Smith v Gardner
[2001] WASCA 401
•19 DECEMBER 2001
SMITH -v- GARDNER & ANOR [2001] WASCA 401
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 401 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:72/2001 | 9 OCTOBER 2001 | |
| Coram: | SCOTT J STEYTLER J EINFELD AJ | 19/12/01 | |
| 10 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed Matter remitted to a different Warden for hearing and determination | ||
| B | |||
| PDF Version |
| Parties: | PETER VICTOR SMITH ROBERT CHARLES GARDNER ROBERT MITCHELL |
Catchwords: | Mining Agreement to provide consultancy services for a fee Compensation for services provided by consultant not determined by Warden Appellate Judge wrongly determining facts Matter remitted to a different Warden for determination of entitlement of consultant Turns on own facts |
Legislation: | Nil |
Case References: | Devries v Australian National Railways Commission (1992-93) 177 CLR 472 Gardner & Anor v Smith [2000] WASCA 93 Gardner & Anor v Smith [2001] WASCA 116 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 Warren v Coombes (1979) 142 CLR 531 Gardner & Anor v Smith [1999] WASCA 168 Gardner & Anor v Smith, unreported; SCt of WA (Anderson J); Library No 960579; 27 September 1996 Smith v Gardner & Anor, unreported; FCt SCt of WA; Library No 970603; 13 November 1997 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : SMITH -v- GARDNER & ANOR [2001] WASCA 401 CORAM : SCOTT J
- STEYTLER J
EINFELD AJ
- Appellant
AND
ROBERT CHARLES GARDNER
ROBERT MITCHELL
Respondents
Catchwords:
Mining - Agreement to provide consultancy services for a fee - Compensation for services provided by consultant not determined by Warden - Appellate Judge wrongly determining facts - Matter remitted to a different Warden for determination of entitlement of consultant - Turns on own facts
Legislation:
Nil
(Page 2)
Result:
Appeal allowed
Matter remitted to a different Warden for hearing and determination
Category: B
Representation:
Counsel:
Appellant : Mr C G Colvin SC & Mr G H Lawton
Respondents : Mr M J McCusker QC & Mr S F Farrell
Solicitors:
Appellant : Lawton Gillon
Respondents : Hotchkin Hanly
Case(s) referred to in judgment(s):
Devries v Australian National Railways Commission (1992-93) 177 CLR 472
Gardner & Anor v Smith [2000] WASCA 93
Gardner & Anor v Smith [2001] WASCA 116
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306
Warren v Coombes (1979) 142 CLR 531
Case(s) also cited:
Gardner & Anor v Smith [1999] WASCA 168
Gardner & Anor v Smith, unreported; SCt of WA (Anderson J); Library No 960579; 27 September 1996
Smith v Gardner & Anor, unreported; FCt SCt of WA; Library No 970603; 13 November 1997
(Page 3)
1 SCOTT J: On 12 July 1996 a Mining Warden at Kalgoorlie adjudicated upon the appellant's claim for compensation arising out of work done by him in relation to mining tenements. The arrangement between the appellant and the respondents was based upon a written contract the relevant terms of which are set out at par[2] of the reasons of the Full Court in Gardner & Anor v Smith [2000] WASCA 93. The Mining Warden awarded the appellant $100,000 damages.
2 The matter was appealed to a single Judge of this Court (Anderson J) who on 27 September 1996 allowed the appeal and ordered that the matter go back to the Warden's Court for re-hearing.
3 The decision of Anderson J was then the subject of an appeal to the Full Court which was heard on 8 October 1997 with judgment delivered on 13 November 1997. The Full Court ordered that the matter be remitted to the Warden in accordance with the reasons of Anderson J without the calling of any further evidence.
4 The matter returned to the Warden and on this occasion he again awarded $100,000 damages to the appellant.
5 That judgment of the Warden was again appealed. The appeal was heard by Heenan J on 10 August 1999. On 9 September 1999 his Honour dismissed the appeal.
