Dovuro Pty Ltd v Wilkins

On appeal from a judge of the Federal Court of Australia

AND: ROBERT JOHN WILKINS, EILEEN JOYCE WILKINS, TREVOR IAN WILKINS, SUSAN CAROLINE WILKINS and LOCHIEL NOMINEES PTY LIMITED as trustee for the R & E WILKINS FAMILY TRUST, all trading as R & E WILKINS

REASONS FOR JUDGMENT FINKELSTEIN J: 7 On Dovuro's motion, I agree with Gyles J. The course that Gyles J takes bears similarity to that taken by Deane J in Theophanous v Herald & Weekly Times Ltd (1994) 182 CLR 104. In any event, I incline to the view that Deane J was not correct in Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311. The appellant, Dovuro, required leave to argue the point not taken before the trial judge. That leave having been refused by majority, the point was not before the court for its determination. Hence the appeal could not be disposed of as if the matter were at large. An analogy, although imperfect, may be drawn with a case where leave to amend has been refused. 8 On the question whether Cropmark is bound by the judgment I note that the whole object of third party procedure is to get the third party bound by the decision between the plaintiff and the defendant: Barclays Bank v Tom [1923] 1 KB 221 at 224. It may be observed that in England (O 16, r 1(3) of the Rules of the Supreme Court 1965 (UK) and in other jurisdictions (eg, O 11, r 1 of the General Rules of Procedure in Civil Proceedings 1996 (Vic)) the rules provide that where a third party notice is served, the third party becomes a party to the action. The Federal Court rules have no counterpart but O 5, r 12(2) does say that the court may give directions concerning, among other matters, "the extent to which the cross-claimant and a respondent to the cross-claim shall be bound as between themselves by a judgment … on the claim on the originating process …". No direction was given, but the trial was conducted on the basis that Cropmark would be bound by whatever findings the trial judge made on Wilkins' claim. It is now too late to resile from that position. 9 On Cropmark's motion I agree with Gyles J and have nothing to add. 10 On the question of costs I also agree with Gyles J.

I certify that the preceding four (4) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Finkelstein.

ON APPEAL FROM A JUDGE OF THE FEDERAL COURT OF AUSTRALIA

AND: ROBERT JOHN WILKINS, EILEEN JOYCE WILKINS, TREVOR IAN WILKINS, SUSAN CAROLINE WILKINS and LOCHIEL NOMINEES PTY LIMITED AS TRUSTEE FOR THE R & E WILKINS FAMILY TRUST, ALL TRADING AS R & E WILKINS

GYLES J: 11 On 21 December 2000 the Court pronounced orders, with each member of the Court publishing separate reasons. The substantive orders were as follows: 1. The appeal by Dovuro Pty Limited ("Dovuro") against the declarations made by Wilcox J on 19 May 2000 be dismissed. 2. The appeal against the order of Wilcox J of 23 December 1999 dismissing Dovuro's cross claim against the second respondent be allowed and the order dismissing the cross claim be set aside. 3. The appeal otherwise be stood over to a date to be fixed for the purpose of determining what other orders, including orders as to costs, should be made." The Court has heard argument as envisaged by O 3 and has also heard argument on notices of motion filed respectively by the appellant, Dovuro Pty Limited ("Dovuro"), and the second respondent, Crop Marketing New Zealand Limited ("Cropmark").

