Total Value Auto and Finance Pty Ltd v Small

[2004] NSWSC 1040

CITATION:	Total Value Auto & Finance Pty Ltd & Anor v Small [2004] NSWSC 1040
HEARING DATE(S):	27/10/04, 28/10/04
JUDGMENT DATE:	10 November 2004
JURISDICTION:	Common Law
JUDGMENT OF:	M W Campbell AJ
DECISION:	Appeal dismissed
CATCHWORDS:	Appeal - point of law - procedural fairness - limitation of cross-examination - sufficiency of evidence - agency.
LEGISLATION CITED:	Local Court (Civil Claims) Act 1970 ss 69(2) Evidence Act 1995 ss 11,26,41 Supreme Court Rules Part 51B r5 Local Court (Civil Claims) Rules 1988 Pt 25 r10
CASES CITED:	Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 Haines v Leves (1987) 8 NSWLR 44 Natoli v Walker (unrep CA 26 May 1994) Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70 The Queen v Kelly 28 SASR 271 Durovic v Judge (unrep Rolphe J 15 February 1997) Soulemizis v Dundley (Holdings) Pty Ltd (1987) 10 NSWLR 247
PARTIES :	Total Value Auto & Finance Pty Ltd - 1st plaintiff Anthony Joseph Sofia - 2nd plaintiff Mark Anthony Small - defendant
FILE NUMBER(S):	SC 03/13401
COUNSEL:	Mr N Morcambe QC with Mr T Duggan - Plaintiffs Mr N Newell - Defendant
SOLICITORS:	L C Murinatti & Associates - Plaintiffs Carneys Lawyers - Defendant

LOWER COURTJURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	2000/55
LOWER COURT JUDICIAL OFFICER :	Magistrate Forbes

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

M W CAMPBELL AJ

Wednesday 10 November 2004

2003/13401 TOTAL VALUE AUTO AND FINANCE PTY LTD and Anthony Joseph SOFIA v Mark Anthony SMALL

JUDGMENT

1 CAMPBELL AJ: This is an appeal from a judgment of Magistrate Forbes of the Local Court awarding the plaintiff before her $25,000 and costs against two defendants.

2 The plaintiffs on the appeal are Total Value Auto & Finance Pty Ltd (Total) and Anthony Joseph Sofia (Sofia). The defendant to the appeal is Mark Anthony Small (Small).

3 Mr Newell of Counsel appeared for Total and Sofia and Mr Morcombe of Queens Counsel and Mr Duggan of Counsel appeared for Small.

4 The appeal is brought under s 69(2) of the Local Court (Civil Claims) Act 1970 and as such is limited to an error of law.

5 Thus Total and Sofia faced all the problems which arise when an appeal is restricted to a question of law: Azzopardi v Tasman UEB Industries Limited (1985) 4 NSWLR 139; Haines v Leves & Anor (1987) 8 NSWLR 442; Natoli & Anor v Walker (Court of Appeal, 26 May 1994 unreported) to cite but several examples. The first such problem is that the appellate Court cannot consider questions of fact or mixed fact and law unless, of course, the submission is that there was no evidence to support a factual finding or the evidence does not meet the test specified by the legislation. The second, which may be relevant to the present appeal, is that the extent to which reasons must be given is somewhat circumscribed.

6 Having regard to the restricted nature of the appeal I shall confine the material dealt with in this judgment to that which is necessary to deal with the grounds raised in the appeal.

7 To that end I mention that a defence was raised that the loan, the subject of the action; had been repaid by one Laurence Suarez a stranger to the loan arrangement. The Magistrate rejected that defence and I say no more as to it except as a matter of background.

8 Prior to 10 December 1998 Small had lent sums of money to Total and one, Hugh Brooks. By 10 December 1998 they had all been repaid. I deal later with claimed payments in excess of the amount lent.

9 Hugh Brooks, who was a third defendant in the proceedings before the Magistrate but did not appear, was the managing director and a shareholder (see affidavit of Timothy François Ray, accountant, of 24 June 2003 tendered in the case of the defendants below) of Total. Sofia was a director and shareholder of Total and also of a company called Totem Fruit Markets Pty Ltd.

