Schol, J.N. v Lennock Motors Pty Limited
[1992] FCA 1005
•14 Aug 1992
1005 i q q z
JUDGMENT No. ,,.,.,,,,,,.,.,,.,I .,.... ,.,.,.
LIMITED DISTRIBUTION
IN THE FEDERAL COURT OF AUSTRALIA ) 1
AUSTRALIAN CAPIT~ TERRITORY j No. ACT G 6 9 of 1 9 9 1 DISTRICT REGISTRY ) GENERAL DIVISION j
ON APPEAL FROM THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN: JUAN NESTOR SCHOL and
ZENAIDA SCHOL
RECEIVED Appellants
08 1AN 1993 AND: LENNOCK MOTORS PTY LIMITED
FEDERAL COURT OF
AUSTRALIA Respondent PRINCIPAL . r '
MINUTE OF ORDER
THE COURT Neaves, Ryan and Higgins JJ. DATE OF ORDER 1 4 August 1992 WHERE MADE Canberra THE COURT ORDERS THAT: 36 of the Federal Court Rules.
1. The appeal and cross-appeal be dismissed.
2. The appellants pay the respondent's costs of the appeal.
3 . There be no order as to the costs of the cross- appeal.
Note: Settlement and entry of orders is dealt wlth in Order IN THE FEDERAL COURT OF AUSTRALIA ) GENERAL DIVISION j
ON APPEAL FROM THE SUPREME COURT
OF THE AUSTRALIAN CAPITAL TERRITORY
BETWEEN: JUAN NESTOR SCHOL and
ZENAIDA SCHOL
Appellants
AND: LENNOCK MOTORS PTY LIMITED
Respondent
CORAM: Neaves, Ryan and Higgins JJ.
m: 14 August 1992
REASONS FOR JUDGMENT
THE COURT:
The Court has before it an appeal by Juan Nestor Schol and Zenaida Schol ("the appellants") from the judgment of the Supreme Court of the Australian Capital Territory (Miles C.J.) given on 6 November 1991 in a proceeding between
the appellants and Lennock Motors Pty Limited ("the respondent"). By that judgment, the Supreme Court dismissed an appeal to that Court by the present appellants from the decislon of the Magistrates Court of the Australian Capital Territory that the appellants were liable in damages to the respondent arlsing from the breach by the appellants of a contract for the purchase from the respondent of a new motor vehicle. The Supreme Court confirmed the orders made by the Magistrates Court, namely that the appellants pay to the respondent damages in the sum of $2,035 plus costs on the appropriate scale, and ordered that each party bear its and their own costs of the appeal to the Supreme Court.
The appeal to the Supreme Court proceeded upon the evidence given before the Magistrates Court, no additional evidence being adduced before the Supreme Court. The evidence established that on 3 September 1988 an order form was signed by one of the appellants on behalf of both of them by which they agreed to purchase from the respondents a new, 1988 model, Nissan Pulsar motor vehicle for the sum of $21,613, that sum including the cost of some extra items of equipment (including alr-conditioning) fitted or to be fitted to the vehicle and amounts to cover registration fees and the cost of compulsory third party insurance. Part of the purchase price was to be satisfied by a "trade-in" allowance of $9,350 upon a Holden Camira motor vehicle which the appellants then owned. The appellants also signed an application form for the registration of the motor vehicle being purchased and provided
an employee of the respondent with personal details required for the purpose of an application for finance to be made through the respondent to Esanda Finance Limited ("Esanda"). The application for finance form recorded that, if finance were approved, repayment would be by 60 monthly instalments of $322.24 per month.
The respondent sought to recover damages from the
appellants by reason of their alleged failure to complete the purchase.
