Yevad Products Pty Ltd v Brookfield

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FEDERAL COURT OF AUSTRALIA

Yevad Products Pty Limited v Brookfield [2005] FCAFC 177

PRACTICE AND PROCEDURE – setting aside judgment for failure to give full discovery – assessing possible impact of ‘fresh evidence’ - whether permissible to take into account possible lines of enquiry – likelihood of difference result - reasonable diligence - no explanation for failure to discover

Briginshaw v Briginshaw (1938) 60 CLR 336 referred to
Council of the City of Greater Wollongong Corporation v Cowan (1955) 93 CLR 435 cited
Commonwealth Bank of Australia v Quade (1991) 178 CLR 134 applied
Grant v Australian Knitting Mills Limited (1933) 50 CLR 387 cited
House v The King (1936) 55 CLR 499 applied
Lexcray Pty Limited v Northern Territory [2003] NTCA 11 cited
Londish v Gulf Pacific (1993) 45 FCR 128 cited
McCann v Parsons (1954) 93 CLR 418 referred to
Orr v Holmes (1948) 76 CLR 632 cited
Ras Behari Lal v King-Emperor [1933] All ER Rep 723 cited

YEVAD PRODUCTS PTY LIMITED (FORMERLY KNOWN AS DAVEY PRODUCTS PTY LIMITED) ACN 004 813 192 v IAN WALTER BROOKFIELD AND SEPTIC PRODUCTS AUSTRALIA PTY LIMITED (IN LIQ)
SAD 24 of 2005

NICHOLSON, FINKELSTEIN & JACOBSON JJ
ADELAIDE
31 AUGUST 2005


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 24 of 2005

On appeal from a decision of a single Judge of the Federal Court of Australia

BETWEEN:

YEVAD PRODUCTS PTY LIMITED
(formerly known as DAVEY PRODUCTS PTY LIMITED)
ACN 004 813 912
APPELLANT

AND:

IAN WALTER BROOKFIELD
FIRST RESPONDENT

AND:

SEPTIC PRODUCTS AUSTRALIA PTY LIMITED (IN LIQUIDATION)
SECOND RESPONDENT

JUDGES:

NICHOLSON, FINKELSTEIN & JACOBSON JJ

DATE OF ORDER:

31 AUGUST 2005

WHERE MADE:

ADELAIDE

THE COURT ORDERS THAT:

1.The appeal be allowed in part.

2.The order made by Branson J on 8 February 1996, to the extent that it dismissed the claims for breach of contract under s 14 of the Sale of Goods Act 1895 (SA), be set aside.

3.Otherwise, the appeal be dismissed.

4.The appellant pay the respondents’ costs of the appeal.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

SOUTH AUSTRALIA DISTRICT REGISTRY

SAD 24 of 2005

On appeal from a decision of a single Judge of the Federal Court of Australia

BETWEEN:

YEVAD PRODUCTS PTY LIMITED
(formerly known as DAVEY PRODUCTS PTY LIMITED)
ACN 004 813 912
APPELLANT

AND:

IAN WALTER BROOKFIELD
FIRST RESPONDENT

AND:

SEPTIC PRODUCTS AUSTRALIA PTY LIMITED
(IN LIQUIDATION)
SECOND RESPONDENT

JUDGE:

NICHOLSON, FINKELSTEIN & JACOBSON JJ

DATE:

31 AUGUST 2005

PLACE:

ADELAIDE

REASONS FOR JUDGMENT

  1. This is an appeal from a judgment of Lander J dated 9 September 2004, and consequential orders, setting aside orders made by Branson J in 1996 and 1997.  On 8 February 1996, her Honour dismissed proceedings brought by the respondents against the appellant (“Yevad”).  On 19 December 1997, her Honour ordered the first respondent (“Mr Brookfield”) to pay Yevad’s costs specified in an amount slightly in excess…

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Details
Case
[2005] FCAFC 177
Decision Date

CaseChat Overview and Summary

Yevad Products Pty Ltd appealed against the orders of Branson J, who dismissed their claims for breach of contract under the Sale of Goods Act 1895 (SA). The appeal was heard in the Supreme Court of South Australia. The primary dispute was the impact of Yevad's failure to provide full discovery on the trial outcome. Yevad argued that the trial judge should not have taken into account the lack of diligence by Brookfield and SPA, and that the primary judge failed to consider the appropriate impact threshold of the fresh evidence.

The legal issues the court had to decide included whether the primary judge correctly applied the principles regarding fresh evidence and whether the primary judge correctly exercised his discretion in setting aside the trial judge's orders. Specifically, the court had to determine if the primary judge considered the degree of default and the impact of the evidence on the trial outcome. The court also had to consider whether the primary judge should have taken into account Yevad's continuing failure to make full discovery.

The court found that the primary judge correctly applied the principles regarding fresh evidence. The court held that the primary judge was entitled to consider the lines of inquiry that might have been available and whether the result would have been different if proper discovery had been made. The court also held that the primary judge correctly exercised his discretion in setting aside the trial judge's orders, despite Yevad's failure to make full discovery. The court held that the primary judge's orders should be varied to set aside the trial judge's orders to the extent that the claims for damages for breach of the implied conditions of merchantability and fitness for the purpose under s 14 of the Sale of Goods Act were prejudiced by the unavailability of the documents.

The court allowed the appeal in part, set aside the trial judge's orders to the extent that the claims for damages for breach of the implied conditions of merchantability and fitness for the purpose under s 14 of the Sale of Goods Act were prejudiced by the unavailability of the documents, and dismissed the appeal otherwise. The appellant was ordered to pay the respondents’ costs of the appeal.