10 The making of the alleged loan appears from the Magistrate’s judgment to which I shall come, however, in order that some of the grounds of appeal may be understood it is convenient to refer briefly to the course of the proceedings.

11 In January 2000 Small filed for himself a simple Statement of Claim in respect of a loan of $25,000 made to the three defendants. Thereafter lawyers became involved and a series of complicated and detailed statements of claim and amended statements of claim were filed. At one stage an application was made, but not pursued, to remove the matter to the District Court on the basis that the claim was properly calculated at $86,150. At the commencement of the proceedings on 26 June 2003 an application to further amend was refused. The matter proceeded and was stood over part heard to 4 September 2003. In the interim a Notice of Motion for leave to amend came on before Magistrate George (it being suggested that to hear it might embarrass Magistrate Forbes) and leave was granted. The matter resumed on the basis of the amended statement of claim as to which I shall say something later. It did not finish on 4 September 2003 but continued on 7 November 2003 with an oral reserved judgment delivered on 27 November 2003.

The Judgment

12 It is convenient now to go to the judgment of the Magistrate.

13 Her Honour referred to the chequered history of the pleadings and then went through the details of a series of loans from Small made at the request of Brooks and said to be to finance a car yard enterprise by Brooks and Sofia. The car yard was operated by Total.

14 For the purposes of the appeal, beyond noting those matters, I can go to the transaction upon which Small alleged his claim was based.

15 Her Honour said:

“On or before 9 December Mr Brooks telephoned him again and said, ‘Tony is in serious financial trouble. The fruit market’ – meaning Totem Fruit Markets – ‘needs $25,000 for five days to pay wages at the fruit market. Can you lend it to us? You should make the cheque out to Total.’ Mr Small said he drew a cheque in favour of Total and a copy of that cheque is also annexed to his statement.
The cheque that is annexed to the statement shows an endorsement in favour of Totem Fruit Markets Pty Limited. He said he recalled that he gave this cheque for $25,000 to Buddy Brooks in his car, that while they were in the car Buddy Brooks telephoned Tony Sofia in his presence and passed on the news that the cheque had been received. Tony Sofia then spoke to Mr Small on the telephone in the car. He said ‘Thank you very much, you’ve saved my backside. The money will be back within five days.’ At this stage Mr Small (said) that he had not met Tony Sofia, though he knew in addition to his being a shareholder in Total, he also had an interest in Totem Fruit Markets which were operated in the Totem Shopping Centre at Balgowlah.
On or about 10 December Total forwarded Mr Small a cheque in the sum of $5000. Mr Brooks said ‘We’re sending you a cheque for $5000 to demonstrate goodwill. Please don’t present the cheque until further notice. I will contact you shortly when you should present it.’ On or about 21 December Total forwarded a further cheque in the sum of $25,000 which Mr Small deposited. On 23 December he received a dishonour notice. He telephoned Mr Brooks and said ’That cheque I received has not been paid.’ Mr Brooks said ‘Don’t worry about it, it’s just around the corner.’ On or about 6 January he received a further cheque in the sum of $26,000. He once again deposited that cheque and it was dishonoured. Mr Small said to Mr Brooks ‘I’ve got to meet Tony, I need that money back, I’m coming down to Sydney.’ Mr Brooks said ‘I will pick you up and take you to his office. He runs a brothel.’
Mr Small said he travelled to Sydney and met Mr Brooks who took him to the office of Mr Sofia at Redfern. He said that was the first time that he met Mr Sofia. Mr Sofia said ‘Would you like a beer?’ Mr Small said ‘No thanks, I’m here to collect the $25,000 you owe me.’ Mr Sofia said ‘I don’t have it. I’ll give you a game of snooker for it.’ and Mr Small said ‘No thanks, I just need the money.’ Mr Sofia said ‘I haven’t got it. When I have got it I will give it to you.’ Mr Small said that this was the only time that he had a direct conversation with Mr Sofia. He said that at no time did Brooks or Sofia deny that payment of $25,000 was owing to him. He said that in July ’99 he deposited the cheque for $5000 that he had been given on 10 December and he was notified by the bank that that cheque was dishonoured.”

16 Her Honour then recounted Sofia’s account of his dealings with Brooks and his denial of any personal dealings with Small that would give rise to any obligation to him personally paying him any money.

