A.V. Jennings Properties Limited v Kam Civil Pty Ltd

Supreme Court of NSW|2013-12-17|Before: Beech-Jones J

ex tempore Judgment 1The respondent to this appeal, Kam Civil Pty Limited ("Kam Civil"), brought proceedings in the Local Court seeking to recover an amount for certain earthmoving work it undertook on behalf of AV Jennings Pty Limited ("Jennings"). 2On 25 June 2013 the Presiding Magistrate in the Local Court published reasons upholding Kam Civil's claim. In September 2013 his Honour entered judgment in favour of Kam Civil in an amount of $83,842.80 together with costs. 3After the publication of his Honour's reasons, but before the entry of orders, Jennings filed a summons in this Court seeking leave to appeal in respect of so much of the matter as had been determined by the published reasons. This step was taken because of a concern that time might run from the publication of those reasons (apparently based on Russo v Acebond Pty Ltd [2012] NSWSC 300). Subsequent to the entry of final orders Jennings filed a further summons. In the end result there is no dispute that Jennings is appealing against final orders made by the Local Court, and doing so within time. 4Sub-section 39(1) of the Local Court Act 2007 enables an aggrieved party to appeal to this Court "on a question of law". Sub-section 40(1) enables a party to appeal to this Court on "a question of mixed law and fact`", but only with the leave of this Court.

Background 5The following facts are either common ground to the parties or are taken from his Honour's judgment. In February 2007 Jennings engaged Kam Civil to undertake earthmoving work on land it was developing. There were three areas of land upon which work was required, but the proceedings in the Local Court only concerned the work undertaken on the third of them, namely land at Wanaruah Circuit. 6The work the subject of the dispute was said to have been undertaken in July and August 2007. As part of that work Kam Civil had brought on to the site substantial amounts of landfill which it later sought to charge for at a specified rate per tonne. At various points in the proceedings Jennings appeared to deny it had an agreement with Kam Civil, denied it agreed on a price, and otherwise disputed Kam Civil's claim as to the amount of landfill that was brought on to the site at Wanaruah Circuit. 7In or about 31 August 2007 Kam Civil sent a set of invoices to Jennings for the work done at Wanaruah Circuit, which included components for importing fill. These invoices were paid except for those parts that sought payment for the importing of fill. 8Kam Civil claimed that a concern was raised by the employee at Jennings with whom it had been dealing about the amount charged for importing fill. It said that, as a consequence, in September 2007 it sent revised invoices solely seeking payment of the amount claimed for fill and which was charged at a lower tonnage rate. These invoices totalled $55,770 and were the basis of Kam Civil's claim. They were not paid.

The proceedings 9In 2012 Kam Civil commenced proceedings against Jennings to recover the amount of the invoices for the fill taken to Wanaruah Circuit. A number of causes of action were pleaded. However ultimately the issues that were identified for determination by the Local Court were the amount of fill that was imported on to the site, the terms of the contract pursuant to which that work was done, and whether the invoices sent properly reflected the amount of fill that was taken onto the site. 10At this point I will briefly summarise the respective cases of the parties concerning the proof of the first and third of those issues. Kam Civil is a family company employing members of the Murphy family. Francis Murphy was the general manager. His daughter, Antoinette Murphy, was the director and company secretary. She also performed various administrative roles. Two brothers, Keith and Mark Murphy, also worked in the business. 11Kam Civil contended that, during the course of the work at Wanaruah Circuit, Keith Murphy maintained some "tally sheets" on scraps of paper that recorded the amount of fill taken to the site. Francis Murphy stated he was on a holiday throughout most of the period when the fill was taken on to the site at Wanaruah Circuit. He said when he returned from his holidays he prepared delivery dockets based upon the tally sheets. He said he gave those dockets to Antoinette Murphy who prepared the initial invoices and the revised invoices, which were based on the lower tonnage rate. 12There were some discrepancies between the amounts listed in the tally sheets and the invoices, which Francis Murphy explained by reference to his using an estimate of the loads taken by the vehicles which he understood were used to transport the fill. 13Jennings disputed the accuracy of the tally sheets. It contended that they were not a reliable record of the amount of fill that was taken on to the site at Wanaruah Circuit. It pointed to various discrepancies in the evidence. The principal discrepancy, according to Jennings, was between the amount of fill as recorded on the tally sheets and the contents of a diary maintained by Antoinette Murphy during the period of the undertaking of the work at Wanaruah Circuit. 