Orders

Orders of the court

1. The appeal be allowed in part.

2. The order made by Branson J on 8 February 1996, to the extent that it dismissed the claims for breach of contract under s 14 of the Sale of Goods Act 1895 (SA), be set aside.

3. Otherwise, the appeal be dismissed.

4. The appellant pay the respondents’ costs of the appeal.

Background

Background to the litigation

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Evidence

Evidence Before The Court

In any event, for reasons referred to above, the successful party in the present case cannot be said to be entirely innocent, albeit that the failure to give discovery was not deliberate. Nor, on the primary judge’s findings can it be said that the unsuccessful parties were lacking in diligence.Issue 5 – the “impact threshold” of the fresh evidence Yevad submitted that Lander J failed to assess the “impact threshold” of the evidence in the light of all relevant factors, including Yevad’s lack of culpability and the lack of diligence of Mr Brookfield and SPA. We reject this submission for reasons set out above in dealing with Issue 4.Issue 6 – the continuing failure to make discovery Mr Wells submitted that Lander J was in error in wrongly taking into account Yevad’s delay and continuing failure to make full discovery after the delivery of Branson J’s judgment. Lander J proceeded on the basis that ordinarily the delivery of judgment after a trial exhausts a party’s obligation to give discovery, but he observed the documents in this matter were created before judgment and should have been discovered before the trial; see at [212] – [213]. His Honour was critical of Yevad’s failure to make full discovery after it became aware of the deficiencies; see at [214]; see also the passage set out at [46] above. His Honour considered that Yevad had an obligation to make full discovery as soon as it became aware of its omissions and an obligation to acquaint Mr Brookfield with that fact. We do not need to decide whether the obligation existed in the terms stated by his Honour. It is sufficient to state that Yevad’s failure to make full discovery in the context of the notices of motion was a relevant consideration to the exercise of the primary judge’s discretion. This is because the absence of full discovery at the time of hearing of the notices of motion was relevant to the question of the degree of likelihood that if proper discovery had been made the result would have been different. It permitted the primary judge to draw inferences adverse to Yevad on that question. In any event, the reason why the primary judge set aside the trial judge’s orders was Yevad’s failure to discover “critical” and “vital” documents which may have led the trial judge to a different conclusion; see [324], [410] and [417].Refusal to set aside part of the orders Order 1 made by Lander J was that [1] of the orders made by Branson J on 8 February 1996 be set aside. Her Honour’s order was that the application be dismissed. Yevad submitted that Branson J’s orders should be set aside only to the extent that the causes of action on which Mr Brookfield and SPA failed have been demonstrated to have been prejudiced by the unavailability of the documents referred to in the application before Lander J. In our view this submission is correct. The causes of action which were prejudiced were the claims for damages for breach of the implied conditions of merchantability and fitness for the purpose under s 14 of the Sale of Goods Act. Lander J’s orders should be varied accordingly.General

Decision

Reasons for decision

The issues raised by Yevad on appeal turn upon whether his Honour correctly applied the principles stated in Quade. Five principal submissions were put by senior counsel for Yevad, Mr Wells QC. The submissions were as follows:-(a)that Lander J was required to confine himself to a consideration of the “fresh evidence” sought to be adduced and that his Honour should not have taken into account lines of inquiry which might have been available and which were said to involve speculation as to whether the result would have been different.(b)that his Honour failed to consider, or adequately consider, whether the respondents could have obtained the evidence at the trial by the exercise of reasonable diligence.(c)that his Honour found that the failure to give discovery was not deliberate and that this should have weighed against the setting aside of the trial judge’s reasons.(d)that his Honour failed to address what was called the “appropriate impact threshold” of the “fresh evidence”. It was submitted that this was to be determined according to a sliding scale depending upon the degree of default.(e)that his Honour wrongly took into account Yevad’s continuing failure to give full discovery.Branson J’s judgment Her Honour referred (at p 4) to the contractual arrangements which were put in place between the parties in about October 1990 for the supply by Yevad (then known as Davey Products Pty Limited) of two models of pump. The first was the Davey Lowara Doc 3 (“the Doc 3 pump”). The second was the Davey Lowara Doc 7 (“the Doc 7 pump”). The arrangements were made following upon conversations between Mr Brookfield and Mr Wilsdon. From about October 1990 to about October 1991, Yevad supplied SPA with the Doc 3 pump and the Doc 7 pump, both of which were used by SPA in the manufacture and installation of the BPS system. The differences between the Parco Beaver system and the BPS system were described by her Honour at pp. 116-7. The principal difference was that the BPS system used a disc pack as the filtering medium in the filter system (“the disc pack modification”) whereas the Parco Beaver system used short lengths of cut plastic piping held within the concrete bowl. Six causes of action were alleged. The first was a claim for damages under s 82 of the Trade Practices Act 1974 (Cth) (“the TPA”), consequent upon a contravention of s 52 of the TPA. The second was for breach of the conditions of merchantability and fitness implied under s 71 of the TPA. The third was for negligent misrepresentation. The fourth was for damages under the Misrepresentation Act 1972 (SA). The fifth and sixth causes of action were for breach of the implied conditions of merchantability and fitness for the purpose under the Sale of Goods Act. Her Honour found that the particular purpose which Mr Brookfield made known to Mr Wilsdon was the purpose of acting as a recirculation pump in a Parco Beaver system. She found (at p 60) that Mr Brookfield did not make known that the Doc 3 pump was required for the purpose of acting as a recirculation pump in the BPS system; that is to say, using the disc pack modification in lieu of the cut plastic piping.

Ratio Decidendi

Legal Principle Established

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