Sun v Hatoum
[2011] NSWSC 516
•03 June 2011
Supreme Court
New South Wales
Medium Neutral Citation: SUN v HATOUM [2011] NSWSC 516 Hearing dates: 26 May 2011 Decision date: 03 June 2011 Jurisdiction: Common Law - Administrative Law Before: HOEBEN J Decision: Appeal dismissed.
Plaintiff to pay the defendant's costs of these proceedings.
Catchwords: APPEAL - appeal from General Division of Local Court - appeal limited to question of law under s39 of Local Court Act 2007 - whether failure to provide adequate reasons - adequacy of reasons to be considered by reference to nature of appeal - issue was scope of agreement for the occupation of rooms in a medical centre - Magistrate found agreement as to one room but not as to the other - reasons adequate. Legislation Cited: Compensation Court Act 1984
Fair Trading Act 1987 (NSW)
Local Court Act 2007
Supreme Court Act 1970Cases Cited: Alchin v Daley [2009] NSWCA 418
Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139
Bruce v Cole (1998) 45 NSWLR 163).
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; 66 NSWLR 186
Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247Category: Principal judgment Parties: Jiwen Sun - Plaintiff
George Hatoum - DefendantRepresentation: Counsel
Mr TJ Morahan - Plaintiff
Mr FFF Salama - Defendant
Solicitors
Haworth & Lexon Lawyers - Plaintiff
Thurlow Fisher - Defendant
File Number(s): 2010/245460
Judgment
HIS HONOUR:
Nature of proceedings
The plaintiff by Amended Summons filed on 3 September 2010 appeals on a question of law from a decision of her Honour Acting Magistrate Tabbaa
handed down on 28 June 2010. The proceedings before her Honour were heard on 7 September 2009, 15 March and 3 May 2010. The plaintiff in these proceeding Dr Sun was the defendant in the proceedings before her Honour and the defendant in these proceedings Dr Hatoum, was the plaintiff.
The plaintiff seeks the following orders:
1. The decision of Acting Magistrate Tabbaa in matter 594 of 2008 in the Local Court at Bankstown be set aside.
2. The claim of the defendant be dismissed.
3. There be an award to the plaintiff in the sum of $7,152.68 plus interest plus costs.
4. In the alternative, that the proceedings be remitted to the Local Court differently constituted, to be heard and determined according to law.
5. The defendant pay the plaintiff's costs of this Summons and the costs of the proceedings in the Local Court.
The appeal grounds were set out as follows:
The learned Magistrate erred in law in:
(i) Failing to provide any or adequate reasons.
(ii) Failing to determine the scope of the contract of lease and whether it consisted of oral terms and conditions.
(iii) Failing to give reasons or any adequate reasons for (apparently) rejecting the contention that the contract of lease consisted of written and oral terms and conditions.
(iv) Failing to determine what representations were made by the defendant in relation to the use of room 4.
(v) Failing to determine whether the plaintiff relied on the representations of the defendant in relation to the occupation of room 4 and failing to determine whether the plaintiff entered into the lease agreement in reliance on the said representations.
(vi) Failing to determine whether the representations made by the defendant were misleading and deceptive pursuant to s42 of the Fair Trading Act 1987 (NSW).
(vii) Failing to determine whether the plaintiff suffered damage as a consequence of the misleading and deceptive conduct of the defendant.
(viii) Failing to determine whether the lease agreement was varied to allow the plaintiff to fit out and repair rooms 4 and 5 at the defendant's expense.
(ix) Failing to determine whether subsequent statements by the defendant that the plaintiff would now have to share room 4 with other specialists constituted a repudiation of the lease agreement.
(x) Failing to give any or any adequate reasons for failing to consider the evidence in relation to the said subsequent statements of the defendant in relation to the use of room 4.
(xi) Finding that the plaintiff had any liability to the defendant for costs the defendant incurred in the Victorian equipment proceedings.
Factual background
For ease of reference, I will refer to the plaintiff as Dr Sun and to the defendant as Dr Hatoum.
Dr Hatoum has practised as a general practitioner in New South Wales since 1993. In 1995 he and his wife opened a medical centre in Bankstown Square. In 1998 Dr Hatoum leased premises in Bankstown City Plaza and he and his wife operated a medical centre from those premises. The premises consisted of five rooms downstairs and two rooms upstairs. Dr Hatoum used one of the rooms and his wife a second room. The remaining rooms were subleased to other persons offering medical services.
