Concrete Equipment Australia (Trading) Pty Ltd v Bonfiglioli Transmission

Supreme Court of NSW|2010-05-06|Before: Barr AJ

CITATION : Concrete Equipment Australia (Trading) Pty Ltd v Bonfiglioli Transmission (Aust) Pty Ltd [2010] NSWSC 393

1.Extend until 13 April 2010 the time within which to seek leave to appeal against the orders of the Local Court made on 19 February 2009; 2.Grant leave to appeal against those orders; DECISION : 3.Quash the orders and substitute the following- A verdict and judgment for Bonfiglioli in the sum of $44,582 together with interest at 30% per annum from 23 January 2007 to the date of these orders; Concrete Equipment to pay Bonfiglioli's costs in the Local Court in an amount to be agreed or assessed; No order as to the costs of appeal.

LEGISLATION CITED : Civil Procedure Act 2005, s 21 Local Courts Act 2007, s 40, 41

AWA Limited v Exicom Australia Pty Ltd (1990) 19 NSWLR 705 CASES CITED : Equititrust v Franks (2009) 258 ALR 388 Roadshow Entertainment Pty Ltd v ACN 053 006269 Pty Ltd (1997) 42 NSWLR 462

PARTIES : Plaintiff/Respondent- Concrete Equipment Australia (Trading) Pty Ltd Defendant/Appellant- Bonfiglioli Transmission (Aust) Pty Ltd

COUNSEL : Defendant/Appellant- M.B. Holmes

SOLICITORS : Plaintiff/Respondent- D. Radman

LOWER COURT JUDICIAL OFFICER : Magistrate Madgwick

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

2009/295341 Concrete Equipment Australia (Trading) Pty Ltd v Bonfiglioli Transmission (Australia) Pty Ltd

JUDGMENT 1 His Honour: By its Amended Summons the plaintiff, Concrete Equipment Australia (Trading) Pty Ltd ("Concrete Equipment") seeks against the defendant, Bonfiglioli Transmission (Australia) Pty Ltd ("Bonfiglioli") an order extending time within which to seek leave to appeal against the orders of Magistrate Madgwick of 7 May 2009, leave to appeal against her Honour's orders and the following consequential orders- "2. The appeal be allowed and the judgment of her Honour Magistrate Madgwick dated 7 May 2009 be set aside. 3. An order that the plaintiff [appellant] pay the defendant the sum of $20,670.15. 4. An order that the plaintiff pay the defendant interest on the sum referred to order 3 above: a. calculated from 20 February 2007; b. at the rate specified in Schedule 5 of the Uniform Civil Procedure Rules 2005 (NSW); c. less an amount of $2,428.21 paid by the plaintiff to the defendant on 2 October 2010 in respect of interest from 7 August 2007; and 5. An order that the plaintiff pay the defendant's costs of the proceedings below as agreed or assessed on a party/party basis: a. less an amount of $883 paid by the plaintiff to the defendant on 2 October 2010 in respect of filing and solicitors fees.

Alternatively, a new trial. 7. The defendant pay the plaintiff's costs of this appeal, where opposed."

2 Concrete Equipment was under contract to a third party to design and construct a concrete batching plant, incorporating a conveyor belt. Bonfiglioli supplied gearboxes necessary to the operation of the conveyor belt. Concrete Equipment did not pay for the gearboxes. On 7 August 2007 Bonfiglioli filed a Statement of Claim in the Local Court. It contained a common money count, expressed as "for goods sold and delivered from 22 December 2006 and recovery expenses, together with interest pursuant to an agreement between the parties at the agreed rate of 30 percent per annum from 23 January 2007 to 7 August 2007 and then accruing at $37.08 per day until payment or judgment". 3 Concrete Equipment filed a defence, which was as follows- "1. The Defendant admits it provided the Plaintiff with a purchase order for the supply and delivery of two gearboxes including various components by purchase order dated 22 December 2006. 2. It says however that the gearboxes did not operate as required including: a. oil leaks which required repair; and b. the sprag clutch failed.