By their amended defence filed in the Magistrates
Court on 6 July 1990, the appellants contended that the
agreement was subject to a condition that the appellants
"procure finance to complete the agreement upon satisfactory
termsn and that that condition was not fulfilled in that,
notwithstanding their reasonable efforts to do so, they did
not obtain satisfactory finance in order to enable them tocomplete the purchase. The Magistrate made no positive finding on the issue whether the agreement was conditional upon finance on satisfactory terms being obtained by the appellants but dealt with the matter on the assumption that a condition to that effect had been agreed. His Worship found, as a matter of fact, that Esanda had approved the grant of finance to the appellants upon the application made by them and that the appellant had also obtained what he referred to as "quotes of finance from at least two other sources where the monthly repayments were lower than those in the Esanda package". In
the light of those findings, the Magistrate concluded that, if the sale had been conditional upon finance on satisfactory terms being available to the appellants, that condition had
been satisfied.The appellants also contended before the Magistrates Court, though it was not pleaded in their amended defence, that they had been discharged from performance of the agreement by reason of anticipatory breach on the part of the respondent. The Magistrate found that an employee of the respondent, fitc Robert Hush, had told the appellants, incorrectly, that they were "bound to take out finance from Esanda" but concluded that nothing that was done by the respondent or by any of its employees entitled the appellants to repudiate the sale agreement.
Before the Supreme Court the appellants submitted that the Magistrate had fallen into error in failing to find that they had been discharged from their obligations under the agreement because of a representation by Mr Hush that the appellants were bound to accept finance from Esanda. His Honour considered whether the evidence allowed of a conclusion that M r Hush had represented to the appellants that they could not complete the purchase unless they used funds offered by Esanda . His Honour was of opinion that, if such a representation had been made, it was a clear indication that the respondent intended to impose upon the appellants a
condition whlch was not one of the terms of the agreement and
that insistence by the respondent on that condition would have amounted to the discharge of the agreement by breach on the part of the respondent with the consequence that the appellants would no longer have been bound to complete the purchase.
Having examined in detail the evidence given before
the I.lagistrate, his Honour expressed himself as being unable
to conclude that Mr Hush had represented to the appellants
that they could complete the purchase only by accepting the
finance approved by Esanda. It is to be noted that M r Hush
was not called as a witness before the Magistrate and, in
reaching his conclusion, his Honour took that circumstance
into account. We need not here repeat the evidence that was
before the Magistrate in relation to this issue. Suffice it
to say that that evidence clearly falls short of establishing
the proposition for which the appellants contended. We see noreason to disagree with his Honour's conclusion. On the hearing of the appeal to this Court, the appellants, who were not legally represented, relied upon a number of other submissions to whlch we now turn.
It was submitted by the appellants that the proceeding, which, they said, had initially been commenced in the Supreme Court "demanding specific performance of the so- called 'contract'", was transferred to the Magistrates Court without their approvel, that the proceeding was converted by
that they had no opportunity to prepare a defence to the the Magistrate hearing the matter into a claim for damages, damages claim and that they had had no chance to inspect or verify the documents on which that claim was made or to call witnesses. By reason of those circumstances it was submitted that "all subsequent proceedings [were] vitiated with illegality" or "tainted .... with invalidity".
The proceeding was, in fact, commenced in the Supreme Court, a writ of summons having been issued out of that Court by the respondent as plaintiff against the appellants as defendants on 8 November 1988. By the statement of claim accompanying the writ, the respondent alleged that the appellants were in breach of the agreement for the purchase of the motor vehicle and claimed the sum of $21,513 being the balance of the purchase price after giving credit for the sum of $100 paid by the respondents on signing the order form or alternatively the sum of $12,263 plus damages for the appellant's failure to transfer to the respondent the trade-in vehicle. A defence denying that they were indebted to the respondent was filed on behalf of the appellants on 20 December 1988, the appellants then being represented by a firm of solicitors. On 24 July 1989, following correspondence passing between the solicitors for the parties, the respondent filed in the Supreme Court notice of a motion that the action be transferred to the Magistrates Court pursuant to s.279 of the Maqistrates Court (Civil Jurisdiction) Ordinance 1982
1989, to increase the monetary limit on the lurisdiction of (A.C.T.) whlch had been amended, wlth effect from 3 January the Magistrates Court from $10,000 to $50,000. An affidavit filed in support of the motion stated that, since the commencement of the action, the respondent had accepted the appellants' repudiation of the sale agreement and that, accordingly, the claim had become one for damages pursuant to the appellants' alleged breach of the agreement. On 10 August 1989, Miles C.J. ordered, by consent, that the action be transferred to the Magistrates Court. As has been mentioned, an amended defence was filed in the Magistrates Court on behalf of the appellants on 6 July 1990. That document was filed by the solicitors then acting on their behalf.