From about 1999 Dr Hatoum leased room 5 to a dentist, Dr Chong. Dr Chong continued to make use of that room until he died in December 2006.
Although the lease with Dr Chong related to room 5, he was able to use room 4. There was no lease covering the use of room 4 but Dr Chong used it under licence with the permission of Dr Hatoum. There was a dispute between the parties as to the extent to which Dr Chong had used room 4.
In the proceedings before her Honour there was evidence from Dr Hatoum and his receptionist Ms Bousamra that while Dr Chong was the main user of room 4, Dr Hatoum used part of room 4 for storage purposes and he and some of the medical centre staff used a sterilisation machine that was in that room. For a period of time there had apparently been two sterilisation machines in room 4, one belonging to Dr Hatoum and one belonging to Dr Chong. It was common ground, however, that during most of 2006 there was only one sterilisation machine in room 4 and it belonged to Dr Chong.
Due to ill health, Dr Chong was not able to continue working until the date of his death. Some months before his death, his partner Ms Miao took over the lease of room 5 and used hire dentists to work from it. One of those dentists was Dr Sun. He commenced working from the medical centre in about May 2006.
Dr Sun was born in China in 1973 and commenced working as a dentist in Australia in 2006. It was his evidence that while he was working at the medical centre, Dr Chong and through him Ms Miao, had exclusive use not only of room 5 pursuant to the lease, but also of room 4. In his affidavit (para 12) and in his oral evidence, he accepted that Dr Hatoum used part of room 4 for storage purposes and occasionally used the sterilisation machine but denied that members of staff shared the use of room 4 and in particular had access to the sterilisation machine.
Ms Miao gave evidence that initially Dr Chong had only used room 5 but that gradually he had increased his use of room 4 so that by 2006 he was using both room 5 and room 4 for his dental practice. She said that inside room 4 were a steriliser, a steel dental chair, a cabinet, a table and a chair. It was common ground that the cabinet, table and chair belonged to Dr Hatoum. Ms Miao denied that other members of staff used the steriliser, but did agree that other members of staff would give her items to be sterilised and that she would carry out that function by using the steriliser. She said that room 4 had a lock to which she had the only key.
In about November/December 2006 Dr Hatoum was negotiating with Ms Miao and with Dr Sun about subleasing room 5 and to use a neutral term, the use of room 4. Neither Dr Hatoum nor Dr Sun wished Ms Miao to know about their direct negotiations. It seems that Dr Chong had built up considerable goodwill while practising from the medical centre and the use of room 5 would carry with it some of that goodwill.
The negotiations with Ms Miao did not result in any agreement. The negotiations between Dr Hatoum and Dr Sun did result in an agreement. The issue before her Honour was the content of that agreement.
It was Dr Hatoum's case before her Honour that he and Dr Sun had entered into a subletting agreement for room 5 in respect of which Dr Sun would pay a monthly rental of $2,500 inclusive of GST. It was common ground that such a sublease was entered into and was in writing. Dr Hatoum said that he had also agreed with Dr Sun that Dr Sun could have non-exclusive use of room 4 for which he would pay $110 per month. That agreement was oral.
It was Dr Sun's case before her Honour that there was an agreement between Dr Hatoum and himself, which was partly in writing and partly oral. The part in writing was the sublease of room 5 and the oral part related to room 4. It was Dr Sun's contention that there was either a single agreement relating to both rooms 5 and 4, or if there were two agreements, they were interrelated so that fulfilment of one was conditional upon fulfilment of the other.
Dr Sun said that Dr Hatoum had represented to him that he could have exclusive occupation of room 4 under licence on the same terms and conditions as Dr Chong for a monthly licence fee of $110 for the same term as the sublease of room 5. One of the difficulties confronting her Honour in this matter was the lack of precision in communications between Dr Hatoum and Dr Sun and Dr Hatoum and Ms Miao. For example, there were letters sent by Dr Hatoum to Dr Sun and Ms Miao which on occasions referred to the sublease as being in respect of room 5 only and in other correspondence suggested that the sublease included rooms 4 and 5.