6 The decision of Heenan J was then appealed to the Full Court and the matter heard by a court comprising of Kennedy J, Ipp J and Wallwork J on 20 March 2000. Judgment in that matter was delivered on 12 April 2000 and the judgment of the Court in Gardner & Anor v Smith [2000] WASCA 93 concluded at [22]:
"Notwithstanding the unfortunate history of this matter we would again remit the matter to the learned Warden, to resolve the determination of the respondent's claim for remuneration under the agreement. As the Full Court previously ordered in the appeal which came before it on 8 October 1997, this issue is to be determined by the Warden without the calling of any further evidence. For the sake of clarity, we reiterate that the only issue to be determined by the Warden is the extent of the remuneration to which the respondent is entitled by way of compensation for his time spent on the project. We trust that expressing the issue in these terms will prevent any other issue from being argued or determined."
(Page 4)
7 Following that decision of the Full Court the matter was returned to the Warden for the third time and on this occasion by written judgment of 29 September 2000 the Warden awarded the present appellant compensation fixed at $72,000. That decision of the Warden was the subject of a further appeal to this Court which was heard by McKechnie J on 7 March 2001 and his Honour delivered his judgment on 11 April 2001 in Gardner & Anor v Smith [2001] WASCA 116.
8 McKechnie J was mindful of the long and tortuous process that surrounded this litigation. Because the Warden had failed, in his view, to carry out the direction of the Full Court, his Honour endeavoured to resolve the factual matters so as to determine the appropriate compensation to be awarded to the appellant. His Honour was of the view that the reasons of the Warden disclosed error, and for that reason, both in the interests of justice and in order to try and finally resolve this matter, his Honour made his own assessment of the appropriate compensation payable to the appellant. McKechnie J was of the view that the reasons of the Warden were in error because no proper analysis had been undertaken as to the work done by the appellant pursuant to the contract. For that reason, as I have said, his Honour made his own assessment of the evidence. His Honour said at [157]:
"I have already remarked that, to some extent, the resolution of this ground depends on findings of credibility between the parties, particularly those of Mr Smith and his witnesses, and Mr Gardner.
The passage of time now precludes, as a realistic possibility, the return of this matter to the Warden to make those findings. There are other reasons why that course would not be favourable."
9 McKechnie J went on to say that he was not in a position to resolve issues of credit generally which is not surprising because his Honour had not had the advantage of hearing the witnesses.
10 In order to try and bring this matter to a conclusion McKechnie J, as I have said, endeavoured to resolve the issues of fact. In that respect it is appropriate to say that McKechnie J deserves no criticism. His Honour was mindful of the protracted nature of this litigation, bearing in mind the value of the subject matter, and the need for the case to be resolved. His Honour had reached the view (and in my view properly) that the effluxion
(Page 5)
- of time and the history of the matter rendered the prospect of a return to the same Warden an unsatisfactory solution.
11 In approaching matters of credibility McKechnie J said at [166]:
"Because the matter cannot now be returned to the Warden, for the reasons I have expressed, I will have to determine whether the grounds of appeal in respect of compensation have been made out. Where there is an issue upon which there is a direct disagreement, and the resolution of which requires an assessment of credit, I will proceed on the basis that the plaintiff has failed to establish that issue on the balance of probabilities."
12 McKechnie J also said at [167]:
"Although it might be said that the Warden has accepted Mr Smith's evidence in preference to that of Mr Gardner, he provides no reasons for so doing. As his assessment was in any event based on a false premise, the fact that the evidence was largely unchallenged, I can give no weight to this acceptance by the Warden."
13 McKechnie J went on to say at [170]:
"Although Mr Smith's evidence was challenged and submissions were made questioning the reliability of his estimates on specific matters, I am prepared to accept Mr Smith's estimates as to specific work he carried out. In respect of some of the matters, the partners are unable to comment they not being present. While criticism is made as to the specific estimates of work on particular matters, I am unable to conclude, by reading the evidence, that there is an exaggeration."
14 McKechnie J then made a specific analysis of the evidence and made findings as to particular hours of work that the appellant carried out pursuant to the contract. Having assessed those hours McKechnie J then applied the agreed rate of $50 per hour (being the remuneration which the appellant was entitled) and arrived at a figure of $22,650 as the appropriate figure for compensation.
