Wandel v Halloran - [2015] SASCFC 155

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
WANDEL v HALLORAN & ANOR
[2015] SASCFC 155
Judgment of The Full Court
(The Honourable Justice Nicholson, The Honourable Justice Bampton and The Honourable Justice Parker)
27 October 2015
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - WHERE FINDINGS BASED ON CREDIBILITY OF WITNESSES - GENERALLY
Appeal against a District Court Judge’s finding that the respondents are entitled to amounts due pursuant to contracts made orally between the parties. The appellant and the respondents owned nearby properties on Kangaroo Island. In 2009, the appellant, Mr Wandel, engaged the first respondent, Mr Halloran, to provide earthmoving services to repair a river crossing that had been washed away as a result of Mr Wandel’s dam overflowing and flooding the Harriet River. Having lost his own water, Mr Wandel also made an arrangement with Mr Halloran to pump water from a dam on the respondents’ property for the purposes of irrigating Mr Wandel's seed potato farm. The respondents rendered invoices to Mr Wandel for both the works concerning the river crossing and for the water supplied to Mr Wandel from the respondents’ dam.
The respondents sued Mr Wandel in the District Court of South Australia, for the invoiced amounts. Mr Wandel denied any contractual liability and contended that the respondents had agreed to conduct the works and supply the water free of charge. The Judge found in favour of the respondents. On appeal, the appellant contended, in essence, that the contractual claims, as found by the Judge, had not been pleaded and that the evidence before the Court was insufficient to establish them.
Held per Nicholson J (Bampton and Parker JJ agreeing):
1. The Judge’s findings with respect to the terms of the contracts for the works to the river crossing conducted by the respondents and the supply of water by the respondents were supported by the evidence and should not be disturbed.
2. Ordinarily, a party will not be permitted to pursue a claim that has not been pleaded in a way that provides proper notice of the case to be met by the opponent.
3. However, in this case, the disconformity between the respondents’ pleaded cases and the evidence led and accepted by the trial Judge did not give rise to any procedural unfairness or miscarriage of justice.
4. Appeal dismissed.
Fox v Percy (2003) 214 CLR 118, [2003] HCA 22; Fitzgerald v Brock Real Estate & Ors [2009] SASC 183; Sands v Channel Seven Adelaide Pty Ltd & Anor [2010] SASC 202; Banque Commerciale SA, En Liquidation v Akhil Holdings Ltd (1990) 169 CLR 279; Dare v Pulham (1982) 148 CLR 658; Gould & Birbeck &Bacon v Mount Oxide Mines (1916) 22 CLR 490; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41; Haynes v McNeil (1906) 8…

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: [2015] SASCFC 155
Decision Date: 27 October 2015

CaseChat Overview and Summary

This case concerned an appeal by Mr Wandel against a decision of the trial judge who found in favour of the Hallorans regarding payment for excavation works and the supply of water. The dispute arose after a dam on Mr Wandel's property overflowed, causing damage to a river crossing on Mr Larcombe's property and a public road crossing. The Hallorans were contracted by the local council to repair the public road crossing, and Mr Wandel subsequently engaged the Hallorans to repair the Larcombe crossing. Additionally, Mr Wandel sought and received water from the Hallorans' dam after his own dam failed. Mr Wandel contended that both the Larcombe crossing works and the water supply were to be provided free of charge, while the Hallorans claimed payment for both.

The primary legal issues before the appellate court were whether the trial judge erred in his findings of fact, particularly concerning the credibility of the witnesses, and whether there was sufficient evidence to support the finding that Mr Wandel agreed to pay for the water supplied by the Hallorans. Specifically, the court had to determine if the trial judge's rejection of Mr Wandel's evidence and acceptance of aspects of Mr Halloran's evidence was justified, and if the agreed price for the water, based on what Mr Wandel paid to a neighbour, was sufficiently established.

The appellate court upheld the trial judge's findings, emphasising that the trial judge was faced with irreconcilable and fundamentally different accounts from the parties, necessitating a determination of credibility. The trial judge found Mr Wandel's evidence to be unreliable and rejected it, while accepting that an agreement for payment for the water existed. The court found that Mr Halloran's evidence, which indicated an agreement to supply water at the same price Mr Wandel paid to Mr Trethewey, was sufficient to support the trial judge's conclusion. The appellate court also noted that the trial judge did not rely on stock journal prices for water, as suggested by one of the appeal grounds.

Consequently, the appeal was dismissed. The court affirmed the trial judge's orders for payment of $26,391.75 for the Larcombe's Crossing works and $61,160 for the supply of water, along with pre-judgment interest and costs.