When the matter came on for hearing before the Magistrates Court, the appellants were not legally represented. However, a perusal of the transcript of the proceedings in that Court makes it clear that they were afforded a full opportunity to put any material before the Court and to call witnesses.
In the light of the matters to which we have referred, we are unable to accept the submission made by the appellants.
The appellants also contended that the agreement
was conditional upon the fitting of an air-conditioner to the
vehicle being purchased and that, as that item of equipment
with the consequence that the respondent's claim was had not been installed, the condition had not been fulfilled unsustainable. As this was not an issue raised before the Magistrates Court, or indeed before the Supreme Court, no evidence was specifically directed to it. Some reference to the cost of fltting air-conditioning to the vehicle was, however, made by the Magistrate in the course of questioning
Michael James Cornock, the managing director of the respondent, as to the quantum of the damages suffered by the respondent by reason of the appellants' failure to complete
the purchase. M r Cornock said:
"From memory, I thought we'd fitted the air- conditioning on the Schol's agreement to purchase and then we were forced to sell the car with air- conditioning unit next time round."
The documentation relating to the subsequent sale of the vehicle is consistent only with air-conditioning having been fitted prior to that sale. There is no evidence to suggest that it was not fitted to the vehicle before the appellants told the respondent that they were not prepared to proceed with the purchase. The appellants' submission is, therefore, rejected.
The appellants referred to the statement by the
Magistrate at the conclusion of the hearing on 4 June 1991
that he would consider the matter and deliver judgment, in
writing, on 11 June 1991. However, they went on to say, no
written reasons were available to them until some time later when they discovered that the reasons had been given orally on
11 June 1991 and subsequently transcribed. This explained,
they said, why the notice of appeal to the Supreme Court did
not specify the grounds of appeal.
Whilst it is unfortunate that the appellants did not receive a copy of the Magistrate's reasons as soon as they had
been transcribed, we are satisfied that no prejudice was suffered by the appellants by reason of that circumstance. They clearly had a copy of the Magistrate's reasons prior to the hearing of the appeal to the Supreme Court and they were not restricted in the matters they were permitted to raise in that Court by the absence from the notice of appeal to that Court of a statement of the grounds of the appeal.
The appellants also sought to rely on ss.21 and 22 of the Credit Act 1985 (A.C.T.). Section 21 enables a buyer in certain circumstances to resclnd a contract of sale of goods and services which is conditional upon the grant of credlt by the supplier. Section 22 makes it an offence for a supplier to require a person who, under a contract of sale, buys or proposes to buy goods and services supplied by that supplier to obtain credit from a specified person in respect of payment for the goods and services. Section 20(1) prescribes the contracts of sale to which ss.21 and 22 apply.
In relatlon to this submission, it is sufficient to say that we are satisfied that, on the findings of fact made by the Magistrate and confirmed by the Supreme Court, ss.21 and 22 of the Credit Act had no application to the circumstances of this case.
Although the issue had not been raised in the Supreme Court, the appellants contended before us that the damages awarded by the Magistrates Court were excessive. The Magistrate correctly concluded, relying on Thom~son (W.L.) Ld v. Robinson (Gunrnakersl Ld [l9551 Ch. 177, that the measure of damages recoverable by the respondent was the loss of profit suffered by reason of the failure of the appellants to complete the bargain. This loss of profit he assessed in the sum of $2035 and we are satisfied, on the material before the Magistrate, that that sum was not excessive.
Before parting with the matter it should be mentioned that the respondent filed a notice of cross-appeal from the judgment of the Supreme Court in so far as it ordered that the respondent bear its own costs of the appeal to that Court. We are, however, relieved from the necessity to deal with that issue as, on the hearing before us, the cross-appeal was abandoned. It should, formally, be dismissed.
For the reasons set out above, the appeal and cross-
appeal are dismissed. The appellants must pay the
respondent's costs of the appeal. There will be no order as
to the costs of the cross-appeal.
I certify that this and the preceding 9 pages are a true copy of the Reasons for Judgment herein of the Court.
Associate ". p 7
Dated: 14 August 1992
The appellants appeared in person.
Counsel for the respondent : M r R.L. Crowe
Solicitors for the respondent : Colquhoun Murphy
Date of hearing : 3 July 1992 Date of judgment : 14 August 1992
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