There was no issue that the parties had entered into a sublease in respect to room 5 only. That document was an exhibit. Dr Hatoum was the sublessor and Dr Sun was the sublessee. The term was 2 years 10 months and 27 days commencing 1 April 2007 and ending 27 February 2010. The agreed monthly rental was $2500 inclusive of GST and the premises were to be used as a dental surgery. Dr Sun was required to pay the reasonable costs associated with the preparation of the lease. Dr Sun was also obliged to indemnify Dr Hatoum for any loss and damages suffered by him arising from any accident or deliberate act in breach of the lease.
Dr Sun took a copy of the sublease to his solicitors before signing it and obtained advice. As a result of that advice he asked for and received a two week rent-free period during which the fit out could take place.
Dr Sun did not say anything to his solicitors about room 4. When cross-examined he said that he did not raise the matter with his solicitors because he trusted Dr Hatoum.
It is common ground that Dr Sun occupied room 5 on 22 April 2007 and commenced fitting it out. On 24 April 2007 Dr Hatoum gave written authorisation to Dr Sun to carry out repairs, both to room 5 and room 4. Dr Sun then commenced practising as a dentist in his own right from the medical centre.
According to Dr Hatoum, after a few weeks Dr Sun ceased attending the medical centre without explanation. According to Dr Sun, he was told on 3 May 2007 by Dr Hatoum that he would have to share room 4 with another doctor. Dr Sun said that he could not conduct his practice if he had to share room 4 and so he ceased working at the medical centre. Apart from returning the keys in early May, Dr Sun did not respond to letters or telephone calls made to him.
The significance of Dr Sun not responding to letters and telephone calls was that a supplier of dental equipment had delivered equipment to the medical centre and was seeking to recover it. Dr Hatoum was not prepared to return the equipment without the consent of Dr Sun. This led to litigation between the supplier (a Victorian company) and Dr Hatoum and the incurring by Dr Hatoum of legal expenses until that issue was resolved.
Dr Hatoum attempted to relet room 5 but was not able to do so until December 2007 when a new sublease was entered into with two dentists. That sublease was to commence on 25 February 2008. The rent payable by the new sub-tenants was comparable to that which would have been paid by Dr Sun. It was common ground that Dr Sun had not paid any rent or licence fee in respect of room 5 or room 4.
Proceedings in the Local Court
Dr Hatoum claimed the following amounts in his Statement of Claim:
Unpaid rent
$ 32,329.92
Loan for fit out
$ 2,000.00
Legal fees for preparation of Sun lease and lease for new tenants
$ 3,300.00
Re-advertising costs
$ 300.00
Legal costs incurred in the Victorian proceedings
$ 671.00
$ 39,600.92
Dr Sun cross-claimed on the basis of breach of the agreement, or in the alternative, making false representations which Dr Sun relied upon in breach of s42 of the Fair Trading Act 1987 (NSW). In his Cross-Claim Dr Sun claimed the following amounts:
Fit out costs of rooms 4 and 5
$ 4,260.60
Repair costs of rooms 4 and 5
$ 970.00
Legal costs incurred in the Victorian proceedings
$ 1,922.08
$ 7,152.68
Her Honour resolved the factual and legal issues before her as follows.
Her Honour concluded that the sublease was a stand alone document and that Dr Sun's entry into it was not conditional upon any other agreement. Inferentially, therefore, she rejected the proposition that there was a single agreement, partly oral and partly in writing, as Dr Sun asserted.
Her Honour reached that conclusion on the basis of the express terms of the sublease and because when Dr Sun had the opportunity to discuss the entire transaction with his solicitors he had only spoken to them about the sublease in respect of room 5. Her Honour found that it was inherently improbable that if the agreement were as Dr Sun asserted, he would not have discussed the matter with his solicitors and would not have insisted that his right to the exclusive use of room 4 be included in the sublease. Her Honour pointed to the discrepancy in the amounts being paid in support of her conclusion. Room 4 was apparently almost the same size as room 5 and yet on Dr Sun's case he was obliged to pay $2500 inclusive of GST per month in respect of room 5 but only $110 per month for the exclusive use of room 4.