15 McKechnie J went on to consider the alternative claim made by the present appellant in relation to quantum meruit and said at [176]:
(Page 6)
- "I am not satisfied that Mr Smith has discharged the burden of proof as to the nature and extent of those discussions and telephone calls, having regard to the unresolvable conflict in the evidence. I am only prepared to find on the balance of probabilities that he undertook the specific work which I have listed."
16 The appellant now appeals to this Court. The grounds of appeal are:
"1. The learned trial Judge having found that:
(a) the plaintiff was entitled to compensation;
(b) the learned Warden fell into error in considering the credibility of the witnesses giving evidence relevant to the calculation of that compensation; and
(c) he was not in a position to resolve issues of credit generally
The learned Trial Judge erred in law
(d) in deciding that the matter cannot now be returned to the Warden; and
(e) in proceeding on the basis that the Appellant had failed on the balance of probabilities to establish any issue upon which there was direct disagreement between the witnesses,
when the Trial Judge should have referred the matter to the Warden for determination of appropriate compensation according to the reasons of the Trial Judge according to law."
17 The substance of the complaint by the appellant is that having received a finding in his favour by the Warden in the sum of $72,000, that award has now been reduced to the sum of $22,650 by McKechnie J in circumstances where the appellate Judge did not have the advantage of hearing any evidence and thereby determining credibility. In that respect it is appropriate to say that the appellant has a justifiable sense of grievance. McKechnie J's findings were at variance with the Warden's findings in circumstances where the Warden did have the advantage of hearing the evidence and making a determination of credibility.
(Page 7)
18 At the outset of these reasons I set out in summary form the history of the application and the various appellate stages. As that history reveals, the matter was first heard by the Warden in July 1996. That is now in excess of five years ago and it is in my view quite clear that there is little or no utility in sending the matter back to the same Warden again. Whilst counsel for both parties have asked the Court not to remit the matter for a re-hearing before a different Warden, in my view that course is inevitable. It is necessary for a judicial officer to hear all of the evidence and to make a determination as to the compensation properly payable pursuant to the contract. That will involve an assessment of the evidence, an assessment of credibility and a determination as to the work undertaken by the plaintiff pursuant to the contractual arrangement.
19 That having been said however, it is clear from the earlier decisions in this matter that many of the issues in these proceedings are now resolved. It will no longer be necessary for the parties to prove the contract or its terms beyond producing the contract to the Warden and it is no longer necessary for the Warden to revisit the issue of the rescission of the contract. As was made clear by the Full Court on 12 April 2000 (Gardner & Anor v Smith [2000] WASCA 93 at [22]) "the central issue for resolution is the extent of the remuneration to which the appellant is entitled by way of compensation for his time spent on the project."
20 In reaching that conclusion I should make it clear that it will be necessary for the Warden to hear evidence as to the nature and extent of the project and the nature and extent of the appellant's responsibilities in relation thereto in order for such an assessment to be properly made. The Warden will have to undertake an analysis of the evidence to determine and quantify the compensable work done by the appellant. In that respect it should be noted that these reasons are not intended to confine the Warden in relation to evidence that may properly be relevant to that inquiry. It is only necessary to identify for the Warden issues that need not be revisited, because they have been finally resolved.
21 It is regrettable that this matter is once again to be remitted to a different Warden for determination according to law. The matter, however, cannot be satisfactorily resolved until such time as proper findings of fact are made to determine the quantity of work performed by the appellant pursuant to the contract. See Devries v Australian National Railways Commission (1992-93) 177 CLR 472 at 479; State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 73 ALJR 306 per Gaudron, Gummow and Hayne JJ at 307.
(Page 8)
22 For these reasons the appeal should be allowed and the matter remitted to a different Warden for hearing and determination according to law and in accordance with these reasons.
23 STEYTLER J: I agree with Scott J that the appeal will have to be allowed.
24 The real difficulty, which has been referred to by Scott J, is that the Judge below, having found that the Warden's apparent preference for the appellant's evidence over that of the respondent was based on a false premise, proceeded to determine issues, upon which there was a direct disagreement and the resolution of which required an assessment of credit, upon the basis that the appellant had failed to establish those issues on the balance of probabilities. That course was not, in my respectful opinion, open to his Honour.