17 Sofia’s denials extended to the telephone conversation in the car, the conversation at his premises in Sydney and to any awareness on his part that a cheque for $25,000 drawn by Small and endorsed by Total had been paid into the account of Totem.

18 Her Honour did not accept him as to any of those matters and for the purpose of the appeal I do not need to review her reasons for so holding except as to one matter to which I shall come when considering ground 8.

19 As I have said the Magistrate did not accept the claim of Suarez to have paid Small and I should note that she did not accept a series of conversations deposed to by Suarez, Sofia and a Nicholson-Read said to lend support to the proposition of repayment.

20 Having dealt with the question of repayment her Honour continued:

“The second issue is, does the Court accept that there was an agreement between the plaintiff and the first and second defendants? The defendants argue that any agreement to repay the money was with Mr Brooks and not the first and second defendants, that Mr Brooks did not have authority to make any agreements between the plaintiff and first and second defendants and that there is no objective evidence that would support a submission of ostensible authority. The defendant states that Mr Brooks was the director of Total Value. He received the cheques, Total Value made out the cheques by way of repayment and there is nothing to link Mr Sofia except the alleged conversation on the telephone on 9 December ’98 when the cheque was handed over. Mr Sofia denies that conversation. The $25,000 cheque that was made out to Total Value is subsequently endorsed to Totem Fruit Markets and is exhibit L. Mr Brooks was not involved in that company in any way.
Is that correct?
SPEAKER: That’s correct.
BENCH: The cheque was paid into its account. This is objective evidence that supports the plaintiff’s version of the events and links Mr Sofia to the agreement. Mr Sofia in his cross-examination denied that he was aware that $25,000 was deposited into his company Totem Fruit Markets account. He confirmed in cross-examination that Mr Brooks did not have anything to do with Totem Fruit Markets Pty Ltd and he stated that the first time he was definitely aware that the $25,000 was deposited into Totem’s account was after these proceedings commenced and he was shown the documents prepared for court. He stated that he did not know in December ’98 that that money went into his account despite being a director of that company, it being his fruit business and looking at the relevant bank accounts once a month or whenever he happened to be at the business.
I do not accept Mr Sofia’s explanation about his not knowing of the deposit of a cheque into his business account as plausible. In his statement Mr Sofia said he was in the process of obtaining monies from Mr Brooks who had not injected the capital into the business Total Value as agreed. If Mr Brooks had paid money to Mr Sofia as capital repayment by putting his cheque into Totem, I am sure Mr Brooks would have told him. I am satisfied on balance there is no reasonable explanation as to why the cheque went into Totem’s Fruit account other than that Mr Sofia requested the loan and in those circumstances that there was a loan agreement between the plaintiff Mr Small and the defendants Mr Sofia and Total Value Finance Pty Limited.”

21 The Magistrate then considered the terms as to repayment and I do not need to go to that. She concluded:

“In conclusion I am satisfied the plaintiff had an agreement with the first and second defendants to loan $25,000 and that a condition of that agreement was that the defendant would repay the plaintiff within five days. I am satisfied on balance that this money has never been repaid by either of the defendants or by Mr Suarez and I make the following orders:
The Grounds of Appeal