14At this point I will briefly describe the Presiding Magistrate's findings. I will describe the reasons said to support those findings in more detail later in this judgment. 15In relation to the first issue noted above his Honour found that the work done was the work recorded on the tally sheets ("the tally sheet finding"). 16With the second issue his Honour found that the contract was with Kam Civil to "perform earthmoving works on the development in accordance with the plans for an amount to be calculated in accordance with a price list", being a reference to a price list supplied by Kam Civil to one of Jennings' employees. 17In relation to the third issue, his Honour found that the invoices were inaccurate in two respects. First, his Honour found that the adjustments that were described by Francis Murphy should not be allowed. Second, his Honour found that Kam Civil could not recover for such amount of fill that they claimed which involved the transportation of an amount on a public road in one load that exceeded the legal limit for the vehicle used. 18Apparently the final judgment sum was calculated on this basis. His Honour also allowed interest from 2007 to the date of the publication of his reasons, namely 25 June 2013.

The appeal and the application for leave to appeal 19Counsel for Jennings, Mr DeBuse, identified three matters his client sought to agitate on the appeal, namely (i) the adequacy of his Honour's reasons in support of the finding that the work done was that recorded in the tally sheets; (ii) the rejection by his Honour of the tender of an expert's report, and (iii) the awarding by his Honour of interest from 2007 to the date of publication of his reasons. These issues correspond to grounds 4, 9 and parts of grounds 7 and 8 respectively of Jennings' summons. I will proceed on the basis that the balance of these grounds are not pressed. 20In that regard I note that grounds 1 to 3 and 5 set out various bases of challenge to the tally sheet finding. The tally sheet finding was quintessentially a finding of fact. These grounds appear to seek leave to appeal on a question of mixed law and fact against the tally sheet finding. However, any such grant of leave would not assist because, as I have stated, the tally sheet finding was not a finding of mixed law and fact, but of fact alone.

Ground 4 - inadequate reasons 21At the heart of Jennings' challenge to the tally sheet finding is an issue about the scope of his Honour's obligation to provide reasons to support a finding of fact. In his written submissions Mr DeBuse cited the passage from Keith v Gal [2013] NSWCA 339 at [109] to [119] per Gleeson JA, as properly summarising the scope of his Honour's obligations to provide reasons. That passage identifies three particular obligations of a trial judge of present relevance, although none of them are unqualified, namely: (i) the obligation to refer to evidence which is important or critical to the proper determination of the matter (Keith at [115]); (ii) the obligation to avoid making "bald conclusionary statements" and instead "expose the reasoning on a point critical to the contest between the parties" (Keith at [116] to [117]); and (iii) the obligation to explain why one witness' evidence is preferred over another (Keith at [118]). 22However, all these observations were made in the context of an appeal from the District Court to the Court of Appeal, and thus in circumstances where the latter exercises a re-hearing function on questions of both law and fact. This appeal has a very different context in that an appeal as of right is restricted to questions of law. 23Subject to one matter of exception, the scope of the obligation to give reasons in this context was described in the following passages from the judgment of McHugh JA in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 281: "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 turns 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." 24This passage was endorsed as applicable to appeals restricted to errors of law from the Land and Environment Court (see Valuer-General v Perilya Broken Hill Ltd [2013] NSWCA 265 at [92] per Leeming JA, with whom Emmett JA and Preston CJ of LEC agreed). 25The import of McHugh JA's statement is illustrated by his Honour's further statements concerning the judgment appealed from in Soulemezis. Thus his Honour stated (at pp 281 to 282): "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. ... 