By reason of failure of the said gear boxes to perform as required the Defendant has suffered loss and damage. PARTICULARS Detailed particulars will be provided prior to trial, however, the Plaintiff has suffered loss and damage pursuant to an agreement with Readymix Pty Ltd for the construction of a concrete batching plant in Brisbane. 4. It says further that the Defendant is entitled to set off costs incurred by it by reason of the following: a. supply of fittings by the Defendant not supplied by the Plaintiff; b. costs of removal and reinstallation of gearboxes for repair b the Plaintiff following oil leaks; and c. credit for oil coolers supplied by the Plaintiff but not required by the Defendant. PARTICULARS The Plaintiff refers to and relies upon the Plaintiff's report dated 7 May 2007 and emails passing between the Plaintiff and Defendant in respect of these matters including those dated 11/1/07, 7/3/07, 16/3/07, 27/3/07, 19/4/07, 23/4/07, 26/4/07, 30/4/07 and 7/5/07.

The costs incurred by the Defendant include: a. $600.26 for items supplied by the Defendant; b. $7,654.90 for removal and reinstallation of the gearboxes for repair by the Plaintiff; c. $7,800 credit for oil coolers not required. 5. The Defendant sets off its claims in extinction of the Plaintiff's claims." 4 The action came on for hearing before Magistrate Madgwick. On 11 September and 2 October 2008 her Honour heard evidence and submissions. At the conclusion of the hearing judgment was reserved. On 19 February 2009 her Honour announced a verdict for Bonfiglioli in the sum of $48,582 together with interest at 30 percent per annum from 23 January 2007 to 7 August 2007 and thereafter until judgment and costs as agreed or assessed. 5 Concrete Equipment brings its claim into this Court under the provisions of s 40 Local Courts Act 2007. That section is as follows-

" (1) A party to proceedings before the Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court but only by leave of the Supreme Court.

(2) A party to proceedings before the Court sitting in its General Division who is dissatisfied with any of the following judgments or orders of the Court may appeal to the Supreme Court, but only by leave of the Supreme Court: (a) an interlocutory judgment or order, (b) a judgment or order made with the consent of the parties, (c) an order as to costs. " 6 The Power of the Court is stated terms in s 41- " (1) The Supreme Court may determine an appeal made under section 39 (1) or 40: (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal." 7 The grounds of appeal, said to raise mixed questions of fact and law, are set out in the Amended Summons as follows- "8. In ordering judgment for a sum of $48,582.79 the Magistrate failed to: a. Take into account the cost of two 'coolers' each at the price of $2,000 (exl GST), where the defendant [respondent] conceded it was not entitled to these amounts. b. Take into account payment by the plaintiff [appellant] to the defendant on 2 October 2008 in the sum of $23,360.86. 9. The Magistrate awarded interest at a rate of in excess of 61% per annum despite there being no grounds to do so.