22 The Grounds of Appeal are as follows:

“The substantive claim -
1. The Magistrate erred in law in finding that certain payments made by the defendants to the plaintiff were made ex gratia and were not made in repayment of amounts owed by the defendants to the plaintiff, as there was no evidence that they were made ex gratia .
2. Further or in the alternative the Magistrate erred in law in finding that certain payments made by the defendants to the plaintiff were made in payment of interest and were not made in repayment of amounts owed by the defendants to the plaintiff, as there was -
(a) no evidence that the payments were intended, or accepted, as payment of interest; and
(b) conclusive evidence that there was no obligation on the defendants to pay any interest.
2A. Further the plaintiffs say that the Magistrate erred in that by reason of the errors relied upon in Grounds 1 and 2, the Magistrate erred in that there was no evidence that the sum of $25,000 was owed by the plaintiffs or one of them to the defendant.
3. Further or in the alternative the Magistrate erred in law in failing to give adequate reasons for her judgment.
4. The learned Magistrate erred and/or denied the defendants plaintiffs natural justice in allowing an amendment to the defendant’s Statement of Claim during the course of the first and second plaintiffs’ cross-examination of the defendant.
5. Further, or in the alternative, the learned Magistrate erred and/or denied the first and second plaintiff’s natural justice in refusing to hear the first and second plaintiffs’ submissions and/or admit evidence sought to be tendered by the plaintiffs for the purposes of the defendant’s application to amend his Statement of Claim.
6. The learned Magistrate denied the defendants natural justice in that she did not allow the first and second plaintiffs to fully cross-examine the defendant as to the history of his claims and pleadings following the allowance of the amendment to the defendant’s Statement of Claim, and, the said denial occurred for the reason that the learned magistrate erred in proceeding on the basis that the question whether the form of the defendant’s amended statement of claim was the result of mistakes was not, following the allowance of amendments thereto on 31 July 2003, an issue properly in dispute for the purposes of the trial of the substantive proceedings.
6A. The learned magistrate allowed the tender of affidavits sworn by the defendants legal representatives without those legal representatives being subject to cross-examination.
7. The Learned Magistrate erred in that there was no evidence capable of supporting a finding that the first plaintiff had entered into a loan agreement with the defendant, and (or for inter alia the reason that) there was no evidence properly supporting the inference that the First Plaintiff acted for material purposes, if and to the extent that it did, as a principal rather than an agent.
8. Further or in the alternative, the learned magistrate denied the defendants plaintiffs (sic) natural justice in that the finding that the first plaintiff had entered into a loan agreement with the defendant was based on reasoning which was logically self-contradictory and/or on reasoning which was not properly exposed.
9. The learned Magistrate erred in that there was no evidence capable of supporting a finding that the second plaintiff had entered into a loan agreement with the defendant, and, (or for inter alia the reason that), there was no evidence properly supporting the inference that the second Plaintiff acted for material purposes, if and to the extent that he did, as a principal rather than an agent.
10. Further or in the alternative, the learned Magistrate denied the second plaintiff natural justice in that the finding the second plaintiff had entered into a loan agreement with the defendant was based on reasoning which was logically self-contradictory and/or on reasoning which was not properly exposed.
Costs
11. The Magistrate erred in law in not giving the plaintiffs defendants an opportunity to be heard on the question of costs.
12. The Magistrate erred in law in failing to take into account, on the question of costs, the procedural history of the matter, in particular the numerous amendments made to the statement of claim, one of which was made after the completion of the first day’s hearing.
13. The Magistrate erred in law in failing to take into account, on the question of costs, that the plaintiff defendant succeeded on grounds introduced by amendments to the statement of claim.”

23 I now turn now to consider the individual grounds.

Grounds 1 and 2

24 It is convenient to deal with grounds 1 and 2 together.

25 The magistrate made no finding impliedly or otherwise as to the characterisation of moneys passing from Total to Small.

26 There was no issue in the matter which called upon her to do so. The Further Amended Statement of Claim is a very curious document. One would expect an application to strike much of it out as embarrassing to be successful, however, no such application was made. Upon analysis the only claim made is in respect of the alleged loan by Small to the three defendants on 9 December 1998 of $25,000. There is no claim on some form of running account.

27 Had the defendants wished to rely upon some agreement that earlier payments were to be credited against this amount it would have been necessary to so plead. This was not done. I should add that the evidence does not support the existence of such an agreement.

28 Accordingly grounds 1 and 2 are not made out.

Ground 2A

29 Ground 2A depends, on its terms, upon the errors alleged in grounds 1 and 2 and falls with them.

Ground 3

30 As I understand ground 3, and I note the words, “or in the alternative”, it is based upon the magistrate’s failure to give reasons for a conclusion that some of the earlier amounts paid were payments of interest or made ex gratia. In written submissions Mr Newell said:

“It is material that the learned magistrate did not offer any reasons as to how she found, if she did, that there was agreement that certain sums would be paid by way of interest or that they were agreed to be ex gratia payments, if they were. It is submitted that this issue, being one in respect of which there was a lack of any discernable evidence, the failure to provide reasons is an impeachable breach of the rules of natural justice.”