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. Accordingly there was no failure to give reasons sufficient to constitute an error of law." 26The one matter of possible exception arose out of a submission made by Mr DeBuse. Mr DeBuse submitted that the application of Soulemezis in this context is qualified by the circumstances that under s 40(1) of the Local Court Act a party has a right to seek leave to appeal on a question of mixed law and fact. This submission has undoubted force, but it has no present relevance because, on any view ,the tally finding was not a finding of mixed law and fact but solely a finding of fact. 27The above statements of McHugh JA in Soulemezis concerning the scope of the obligation to give reasons in respect of a finding of fact which is not subject to an appeal, and which is not dependent upon the application of a legal standard, apply with full force to the tally finding. 28To address this ground it is next necessary to explain in more detail the basis of the tally finding. The opening part of his Honour's reasons outlines the background to the dispute, and identifies the issue to be resolved. Next, under the heading "what work was done" his Honour set out a sixteen paragraph précis of the evidence given on this topic by the various witnesses, being the members of the Murphy family and a site supervisor employed by Jennings. In doing so his Honour set out a summary of a number of entries in the diary maintained by Antoinette Murphy. 29Next under the heading "submissions" his Honour set out a nine paragraph summary of at least some of the respective contentions of the parties. Under the heading "the diary" his Honour then addressed some matters concerning the diary. This occupied five paragraphs of his Honour's judgment. Of course, as I have stated, the significance of the diary was that it was Jennings' contention that its contents substantially undermined Kam Civil's claim. 30In this part of his judgment his Honour noted the diary only recorded loads being imported on three dates, when the clear effect of Kam Civil's witnesses was that there were many more days when fill was imported on to the site. His Honour also noted one part of Keith Murphy's evidence, that the load references "contained in the diary were estimates he made at that time". 31At this point it is appropriate to set out the entirety of [35] and [36] of his Honour's reasons in full: "35 The entry in the diary of 23/07/2007, supports the evidence of Mr Keith [Murphy] in that it records that 'each site is taking 18-19 loads of fill, we are charging for 250 tonnes on each site' and 'finished lot 917'. Lot 917 was the first lot to be done. If lot 917 was finished on 23/07/2001, the record in the diary for 19/07/2007, 20/07/2007 and 23/07/2007 can only be estimates, except in relation lot 917, which was finished. The question arises, if lot 917 was finished and took 480 tonnes why did Mr Keith Murphy make the remark recorded in the diary for 23/07/2007. One explanation is that he spoke to Antoinette without having added up the tally for the lot. The explanation is contrary to the evidence of Mr Mark Murphy that he and Keith compared tallies and then informed Antoinette, however, the evidence of Mr Mark Murphy must be wrong, because Antoinette did not record loads each day of the diary record. Another explanation is that there has been a mistake between the use of the semi tipper and the bogey tipper. The semi tipper carries 24 tonnes, 20 loads would equal 480 tonnes. The explanation is contrary to the tally sheets, which records more than 20 loads delivered to lot 917. Another explanation is that the tally sheet is a false document. The amended defence does not admit that fill was imported and states that the importation of fill was unnecessary. It does not allege fraud, and witnesses were not questioned so as to allege fraud. Mr Keith Murphy says that he made the tally sheets at the time the work was done. He does not know what he did with them, however his lack of memory as to what he did with the sheets is not an issue because he recognises the sheets as ones he made at the time. Conclusion 36 The diary was an idea by which Mr Francis Murphy could be informed of what was going on while he was on holiday, rather than a regular practice of KAM Civil Pty Ltd. Contrary to the evidence of Mr Mark Murphy, he and Keith did not call Antoinette each day to [give] her the tally count. The diary records conversations, and the evidence of Mr Keith Murphy that the relevant information contained in the diary about loads and tonnes were his estimates at the time, and were made without reference to the tally sheets. Since the diary was used to inform Mr Francis Murphy what was going on, rather than as a record of work done, there was no compulsion for Mr Keith Murphy to correct statements." 