The Magistrate failed to provide written reasons for her decision, despite a request from the plaintiff [appellant] for same." 8 There was evidence before her Honour of the following matters. The parties had been doing business with each other for 10 years, Bonfiglioli supplying gearboxes for use in concrete batching plants established by Concrete Equipment. Concrete Equipment was contracted to design and construct a concrete batching plant at Eaglefarm, Brisbane. It asked Bonfiglioli to supply gearboxes. Bonfiglioli submitted a revised quotation for the supply of two gearboxes with specified inclusions, namely cooler fittings, plus freight and including GST for a total of $44,954.80. On the same day Concrete Equipment issued to Bonfiglioli a purchase order, referring by number to the revised quotation. At the hearing it was agreed that there was an agreement between the parties for the supply of the goods described in the revised quotation for the price quoted. 9 The revised quotation bore a statement in these words: "All quotations are subject to BTA's general conditions of sale". 10 The goods referred to in the revised quotation and the purchase order were delivered to Concrete Equipment on or about 28 December 2006. They were brand new, unassembled and had no signs of rust. Bonfiglioli issued an invoice dated 22 December 2006 in the amount of $45,119.80. 11 Although Bonfiglioli's employees would have done so, Concrete Equipment's employees, who had the expertise to do so, assembled the gearboxes. They assembled the electrical wiring incorrectly and when the gearboxes were first switched on in about mid January 2007 the sprag clutch failed as a result. That caused metal parts to fragment in the gearboxes. If they were not repaired they were likely to fail altogether. The fragments were not removed but the gearboxes were used. They began to rust and to leak oil. At some time before the middle of April 2007 Concrete Equipments principal contractor learned about the oil leaks and the metal fragments in the gearboxes. The contractor and Concrete Equipment raised the warranty with Bonfiglioli, and it was agreed that Bonfiglioli could warrant the performance of the gearboxes only if the oil leaks were stopped, the rusting repaired and the metal fragments removed. By agreement between the parties Bonfiglioli removed the gearboxes and took them back to its factory and repaired them. It returned them, repaired, to the batching plant on 7 May 2008. After that they operated satisfactorily. 12 Part way through the hearing, Concrete Equipment appears to have abandoned the defence raised in paragraphs 2 and 3 of the Defence. 13 Her Honour found that the gearboxes were delivered to Concrete Equipment in working order, free of rust. Her Honour found that Concrete Equipment, by an incorrect installation, caused the sprag clutches to fail. Even then, notwithstanding the oil leaks that emerged, Concrete Equipment was unperturbed and continued operating the gearboxes. It was when Concrete Equipment's principal contractor found out about the state of affairs that the matter was brought to a head. Her Honour found that it was reasonable, if Bonfiglioli were to give the required warranty, to have the gearboxes returned, disassembled and thoroughly inspected. It was only when that was done that rust was found. 14 The first ground of appeal asserts that her Honour failed to take into account what is described as the cost of two coolers, each at the price of $2,000 excluding GST, where Bonfiglioli conceded that it was not entitled to those amounts. 15 By paragraph 4(c) of the Defence Concrete Equipment claimed credit by way of set-off for "oil coolers supplied by the plaintiff but not required by the defendant". I will not repeat the particulars that were supplied under that paragraph of the Defence. They convey no useful information and do not in my view constitute particulars. As the hearing proceeded Counsel for Concrete Equipment pressed the claim for the cost of the coolers. No attempt was made, however, to make out the sum of $7,800 claimed as a set-off. I might mention that in the invoice sued on are two items each at $3,900 and totalling the figure claimed. It seems possible that the equipment charged out at that price comprised coolers, in whole or in part, but that simply does not appear on the face of the invoice. An inspection of the quotation sheds no light on the problem. It is also possible that those advising Concrete Equipment seized on that item in the invoice as being the one most likely to refer to coolers. 16 Mr Lewis, the Managing Director of Bonfiglioli, gave evidence and was cross-examined by Counsel for Concrete Equipment. Mr Lewis had made a statement on the 19 January 2008, which had been read into evidence. Paragraphs 38 and 39 were as follows- "38. The defendant alleges in its Defence that the coolers supplied by Plaintiff were not 'required' the Defendant and should be credited to the Defendant. The coolers were ordered by the Defendant. Please see Plaintiff's Quotation No. MB06-2361B (Annexure 'B') and the Defendant's Purchase Order No. 22549. The Plaintiff quoted for a ratio of 29.3:1 which is a stage 3 gearbox which required cooling therefore the cooling devices were affixed to the gearboxes. However the ratio was changed by the Defendant to a stage 2 unit ratio of 19.5:1 which does not need cooling. Given that the specification of the gearboxes were changed by the Defendant, the coolers were not required and therefore the Plaintiff retained the coolers when the gearboxes were returned for repair in late April 2007.

The Plaintiff advised the Defendant in writing on 12 October 2007 that the Plaintiff was prepared to credit the Defendant for the coolers off the original invoice but that the Plaintiff could not issue a credit when the original Invoice had not yet been paid. See Annexure 'N' attached hereto." 17 At the hearing there was these questions and answers- "Q. Now, in paragraph 38, you refer to these coolers. Now, it's my understanding that it's accepted that the coolers should be deducted from the claim? A. Yes.

