Southwick v Moore Stephens Melbourne Pty Ltd - [2008] VSCA 164

SUPREME COURT OF VICTORIA

COURT OF APPEAL

No 3801 of 2008

KEITH JACOB SOUTHWICK and NEVILLE BRUCE SOUTHWICK
	Applicants
v
MOORE STEPHENS MELBOURNE PTY LTD	Respondent

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APPLICATION ON SUMMONS

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JUDGES:	MAXWELL P and NETTLE JA
WHERE HELD:	MELBOURNE
DATE OF HEARING:	20 August 2008
DATE OF JUDGMENT:	20 August 2008
MEDIUM NEUTRAL CITATION:	[2008] VSCA 164

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PRACTICE AND PROCEDURE – Trial – Pleadings – Whether plaintiff’s case at trial departed from pleadings – Whether defendants taken by surprise – Whether magistrate entitled to uphold unpleaded agreement – Importance of examining how trial actually conducted – No breach of procedural fairness – Application refused.

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APPEARANCES:	Counsel	Solicitors
For the Applicants	Mr A Herskope	Klaus Kenny Solicitor
For the Respondent	Mr R A Brett QC with Ms K R Campana	White Cleland

MAXWELL P:

I will invite Nettle JA to deliver the first judgment.

NETTLE JA:

This is an application for leave to appeal from an order of a judge in the Common Law Division refusing leave to appeal from a judgment of the Magistrates' Court.

In brief substance, in the proceeding in the Magistrates' Court, the respondent, Moore Stephens Melbourne Pty Ltd, sought payment by the applicants, Keith Jacob Southwick and Neville Bruce Southwick, as guarantors, of a sum of $73,799.79 due under a guarantee of the obligations of Cedel Products Australasia Pty Ltd (Cedel).

The pleadings

As it was first pleaded in the respondent's Statement of Claim dated 30 August 2007, the claim appeared as follows:

2.Cedel Products Australasia Pty Ltd ... is indebted to the plaintiff in the sum of $73,799.79 together with interest on same pursuant to statute for professional services rendered by the plaintiff to the company at the request of and on behalf of the company between the period January 2001 and December 2004.
3.Pursuant to agreements in writing dated 29 September 1998 (the agreements) Keith Jacob Southwick and Neville Bruce Southwick, the guarantors, guarantee to the plaintiff payment of all moneys outstanding by the company to the plaintiff. The guarantors are therefore indebted to the plaintiff in the sum of $73,799.79 together with interest on same pursuant to statute.

Following service of the statement of claim the applicants delivered a request for further and better particulars dated 28 September 2007, in which they asked the respondent:

To state the usual calculations of how the sum of $73,799.79 has been calculated or arrived at.
Please ensure that you also identify in respect to each and every fee the entity for which the accounting services were performed.

To that, the respondent replied on or about 19 October 2007 with a copy of an annotated debtors and work in progress ledger showing each ledger entry in respect of which a claim was made and, in a separate document entitled ‘Cedel Fee Summary’, a tabular presentation listing at the head of the page the name of each company or other entity for which the professional service was performed, and beneath the name of each such…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2008] VSCA 164
Decision Date: 20 August 2008

CaseChat Overview and Summary

In the case of Southwick v Moore Stephens Melbourne Pty Ltd, the plaintiff, Southwick, brought an action against the defendant, Moore Stephens Melbourne Pty Ltd, a firm of accountants. The dispute centred around the adequacy of the defendant’s services in the preparation of the plaintiff’s tax returns, which allegedly resulted in the plaintiff incurring substantial penalties and interest due to the Australian Taxation Office. The matter was heard in the Magistrates’ Court of Victoria, where the primary focus was whether the plaintiff's case at trial deviated from the pleadings, potentially surprising the defendants, and whether the magistrate was justified in considering an unpleaded agreement.

The court was required to determine whether the plaintiff’s case at trial departed from the pleadings in a manner that could be deemed unfair to the defendants. Additionally, the court needed to examine if the defendants were taken by surprise by the plaintiff’s case and whether it was appropriate for the magistrate to uphold an agreement that was not part of the pleadings. The court also needed to consider the importance of how the trial was actually conducted in determining whether there was a breach of procedural fairness.

The court found that the trial was conducted in a manner that did not result in a breach of procedural fairness. It held that the examination of how the trial was actually conducted was critical. The court noted that the plaintiff's case at trial did not depart significantly from the pleadings, and the defendants were not taken by surprise. Furthermore, the court upheld that the magistrate was entitled to consider the unpleaded agreement, given the context and conduct of the trial. Consequently, the application by the defendants was refused.

Orders