31 This ground fails also because there was no call for the magistrate to reach a decision upon the point.

32 I should add that I have considered the magistrate’s reasons more generally and find them adequate to the issues arising in the case. Particularly is this so, having regard to the principles discussed by Rolfe J in Durovic v Judge (unreported 15 February 1997) as to the extent of reasons required where no appeal lies against a finding of fact. (And see Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 per McHugh J at 282).

Grounds 4 and 5

33 By the time of addresses grounds 4 and 5 were no longer relied upon.

Ground 6

34 In support of ground 6 Mr Newell submitted that the magistrate had taken the decision on the Notice of Motion before Magistrate George as concluding the issue of whether the need for amendment of the Statement of Claim had arisen from mistake. This view, it was put, both prevented the magistrate considering the contention of the defendants that it was not a mistake, with the consequences said to flow from that and also led the magistrate to inappropriately curtail cross-examination.

35 Mr Newell took me to the transcript where the following appears:

“BENCH: Mr Duggan let me say – sorry, Mr Dupree let me say this to you. Obviously what’s happened in this case, there was a mistake made in the Statement of claim. That’s now been rectified and I think we should put that behind us and get ahead. There is no point in us spending any more time on that.
DUPREE: Thank you your Worship. We don’t accept there was a mistake --

BENCH: I know you don’t accept it --
DUPREE: And we want to test it.
BENCH: -- but you have to accept it now because Notice of Motion has been put on, it was accepted that a mistake was made and it was accepted they be allowed to amend that –“

36 However, what then occurred was that Mr Dupree of Counsel, who appeared for the defendants at trial, then made a further submission ending:

“DUPREE: …And your Worship, and frankly, yes your Worship will not be able to fully appreciate the true nature and extent of, firstly the credit issues and, secondly, the factual background advanced by this witness unless your Worship is exposed to the factual circumstances in respect of matters that are now pleaded in the statement of claim.”

37 Thereupon the following exchange occurred:

“BENCH: You want to cross-examine about inconsistencies is that what you’re talking about?
DUPREE: Yeah --
BENCH: All right, well do it, let’s do it.
DUPREE: Thank you.”

38 I return to the cross-examination that followed.

39 That the magistrate had not regarded the issue as determined is clear from her reasons when, after referring to the chain of amendments of the Statement of Claim, she said:

“The defendant states that as a result of the plaintiff’s changes to his pleadings and the assertions that he made in those pleadings, this Court could not be satisfied what the plaintiff’s claim in fact is or how much money is outstanding.
I have thoroughly read and compared all the pleadings and I am satisfied Mr Small has consistently stated that since January – sorry – since January 2000 when he commenced his proceedings, that he advanced $25,000 to the defendants at the request of Mr Brooks and that it was agreed that the amount would be repaid within five days and that since that date of the loan in December, he has not received any monies by way of repayment. “

40 Mr Newell put that the contrary was shown by the following comment of the magistrate:

“It is a well established principle that the object of the Courts is to decide the rights of the parties and not to punish them for making mistakes they make in the conduct of their cases. With that in mind I make no adverse findings in relation to the amendments in the plaintiff’s pleadings.”

41 However, the remark about “adverse findings” related to “punishment” and is not be understood as some statement that the magistrate would disregard matters bearing upon the facts in issue. Clearly she had considered those.

42 In relation to the issue as to restricting cross-examination Mr Morcombe put that cross-examination on the Statements of Claim could properly be disallowed as they were not previous inconsistent statements. He relied upon, amongst other cases and references, Laws v Australian Broadcasting Tribunal (1990) 170 CLR 70. Mr Morcombe pointed out that there are other views upon this question and referred to Odgers on The Uniform Evidence Law 6th ed. 291.

43 I do not need to pursue this interesting question for I do not consider, that the point can be used in aid of the Magistrate’s rulings. The point was not taken at trial. Further, whilst not verified much of the material in the Statements of Claim was referred to in contemporaneous affidavits.

44 As it happens I reach the same result for I am satisfied that Mr Dupree was given ample opportunity to explore all relevant issues to and beyond reasonable limits.

45 Mr Newell has supplied me with a helpful list of references as to Mr Dupree being stopped, told to come to the point or move on. On the other hand Mr Morcombe has supplied me with an equally helpful list of references as to Mr Dupree’s examination of the issues in relation to which complaint has been made.