Her Honour specifically found that the use of room 4 was the subject of separate oral negotiations between the parties. She found that Dr Sun became upset when agreement could not be reached on that separate and discrete issue, i.e. the exclusive use of room 4 and that resulted in him repudiating the sublease on 5 May 2007 by handing back the keys and walking away from his contractual obligations in relation to room 5. In relation to room 4 when discussing Dr Hatoum's claim for fit out and cleaning costs, her Honour found that "there was no agreement finalised in relation to room 4".
Her Honour rejected Dr Hatoum's claim for fit out/cleaning costs. Her Honour allowed Dr Hatoum's claim for legal expenses incurred by him in preparing the sublease in respect of room 5. Her Honour also found that he was entitled to the costs incurred by him in relation to the claim made by the Victorian supplier of dental equipment. I do not understand the payment of these amounts to be in issue between the parties.
As a result her Honour ordered that Dr Sun pay the following amounts:
1. A sum equivalent to the rent Dr Hatoum would have received from the conclusion of the two week rent free period to the date of commencement of the new lease on 25 February 2008 calculated on the basis of a monthly rental of $2,500 inclusive of GST.
2. Legal fees incurred in relation to the preparation of the commercial lease for room 5.
3. $671 being the legal costs incurred in the Victorian proceedings.
Her Honour also ordered Dr Sun to pay interest on the above monies and the costs of the proceedings.
Appeal
This appeal is brought pursuant to s39 of the Local Court Act 2007. Section 39 relevantly provides:
"39(1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law."
It is common ground that this matter was before the General Division of the Local Court and that accordingly the appeal is limited to a question of law.
From the Amended Summons it is clear that the error of law relied upon by Dr Sun is a failure to provide adequate reasons and as part of that complaint, a failure to specifically address issues which were raised by him in his case, i.e. the scope of the contract between the parties, the repudiation of the contract by Dr Hatoum and his misleading and deceptive conduct claim.
Before embarking on an analysis of the submissions, it is useful to clarify the parameters of the appeal. In support of his case, Dr Sun referred the court to a number of cases where the Court of Appeal set out in some detail the requirement for reasons to be given and provided guidance as to the extent of those reasons. The court was referred to Alchin v Daley [2009] NSWCA 418 where Sackville AJA, with whom McColl and Young JJA agreed, said:
"35 There was no dispute as to the principles to be applied in determining whether a trial Judge has given adequate reasons for making findings of fact. McColl JA stated the principles, supported by detailed citation of authority, in Pollard v RRR Corporation [2009] NSWCA 110. The principles articulated in that case were summarised in Qushair v Raffoul [2009] NSWCA 329, at [52], per Sackville AJA, with whom Campbell JA and Bergin CJ in Eq agreed (the paragraph references are to McColl JA's judgment in Pollard ):
"(i) The giving of adequate reasons lies at the heart of the judicial process, since a failure to provide sufficient reasons can lead to a real sense of grievance because the losing party cannot understand why he or she lost (at [57]): see Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430, at 442, per Meagher JA.
(ii) While lengthy and elaborate reasons are not required, at a minimum the trial judge's reasons should be adequate for the exercise of a facility of appeal, where that facility is available (at [56]): see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, at 260, per Kirby P; at 269, per Mahoney JA.
(iii) The extent and content of the reasons will depend on the particular case and the issues under consideration, but it is essential to expose the reasoning on a point critical to the contest between the parties (at [58]): see Soulemezis v Dudley , at 259, per Kirby P; at 280, per McHugh JA. This may require the judge to refer to evidence which is critical to the proper determination of the issue in dispute (at [62]): Beale v GIO , at 443, per Meagher JA.
(iv) Where credit issues are involved, it is necessary to explain why one witness is preferred to another. Consequently, bald findings on credit, where substantial factual issues have to be addressed, may not comply with the common law duty to give reasons (at [65]): Palmer v Clarke (1989) 19 NSWLR 158, at 170, per Kirby P (with whom Samuels JA agreed).
(v) Where an appellate court concludes that the trial judge has failed to give adequate reasons, the court has a discretion whether or not to direct a new trial. If, despite the inadequate reasons, only one conclusion is available, a new trial may not be necessary (at [67])."