Q. I just wanted to clarify that? A. Yes, absolutely, yes. We're already in possession of them, so no problem with that.

Q. Paragraph 39, you say the plaintiff advised the defendant that the plaintiff was prepared to credit the defendant for the coolers off the original invoice but the plaintiff could not issue a credit when the original invoice had not yet been paid. So, what you're saying is pay the full amount and then we'll give you a credit back? A. I would have preferred to have had some money, yes, because when I spoke to Michael on 30 April 2007, he assured me he'd pay us the following week. No such payment was received, and so I felt that at this point in time, they should pay the original invoice and then we would do the credit, because a this time I hadn't received any money whatsoever.

Q. So when you said the plaintiff could not issue a credit, what you're referring to is that you're relying upon an earlier promise to pay the full amount of the invoice; is that the case? A. We would prefer to have the original invoice paid and then done a credit." 18 In a further statement of 2 September 2008 Mr Lewis, at paragraph 66, summarised Bonfiglioli's claim as being for the particular amounts set forth therein "less the credit for coolers as follows". A little further down in Mr Lewis's calculation was the following item- "(b) less credit for the two coolers ($2,000 for each cooler)" 19 Although her Honour made no particular finding about the matter, it seems common ground that when the gearboxes were returned to Bonfiglioli's Sydney factory for repair the coolers were removed. It may be accepted that they remained thereafter at Bonfiglioli's factory, though whether property in them passed to Bonfiglioli was never explored at the hearing. The reason for the removal of the coolers seems to have been this. The quotation for the original supply was for gearboxes that had a reduction ratio of 29.3:1. The order issued in response by Concrete Equipment was for gearboxes with a reduction ratio of 19.5:1. Although it may be accepted that gearboxes of the higher reduction ratio need coolers, the ones ordered do not. Even so, Concrete Equipment ordered coolers as well as the lower ratio gearboxes. The evidence is silent about whether the coolers were ever fitted to the lower ratio gearboxes supplied, though Mr Lewis's evidence that the coolers were returned with the gearboxes when they were sent back to Sydney for repair implies that they were. The evidence is silent as to whether any damage to the gearboxes might also have affected the coolers. Mr Lewis was not asked what the invoice price for the coolers was or how he valued them at $2,000 each. Her Honour made no findings about these matters, perhaps because of the way Concrete Equipment had changed its case. 20 On the evidence Counsel for Concrete Equipment asked her Honour to make an allowance by way of set-off of $4,000 for the coolers. 21 In giving judgment her Honour referred to the set-off claims set up by the defence, including that for the coolers, and continued- "The plaintiff's answer to the defendant's submissions is that as the only remaining aspect of the defence is a defence of set-off and set-off relates to amounts, seemingly claimed for the removal and return of the goods for the period of their repair as from 30 April 2007 to 7 May 2007 and other identified costs, it says that in order to succeed in a defence for set-off s 21 of the Civil Procedure Act 2005 requires the defendant to establish that it is owed a debt by the plaintiff. A debt is defined as a liquidated claim and in order to establish a liquidated claim the defendant must precisely plead and establish a cause of action against the plaintiff which entitles it to set-off amount being claimed. There is no cause of action pleaded in the defence which would entitle the defendant to a set-off as claimed in the defence, that being so, they say on the defendant's own pleadings any defence of set-off must fail." 22 The Civil Procedure Act 2005, to which her Honour was referring, provides as follows- " 21(1) If there are mutual debts between a plaintiff and a defendant in any proceedings, the defendant may, by way of defence, set off against the plaintiff's claim any debt that is owed by the plaintiff to the defendant and that was due and payable at the time the defence of set-off was filed, whether or not the mutual debts are different in nature. (2) This section extends to civil proceedings in which one or more of the mutual debts is owed by or to a deceased person who is represented by a legal personal representative. (3) This section does not apply to the extent to which the plaintiff and defendant have agreed that debts (whether generally or as to specific debts) may not be set off against each other. (4) This section does not affect any other rights or obligations of a debtor or creditor in respect of mutual debts, whether arising in equity or otherwise. (5) This section is subject to section 120 of the Industrial Relations Act 1996 . (6) In this section, debt means any liquidated claim. " 23 It was submitted before this Court that her Honour was not entitled to conclude that there was no cause of action pleaded in the Defence. It was submitted that, however imperfectly, the Defence of set-off was squarely raised. 24 Counsel addressed her Honour on set-off as contemplated by s 21. In this Court set-off under s 21 was not pursued. Counsel relied instead on equitable set-off. It is unclear whether equitable set-off was argued in the Local Court. A defendant may rely on equitable set-off, whether or not the contrary claims are mutual in the sense required by the statutory right in section 21 and irrespective of whether both claims involve liquidated demands. The right of set-off in equity depends on the more general proposition that the contrary liabilities are sufficiently closely connected that it would be inequitable for the plaintiff to be permitted to proceed with its claim without making an allowance for the defendant's claim against it: Roadshow Entertainment Pty Ltd v ACN 053 006269 Pty Ltd (1997) 42 NSWLR 462. In Equititrust v Franks (2009) 258 ALR 388 Macfarlan JA said at [59]- " I mention in conclusion in relation to s 21 that that section speaks of a defence of set-off being "filed". I do not regard this reference as precluding a defence of set off being raised where, although not contained in a filed form of defence, the defence, as here, is litigated at the hearing." 25 In AWA Limited v Exicom Australia Pty Ltd (1990) 19 NSWLR 705 at 711, Giles JA said- "Thus the effect of an equitable set-off is not just a restraint upon enforcement of a judgment, but a restraint which if imposed will have important consequences if (for example) the plaintiff be insolvent. Its effect is not just procedural: see Derham, Set-Off (1987) (at 47-52). There must be something additional to the fact of a cross-demand to cause the court, in the exercise of its equitable jurisdiction, to require the plaintiff to set-off against his claim the claim of the defendant.