32His Honour's analysis of the evidence continued after this point. His Honour addressed what his Honour identified as some inconsistencies between the witnesses, some submissions made concerning four of the lots on the site, the inconsistencies between the loads recorded in the tally sheets and the invoices, which as I have stated were addressed by Francis Murphy, and the inconsistencies between Keith Murphy's initial recollection in his first affidavit of the amount of load that was taken on to the site, and the tally sheets. In that regard Keith Murphy's evidence was that at the time he prepared his first affidavit the tally sheets could not be found. However he said they were found later, and for that reason he corrected his account. After this his Honour then set out the tally finding. 33Thus the essence of his Honour's reasoning was to express preference for the reliability of the tally sheets over the entries in the diary, bearing in mind his Honour's analysis of the purpose for which each document was prepared. This analysis was at least in part informed by his Honour's acceptance of Keith Murphy's evidence which involved his identification of the tally sheets and his only providing an estimate to Antoinette Murphy, which she then recorded in her diary. 34At this point it can be seen that, to use the language of McHugh JA in Soulemezis, at the very least his Honour provided the "ground for" the tally finding. Nevertheless Mr DeBuse points to that part of the passage that I have cited from the judgment of McHugh JA in Soulemezis in which his Honour referred to a category of case in which matters other than credibility are said to bear upon the probability or improbability of the fact in issue. Mr DeBuse submitted there were such matters in this case that his Honour was obliged to address but did not. 35Although aspects of the submissions appear to, in truth, seek to re-agitate the correctness of the tally finding, I will address the matters it is said his Honour did not address. They were set out in Mr DeBuse's written submissions at [20] and [24], and in part elaborated upon in his oral submissions. 36Sub-paragraph 20(a) of Mr DeBuse's written submissions asserts that his Honour failed to give adequate reasons or resolve the issues presented to him in "determining that the tally records of [Kam Civil] justif[ied] the conclusion that the work of placing fill on the sites was done as claimed by [Kam Civil]". As formulated, this is no more than a re-statement of the ground of appeal. I have already described the essence of his Honour's reasoning for placing reliance on the tally records. 37Sub-paragraph 20(b) asserts that his Honour failed to give adequate reasons or resolve the issues presented to him in that his Honour failed to explain "the discrepancy in the records of [Kam Civil] in its invoices, tally records and the diary of Antoinette [Murphy], as to the loads of earth delivered to the relevant sites". 38As I have stated, the discrepancy between the invoices and the tally records was explained by Francis Murphy in his evidence. In his Honour's judgment his Honour expressly referred to Mr Murphy's explanation, and accepted it. To the extent that there was a discrepancy between the invoices and tally records on the one hand and the diary on the other, as I have stated, his Honour reconciled that discrepancy by expressing his preference for the reliability of the tally records, and diminishing the weight attached to the diary, having regard to what his Honour determined was the purpose for which it was prepared. 39Sub-paragraph 20(c)(i) contends that his Honour failed to address Mark Murphy's "evidence of the process of record keeping and his denial of seeing the tally records previously". At [14] of his Honour's judgment his Honour recorded the effect of Mark Murphy's evidence, given in cross-examination, that "whilst working on the site he kept a diary describing the work done" and that "each night Keith [Murphy] would call Antoinette [Murphy] and tell her what lot they had been working on and give her the tallies of the loads for the day". 40In [35] of his Honour's judgment, which is extracted in [31] above, his Honour addressed Mark Murphy's evidence, concluding that he was in effect mistaken, because if Mark Murphy's evidence was accurate his Honour considered it would follow that the diary would refer to many more days on which fill was imported than it did. Thus his Honour did address Mark Murphy's evidence. His Honour's analysis was more than sufficient to discharge the obligation that was imposed upon him. 41Sub-paragraph 20(c)(ii) contends that his Honour failed to address evidence which was said to demonstrate that Keith Murphy's "absence from the site [made] such record keeping impossible", being a reference to the tally records. This contention was not developed before me. The passages from the evidence that I was taken to do not suggest that, whatever absences Keith Murphy had from the site, they were such that he was unable to record the amount of fill being taken to the site on his tally sheets. 