36 In Pollard , McColl JA also cited with approval a passage from the judgment of Ipp JA, with whom Mason P and Tobias JA agreed, in Goodrich Aerospace Pty Ltd v Arsic [2006] NSWCA 187; 66 NSWLR 186, at 191-192 [28]. The passage, including the succeeding paragraph (at [29]) is as follows:
"It is not appropriate for a trial judge merely to set out the evidence adduced by one side, then the evidence adduced by another, and then assert that having seen and heard the witnesses he or she prefers or believes the evidence of the one and not the other. If that were to be the law, many cases could be resolved at the end of the evidence simply by the judge saying: 'I believe Mr X but not Mr Y and judgment follows accordingly'. That is not the way in which our legal system operates. ...
Often important issues of credibility involve sub-issues. Often, objective facts, or facts that are probable, are capable of having significant bearing on the sub-issues. In cases of this kind, it is incumbent upon trial judges to resolve the sub-issues and to explain, by reference to the relevant facts, the conclusions to which they have come. This having been done, they should then turn to the ultimate facts in issue and explain how their decisions on the sub-issues have assisted them in forming a conclusion on the ultimate issue. It is only when adequate reasons of this kind are given that an unsuccessful party will be able to understand why the judge has believed his or her successful opponent".
In Dr Sun's written submissions the above observations of Ipp JA were adopted, in particular the reference to decisions concerning credit and the development of those conclusions towards a resolution of the ultimate issue.
The analysis by Dr Sun of the obligation to give reasons and the citation of this authority does not have adequate regard to the nature of this appeal. The comments of Ipp JA and those made in Alchin v Daley need to be considered against the background of the right of appeal which the Court of Appeal was exercising. The nature of that appeal is set out in s75A of the Supreme Court Act 1970. Most particularly subs (5) provides that the appeal "shall be by way of rehearing". The far-reaching extent of such an appeal with its limitations were fully reviewed by the High Court in Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [22] - [31]. There the plurality observed that "in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law" [29].
This is not an appeal by way of rehearing. This is an appeal restricted to a question of law. In that regard the observations of the Court of Appeal in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 is of considerable assistance. In that case while the Court of Appeal made general observations concerning the obligation of judges to give reasons, the particular facts of the case involved an appeal similar to this, i.e. an appeal limited to cases where a party was aggrieved "in point of law " (s32(1) Compensation Court Act 1984).
In the course of delivering its decision in Soulemezis, the Court provided useful guidance in relation to appeals of this kind. Mahoney JA said:
" In my opinion, the law does not require that a judge make an express finding in respect of every fact leading to, or relevant to, his final conclusion of fact; nor is it necessary that he reason, and be seen to reason, from one fact to the next along the chain of reasoning to that conclusion. (271C)
...
Their Lordships did not, I think, suggest as a model of a judgment one in which, having the evidence in mind, the judge does no more than state his final conclusion of fact. Professional skill would suggest that something more be done. But their Lordships did make clear that there is no ground for reversal in the fact that, having made clear the facts on which he based himself, the learned judge did not detail the steps by which he proceeded from
those facts to his final conclusion. (272D)
Soulemezis was of course concerned with a claim for workers compensation. In setting out his reasons why there was no error of law in the trial judge's reasons, Mahoney JA said:
As I have said, it is clear why the learned judge made the order that he did. He found the worker was incapacitated up to but not beyond 17 January 1984. As I have said, the nub of the complaint made is that he did not detail the reasons why he found the incapacity to cease on that date.
He was moved to select that date because it was the date of, or of the report of, the CAT scan. It is, in my opinion, not required of a judge to detail why the CAT scan, for example, carried such weight as to change his view of her condition at that time. It is sufficient that it be clear, as I think it is, what it was that was involved in his reasoning process. (274F)
McHugh JA provided the following guidance:
"In a case where a right of appeal is given only in respect of a question of law, different considerations apply from the case where there is a full appeal. An ultimate finding of fact, which is not subject to appeal and which is in no way dependent upon the application of a legal standard, can be treated less elaborately than an issue involving a question of law or mixed fact and law. If
no right of appeal is given against findings of fact, a failure to state the basis of even a crucial finding of fact, if it involves no legal standard, will only constitute an error of law if the failure can be characterised as a breach of the principle that justice must be seen to be done. If, for example, the only issue before a court is whether the plaintiff sustained injury by falling over, a simple finding that he fell or sustained injury would be enough, if the decision turned simply on the plaintiff's credibility. But, if, in addition to the issue of credibility, other matters were relied on as going to the probability or improbability of the plaintiff's case, such a simple finding would not be enough. (281A)
...