25 If the issues of credibility to which his Honour referred had not properly been determined by the Warden, with the result that they were, for any practical purpose, left unresolved by express judicial determination (that, in effect, being what his Honour found, correctly in my opinion), then his Honour had either to determine them himself, if that could be done (as to which see Warren v Coombes (1979) 142 CLR 531 at 551 and the comprehensive discussion in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588 at 608 - 622, per Kirby J), or, if that could not be done (as appears to have been implicit in what was said by his Honour), to remit the matter for rehearing. What his Honour could not do, in my respectful opinion, was decide those issues against the appellant upon the basis of an assumption that he had failed to establish them on a balance of probabilities.
26 It follows that, like Scott J, it seems to me that, regrettable though that is, the matter must be remitted for rehearing in accordance with the reasons of the Court and on the limited issue in respect of the quantum of compensation to which the appellant is entitled in respect of the services rendered by him. I agree with Scott J that, having regard for the lengthy history of the matter, the matter could as well be remitted to a different Warden and that that may be the preferable course.
27 EINFELD AJ: I have had the advantage of reading the separate views in draft of Justices Scott and Steytler. This case brings the administration of
(Page 9)
- justice into significant disrepute in a way that would not occur if the appeal from the Mining Warden was legislatively constituted as a rehearing. It is quite unacceptable that any court case should be heard three times over five years and have been before nine courts, particularly in a matter of small to moderate size such as this one where the legal costs will far outweigh whatever amount is recovered.
28 However, this Court is only charged with examining Justice McKechnie's judgment and can do nothing about what has previously taken place. In my view, Justice McKechnie's recognition of the past saga and his Honour's attempt to bring the litigation to an end was brave and innovative. The problem now faced by this Court, however, is the same as his Honour himself faced, viz how, in the sense of on what facts, the Warden was enabled to make his assessment. His Honour's identification of the Warden's error is set out in the judgment of Justice Scott and has not been challenged. What is at issue is whether Justice McKechnie's attempt to substitute a just and correct finding is flawed because it requires an assessment of, and factual findings on, conflicting evidence which his Honour did not personally hear. He was thus constrained to make assumptions, in the event specifically rejecting the Warden's findings on credibility while correctly pointing out why the Warden's finding was tainted by error.
29 The history, longevity and cost of this litigation impel this Court to try to avoid yet another hearing with all the attendant possibility of still future appeals. For myself I should have been determined not to support a retrial if the result arrived at by Justice McKechnie had been shown to do even substantial, if not complete, justice to the appellant. Unfortunately I am unable to be so satisfied. His Honour's general determination that issues of credit should be determined adversely to the appellant, as a means of resolving the dilemma posed by yet another hearing, might still have survived appellate scrutiny had he not rejected, in the sense of found unpersuasive, the appellant's evidence as to the value and extent of discussions and telephone calls with the respondents due to what his Honour himself described as "the unresolvable conflict in the evidence". His Honour was referring to the fact that as he had not seen and heard the parties, he could not resolve the conflict whereas the Warden who had heard the evidence had resolved it, albeit on a legally unacceptable basis.
30 As I understand the case, no reasonably accurate assessment of the damages could and can now be made without resolving that factual conflict and this Court cannot resolve it for the same reason as Justice
(Page 10)
- McKechnie decided he could not do it without resorting to what were really arbitrary, if understandably made, assumptions. With unfeigned respect, the adoption of this procedure did not then and would not now assess the appellant’s case in accordance with the evidence, as the legislation requires.
31 The Parliament has constituted the Warden as the only tribunal empowered to make factual findings in cases of this kind. It has provided no rehearing on appeal. The authorities quoted by Justice Scott make clear that an appellate court can only substitute its own findings if it is in no worse or different a position than the trial court. Regrettably that criterion was not present in this case before Justice McKechnie and is no more available to this Full Court.
32 That is why I am reluctantly compelled to agree that the appeal must be allowed and the matter remitted for a retrial of the issue of compensation alone. Because of the history of the matter, the new hearing should be conducted by a different Warden.
0
6
1