46 It is neither necessary nor practicable for me to go through the references in detail. I have read the transcript and reached the view I have expressed above.

47 I refer to but two examples. Mr Small had filed his first Statement of Claim, acting for himself, at Manly Court on 14 January 2000.

48 A passage of cross-examination in September 2003 was as follows:

“DUPREE: Q. Sir when you first came to this Court, you came unaided by lawyers, is that right?
A. That’s correct yeah.
Q. And you approached the counter presumably?
A. That’s right.
Q. And you spoke to someone at the counter of the Court, is that right?
A. Yes.
Q. Do you recall who it was you spoke to?
A. No I don’t.
----
Q. I think you’ve told the Court you went to the counter in respect of the Statement of Claim of 14 January 2000 and had a conversation, is that right?
A. Yes.
Q. And the conversation was with a court officer, is that right?
A. Yes.
Q. And you don’t recall the name of that court officer?
A. No I don’t.
Q. And is it the case that you told the court officer why you were there?
A. I would have yes.
Q. No I’m not asking you whether you would have, I’m asking you what you --
BENCH: Mr Dupree it was a long time ago.
DUPREE: Your Worship --
BENCH: Mr Dupree --
DUPREE: I would ask the Court not to descend into the arena, it’s a perfectly legitimate question.
BENCH: Would you please move along.”

49 Rather to my surprise Mr Newell put this as an example of inappropriate limitation upon Counsel, albeit he did appear to consider that the occasion was one relating to the signing of default judgment rather than filing the Statement of Claim, as it was. On either basis, I regard it as a line of questioning which no court, let alone a Local Court dealing with a claim for $25,000, should allow to continue.

50 After a considerable amount of cross-examination on the second occasion of cross-examination the following occurred:

“BENCH: I have heard the answers to these questions Mr Dupree I’m not allowing any further questions, please understand my ruling I’m making it now. There are no further questions on the history of the matter unless there is something new that you wish to raise.
DUPREE: Your Worship I submit to you there is --
BENCH: If there is something new could you please raise it now.
DUPREE: Well I’ll do it in the absence of the witness --
BENCH: No I want you to continue with cross-examination.
----
BENCH: I don’t want to hear about the history of the matter any further. You’ve had an opportunity to cross-examine him about that. You cross-examined him at length on that. If there’s anything new you want to ask him, ask it now and ask that it be the next question.
DUPREE. Q: Just have a look – your Worship the forensic effect of my cross-examination is being severely curtailed because of the nature of where I want to tend up.
BENCH: All right could you please get there. We haven’t even moved anywhere since last time. Could you please move along?”

51 Mr Newell relied upon the magistrate’s refusal to exclude the witness on this and other occasions. Such a decision is a discretionary one and I am quite unpersuaded that the discretion exercised by the magistrate miscarried on any of the occasions. An important factor in such a court and such a case was to determine the case within a reasonable time frame. The Magistrate was in a good position to assess the likely importance of the step sought by Mr Dupree.

52 The other matter to note from these passages is the magistrate’s willingness to allow “something new”.

53 As King CJ said in The Queen v Kelly 28 SASR 271 at 273:

“A judge or magistrate has a wide discretionary power in any proceedings to contain cross-examination within proper limits and to disallow prolix or unnecessary questions.”

And see Evidence Act 1995, ss 11,26 and 41.

54 I am not persuaded that the Magistrate went beyond a proper exercise of those powers.

55 This ground is not made out.

Ground 6A

56 Ground 6A fails because counsel for the defendants at the trial did not, in the event, seek to cross-examine the deponents to the affidavits in question.

57 Mr Newell, correctly, did not contend that before the affidavits were tendered it was necessary for the deponents to have been cross-examined. Such a contention would have been in conflict with Pt 25 of the Local Courts (Civil Claims) Rules 1988, to say nothing of usual practice.

58 Part 25 r 10 provides:

“Cross-examination .
10. (1) A party may require the attendance for cross-examination of a person making an affidavit.
(2) A requirement under subrule (1) shall be made to the party filing or proposing to use the affidavit.
(3) Where the attendance of a person is required under subrule (1) and the person does not attend, the affidavit shall not be used without the leave of the court.
(4) Where a person making an affidavit is cross-examined, the party using the affidavit may re-examine the person.”