That requirement has often been expressed in language to the effect that the equitable set-off must go to the root of or impeach the title of the plaintiff's claim. What is meant by such phrases, particularly in the light of the more recent cases, itself needs explanation. In D Galambos & Son Pty Ltd v McIntyre (at 18), Woodward J extracted from the language used by Lord Cottenham LC in Rawson v Samuel and the cases to which his Lordship referred that the prerequisites of an equitable set-off were clear cross-claims for debts or damages which were:

'… so closely related as to subject-matter that the claim sought to be set-off impeached the other in the sense that it made it positively unjust that there should be recovery without deduction .' (Emphasis added.) In British Anzani (Felixstowe) Ltd v International Marine Management (UK) Ltd , Forbes J referred (at 145) to the essential attribute of a valid equitable set-off that the equity must go to the very root of the plaintiff's claim, but went on to adopt as a felicitously expressed statement of the principle the passage in the judgment of Parker J in Compania Sud Americana de Vapores v Shipmair BV (The "Teno") [1977] 2 Lloyd's Rep 289 at 297: '… where the cross-claim not only arises out of the same contract as the claim but is so directly connected with it that it would be manifestly unjust to allow the claimant to recover without taking into account the cross-claim there is a right of set-off in equity of an unliquidated claim.' His Lordship went on to say that it was not necessary that the cross-claim arose out of the same contract as the claim, but could be sufficient if it arose otherwise provided there was the requisite close connection, and after citing a passage from Hanak v Green [1958] 2 QB 9 said (at 155):