42Sub-paragraph 20(c)(iii) restates the complaint about his Honour not addressing the evidentiary effect of the diary maintained by Antoinette Murphy. I have already described how his Honour dealt with the diary. 43Sub-paragraph 20(c)(iv) contends that his Honour failed to address the inconsistencies between the amounts invoiced and the tally records. As stated, his Honour expressly addressed this by accepting Francis Murphy's evidence explaining the discrepancy between the two. 44The remaining complaint in relation to the adequacy of his Honour's reasons concerned his Honour's alleged failure to address certain evidence given by Antoinette Murphy and Keith Murphy. As already noted, Mark Murphy accepted in cross examination that he and his brother maintained records, and stated that Keith Murphy had informed his sister every night of the amount of fill imported on to the site. As noted, his Honour rejected that evidence as mistaken. 45In [24] of his written submissions, and in his oral submissions, Mr DeBuse contended that Antoinette Murphy and Keith Murphy gave evidence to similar effect. He contended his Honour was obliged to but did not address this evidence. 46In one of her affidavits Antoinette Murphy described maintaining a daily diary of the work that occurred on the Wanaruah Circuit site while her father was on vacation. She stated that this was done to assist, inter alia, with calculating the amount that had to be invoiced to Jennings. In her affidavit she also described a common practice she adopted of speaking to the Kam Civil employees every night, including her brothers, about inter alia "what work was completed that day". 47His Honour did not refer to this evidence. This evidence was certainly capable of basing a conclusion that the diary was meant to record the amount of fill imported on to the site. However, Antoinette Murphy's evidence, considered in its totality, certainly did not compel that conclusion. As noted, at [13] of his Honour's judgment, his Honour set out a summary of aspects of Antoinette Murphy's oral evidence in which he explained the meaning of some of the diary entries. As part of that evidence, as summarised by his Honour, Antoinette Murphy cast doubt over whether one of the entries in her diary was meant to record the amount of fill imported on to the site. 48In relation to the evidence of Keith Murphy, Mr DeBuse pointed to an answer given to him in cross-examination in which he accepted that either he or his brother Mark rang his sister from the site nightly and gave "her information as to the number of loads that had been done that day". Again, this concession was capable of suggesting that the diary was meant to be an accurate record of the amount of imported fill. This concession was not referred to by his Honour. Nevertheless Keith Murphy's evidence certainly did not compel the conclusion that the diary was meant to record the amount of fill taken onto the site. To the contrary, his Honour referred to numerous aspects of Keith Murphy's evidence that supported the accuracy of the tally records, and diminished the significance of what he may have told his sister, and in turn what she may have written in the dairy. 49Critically, the final sentence of [35] of the judgment, which is set out above at [31], reveals that his Honour placed particular weight on Keith Murphy's evidence that he recognised the tally sheets as contemporaneous records that he made at the time. 50In the end result, Mr DeBuse's complaint reduces to a contention that his Honour's reasons do not address two aspects of the evidence by Kam Civil witnesses which potentially undermined its case. However, in context it is clear that his Honour preferred and gave weight to other aspects of those same witnesses' evidence, which supported the accuracy of the tally records. 51Consistent with Soulemezis I consider that the obligation to provide reasons imposed on his Honour in relation to a bare, albeit critical, finding of fact, did not require his Honour to expressly address the evidence that Mr DeBuse has pointed to. The basis for his Honour's finding was explained with sufficient clarity in his Honour's judgment. His Honour did not have to expressly address all the competing evidence and the contentions to discharge the relatively limited obligation imposed upon his Honour to give reasons in respect of the tally finding. 52Accordingly I reject ground four of the appeal.