59 On the hearing of the Notice of Motion to amend the Statement of Claim the three affidavits in question were relied upon. In addition to the granting of leave to amend Magistrate George made an order granting leave for Small to “read and reply” upon the three affidavits at the hearing. In seeking the order Mr Duggan said: “Of course objections may be made at the time.” The order should be read as “subject to all proper objections, however, nothing presently turns upon that.

60 At the resumed hearing on 4 September 2003 Mr Dupree drew attention to the fact that the copy of the Notice of Motion he had did not contain the name of one of the three deponents. No doubt this was because it was amended at the hearing before Magistrate George. Nothing turns on this, however, it explains part of the following observation by Mr Dupree:

“DUPREE: Anyway we require them for cross-examination if they’re to be called. I can’t think that one extra witness really makes much difference.”

61 This observation clearly reflects a requirement at that time, for cross-examination if the affidavits are to be relied upon. No discussion would have been necessary if the witnesses were “to be called”.

62 During a discussion as to the proposed course of the matter Mr Duggan referred to his intention to formally tender the affidavits. The following exchange occurred:

“DUPREE: No we will want to cross-examine those witnesses. We gave notice on 29 July as to their requisition for cross-examination on the understanding – yeah anyway we gave, and I show you this. I note Mr Titus is in court in any event, so that if – it doesn’t seem to be --
DUGGAN: That was in regard to the motion. We’ve received no notice at all that these witnesses are required for cross-examination today and I can say that Mr Titus is available”

63 Subsequently, Mr Dupree appeared to submit that notice for cross-examination was not required for a hearing and that he had only expected the affidavits to be used for the Notice of Motion. Not surprisingly he did not pursue these contentions. However, the following exchange took place:

‘BENCH: -- and read what orders were made. It appears to me that those affidavits have already been filed and they’re part of the Court papers in the hearing.
DUPREE: Well we can debate, but let it be known that we now require, if any notice was defective previously, we now require them for cross-examination.
BENCH: All right.
DUPREE: That’s at about quarter past 10 this morning.”

64 Later in the day the following observations were made by Counsel:

DUGGAN: Your Worship as I indicated I think we can tender the affidavit of Stephen John Titus. As I indicated before he is here and able to be cross-examined by Mr Dupree but we don’t oppose that course being taken. We have made enquiries first of all this morning of Anthony McInerney, he is simply in court on a five-week trial and John Dawson we’ve just made recent enquiries again and he also finds it impossible to attend today so I call Stephen John Titus.
DUPREE: Perhaps we can deal procedurally with the question of the affidavit. We object to the tender of them and ask rhetorically what fact in issue do they go to? At best they could be said to be self serving to try and set up the, as it were –“

65 The magistrate having indicated that she was not re-hearing the motion Mr Dupree said “I’m not asking you to re-hear the motion. I’m asking you not to receive this evidence….“

66 Mr Dupree then developed an argument on relevance. The magistrate considered that issue, ruled upon it and admitted the three affidavits.

67 The transcript records all three affidavits as being “tendered, admitted without objection”. I consider that should be read as “without further objection”. It is, in any event, clear that Mr Dupree did not take an objection based upon Part 25 r 10(3). He did not seek to cross-examine Mr Titus, one of the deponents, who was present nor make any application or even complaint in respect of the other two.

68 After the tender of the affidavits Mr Small’s case was closed and Mr Dupree made an application for dismissal under Pt 21 r 5 which Mr Duggan declined to argue. Thereupon Mr Dupree commenced the defendants’ case with the calling of Mr Sofia.

69 In the event Mr Dupree did not press his earlier expressed intention of cross-examining the deponents even in respect of the one who was present.

Ground 7

70 Mr Newell said in the address:

“It would not have been perverse, I concede, for her Honour to find that Total Auto Value might have entered into the agreement as a principal because the instruction was to pay the money to Total Auto Value’s account.”

71 Even if perversity were shown, that would not of itself be sufficient to establish an error of law.

72 Mr Newell contended that the fact that the money was lent for the purposes of Totem Fruit Markets Pty Ltd and found its way to that company’s bank account excluded a loan to Total.