'… In other words, in considering questions of this kind it is what is obviously fair or manifestly unjust that will determine the solution. This is because today, while it is necessary to look back before the Judicature Act to discover the broad principles upon which equity would grant relief, it may not be helpful to seek to find out from the cases what a court of equity would have done in a similar case. The principle may be derived from the older cases. The application of that principle should be reached by a consideration of what today would be regarded as fair or just.'" 26 Bonfiglioli considered the coolers returned in the circumstances I have mentioned as worth $4,000 and considered it just that, provided it paid the bill, Concrete Equipment should have a credit for that amount. It seems to me that however the claim was pleaded, Concrete Equipment raised a claim of set-off for the cost, or perhaps the value, of the coolers, and that Mr Lewis' evidence supported it. In my opinion her Honour erred in law in regarding the claim as available only within the confines of s 21. 27 In my opinion the judgment debt should be reduced by that sum. 28 The next complaint was that her Honour erred in failing to take into account a payment made on behalf of Concrete Equipment to Bonfiglioli on 2 October 2008. During the course of the hearing on that day, the second day of hearing, Counsel for Concrete Equipment made this announcement- "HOLMES: Your Honour, before we begin again, there's a matter that I'll deal with now; I would otherwise have dealt with it prior to calling Mr Galijan, but it's an important aspect of the defendant's case and I had to get some instructions about it. Now, what it is that I have here, and I'm instructed to provide a cheque to the plaintiff, and the cheque represents the admitted portion of the claim, in essence, and this is something which on the last hearing date was flagged and was correctly pointed out by your Honour that the offsetting claim doesn't serve to extinguish the entirety of the plaintiff's claim. So, the cheque that I have, and I'm instructed, comprises this, comprises the balance of the claim which appears in the statement of claim together with interest at the rate of 10.5% due today. Now, clearly, that's without prejudice to the offsetting claim, but as it's something that's admitted in terms of that portion of the claim, then it is something which the clients indicate they're willing to have flagged." 29 Her Honour and the representative of Bonfiglioli asked for particulars to explain what precisely what was represented by the money it was intended to pay over. Counsel for Concrete Equipment handed a bank cheque to the representative of Bonfiglioli in the sum of $23,360.86. Counsel also handed to the legal representative to Bonfiglioli a handwritten sheet outlining the composition of the amount of the bank cheque. That document was in these terms- " Summary of Payment on 2.10.08

Invoice amount $45,119.80 (inc GST) Less credit for coolers $4,400 (inc GST) Sub Total $40,719.80 (inc GST)

Less set off claim $20,670.14 (inc GST) Sub Total $20,049.66

Plus interest from service $2,428.21 (inc GST) Of SOC (7 August 2007) to 2 October 2008 @ 10.5%

Plus filing and $883 solicitors fees

Total $23,360.86" 30 On 23 October 2008 the solicitor for Bonfiglioli wrote to solicitor for Concrete Equipment mentioning the receipt of the cheque and the payment sheet and continued- "As you are aware, our client is seeking to recover the entire amount sought in its Statement of Claim dated 7 August 2007 (plus ongoing interest) less an amount to be deducted in relation to the coolers in the amount of $2,200.00 (inclusive of GST). We note that your client has given our client the bank cheque to be applied to the amount sought in the Statement of Claim pursuant to the attached payment sheet. Our client will not settle these proceedings nor will it reduce or compromise its claim for the amount of $23,360.86 as specified in the bank cheque. Accordingly, please advise us of the following:-

That your client has sent the bank cheque to our client in part payment of the Statement of Claim issued in these proceedings on 7 August 2007.

That by banking the bank cheque in the amount of $23,360.86, our client does not waive any right or entitlement to recover from your client the balance of the amount sought in the Statement of Claim over and above the amount of $23,360.86 as specified in the bank cheque.

That the plaintiff does not waive any right of entitlement to seek the recovery from the defendant any judgment which is entered in its favour for an amount on its statement of claim in excess of the amount of the bank cheque.

