Peoples v Thornton

[1995] QCA 188

IN THE COURT OF APPEAL	[1995] QCA 188
SUPREME COURT OF QUEENSLAND

Appeal No. 231 of 1994

Brisbane
[Peoples & Ors. v. Thornton & Ors.]

BETWEEN:

MICHAEL NEVILLE THORNTON

and GLENYS BETTY MUIR First

(First Plaintiffs) Respondents

- and -

LAUREL ALMA THORNTON Second

(Second Plaintiff) Respondent

AND:

NEVILLE ANDREW ROSS PEOPLES and SUSAN PATRICIA PEOPLES

(First Defendants) Appellants

- and -

ASHLEY & MUNRO PTY LTD

(Second Defendant)

- and -

WILLIAMS & PARTNERS PTY LTD

(Third Defendant)

Davies J.A.
McPherson J.A.

Byrne J.

Judgment delivered 19/05/1995

Judgment of the Court

APPEAL DISMISSED WITH COSTS

CATCHWORDS:	CONTRACTS - misrepresentation - valuation of property passing under contract - valuation of business - whether expenses attributable to separate business.
APPEAL - fresh evidence - financial statement produced after trial - whether admissible.
Counsel:	Mr C.F.C. Wilson for the appellants
Mr P McMurdo Q.C. with him Mr G.K. Flint for the first and second respondents
Solicitors:	Maxwell, Mead & Young as town agents for K. O'Hanlon & Associates for the appellants
Hawthorn Cuppaidge & Badgery as town agents for M. South & Geldard for the first and second respondents

Hearing Date: 27 March 1995
IN THE COURT OF APPEAL

SUPREME COURT OF QUEENSLAND

Appeal No. 231 of 1994

Brisbane

Before Davies J.A.
McPherson J.A.
Byrne J.

[Peoples & Ors. v. Thornton & Ors.]

BETWEEN:

MICHAEL NEVILLE THORNTON

and GLENYS BETTY MUIR First

(First Plaintiffs) Respondents

- and -

LAUREL ALMA THORNTON Second

(Second Plaintiff) Respondent

AND:

NEVILLE ANDREW ROSS PEOPLES and SUSAN PATRICIA PEOPLES

(First Defendants) Appellants

- and -

ASHLEY & MUNRO PTY LTD

(Second Defendant)

- and -

WILLIAMS & PARTNERS PTY LTD

(Third Defendant)

REASONS FOR JUDGMENT - THE COURT

Judgment delivered the 19th day of May 1995

The appellants entered into a written agreement to sell to the first respondents a newsagency business at Aramac and assets of that business. The first respondents took the business over in December 1992. After a trial in the Rockhampton District Court, the judge found that the contract had been induced by fraudulent misrepresentations concerning the profitability of the business and the value of stock on hand.

The judge assessed the value of the property passing under the contract, and, in doing so, considered the profitability of the newsagency at the time the first respondents purchased the business. By their notice of appeal, the appellants challenge the judge's view of the profitability of the business in the hands of the appellants. The profit for the year or so during which the appellants conducted the newsagency was, they contend, $4,685 higher than the figure his Honour found - a contention which, if correct, matters to the relief granted.

After the appellants purchased the newsagency in mid-
October 1991, the male appellant began driving every day to
Barcaldine to collect newspapers intended for sale at the
Aramac shop. From December 1991 the daily trip was made in
conjunction with a separate venture established by the
appellants: a courier business styled "Security Express".

The courier business, which involved carrying things between Barcaldine and Aramac, ceased in August 1992. Afterwards, the male appellant kept making his daily trips to Barcaldine to collect the papers, just as he had previously, until the business was acquired by the first respondents.

The courier business earned $4,685. Appropriately enough, this income was excluded in the judge's assessment of the profit attributable to the discrete newsagency business the first respondents purchased. The appellants contend that the judge, in considering the profit of the newsagency business, failed to exclude expenditure incurred in conducting the courier business. Mistakenly, it is said, his Honour attributed courier expenses to the newsagency and thereby understated the true profits the appellants earned in their newsagency.

Income received from the courier business was paid into the newsagency bank account, and all expenses associated with travelling between Barcaldine and Aramac (for example, fuel, oil, other vehicle expenses and wages) were paid from the newsagency account. Separate books were not kept and no attempt was made to apportion between the businesses the costs related to the daily excursion. Expenses incurred in travelling between Aramac and Barcaldine in the period during which the courier business operated exceeded, it seems, the income the courier business derived. However, no particular expense was identified in argument before us as solely attributable to the courier business, no doubt because it was merely an adjunct to the daily activity of driving to Barcaldine to collect the newspapers and did not involve any expense beyond that incurred for the newsagency.

In these circumstances, his Honour was entitled to take the travel expenditure into account in calculating the profits of the newsagency. The challenge to the finding as to profitability therefore fails.

Leave was sought to adduce fresh evidence in the form of a trading profit and loss statement for the year ended 30 June 1993 relating to the newsagency. The statement bears on the profitability of that business in the first six months or so after the first respondents acquired it.

The financial record in question was brought into existence after the trial. All the pertinent information it contains or reflects is, however, to be found in papers discovered by the first respondents in their affidavit of documents. Although the discovered documents pose no particular difficulty of interpretation, any significance in the information they contain was not, it seems, appreciated by the appellants' lawyers. The documents may have been overlooked or their relevance may have escaped attention because no accountant was asked to examine them.

Whatever the explanation for the omission to attend to the papers may be, the fact remains that the information conveyed by the financial statement brought into existence after the trial relevantly accords with evidence which the appellants' lawyers either had or could have obtained by inspection of discovered documents. In the circumstances of this case, that the appellants' lawyers failed to detect any significance in the information is scarcely a basis for permitting the new financial records to be received on appeal. The application to adduce fresh evidence also fails.

The appeal must be dismissed with costs.