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[2021] VSC 330
General information, not legal advice.
Supreme Court of Victoria
2021-06-08
Robson J
Original judgment source is linked above.
JUDICIAL REVIEW - Appeal against a VCAT decision - Contract for the sale of goods - Vendor claimed price of the goods - Vendor failed at VCAT - Vendor sought to raise a new ground on appeal that property passed on inspection and approval of the goods and the price was thus payable - Held that it would not be in the interests of justice to raise the new ground on appeal, as the purchaser was not informed of this ground at the hearing and was denied the opportunity to raise possible defences and counterclaims to the new ground - Appeal dismissed.
1 Daidai Mama Pty Ltd (Daidai Mama) (appellant) appeals against a decision by the Victorian Civil and Administrative Tribunal (the tribunal).
2 Daidai Mama brought a claim at the tribunal concerning an agreement for the sale of infant formula which was negotiated by Mr Xueming Liu on behalf of Daidai Mama, as the vendor, and Mr Zi Wang (first respondent) on behalf of Leaf Supplements and Co Pty Ltd (Leaf Supplements) (second respondent) as the purchaser.[1]
3 Daidai Mama claimed that, on 15 August 2018, Mr Wang collected infant formula on behalf of Leaf Supplements from a warehouse used by Daidai Mama but did not pay for the goods.[2] Mr Wang said he did not collect the infant formula on the day, or at all, and was thus not liable to pay for the goods.[3]
4 In its points of claim at the tribunal dated 21 February 2019, Daidai Mama claimed that it has suffered loss and damage as a result of the respondents' failure to make payment for the formula. As such, Daidai Mama claimed for the price of the infant formula, as well as interest and costs.
5 The facts were otherwise not in dispute. The parties agree that, on 13 August 2018, Daidai Mama and Leaf Supplements entered into an agreement for the sale of 180 units of A2 Platinum Stage 2 formula and 720 units of A2 Platinum Stage 4 formula (together, the goods) for a total of $24,030.[4] They also agree that, on 15 August 2018, Mr Wang came to the warehouse to inspect the goods.[5] Mr Wang said that he confirmed acceptance of the goods by attempting to make a bank transfer to Daidai Mama, but due to an error, the bank transfer failed.[6]
6 The proceeding was dismissed at a hearing before the tribunal on 22 March 2019. On 14 May 2019, the tribunal published its written reasons. At the tribunal hearing, Daidai Mama contended that the buyer took possession of the goods. Daidai Mama presented video footage allegedly showing Mr Wang taking away the goods from the warehouse, in order to support its claim for the price of the goods.[7] The tribunal determined that evidence given at the hearing was insufficient for it to be satisfied that on the balance of probabilities, it was Mr Wang who can be seen in the video at the warehouse, or that it was Mr Wang who took the goods away.[8]
7 On 11 June 2019, Daidai Mama filed a notice of appeal, which sought leave to appeal pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act') against the tribunal's order dismissing the proceedings. Section 148 permits parties to a proceeding to appeal decisions at the tribunal on a question of law.[9]
8 On 4 November 2019, Daidai Mama filed an amended notice of appeal, which set out the following questions of law:
(a) Whether an unpaid vendor of goods of which property has passed to the purchaser may sue for the contract price even if the purchaser fails to collect the goods sold.
(b) Whether the VCAT Act authorises a decision:
(i) based on a reasoning process that was illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds; or
(ii) reached as a consequence of the tribunal failing to take into account relevant matters.
9 In the amended notice of appeal, Daidai Mama sought, amongst other orders, an order setting aside the tribunal's order, or in lieu thereof, judgment for Daidai Mama against Leaf Supplements in the amount of $24,030, together with interest.
Appellant's submissions on the first question of law
10 As outlined in the amended notice of appeal, Daidai Mama relies on the following grounds to argue the first question of law:
(a) The tribunal erred by holding that Daidai Mama was not entitled to sue for the contract price of the goods.