We look forward to receiving your urgent response on or before 4pm on 24 October 2008. In the event that we do not receive confirmation from you of the matter specified above, our client shall not bank the bank cheque until such time as judgment is given in these proceedings. If a judgment is made in favour of the plaintiff, then, the plaintiff shall apportion the bank cheque to the payment of that judgment amount." 31 The solicitor for Concrete Equipment did not reply. 32 Her Honour made no mention of this matter in giving judgment. Counsel for Concrete Equipment submitted in this Court that her Honour ought to have referred to the matter and to have given full credit to Concrete Equipment for the amount of the cheque. 33 In my opinion the cheque did not constitute and could not have been understood by the Court or by those advising Bonfiglioli as constituting part payment of the amount claimed. Counsel for Concrete Equipment stated in court that the payment was offered without prejudice to some parts of Concrete Equipment's claim by way of Defence. The document handed over with the cheque was expressed to be without prejudice. In my opinion it was reasonable for the solicitor for Bonfiglioli to write as he did. I think that the failure to respond is telling. I do not think that Concrete Equipment was entitled, by the tender of a cheque on uncertain conditions, to obligate Bonfiglioli to accept the cheque or suffer the consequences in the quantum of judgment or in costs. I think it significant also that, having announced in court the intention to hand over the cheque and having been requested to supply particulars, Counsel did nothing further to throw any light on the matter. In my opinion the Court could not in all the circumstances give effect to the offer or the delivery of the cheque. 34 It seems possible that when required to satisfy the judgment debt Concrete Equipment will be able to demonstrate that it has paid Bonfiglioli moneys on account of its claim. In that event Concrete Equipment will be entitled to proportionate relief from the judgment debt. 35 The next ground of appeal asserts that her Honour awarded interest at a rate in excess of 61% per annum despite there being no grounds to do so. Two arguments were put to the Court. The first was that Bonfiglioli was claiming interest at 30% per annum but there was no evidence upon which an award could be made to allow interest at that rate. Some lesser rate of interest should therefore apply to whatever remained of the judgment debt after the determination of this appeal. 36 I mentioned earlier that Bonfiglioli's amended quotation bore the statement that all quotations were subject to B.T.A's general conditions of sale. The reference to B.T.A was obviously a reference to Bonfiglioli's full name. 37 Mr Lewis was cross-examined about this matter. This passage is taken from page 16 of the Transcript of 2 October 2008. Mr Lewis was being asked about paragraph 17 of his statement in which he had referred to the notation on the quotation- "Q. If you can go to paragraph 17, please. You say: I note the revised quotation, which is annexure B of my witness statement, provides that all quotations are subject to BTAs general conditions of sale? A. Mmm.

Q. There's no document that's headed BTAs general conditions of sale in evidence, is there? A. No, there's a mistake there, admittedly. When it was changed in 2003, our finance manager changed it to conditions of trade which is actually wrong. We're currently amending that. I accept that's an error on our part, but the conditions of sale, the original ones that Michael would have received when we opened the account would have said conditions of sale on it.

Q. And what are you saying those general conditions of sale are, which document? A. That was the document that I referred to, your Honour, previously where we can provide it if you want to see it. It was the original terms and conditions of sale that we had up until 2003 when they were amended." 38 Mr Lewis's reference to "Michael" was to Mr Michael Galijan, Managing Director of Concrete Equipment, with whom Mr Lewis had dealt in this matter and, before that, in numerous other matters. 39 There was in evidence a copy of a document called "Bonfiglioli Transmission (Aust) Pty Ltd-Terms & Conditions of Trade (AUS)". Clause 12 of that document ran, in part- "12. Default & Consequences of Default

12.1 Interest on overdue invoices shall accrue from the date when payment becomes due daily until the date of payment at a rate of 2.5% per calendar month and shall accrue at such a rate after as well as before any judgment." 40 In giving judgment on 19 February 2009 her Honour said this- "I find in favour of the plaintiff in the sum of $48,582.00 together with interest pursuant to an agreement between the parties at an agreed rate of 30 per cent per annum from 23 January 2007 to 7 August 2007 and thereafter per day until today and costs as agreed or assessed." 41 In my opinion there was before her Honour evidence upon which she was entitled to find that there was an agreement between the parties that interest on unpaid debts should be payable at 30% per annum, which is equivalent to the stated rate of 2.5% per calendar month. The first argument fails. 42 The second argument was based on the certificate of judgment prepared by the Registrar of the Local Court. The certificate is dated 19 February 2009, the day on which her Honour delivered judgment, and is signed by the Registrar. It is not her Honour's document. It sets out the judgment amount and continues-

"Amount of claim: $48,582.79 plus interest as calculated by the Registrar.