Ground 9 - rejection of expert evidence 53During the hearing in the Local Court, Jennings sought to tender an expert's report from a surveyor in an effort to establish that the amount of fill that had been placed on the site at Wanaruah Circuit was less than that claimed by Kam Civil. His Honour rejected the tender of the report. The reasons for his rejection are encompassed by the following extract from the transcript of his Honour's reasons: "In this report prepared by Mr Petersen of Boardman Peasley, opinion is based on facts which are not necessarily observed by the expert but referred to by him in the report. Those facts have not been admissibly proved by the expert, and in that regard I refer to the survey report, the survey carried out by Boardman Peasley Pty Ltd as set out in para 2. It is apparent from the expert's report that the export that used the facts from the survey to form an opinion, but the facts upon which the opinion is based have not been identified and admissibly proved in that the expert has merely referred to a survey being done. It is also apparent from the report that the table is based on calculations. Although the expert has said in some respects the process by which he has undertaken the assessment, he has not shown how those figures had been derived. So for that reason, it is not an opinion which is based on reasoning which the court can ascertain, and due to the absence of reasoning set out in the report, the report is not admitted." 54A degree of latitude must be afforded when construing ex tempore reasons for rejecting evidence given during the course of a hearing. Nevertheless I regard this extract as clearly enunciating two bases for the rejection of the surveyor's report, namely the failure to establish the factual basis of the opinion (ie the survey) and the failure of the surveyor to demonstrate how the figures for fill usage in the report were derived. 55In considering this ground it is to be remembered that, consistent with s 40(1) of the Local Court Act, this ground of appeal alleges that his Honour erred in law or otherwise "misdirected" himself, which is the same thing. Thus this ground will not be demonstrated by simply establishing that his Honour was wrong in rejecting the report. Instead, there must at the very least be established that his Honour erred in principle in doing so. 56The surveyor's report described in a general sense the methodology that was adopted to determine how much fill was taken on to the site. Thus in his report the surveyor stated that: "These volumes in Bulk Cubic Metres (BCM) were based on a comparison between the contours shown on each of the Lot site plans and the Survey carried out by Survey Technician George Cooke and Fieldhand Ashley Partridge of Boardman Peasley Pty Ltd under my direct supervision as a $registered Land Surveyor in December 2007. The Survey Origin was PM53059 located to the north of the White water tower some 700 metres to the west of the site, and was verified by connection to two more co-ordinated marks being PM53060 and SSM98661 located nearby, thus confirming that there was no gross error in the set up procedures. The Height datum adopted for the Survey was Australian Height Datum (AHD)" 57The next two paragraphs describe the original survey report on which this comparison was based. Thereafter the surveyor made certain observations, which are of no present relevance. Attached to the report are what appear to be the outcome of various calculations which were performed to derive the volumes of fill that had been taken on to the site. In effect it involved a calculation of the difference in amount of earth that was present before and after the work was undertaken. 58His Honour was correct in stating that the survey referred to in the above extract was not attached to the report, nor was it sought to be independently proved. Further, not only were the calculations of the figures that were attached not provided, there was no description of how they were performed, such as the provision of a formula. Instead, on that point, all that report stated was as noted above, namely that the "volumes were based on a comparison" between two survey plans. 59As stated, the first basis upon which his Honour rejected the tender of the report was because of the failure to either annexe or otherwise prove the survey. Before me, both parties accepted Heydon J's conclusion in Dasreef Pty Ltd v Hawchar [2011] HCA 21; 243 CLR 588 at [127] that the proof of assumptions rule survived the enactment of the Evidence Act 1995. Once that proposition is accepted then I do not see how I can conclude that his Honour acted on the wrong principle in applying it. 60In my view it was certainly open to his Honour to conclude that, without the survey being admitted into evidence, one of the foundations for the surveyor's conclusions simply could not be established. The opinion provided by the surveyor assumed a starting point being the original survey, and an end point being the survey referred to in the extract noted above. In my view it was certainly open to his Honour to conclude that without that end point being proved, or at least described in more detail than was provided, the report was inadmissible. 61Further, as I have stated, his Honour also rejected the report because his Honour considered that the surveyor did not "show how those figures had been derived", which I understand is a reference to the figures attached to the report. In so concluding his Honour appears to have either been applying or at least reflecting the application of the following passage from Dasreef at [42]: "A failure to demonstrate that an opinion expressed by a witness is based on the witness's specialised knowledge based on training, study or experience is a matter that goes to the admissibility of the evidence, not its weight ... as the Court of Appeal observed, his opinion on that matter lacked reasoning, the absence of reasoning pointed (in this case, inexorably) to the lack of any sufficient connection between a numerical or quantitative assessment or estimate and relevant specialist knowledge." 62In this case it was open to his Honour to conclude that the absence of either any calculation, or at least a more detailed explanation of how the relevant figures in the report were derived, meant that his Honour could not be satisfied that there was established a "sufficient connection" between the figures outlined and the surveyor's specialist knowledge. 63It follows from these conclusions that I reject ground 9 of the appeal.