Orders

Orders of the court

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Background

Background to the litigation

It is common ground, and the Judge does not appear to have departed from this common ground,[3] that the Hallorans’ case was to succeed or fail according to the law of contract. No claim of quantum meruit or resting on any other equitable or restitutionary basis was pleaded or otherwise relied upon. [3] Reasons for judgment at [11].Background to the dispute In July 2009, a dam on Mr Wandel’s property which, if full and operational, would have contained sufficient water to meet his needs for the 2009/2010 potato growing season, started to overflow. Mr Wandel was in Mount Gambier at the time. He telephoned Mr Halloran and requested that he undertake some excavation works to create a passage to allow water to escape the dam with a view to saving the dam. However, by the time Mr Halloran arrived, the problem had progressed to such an extent that it was not possible to save the dam. The dam gave way and a large quantity of water rushed down the Harriet River, causing damage on the way. In particular, the river crossing constructed to allow motor vehicles to cross the Harriet River and permit access to and from the property of Mr Larcombe and the river crossing constructed at the East-West Highway were both washed away. The East-West Highway was a public road under the control of the local council which, after calling for tenders, awarded a contract for the repair of the crossing to the Hallorans at a cost of $35,000. Mr Wandel had expected to be approached to pay for the cost of the East-West Crossing repair but, to his surprise, was not. However, Mr Wandel did assume responsibility for the repair of the Larcombe’s Crossing with respect to which he sought the assistance of Mr Halloran. The failure of the Harriet River dam on Mr Wandel’s property meant that his capacity to irrigate his seed potato crop for the 2009/2010 season was badly compromised unless he was able, immediately, to source an alternative supply of water. There were several dams in the area. In particular, to the east of Mr Wandel’s farm, there was a dam on the adjacent property of Mr Nathan Trethewey and to the south of Mr Trethewey’s property there was a dam on the Hallorans’ property. Mr Trethewey and Mr Wandel shared a boundary and Mr Halloran and Mr Trethewey shared a boundary. After negotiating with Mr Trethewey, Mr Wandel acquired access to the water in Mr Trethewey’s dam and when that was exhausted, and as a result of negotiations with Mr Halloran, he acquired access to the water in the Hallorans’ dam (which water became the subject of the water invoice).The Judge’s findings with respect to credibility and reliability of witnesses Mr Wandel, in his evidence, maintained that the arrangement with Mr Halloran was to the effect that the Larcombe’s Crossing works were to be performed free of charge and that the Hallorans’ water would be provided free of charge. The Judge rejected Mr Wandel’s evidence on this critical issue and more generally. His Honour observed as follows.[4]The differences between the evidence of [Mr Halloran] and the evidence of [Mr Wandel] are fundamental and irreconcilable. There is no scope for one or other of them to be mistaken. This is a case where one or both of the principal witnesses must have given deliberately false evidence. It is a credibility case. [4] Reasons for judgment at [12].

Evidence

Evidence Before The Court

The Judge was faced with this difficult position. He was unable to accept virtually anything Mr Wandel had told him and was in the position of having to put Mr Wandel’s evidence to one side and to have no regard to it. However, he found that Mr Wandel agreed to pay for the water but was faced with jumbled and internally inconsistent evidence from Mr Halloran concerning the terms of payment. Ultimately, his Honour was satisfied that the parties agreed that the respondents would be paid for their water at the same price that Mr Wandel was paying or had paid to Mr Trethewey.[49] Three main issues arise.(i)Was there evidence sufficient to support this finding?(ii)What was the price that Mr Wandel paid Mr Trethewey and, as a consequence, what was the price per megalitre that Mr Wandel agreed to pay the respondents in the event that the finding to which (i) above refers was correctly arrived at?(iii) How much water did the respondents supply to Mr Wandel?Does the evidence support the Judge’s finding that the parties agreed that Mr Wandel would pay the same price that he had paid for Mr Trethewey’s water[49] Reasons for judgment at [114], [118]. I have reviewed the evidence of Mr Halloran that bears on the nature of any agreement reached with Mr Wandel for the supply of the water.[50] This evidence supports the Judge’s findings as to the nature and terms of the agreement reached. The critical features of Mr Halloran’s evidence, in this respect, are as follows. [50] Trial transcript of examination in chief at T43.5-43.28, 44.15-44.34, 45.10-45.31, 47.11-47.15, 47.31-48.4 and 48.7-48.28 and trial transcript of the cross-examination at T75.6-75.10, 77.34-78.7, 78.16-78.21, 78.27-79.2, 79.26-80.32, 85.8-85.37 and 89.6-90.11.(i)Mr Wandel told Mr Halloran that Mr Trethewey was doing very well “he’s getting his dam paid for” and “he’s doing very well, he’s getting piping in the ground to the cost of $45,000”.(ii)Mr Halloran was of the belief, at the time, that the cost of installing Mr Trethewey’s dam might have been $55,000 but he indicated to Mr Wandel that he was happy to proceed on the assumption that the cost had been $45,000 which had been the approximate cost of Mr Halloran’s dam.(iii)Mr Halloran indicated to Mr Wandel that he would be happy to receive the same and, in effect, to have his dam paid for. (iv)Mr Halloran said “I’m happy as long as I get the same as Nathan” and that “I’m happy with the price, the same price as Nathan”. (v)Mr Halloran summarised the position in cross-examination as follows.Discussion on price of water was discussed and it was put to me by Mr Wandel the price of the neighbour’s dam at 45,000 or 55, and he said he’s getting the equivalent money’s [sic] worth of piping in the ground and I agreed that I’d be happy with a similar price.Earlier in his examination in chief Mr Halloran said that when he told Mr Wandel “I’m happy with the price, the same price as Nathan. You discussed $45,000 for the dam that’s the end of that”, Mr Wandel was “in agreeance, he’s usually looking down on the ground and shuffling his feet and walks off”.

Decision

Reasons for decision

NICHOLSON J

By appeal ground (U) the appellant contends that the Judge erred in having regard to the evidence of stock journal prices for water. Whilst there was some evidence given along these lines the Judge, ultimately, did not rely on it nor make use of it in arriving at his decision.Conclusion The appellant’s attack on the judgment, ordering payment of $26,391.75 with respect to the Larcombe’s Crossing works and $61,160 with respect to the supply of water, should fail. In these circumstances, there is no reason to adjust his Honour’s order for lump sum pre-judgment interest nor his Honour’s orders with respect to the costs of the trial. The appellant does not challenge either of these matters, independently of the appeal on the substantive issues. I would dismiss the appeal. I would dismiss the appeal for the reasons given by Nicholson J. I agree with Nicholson J that the appeal should be dismissed for the reasons he has stated.

Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

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