask questions of the other side.
Mr Goldsmith took some time in his cross examination of the applicant. He drew her attention to those parts of her statement and submissions in which she said that she would not be releasing the plates to anyone until the end of the fixed term agreement with the respondent and to an email of 6 February 2019 from the respondent reminding her of her duty to attempt to release the plates.
In response to a question from the Tribunal, the applicant said:
The plates were surrendered to the Motor Registry by Amir (sic). I didn’t do anything for ages, until financially I was forced to try and find some financial solution for myself on this. I tried, on the occasions that I have mentioned in the statutory declaration, and that’s really the end of the story.[1]
[1] Transcript of proceedings 17 August 2020 page 9, line 40
In response to a following question the applicant said her first attempt to do anything with the plates on 17 June 2019 in a meeting with ‘Peter’ of All Green Cabs. The applicant’s account of the meetings with the representatives of All Green Cabs and Aerial Taxis is sketchy and the Tribunal could not discern whether it went beyond a mere exploration of possibilities on the applicant’s part.
Mr Goldsmith put to the applicant that she did not in fact speak at all with representatives of All Green Cabs or Aerial Taxi in an attempt to negotiate a lease or sale. The applicant denied the assertion and said that she had recently attempted to obtain a statement from these representatives to corroborate her evidence, but had met with a lack of co-operation from them.
Mr Goldsmith submitted that the applicant bore the evidential onus to have called the representatives of All Green Cabs and Aerial Taxis, by summons if necessary, to corroborate her evidence of their meetings. The Tribunal replied to Mr Goldsmith that the applicant was entitled to give evidence of the meetings and this was admissible firsthand evidence. Whether the Tribunal believes it is another matter but in the absence of any reason to disbelieve that evidence, it would be accepted. It was pointed out to Mr Goldsmith that he could have called either or both representatives to give evidence denying the meetings, by subpoena if necessary, but he did not do so. Mr Goldsmith submitted that he was under no evidential duty to do this, and the absence of corroboration rendered the applicant’s evidence on the points inadmissible. The issue of the onus of proof in mitigation cases is addressed below.
Having said this, there is no doubt that the evidence of these representatives may have thrown light on the nature and seriousness of the applicant’s attempts to re-lease the plates and the general state of the market for taxi plates. The Tribunal is left in the situation that the meeting occurred, but the content of the meetings is largely unknown.
The duty on the innocent party to mitigate losses
Mitigation of losses means the taking of reasonable action by the innocent party to reduce the impact of a breach by the other party.[2]
[2] See, Peter Gillies and Niloufer Selvadurai, Law of Contract (Federation Press, 2009) page 242.\
The duty to mitigate is drawn from the common law. The following five common law principles concerning mitigation of losses are most likely to be relevant in Tribunal proceedings:[3]
(1)The plaintiff must take all reasonable steps to mitigate the loss caused by the defendant’s breach and cannot recover damages for any loss which he or she could have avoided but failed, through unreasonable action or inaction, to avoid.
(2)Where the plaintiff does take reasonable steps to mitigate the loss, he or she can recover for any loss incurred in so doing. It does not matter that the resulting loss is greater than would have been the case had no mitigating steps been taken.[4]
(3)Where the plaintiff does take steps to mitigate the loss and those steps are successful, the defendant is only liable for the loss as lessened. In other words, the defendant takes the benefit of the plaintiff’s actions.
(4)The onus of proof is on the defendant to show that the plaintiff acted unreasonably in failing to mitigate the loss.[5]
(5)Not only is the onus on the defendant to show that the plaintiff acted unreasonably, but the onus is also on the defendant to prove the value of what would have occurred had the plaintiff acted reasonably or the value of loss in fact avoided by the plaintiff who did act reasonably.[6]
[3] See, Fallon v Johnson (2018) VSC 273
[4] Simonius Vischer & Co v Holt [1979] 2 NSWLR 322 at pages 355–356 (obiter); Lloyds and Scottish Finance v Modern Cars and Caravans [1966] 1 QB 764
[5] TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd [1963] HCA 57 at [9]-[10]; Wenkart v Pittman (1999) 46 NSWLR 502 at pages 520–523
[6] Karacominakis v Big Country Development Pty Ltd [2000] NSWCA 313 at [187]
It is the facts of any given case which determine whether the innocent party acted reasonably in attempting to mitigate loss. The question is often phrased as it was by McCardie J in Payzu Ltd v Saunders [1919] 2 KB 581:
The question, therefore, is what a prudent person ought reasonably to do in order to mitigate his loss arising from a breach of contract.