Grounds 7 and 8 - interest 64The judgment entered in favour of Kam Civil included a considerable amount of interest, having regard to the years that had elapsed between the time the work was performed and when the proceedings commenced. His Honour addresses this topic in his judgment, stating as follows: "A V Jennings Properties Limited submits that it should not pay interest due to delay by Kam Civil Pty Ltd in bringing the claim. Pre-judgment interest compensates a party for being out of money it is entitled to. If [Kam Civil] was not awarded interest it would not obtain the value of its work, due to the decline in the real value of the nominal dollar amount it was entitled to in 2007." 65Mr DeBuse accepted that the awarding of interest was generally compensatory (Bennett v Jones [1977] 2 NSWLR 355). However, the awarding of interest in this case also involved the exercise of a discretionary power, being that conferred by s 100 of the Civil Procedure Act 2005. Mr DeBuse contended that the exercise of that power miscarried because his Honour overlooked that the cause of action sued upon by Kam Civil did not arise until "valid invoices were issued" and his Honour found that the invoices that were issued were erroneous in certain respects. 66There are two related difficulties with this contention. First, the submission is predicated upon the agreement as found being construed so that no cause of action arose unless "a valid invoice had been issued". However, there was no finding to that effect by his Honour. 67Second, the contention otherwise overlooks that the adjustments to the amount claimed from the invoices that followed as a consequence of his Honour's findings were very minimal. Counsel for Kam Civil, Ms Clemmett, provided to the Court a table indicating that the maximum variation in any of the invoices was $52, and the total difference between the amount invoiced and the amount recovered was $33. Thus, even if it was a term of the agreement that a "valid", or even relatively precise, invoice be issued before the obligation to pay arose, then based on his Honour's findings, such a term was complied with or at least substantially complied with. 68Otherwise no error of principle is evident from his Honour's approach to interest. I reject grounds 7 and 8.

Notice of contention 69In light of my rejection of Jennings' grounds of appeal it is not necessary to address Kam Civil's notice of contention.

Conclusion 70It follows that the appeal will be dismissed. [The parties addressed on costs.] 71Ms Clemmett relies on an offer of compromise made on 26 August 2013 in which her client offered to settle the proceedings on the basis that Jennings' summons be dismissed and that her client would accept an amount which, as it turned out, was less than the award that was ultimately entered by the Local Court in September 2013. 72The only possible nuance about the offer is that at the time it was made final orders had not been entered in the Local Court. That said, as explained at the outset of the judgment and for the abundance of caution, by this point Jennings had nevertheless commenced its appeal. In light of his Honour's reasons it seems to me that it must have been known by all parties at that time that an order for judgment in excess of the amount offered would be paid. 73In those circumstances I see no basis upon which to deprive Kam Civil of the benefit of the offer of compromise. Accordingly I make orders as follows: (1)The Plaintiff's summons be dismissed. (2)The Plaintiff pay the Defendant's costs up to and including 26 August 2013 on the ordinary basis. (3)The Plaintiff pay the Defendant's costs on an indemnity basis thereafter.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 January 2014

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