(b) The tribunal should have found (pursuant to ss 23 and 55 of the Goods Act 1958 (Vic) ('Goods Act') or at common law) that property in the goods passed, and Leaf Supplement's obligation to pay for the goods arose, at the time the purchaser inspected and approved the goods.[10]
11 In written submissions filed 30 October 2019, Daidai Mama submits that the tribunal made an error of law by assuming that property in identified goods under a contract of sale would not pass until collection, and that Leaf Supplements was therefore not liable to pay the contract price.[11] Daidai Mama submits that this finding failed to take into account ss 23 and 55 of the Goods Act which compelled the contrary conclusion.[12] Daidai Mama submits that this error of law is sufficient to set aside the judgment and substitute judgment in favour of Daidai Mama.[13]
13 Daidai Mama submits that there was no evidence of any such contractual arrangement.[16] Consequently, it submits that s 23 of the Goods Act applies, which sets out the applicable rules for ascertaining the intention of the parties as to the time at which the property in the goods is to pass to the buyer.[17] Daidai Mama identified r 5 under s 23 as the applicable rule in this case.[18] According to r 5(1), unless a different intention appears,
Where there is a contract for the sale of unascertained or future goods by description and goods of that description and in a deliverable state are unconditionally appropriated to the contract either by the seller with the assent of the buyer or by the buyer with the assent of the seller, the property in the goods thereupon passes to the buyer. Such assent may be express or implied and may be given either before or after the appropriation is made.
14 Daidai Mama submits that the latest time at which the goods were 'ascertained' or 'appropriated to the contract' was when Mr Wang attended the warehouse, inspected the goods, approved them, and then attempted to pay.[19] Daidai Mama submits that since at that point they were in a 'deliverable state' within the meaning of s 3(4) of the Goods Act,[20] property in the goods had passed to the buyer.[21]
15 The tribunal found that concessions by Mr Wang establish that Mr Wang and Mr Liu formed a contract, Mr Wang inspected the goods, and Mr Wang attempted to make payment.[22] As such, Daidai Mama said that all the necessary prerequisites were conceded in relation to establishing when property passed.[23] Daidai Mama argued that it follows as a matter of law from the findings of fact at the tribunal, that property in the goods did pass to the purchaser, while Mr Wang was in attendance at the warehouse.[24]
16 Since Daidai Mama claims that property in the goods has passed, Daidai Mama relies on s 55(1) of the Goods Act to maintain an action for the price of goods.[25] Section 55(1) provides:
Where under a contract of sale the property in the goods has passed to the buyer, and the buyer wrongfully neglects or refuses to pay for the goods according to the terms of the contract, the seller may maintain an action against him for the price of the goods.
17 Daidai Mama said that the following elements necessary for an action for the contract price were pleaded by Daidai Mama in its points of claim at the tribunal:[26]
(a) there was agreement for the respondents to purchase the goods from Daidai Mama;[27]
(b) Mr Wang made a bank transfer of $24,030 pursuant to the agreement;[28]
(c) following Mr Wang's unsuccessful bank transfer, Daidai Mama requested payment;[29] and
(d) the respondents refused or neglected to make payment pursuant to the agreement.[30]
Respondents' submissions on appealing on question of law
19 The respondents argued that Daidai Mama's first question of law should fail for two reasons. First, they argued that since the question requires the Court to positively determine questions of fact, it is not amenable for a review under s 148 of the VCAT Act. Second, they argued that this is not a case where the Court should exercise its discretion to allow a matter to be raised for the first time on appeal.