DOVURO'S MOTION 12 Dovuro's notice of motion sought the following orders: "1. The orders made by the Full Court on 21 December 2000 be reconsidered; and 2. In view of the orders made by the Full Court on 21 December 2000, orders as follows: (a) appeal by Dovuro Pty Ltd against the declarations made by Wilcox J on 19 May 2000 be allowed with costs; (b) the court make such other consequential orders as are appropriate." 13 The essence of Dovuro's argument is that I should have given effect to the view I expressed as to the availability to Dovuro on appeal of the argument as to the absence of a duty of care and my conclusion that there was no duty of care owed by Dovuro to the first respondent, with the consequence that there would have been a majority consisting of Finkelstein J and myself for allowing the appeal. There is no dispute as to the proposition that members of a court need not agree as to reasons for decision. So long as the majority favours a particular order, that will be the order of the court. It is clear from my concurrence in the orders of the Court that I deferred to the separate views of Branson J and Finkelstein J that Dovuro should not be permitted to rely upon an argument upon appeal that Dovuro owed no relevant duty of care. Indeed, at par 235 of the principal judgment I described what had occurred as a procedural ruling. 14 The primary submission for Dovuro was that whether a point taken for the first time on appeal may be pursued is a matter for each judge to decide if and to the extent to which the matter is relevant to his or her own decision. A number of cases in the High Court were referred to which, it was put, illustrated that various justices of the High Court had, from time to time, acted upon the view that this point or related questions are not governed by majority decision - including Crampton v The Queen (2000) 176 ALR 369 at pars 9, 13, 21, 22, 47, 52, 57, 65, 68, 113, 121, 123, 148, 155 and 165; Romeo v Conservation Commission of Northern Territory (1998) 192 CLR 431 at pars 24, 46, 111, 114, 144 and 146; Van Gervan v Fenton (1992) 175 CLR 327 at 339-341, 351; Tyson v Brisbane Market Freight Brokers Pty Ltd (1993) 120 ALR 1 at 5, 9 and 11; Cohen v Lapin (1924) 35 CLR 247 at 255 and 259; and Davison v Vickery's Motors Ltd (in liq) (1925) 37 CLR 1 at 7 and 29. To these authorities might be added the view of Deane J in Evda Nominees Pty Ltd v Victoria (1984) 154 CLR 311 at 316, and the approach of Gaudron and Gummow JJ in the recent case of Commissioner of Taxation (Cth) v Payne [2001] HCA 3 at pars 56 and 57. 15 The findings of the members of the Court upon the issue as to whether Dovuro can rely upon the point are to be found in the principal judgment as follows: Branson J at par 38; Finkelstein J at par 114-120 (inclusive); and my own views at par 180 and par 181. It is only necessary to add that at no time during the hearing was an objection taken to the fact that no amendment was sought to the notice of grounds of appeal by Dovuro to encompass the issue. On the hearing of this motion, when attention was drawn to that matter, and after argument, the Court ruled that if Dovuro were able to persuade the Court of the merit of its argument then an appropriate amendment to the notice of appeal would be made. 16 Counsel for Cropmark supported the submissions made on behalf of Dovuro. Counsel for the first respondent submitted that I was entitled to defer to the majority and, after some equivocation, that I was bound to do so. No authority was cited. 17 In my opinion I was at least properly entitled to defer to the majority of the Court on the particular point even if not bound to do so. The question as to whether a party may withdraw a concession made below and rely upon a point not argued below is a matter for leave, not a matter of right, and is therefore a matter of practice and procedure arising in the course of disposing of an appeal. In my opinion, it is usually appropriate that such a question be decided by the majority. In the present case the Court did not decide the question as a preliminary issue before hearing argument. In fact, the argument had been heard in any event through counsel for Cropmark, and counsel for Dovuro sought to adopt those arguments. Put another way, the Court did not decide the issue during the hearing but elected to decide it as part of the final judgment. This is common enough with matters of practice and procedure which arise in the course of the hearing. However, if the Court had decided to resolve the matter immediately it was raised, that is, prior to hearing any further argument which counsel may have wished to advance on the substance of the issue, it would certainly have been orderly for the matter to have been decided by majority and, in my opinion, to do so would be consonant with the ordinary practice of the Court and other appellate courts. If leave is to be granted it is normally granted by the Court rather than by an individual judge: Iyer v Minister for Immigration & Multicultural Affairs [2000] FCA 1788, par 14-16 (inclusive); H v Minister for Immigration & Multicultural Affairs [2000] FCA 1348; Harris v Repatriation Commission [2000] FCA 1687; Eastman v R (2000) 172 ALR 39 at par 9; State Superannuation Board v Trade Practices Commission (1982) 150 CLR 282 at 287-8; CSR Ltd v Cigna Insurance Australia Ltd (1997) 189 CLR 345 at 405-6. 18 It is not necessary to consider the position which would have arisen if I had sought to limit my judgment to allowing the appeal on the basis that no duty of care was owed. If that had occurred there would be the need for much closer examination of the authorities cited by counsel for Dovuro and, no doubt of other cases, than has been necessary to dispose of the present motion. In my opinion the motion should be refused.