Accordingly, the present case is concerned with a finding of fact which involves no legal standard and is not subject to appeal. The issue, therefore, is whether the failure to explain the basis of the crucial finding of fact involves a breach of the principle that justice must not only be done but must be seen to be done. If it was, that is itself an error of law because, as Asprey JA pointed out in Pettitt v Dunkley (at 382), the learned judge "has not properly fulfilled the function which the law calls upon a judicial person to exercise".
However, in determining the issue which this appeal raises, great care needs to be taken that dissatisfaction with the finding of fact does not mislead the Court into holding that the learned judge has failed to give his reasons for his finding.
Here the learned judge has obviously acted on the strength of the CAT scan report. His reasons for judgment necessarily involve the total acceptance of the opinions of the applicant's doctors until 17 January 1984 and the total rejection of their opinions after that date. His Honour gave no reasons for doing this. Since, ex hypothesi, the opinions of the applicant's doctors concerning her fitness after 17 January 1984 are necessarily wrong, it is difficult to see how on the facts of this case they could be right for the period
immediately before that date. Alternatively, if they were right before that date, it is difficult to see how they could be wrong immediately after that date. Moreover, as counsel for the applicant pointed out, a CAT scan is simply a diagnostic aid. It would be quite erroneous to find as a fact that the applicant was fit for work from the date of the CAT scan simply because the CAT scan failed to reveal any evidence of unfitness. However, the question is
not whether his Honour's finding that the applicant was "fit for all work" after 17 January 1984 was correct. It is whether his Honour gave reasons, however erroneous, for that finding. While it is true that his Honour did not expressly give any reasons for the finding, his reasons for judgment show quite clearly in my opinion that he held that the applicant was fit for work because the CAT scan did not reveal any abnormality. It is not to the point that his Honour's finding was erroneous or as counsel for the applicant claimed, perverse. An erroneous or perverse finding of fact raises no question of law and cannot be challenged by way of appeal. What is decisive is that his Honour's judgment reveals the ground for, although not the detailed reasoning in support of, his finding of fact. But that is enough in a case where no appeal lies against the finding of fact." (281F)
It should be noted that the observations in Soulemezis and in the earlier case of Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139 to the effect that a perverse finding of fact cannot constitute an error of law have been subject to some judicial criticism in more recent cases ( Bruce v Cole (1998) 45 NSWLR 163). Nevertheless, neither case has been overruled and the above statements of principle have not been challenged. It is accordingly incumbent upon this Court to apply those statements of principle. In any event there has been no suggestion in these proceedings that her Honour's fact finding was "perverse".
Scope of the agreement
Dr Sun submitted that it was necessary for her Honour to analyse all of the conversations which were alleged to have occurred between Dr Sun and Dr Hatoum so as to determine precisely what representations were made by Dr Hatoum to Dr Sun. Her failure to do so, it was submitted, meant that she had not properly considered all of the evidence and had not provided proper reasons.
Dr Sun submitted that to the extent that her Honour had given reasons, these reasons only covered part of the evidence and did not encompass the disputed conversations.
It is true that there was other evidence, in particular the disputed conversations between Dr Sun and Dr Hatoum, to which her Honour did not refer. Had her Honour interpreted that evidence in the way in which Dr Sun submitted, she could have come to a different conclusion as to the scope of the agreement. Put another way, there was evidence before her Honour which could have led to a different factual conclusion. That, however, is not the test.
As Soulemezis made clear, the obligation on her Honour was to set out clearly the basis for her decision. This she did. The existence of a written agreement, which made no reference in its terms to room 4, and the failure of Dr Sun to make any mention of any arrangement regarding room 4 to his solicitors, were compelling reasons which allowed her Honour to make the finding that she did. Coupled with those reasons was her Honour's finding that no final agreement had been entered into between Dr Hatoum and Dr Sun concerning room 4. In reaching that conclusion, her Honour was rejecting not only parts of Dr Sun's evidence but also parts of Dr Hatoum's evidence.
That approach was also well open to her Honour. Even on Dr Sun's case, the arrangement in respect of room 4 was vague in the extreme. No precise terms were identified, except that occupation was to be on the same basis as that of Dr Chong. Against a background where (as her Honour pointed out) the nature of Dr Chong's occupation of room 4 had changed over time, the precise content of that representation (if it were made in those terms) could well be regarded as so imprecise as to be unenforceable. That is clearly the conclusion arrived at by her Honour.