20 In written submissions filed on 15 January 2020, the respondents submit that the first question is not a proper question of law. They submit that, although a question of law may encompass a mixed question of fact and law, the Court in this instance must positively determine a question of fact for itself in order to resolve the dispute before it, rather than simply judicially reviewing the tribunal's fact-finding.[33]
22 The respondents argued that the court needs to make findings of fact due to the qualification in s 23 of the Goods Act creating, in essence, a rebuttable presumption at law, which can be rebutted with evidence of contrary intention.[36] Counsel for the respondents highlighted the wording of s 23, which provide the rules for ascertaining the intention of parties as to the time at which the property in the goods is to pass to the buyer unless a different intention appears.[37] The respondents said there was no evidence led or tested at the tribunal towards the question of different intent, as there was no cause to, as the issue now contended, was not before the tribunal.[38]
23 Indeed, the respondents submit that if Daidai Mama's case in the tribunal were to be that there was a contract to purchase the goods for which property has passed to the buyer, the respondents may have led other evidence about when property in the goods was to pass within the meaning of the Goods Act provisions.[39]
24 I accept the respondents' submission that findings of fact would need to be made to determine if the respondents had a different intention as to when property passed under s 23 of the Goods Act. I reject Daidai Mama's argument that there was no contrary intention, and that there can be no evidence led to contradict that. I accept that it would have been open to the respondents, for example, to argue that there was an agreement between the parties that property would not pass until payment had cleared.[40] On that point, the respondents argued, and I agree, that it would have been open to them to raise the fact that Mr Wang did not only attempt to pay for the goods on the day, but also sent a screenshot of the payment on the day to provide assurance to Daidai Mama that payment would clear.[41]
25 Consequently, I am not satisfied that it follows as a matter of law, from the facts found at the tribunal, that property in the goods had in fact passed when Mr Wang attempted to pay for the goods, thus entitling Daidai Mama to make a claim for the price of the goods.
Respondents' submissions on raising a new matter on appeal
26 Secondly, the respondents also argued that the first question of law should fail as this is not a case where the court should exercise its discretion to permit a matter to be raised for the first time on appeal.[42] The respondents correctly argued that there are limited circumstances in which a party would be permitted, on a review before a court from a tribunal, to raise an issue that had not been raised at the tribunal.[43]
(a) the substantial issues between the parties are ordinarily settled at the trial; and
(b) where, had the issue been raised below, evidence could have been given which possibly could have prevented the point from succeeding, the point cannot be taken afterwards.[46]
29 According to the respondents there is a very real possibility that Daidai Mama's case would not have succeeded at the tribunal.[49] The respondents submit that they may have led evidence, for instance, around bailee's duties and the common law duty of care.[50] Indeed, I have accepted above that there may also be a possible defence around the issue of the respondents' different intent as to when property in goods were to pass.
30 Further, if the respondents had been given notice that Daidai Mama sought to make its claim on the basis that property had passed at the time Mr Wang inspected and approved the goods, then on the fact that there was a dispute over whether or not the respondents collected the goods, and the undisputed fact that the goods were taken by someone, the respondents may have had a claim in conversion against Daidai Mama, or breach of contract in failing to make the goods available for the respondents to collect.
31 The fundamental difficulty with Daidai Mama raising this new claim on the appeal is that the respondents had no notice of the claim below and were not able to meet the claim or raise a counterclaim, below, which appears to have been open on the facts.
32 Consequently, I agree with the respondents that had it been alleged at the tribunal that property passed and the respondents' liability would arise regardless of who collected the goods, the respondents may have agitated possible defences or other issues at the tribunal. I am not satisfied that there exists no evidence which could have prevented Daidai Mama's point from succeeding at the tribunal. In my opinion, this is not a question of law which was open for Daidai Mama to only raise on appeal.
33 In addition, although I find the respondents' submissions above sufficient to dispose of the first question of law, I will also briefly address Daidai Mama's submission that it is in the interests of justice that this Court apply what they submit to be the correct law to resolve the parties' dispute.[51]
34 In its written submissions, Daidai Mama relies on Haritos v Federal Commission of Taxation[52] ('Haritos') to argue that there is no bar to a matter first being raised on an appeal on a question of law.[53] However, as I have accepted above, whether Daidai Mama may in fact raise a fresh argument is at the discretion of the appellate court. In this regard, the Full Court of the Federal Court of Australia in Haritos held that the 'correct and orthodox' approach to making such a decision involves consideration of whether doing so is expedient and in the interests of justice.[54] The Federal Court in Haritos continued by stating that the appellate court must also be satisfied that allowing the new point to be argued would work no injustice to the other party.[55]
35 I am satisfied that to allow Daidai Mama to raise its new argument would work an injustice to the purchaser. I consider that justice requires that Daidai Mama be bound the way in which it conducted its case at first instance. At the tribunal, it was Daidai Mama that had the benefit of legal representation, while the respondents were self-represented. In Daidai Mama's points of claim filed at the tribunal, it was Daidai Mama that raised the issue of collection of goods as critical to its claim. As such, I agree with the respondents' submission that potentially relevant issues to the claim that Daidai Mama now seeks to make, were not considered, and evidence that might have been led or adduced, was not led, essentially because of the way Daidai Mama ran its case before the tribunal.[56] I accept that it would be unfair to the respondents for Daidai Mama to run a different case to that run below, on appeal.