73 However, there was nothing in the oral conversations forming the loan agreement which introduced Totem Fruit Markets Pty Ltd as a principal, disclosed or otherwise. On the Magistrate’s findings Small knew the money was ultimately to be used for paying the wages of Totem Fruit Markets. There is nothing to show that he was aware of the existence of Totem Fruit Markets Pty Ltd either as operator of the fruit market of otherwise. It is to be observed that Sofia in evidence in chief gave the following evidence:

“Q. Do you recognise the name Totem Fruit Markets Pty Ltd.
A. Yes I do.
Q. Why do you recognise that name?
A. I am a director of the company, a shareholder.
Q. Were you a director and shareholder of that company as at the date of that cheque being 10 December 1998.
A. Yes I was.
Q. Are you able to say what business that company traded in, what was the business of that company.
A. It was my fruit market.

The underlining is mine.

74 The conversation with Brooks and the subsequent telephone conversations were singularly bereft of any indication that money was to be lent by Small to Totem Fruit Markets Pty Ltd.

75 Brooks’ request that the loan be to “us”; the request that the cheque be made payable to Total made by the managing director of Total; the ratification of the arrangements by Sofia another director of Total and the tender of a number of cheques from Total in purported repayment of the debt left it open to the Magistrate to find, as she did, that Total was one of the three borrowers.

76 This ground fails.

Ground 8

77 Had there been a finding that Small had been asked to lend money to Totem Fruit Markets Pty Ltd, then this ground might have had some substance. However, there is no such finding and indeed no evidence to support such a finding. I do not consider there to be any self contradiction in the Magistrate’s reasoning. Further, within the principles I have discussed earlier as to matters of this type, I consider her reasoning to have been adequately exposed.

78 This ground fails.

Ground 9

79 I repeat the observations I made in dealing with ground 7 as to the absence of any reference to Totem Fruit Markets Pty Ltd. In any event the telephone conversation and the conversation at Sofia’s premises in Sydney are replete with references to a personal liability which provide more than sufficient evidence to support, as a matter of law, the findings made. Although unnecessary it is interesting to observe that Sofia did not give evidence that he borrowed the money, as the Magistrate found he did, as agent for Totem Fruit Markets Pty Ltd.

80 This ground fails.

Ground 10

81 The Magistrate’s reasoning was neither illogical nor not properly exposed. This ground is not made out.

Grounds 11, 12 and 13

82 Grounds 11, 12 and 13 relate to costs. Section 69 (2B) provides that an appeal on costs can only be made pursuant to leave of the Supreme Court. Pt 51B r 5 of the Supreme Court Rules provides the procedure for making an application for leave.

83 No application for leave has been made in this case and therefore these grounds fail.

84 I should indicate that I have considered the question whether leave, if sought, should be granted and concluded that it should not. Having regard to this view it is unnecessary for me to determine whether I should permit an application for leave to be made.

85 The magistrate at the conclusion of the hearing reserved her decision and delivered it orally on 27 November 2003. The then defendants were represented by Counsel.

86 The magistrate ordered that the then defendants pay the then plaintiff’s costs and continued, “Are there any other orders sought?”

87 No submissions were made or other orders sought. That was the time for Counsel for the then defendants to make submissions as to costs and I do not doubt that the magistrate would have heard him had he wished to do so.

88 It would have been open to Counsel on the last day of hearing to make, subject to time constraints, submissions as to costs or, alternatively and more practically in this case, to indicate that the then defendants would wish to be heard as to costs after delivery of the decision.

89 It would be inappropriate for the Court to embark upon a review of the magistrate’s discretionary order as to costs without knowledge of her reasons for it where that absence of knowledge flowed from the failure of the then defendants to present any argument on the matter. The order made was the usual order. It by no means follows that the then plaintiff’s pleading errors may not have been offset by the time taken by the then defendants in the conduct of the case.

Conclusion

90 For the reasons given I conclude that all the grounds of appeal fail.

ORDERS

91 I make the following orders:

1. Appeal dismissed.

2, I shall hear the parties as to costs.

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Last Modified: 11/18/2004