Dr Sun sought to rely upon the evidence in respect of the fit out and repair of rooms 5 and 4 as supporting his case concerning the scope of the agreement. His submission was to the effect that the permission granted to repair and in part fit out rooms 5 and 4 supported his primary contention that there was a single agreement encompassing both rooms.
As with the other factual matters raised in his submissions, the evidence was open to that interpretation. It was also open to the interpretation that at least implicitly, her Honour appears to have given it, i.e. that while discussions were taking place about both rooms, those discussions were not interdependent but were separate from each other.
In reality, the challenge to her Honour's findings in respect of the scope of the agreement, are challenges to her Honour's fact finding and are not permissible in an appeal of this kind. In the circumstances of this case where her Honour has clearly set out the basis for her reasoning and there was evidence supporting her Honour's conclusions, there has been no failure to give reasons on the issue of the scope of the agreement.
The claim under the Fair Trading Act 1987
Implicit in this part of Dr Sun's cross-claim are the following propositions:
(i) The representations as set out by Dr Sun were made.
(ii) The representations were relied upon by Dr Sun when he entered into the sublease in respect of room 5.
(iii) The representations were false.
This raises in another way the same issues previously examined in the scope of the agreement submissions. The claim under the Fair Trading Act was only viable if Dr Sun could establish that he relied upon the representations when entering the sublease. Her Honour, for the reasons previously set out, found against him on that issue. That was a finding open to her on the evidence and the basis for the finding was clearly set out. That being so, there was no need for her Honour to say anything else about the claim under the Fair Trading Act . On the basis of her primary findings, it could not succeed. This challenge to her Honour's judgment has not been made out.
Credit findings
Dr Sun submitted that the resolution of this case depended upon her Honour making findings as to the credit of Dr Sun and Dr Hatoum. Dr Sun submitted that her Honour made adverse findings as to the credit of Dr Hatoum but did not make any adverse findings as to his credit. He submitted that by implication, her Honour must have accepted his evidence and that if she had done so, he should have succeeded in his claim. A number of examples were given in the submissions of where credit issues arose and where Dr Sun's evidence should have been preferred to that of Dr Hatoum. In failing to follow through her adverse findings as to the credit of Dr Hatoum, and in failing to resolve in his favour those other credit issues, Dr Sun submitted that her Honour had failed to give adequate reasons.
It is true that her Honour was critical of some of the evidence of Dr Hatoum. That having been said, her Honour was careful in giving her reasons to base them as much as she could on the "objective" evidence which did not rely on whether one party was believed in preference to another. That is why her Honour focused upon the terms of the sublease and the inherent improbability of some of the conduct relied upon by Dr Sun in support of his case. That was a legitimate approach by her Honour. In deciding a matter of this kind, it was not necessary for her Honour to decide every issue, in particular every credit issue which arose. If the case could be resolved on a rational basis by reference to other evidence, that was sufficient. This is what her Honour did. There was no obligation on her Honour to resolve the many credit issues which were thrown up in the matter.
Conclusion
The problem for Dr Sun in this appeal is that he has challenged the reasons of her Honour because they did not measure up to the sort of reasoning described by Ipp JA in Goodrich Aerospace v Arsic . That might be so. However, the comments of Ipp JA were made in the context of an appeal pursuant to s75A of the Supreme Court Act 1970 by way of rehearing. The obligations of a judicial officer in giving reasons where those reasons are subject to such an appeal may well require more detail than was present in her Honour's reasons.
What is clear from Soulemezis, however, is that in circumstances where an appeal is limited to a question of law, provided there is evidence available to support the findings of the judicial officer, and provided the basis for those findings is clearly set out, no more is required. Specifically, her Honour was not required to make a finding on every disputed issue in the trial. It was sufficient for her Honour to make only those findings necessary to resolve the issues before her and that is what she did. The basis for her reasoning is clear. Her reasons were adequate. She did not err in the way submitted by Dr Sun.
The orders which I make are as follows:
(1) The appeal is dismissed.
(2) The plaintiff is to pay the defendant's costs of these proceedings.
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Decision last updated: 16 June 2011
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