36 In my opinion, the tribunal acted according to the rules of natural justice, as required by s 98(1)(a) of the VCAT Act, in dismissing Daidai Mama's claim.
37 The second question of law in Daidai Mama's amended notice of appeal concerns whether the VCAT Act authorises a decision based on a reasoning process that was illogical, irrational or lacking a basis in findings or inferences of fact supported on logical grounds, or was reached as a consequence of the tribunal failing to take into account relevant matters.
38 In alleging this error of law, it submits the following grounds:
(a) The tribunal reasoned irrationally or illogically in finding:
(i) the only evidence to support Daidai Mama's claim was video evidence;
(ii) no one could give evidence of the identity of the people who are shown in the video;
(iii) there was no evidence that Mr Wang placed the goods in his vehicle; and
(iv) there is no evidence that substantiates any part of the claim.
(b) By reason of the tribunal's findings set out in (a), the tribunal failed to take into account the affidavit and oral evidence of Mr Liu, and the oral evidence of Mr Wang and Ms Qiu to the effect that:
(i) Mr Wang and his employee took the goods away;
(ii) Mr Wang attended the warehouse, inspected the goods, and was satisfied with them and attempted to pay for them; and
(iii) the only potential purchaser who attended the warehouse on 15 August 2018 was Mr Wang and his co-worker.
39 Daidai Mama submits that although a tribunal's reasons should not be too closely scrutinised, a court on review will set aside for error of law a decision reached upon reasoning that is illogical, irrational, or lacking a basis in findings or inferences of fact supported on logical grounds.[57] Daidai Mama submits that the tribunal erred by failing to weigh evidence before it and disregarding affidavit and oral evidence called by Daidai Mama.[58] It submits that the tribunal made findings that there was 'no evidence' of certain matters on which Mr Liu had given direct, and sometimes unchallenged, evidence.[59]
40 The respondents submit in response that the tribunal's reasons should be read fairly, and particular parts have to be read in the context of the tribunal's written reasons as a whole, and the manner in which the parties have conducted the proceeding below.[60] They submit, for example, that references to 'no evidence' in the tribunal's written reasons, which Daidai Mama contends constitute unreasonableness or failure to take into account relevant considerations, should be read against the passage which states '[t]here was no evidence before the tribunal that could satisfactorily identify the two other people in the video'.[61]
41 On the appeal, I did not hear any oral arguments on the second question of law. In the absence of any such argument, I am satisfied by the respondents' submission that the tribunal's references to 'no evidence' should be understood to mean that there was no evidence that could satisfy the tribunal of the relevant matters. In my opinion, the tribunal gave its reasons with consideration to the arguments and evidence that the parties put before it. As such, I do not accept that the tribunal's decision was based on a reasoning process that was illogical, irrational or lacking basis.
42 For the reasons above, I find that there was no error of law made by the tribunal by not making an order on a claim that was not made, in the circumstances described above. Furthermore, I do not find that the tribunal reasoned illogically, irrationally or without proper reference to relevant matters in reaching its decision to dismiss the proceedings.
[1] VCAT Written Reasons (14 May 2019), 2 [2].
[2] VCAT Written Reasons (14 May 2019), 2 [5].
[3] VCAT Written Reasons (14 May 2019), 2 [6].
[4] VCAT Written Reasons (14 May 2019), 2 [4], 9 [46].
[5] VCAT Written Reasons (14 May 2019), 2 [6].
[6] VCAT Written Reasons (14 May 2019), 2 [6].
[7] VCAT Written Reasons (14 May 2019), 3 [7].
[8] VCAT Written Reasons (14 May 2019), 9 [44].
[10] Amended Notice of Appeal (4 November 2019).
[11] Appellant's Outline of Submissions (30 October 2019), 1 [1].
[12] Appellant's Outline of Submissions (30 October 2019), 1 [1].