It should not be forgotten, however, that it is the innocent party who is required to take steps to mitigate the loss because of the breach of the other party, and that the steps required of the innocent party will not generally be set too high. Thus, in Banco de Portugal v Waterlow and Sons Ltd [1932] AC 452 at page 506 Lord McMillan said:
Where the sufferer from a breach of contract finds
himself in consequence of that breach placed in a position of
embarrassment the measures which he may be driven to adopt in
order to extricate himself ought not to be weighed in nice scales at
the instance of the party whose breach of contract has occasioned
the difficulty. It is often easy after an emergency has passed to
criticise the steps which have been taken to meet it, but such
criticism does not come well from those who have themselves created
the emergency. The law is satisfied if the party placed in a difficult
situation by reason of the breach of a duty owed to him has acted
reasonably in the adoption of remedial measures and he will not be
held disentitled to recover the cost of such measures merely because
the party in breach can suggest that other measures less burdensome
to him might have been taken.In Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 at [187], the NSW Court of Appeal said:
A plaintiff who acts unreasonably in failing to minimise his loss from the defendant’s breach of contract will have his damages reduced to the extent to which, had he acted reasonably, his loss would have been less. This is often misleadingly referred to as a duty to mitigate, although the plaintiff is not under a positive duty. The plaintiff does not have to show that he has fulfilled his so-called duty, and the onus is on the defendant to show that he has not and the extent to which he has not (TCN Channel 9 Pty Ltd v Hayden Enterprises Pty Ltd (1989) 16 NSWLR 130). Since the defendant is a wrongdoer, in determining whether the plaintiff has acted unreasonably a high standard of conduct will not be required, and the plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct if it was reasonable for the plaintiff to do what he did (Banco de Portugal v Waterlow and Sons Ltd [1932] UKHL 1; (1932) AC 452; Pilkington v Wood (1953) Ch 770; Sacher Investments Pty Ltd v Forma Stereo Consultants Pty Ltd (1976) 1 NSWLR 5).
Consideration of the issues
The Tribunal is satisfied from the applicant’s own evidence that when the respondent returned the plates to Access Canberra in early March 2019, she deliberately took no action to re-lease the plates based on her understanding that there was no legal requirement for her to do so, and that the fault and responsibility for her losses lay with the respondent. Her first actions which could conceivably amount to mitigation, did not occur until the meeting with All Green Cabs in mid-June 2019.
The applicant had a duty to make a reasonable attempt to re-lease or otherwise use the plates for the balance of fixed term expiring in October 2020. She could have done this either by a short-term lease for the balance of the fixed term or a longer-term lease that included but extended past the balance of the fixed term.
The applicant’s meetings with All Green Cabs and Aerial Taxis in mid-June 2019 and thereafter are not consistent with an attempt to re-lease the plates from the time of their surrender by the respondent. These meetings are consistent with the applicant putting out feelers to the market to determine what to do with the plates, after the expiry of the fixed term in October 2020.
The Tribunal finds that the applicant did not attempt to mitigate her losses during the remaining balance of the fixed term. No attempts at all cannot satisfy the applicant’s duty at law to take reasonable steps to that end.
But this finding does not end the inquiry. It is not sufficient just to find that the applicant took no steps to mitigate her losses. The Tribunal must also be satisfied that:
(a)there were reasonable steps the applicant might have taken;
(b)the likelihood that these steps would have been successful; and
(c)the likely level of financial return that these steps would have produced for the balance of the fixed term period.
This evidence is necessary to determine what amount of set-off from the applicant’s damages flows from the failure to mitigate. The onus of proof on these matters falls upon the respondent.
The applicant gave evidence that she was not in an economic position to invest large sums of capital into any venture and for All Green Cabs and Aerial Taxis this included buying a vehicle to attach the plates to. The sum of $30,000 was mentioned as the cost of a suitable second-hand vehicle.
This left either the sale or leasing of the plates as the only options open to her. She said that the prior advent of Uber into the market had substantially reduced the value of the plates for sale and any sale would be at a loss relative to the price she purchased them for. In the end the applicant has done nothing with the plates.
This is the extent of the evidence before the Tribunal concerning the relevant market.
The respondent could have called the two representatives from All Green Cabs and from Aerial Taxi, by subpoena if necessary, to testify on the fact and content of the meeting and could have led evidence on the state of the market and the amount that the applicant could reasonably have obtained for a short or long term lease without a vehicle attached. The respondent is itself a major player in the Canberra taxi market. The respondent did neither of these things.
Had there been evidence before the Tribunal that there was in fact a market open to the applicant and some evidence of the return she could have expected from re-leasing the plates, then the respondent’s case would have been made out and it would have been entitled to a reduction in damages to the extent of expected return for the balance of the fixed term.
In the end, the Tribunal is satisfied that the applicant did not take reasonable steps to mitigate her losses, but on the evidence is unable to find:
(a)what steps could reasonably have been taken by way of mitigation;
(b)the prospect that those steps would have been successful; and
(c)the amount of financial return those steps would likely have produced for the balance of the fixed term.
In these circumstances the Tribunal is unable determine any amount of setoff from the applicant’s damages, which leaves the whole of the damages for the respondent’s breach of contract, payable, being the sum of $25,000 jurisdictional limit and the filing fee of $572.50.
…………………………….
Senior Member A Anforth
HEARING DETAILS
FILE NUMBER: | XD 1123/2019 |
PARTIES, APPLICANT: | Christine Mary Nichols |
PARTIES, RESPONDENT: | Amers Pty Ltd ACN 112 055 366 |
COUNSEL APPEARING, APPLICANT | N/A |
COUNSEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | N/A |
SOLICITORS FOR RESPONDENT | Goldsmiths Law |
TRIBUNAL MEMBERS: | Senior Member A Anforth |
DATES OF HEARING: | 17 August 2020 |
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