Bushby v Dixon Holmes du Pont Pty Ltd & Anor - [2012] NSWCA 90 - NSWCA 2012 case summary — Zoe

NSWNSWCA

Bushby v Dixon Holmes du Pont Pty Ltd & Anor

[2012] NSWCA 90

Court of Appeal (NSW)|2012-04-02|Before: Basten JA

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At a glance

Source facts

Court

Court of Appeal (NSW)

Decision date

2012-04-02

Before

Basten JA

Catchwords

3 All ER 1593 Zelden v Sewell

Source

Original judgment source is linked above.

Catchwords

3 All ER 1593 Zelden v Sewell

Judgment (2 paragraphs)

[1]

Judgment 1THE COURT: This is an application for leave to appeal from a judgment of the District Court (Sorby DCJ). His Honour entered judgment for the first respondent ("DHDP") in the sum of $59,562 and interest against the applicant for breach of contract. His Honour also dismissed the applicant's cross-claim against DHDP and the second respondent ("Mr Junn"), the sole director and shareholder of DHDP. The applicant accepts that he requires leave to appeal because the proceedings involve a matter at issue of less than $100,000: District Court Act 1973, s 127(2)(c). 2The applicant and DHDP entered into a written licence agreement on or about 15 September 2008. Under the agreement, the applicant, a solicitor, agreed to license a room at Level 13, 99 Elizabeth St Sydney, for a term of four years and two months. The term commenced on 1 October 2008 and was to terminate on 30 November 2012. The licence fee payable by the applicant was $2,515 per month, plus GST and service charges. 3The primary Judge found that the applicant repudiated the licence agreement by a letter dated 27 November 2009, purporting to terminate the agreement from 30 November 2009. His Honour further found that DHDP accepted the applicant's repudiation as terminating the licence agreement. His Honour awarded damages by reference to the licence fees payable by the applicant for the remaining period of the contractual licence (had not it been terminated), subject to certain adjustments not now in dispute. 4The applicant defended the proceedings on the ground (among others) that the licence agreement had been discharged by the applicant's acceptance, on 23 September 2009, of an offer made on 3 June 2009 on behalf of DHDP. The primary Judge found that in a conversation that took place on 3 June 2009, Mr Junn, on behalf of DHDP, proposed that the applicant could either:

leave the premises at the end of November 2009 and forfeit his security bond; or
leave at the end of June 2010 and retain (or reclaim) the security bond. 5The primary Judge rejected the applicant's discharge defence on the ground that the offer made on behalf of DHDP was capable of acceptance only within a reasonable period from 3 June 2009, and that the applicant's purported acceptance of the offer had been communicated outside that period. 6His Honour also rejected a defence of estoppel by representation, which was based on the conversation which took place on 3 June 2009. His Honour found that any representation that DHDP was prepared to discharge the agreement on 30 November 2009 if the applicant forfeited the bond, was an "alternative option" put by Mr Junn to the applicant. It was not a representation as to what DHDP proposed to do. 7The applicant's cross-claim alleged that he had been induced to enter into the licence agreement by certain representations relating to the rectification of air-conditioning problems in the building. The applicant pleaded that the representations were false and constituted misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) ("TP Act"). 8His Honour rejected the applicant's cross-claim in so far as it was based on allegations of misleading and deceptive conduct. His Honour found that, although DHDP had made representations prior to the licence agreement being entered into, they related to future matters. Since DHDP and Mr Junn had reasonable grounds for making the representations, they had not engaged in misleading or deceptive conduct within s 52 of the TP Act. 9The applicant submits that leave to appeal should be granted on the grounds that the primary Judge erred in holding that:
DHDP's offer was not accepted within a reasonable period;
the pre-licence agreement representations were not as to future matters, but were representations as to existing facts;
the applicant had not shown that DHDP had failed to mitigate loss;
the applicant had not made out a case of representation by estoppel; and
the primary judge failed to give adequate reasons for his conclusions. 10The trial in the District Court took place over three hearing days. Both parties were represented by counsel. The amount claimed by DHDP and awarded as damages by the primary Judge was $59,562, to which his Honour added a modest amount by way of interest ($4,878.13). The cost of the District Court proceedings would have constituted a significant proportion of the amount in dispute in the proceedings. 11The application for leave to appeal involves an amount substantially less than the threshold of $100,000, above which an appeal is available as of right. In a case involving a modest amount in dispute, it is necessary to bear in mind the reasons why leave to appeal is required. As Kirby P said in Gurr v Robinson (NSWCA, 10 February 1986, unreported): "One justification is that, where the amount in issue in a case is small, the parties have a special interest in finality. Protracted litigation necessarily involves cost and inconvenience. If the stake is small, the cost may soon become disproportionate to the amount in issue. Secondly, the provision reflects a number of public interests which must be protected by the Court. They include the discouragement of litigation, the principal purpose of which is to recover an order for costs, and the efficient and cost-effective use of court time, which necessarily involves large public costs." See also Carolan v AMF Bowling Pty Ltd t/as Bennetts Green Bowl [1995] NSWCA 69. 12It is also necessary to bear in mind in a case such as the present that an applicant for leave must demonstrate something more than that the trial Judge was arguably wrong in the conclusion he or she reached. This reflects the principle that: "where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute." Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56, at [22], per Campbell JA, with whom Young JA agreed. 13We are not persuaded that the applicant has substantial prospects of success of overturning the primary Judge's finding that DHDP's offer was not accepted within a reasonable period. Approximately three months and three weeks elapsed between DHDP's offer and the applicant's purported acceptance of that offer. During this period, it appears that no relevant communications took place between the parties. 14Mr Grant, who appeared for the applicant, relied on Manchester Diocesan Council for Education v Commercial General Investments Ltd [1970] 1 WLR 241; 3 All ER 1593 (Buckley J) as authority for the proposition that the applicant's uncommunicated intention to accept DHDP's offer earlier than 23 September 2007 can be taken into account in determining whether he communicated his acceptance within a reasonable time. In our view, the case does not support that proposition. 15As we read the statement of claim, the applicant's pleaded case on misleading or deceptive conduct asserted that the representations made by DHDP were as to future matters and were misleading or deceptive because DHDP had no reasonable grounds for making them: see TP Act, s 51A. The primary Judge rejected the pleaded case, finding that the applicant had reasonable grounds for representing to the applicant that difficulties with the air-conditioning system would be rectified by the time the licence took effect. 16Mr Grant, in his oral submissions on the leave application, submitted that the applicant had put an alternative case under s 52 of the TP Act to the primary Judge. The alternative case was that the representations made by DHDP were as to existing facts (namely, that the air-conditioning problems had already been rectified) and the representations were false when made. Mr Grant submitted that, although the primary Judge made no findings on the issue of falsity, the evidence was sufficient to establish that the representations, understood as relating to an existing state of affairs, were indeed false when made. 17We accept that it is arguable that the applicant put an alternative case to the primary Judge, although it was not specifically pleaded and received only a brief mention in the written submissions at trial. We accept also that, if the argument was put, his Honour did not deal with it in his judgment. We are further prepared to accept that there may have been evidence to support the claim that the representations were false when made. 18The difficulty faced by the applicant is that, even if he can establish on appeal that DHDP made a false representation as to an existing fact, the issue of reliance remains unresolved. This was hotly contested at the trial, not least because the applicant insisted on the insertion of a specific clause in the licence agreement relating to the adequacy of air-conditioning, perhaps suggesting that he had not relied on the representations as to the state of the air-conditioning in entering into the licence agreement. Since his Honour made no finding on reliance, a successful appeal by the applicant on the issue of misleading or deceptive conduct is very likely to require a retrial on the issue of reliance. Any such retrial would necessarily add to the disproportionate cost already incurred by the parties in respect of a modest claim. 19Having regard to these matters, the fact that the applicant has an arguable case on appeal on the alternative case of misleading or deceptive conduct does not justify, in our opinion, the grant of leave to appeal. There is no issue of principle involved and a successful appeal would be likely to prolong the litigation with no certainty as to the outcome. 20There is no merit in the applicant's contentions that the offer of 3 June 2009 created an estoppel by representation or that the primary Judge's findings on mitigation should be set aside. The submission that the primary Judge failed to give adequate reasons does not materially advance the applicant's case. 21Accordingly the following orders will be made: (1) The application for leave to appeal is dismissed. (2) The applicant pay the respondents' costs of the application.