[13] Appellant's Outline of Submissions (30 October 2019), 2 [3].
[14] Transcript of Proceedings (3 March 2021) 3.18-21.
[15] Goods Act 1958 (Vic) s 22(1).
[16] Appellant's Outline of Submissions (30 October 2019), 3 [10].
[17] Appellant's Outline of Submissions (30 October 2019), 3 [10].
[18] Transcript of Proceedings (3 March 2021), 3.25.
[19] Appellant's Outline of Submissions (30 October 2019), 4-5 [15].
[21] Appellant's Outline of Submissions (30 October 2019), 4-5 [15].
[22] VCAT Written Reasons (14 May 2019), 9 [46].
[23] Transcript of Proceedings (3 March 2021), 7.9-12.
[24] Transcript of Proceedings (3 March 2021), 4.22-27.
[25] Transcript of Proceedings (3 March 2021), 2.15-24.
[26] Transcript of Proceedings (3 March 2021), 5.1-15.
[27] Applicant's Points of Claim (21 February 2019) [3].
[28] Applicant's Points of Claim (21 February 2019) [4].
[29] Applicant's Points of Claim (21 February 2019) [7].
[30] Applicant's Points of Claim (21 February 2019) [8].
[31] Appellant's Outline of Submissions (30 October 2019), 5 [15].
[32] Appellant's Outline of Submissions (30 October 2019), 5 [16].
[33] Respondents' Submissions (15 January 2020), 4 [6], citing Haritos v Federal Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315, 383 [192]; Transcript of Proceedings (3 March 2021) 24.1-24.8.
[34] Respondents' Submissions (15 January 2020), 4 [7].
[35] Respondents' Submissions (15 January 2020), 4 [7].
[36] Transcript of Proceedings (3 March 2021) 24.9-12.
[38] Transcript of Proceedings (3 March 2021) 24.12-14.
[39] Respondents' Submissions (15 January 2020), 5 [9].
[40] Transcript of Proceedings (3 March 2021) 24.14-17.
[41] Transcript of Proceedings (3 March 2021) 24.14-20.
[42] Transcript of Proceedings (3 March 2021) 23.29-31.
[43] Transcript of Proceedings (3 March 2021) 27.16-27.20.
[45] Transcript of Proceedings (3 March 2021) 28.18-20; 28.25-31; 29.1-2.
[46] Medical Practitioners Board of Victoria v Lal [2009] VSCA 109; (2009) 23 VR 702, 713 [41] (Maxwell P, Weinberg JA and Kyrou AJA).
[47] [2002] VSC 282, [8] (Balmford J).
[48] Respondents' Submissions (15 January 2020) 4-5 [8].
[49] Transcript of Proceedings (3 March 2021) 31.3-4.
[50] Respondents' Submissions (15 January 2020), 5 [9].
[51] Appellant's Outline of Submissions (30 October 2019), 6 [18].
[52] [2015] FCAFC 92; (2015) 233 FCR 315, 347-8 [80].
[53] Appellant's Outline of Submissions (30 October 2019), 5-6 [17].
[54] Haritos v Federal Commission of Taxation [2015] FCAFC 92; (2015) 233 FCR 315, 346-7 [79].
[55] Haritos v Federal Commission of Taxation [2015] FCAFC 92; (2015) 233 FCR 315, 346-7 [79].
[56] Respondents' Submissions (15 January 2020), 5 [10].
[57] Appellant's Outline of Submissions (30 October 2019), 7 [24], citing Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611, 625 [40] (Gummow ACJ and Kiefel J, 647-8 [130] (Crennan and Bell JJ).
[58] Appellant's Outline of Submissions (30 October 2019), 1 [2].
[59] Appellant's Outline of Submissions (30 October 2019), 1 [2].
[60] Respondents' Submissions (15 January 2020), 5 [11].
[61] Respondents' Submissions (15 January 2020), 5-6 [12], citing VCAT Written Reasons (14 May 2019), 9 [43].
Daidai Mama Pty Ltd
Wang & Anor [2021] VSC 330
(2015) 233 FCR 315
(2009) 23 VR 702
(2010) 240 CLR 611