I have calculated the interest AT 30% from 23/1/2007 TO 7/8/2007 ($15,962.31) AND THEREAFTER AT $37.08 PER DAY UNTIL 19/2/2009 ($20801.88) in the sum of $36,764.19" 43 The expression "interest at a rate of in excess of 61% per annum" used in expressing this ground of appeal derives from the Registrar's calculation. The argument is, I think, that the interest calculated on the judgment debt for the period stated in the certificate of judgment shows that an interest rate of something exceeding 61% per annum must have been used. 44 I do not think it necessary to decide whether that contention is correct. As I have said, her Honour was entitled to award interest on the judgment debt at 30% per annum. If any other than that rate of interest has been used to arrive at the interest figure stated in the certificate of judgment, there has been an error in the preparation of the certificate. In that event Concrete Equipment's remedy will be to approach the Registrar and have interest calculated properly. In any event interest will have to be calculated again in consequence of the orders I intend to make. 45 This ground of appeal fails. 46 The final ground of appeal asserts that the Magistrate failed to provide written reasons for her decision, despite a request from the plaintiff to do so. Judgment was delivered orally. There are two documents relating to the form of the judgment. The first is a transcript of part of what her Honour said in delivering judgment. It begins with this notation- "Tape C1, Approximately 7 minutes, unable to be transcribed due to faulty tape" 47 After that the transcript appears to record the whole of what her Honour said until announcing judgment in the terms I have already recorded. 48 The submission was that Concrete Equipment was not represented when judgment was given orally. It had no record of what her Honour said in the unrecorded portion of the judgment. Concrete Equipment wrote to the Local Court requesting the reasons for judgment. The incomplete transcript was the response. The missing part of the judgment may or may not have contained reasons for the decision unknown to Concrete Equipment which, having been unrepresented, was placed at a significant disadvantage. What the disadvantage was was not stated. It was further submitted that there had been a denial of natural justice. 49 There is a second document. The solicitor for Bonfiglioli informed this Court that it had been supplied by the Local Court registry from its file. A copy is Exhibit L to the affidavit of Donald Ward Taylor sworn on 19 November 2009. It comprises six and one-half pages. About three quarters of the way down the fourth page, in mid sentence, the text matches the commencement of the official court transcript to which I have referred. Thereafter, although they are not in identical terms, the two documents are substantially same in their expressed intent. 50 It was submitted by the solicitor for Bonfiglioli that this was a further record made by the Court of the judgment. I think that that may not be an accurate way to refer to the document, however, because it seems to me more like a draft from which her Honour worked during the delivery of her oral reasons for judgment. That is what I take it to be. 51 Altogether, that document and the original transcript deal adequately with the issues apparently raised at trial. They do not in combination appear to omit consideration of any matter which gives particular cause for concern on the part of Concrete Equipment. No particular matter is pointed to by Concrete Equipment in that respect. I do not think that the Court failed to provide written reasons for the decision. I do not think that Concrete Equipment suffered any disadvantage. I do not think that there has been any denial of natural justice. This ground of appeal fails. 52 I propose to vary the terms of the orders appealed from by reducing the amount of the verdict by $4,000 to allow for Concrete Equipment's equitable set-off of the value of the coolers. I would not vary the Magistrate's order that Concrete Equipment pay Bonfiglioli's costs in the Local Court. I shall vary the order for interest at 30%per annum only so as to extend its operation to the date of this Court's orders. 53 Concrete Equipment has for the most part failed in its appeal. However, it succeeded on the ground of set-off, and that issue occupied a substantial part of the evidence and took up a substantial part of the hearing time, including Counsel's submissions. Accordingly, I do not think that either side should be ordered to pay the other's cost of appeal. 54 I make the following orders- 1. Extend until 13 April 2010 the time within which to seek leave to appeal against the orders of the Local Court made on 19 February 2009; 2. Grant leave to appeal against those orders; 3. Quash the orders and substitute the following- A verdict and judgment for Bonfiglioli in the sum of $44,582 together with interest at 30% per annum from 23 January 2007 to the date of these orders; Concrete Equipment to pay Bonfiglioli's costs in the Local Court in an amount to be agreed or assessed; 55 I make no order as to the costs of appeal.

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