argument on reserved leave 19 The context is explained in par 235 of the judgment in the proceedings, which I do not repeat. Cropmark used the words "… particular damage which Dovuro sustained was because of the effect of these judgments, substantially as a result of out-of-Court admissions together with the concession as to the existence of a duty of care" to found a submission that the damage was caused by those factors rather than by the breach of warranty. It is submitted for Dovuro that the reasoning of Finkelstein J in pars 155 and 156 of the principal judgment, agreed with by me in the first sentence of par 235, compels the conclusion that, in the relevant sense, the damage was caused by the breach of warranty. Neither side referred to any authority and there was no separate discussion of the issue of foreseeability. It was submitted on behalf of Dovuro that once a judgment was obtained in proceedings to which Cropmark was a party, Cropmark was bound by the judgment as much as Dovuro and could not question it and, further, that it is not possible to attribute a judgment to any particular aspect of the matter at hearing. 20 The presence of undesirable seed was undoubtedly the cause of both the out-of-court admissions and the litigation. Nothing occurring in the ordinary course of that litigation would break the chain of causation. The making of a concession in the course of address in a matter of this kind is an ordinary incident of litigation. Indeed, the concession accords with the view of a majority of the members of this Court as to the existence of a duty of care. The way in which the judgments panned out is also an ordinary incident of litigation. If Dovuro had won before the trial judge, it would have had a good case for indemnity for the costs of defending the action against Cropmark. Thus, even if it is open to Cropmark to go behind the judgment, it would be to no avail. In my opinion the argument of Dovuro is sound and Cropmark is bound to indemnify Dovuro for the damages it is ordered to pay to the first respondent. Whilst it is difficult to envisage circumstances in which this indemnity is not to be complete, it will be open to Cropmark to argue for a different position in relation to particular heads of damage. In any event, Cropmark is entitled to participate in the assessment of damages.

CROPMARK'S MOTION 21 Cropmark's notice of motion was as follows: "1. That the orders made by this Court on 21 December 2000 not be entered until further order of this Court. 2. The leave be granted to Cropmark to make further submissions on the application of clause 3 of Cropmark's General Conditions of Sale upon such terms as to form and time as the Court may direct. 3. That leave be granted to Cropmark to make submissions on the damages which result from any breach of Cropmark's General Conditions of Sale." 22 The substance of the application is captured by a proposed amendment to the defence to amended cross claim by Dovuro against Cropmark as follows: "(f) in the alternative, the conduct of Dovuro in making the concession at trial that it owed a duty of care to the applicant and/or the out-of-court admissions (referred to in the reasons of Gyles J at [235]): (1) Was not reasonably foreseeable by Cropmark and could not be reasonably foreseen at the time of contract. (2) Was the effective cause of Dovuro's liability to the applicants (if any). (3) Was a cause of circumstance beyond Cropmark's control within the meaning of condition 3 of the contract." Whilst (1) and (2) were open to be argued pursuant to the leave expressly reserved in the judgment, (3) is a new point. 23 Even if leave were granted, the argument is unsound for the reasons I have given in relation to the argument reserved. It is, in any event, far too late to be making a substantive amendment of this character. It should be noted that it was argued for Dovuro that the point is, in any event, misconceived, as Cropmark had the ability to seek to directly argue the issue of Dovuro's duty of care once the concession was made or otherwise protect itself at the trial but did not do so and so is bound just as much as Dovuro by the judgment.

costs 24 In my opinion, the reasons advanced by Cropmark are not sufficient to displace the ordinary consequences of the disposition of the appeal. Dovuro should pay the costs of the first respondent of the appeal; Cropmark should pay the costs of Dovuro of the appeal against dismissal of the cross claims and of the hearing below and Cropmark should pay Dovuro the costs it pays the first respondent of the appeal and the hearing below. The costs of this further hearing should be costs in the appeal.

orders 25 I would propose the following further orders:

1. That the notices of motion of the appellant and of the second respondent be dismissed.
2. That the costs of and incidental to the hearing on 30 January 2001, including all notices of motion, be costs in the appeal.
3. That the proceeding be remitted to the primary judge for determination of outstanding issues on the application and the first cross claim.
4. That the appellant pay the costs of the first respondents of the appeal.
5. That the second respondent (the first cross respondent below) pay the costs of the appellant (the first cross claimant below) of the appeal against dismissal of the cross claim and of the hearing below.
6. That the second respondent pay the appellant the costs that the appellant pays to the first respondents of the appeal and the hearing below. I certify that the preceding fifteen (15) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gyles.

Associate: Dated: 5 March 2001 Counsel for the Applicant: Mr BW Rayment QC with Mr MM Macrossan

Solicitor for the Applicant: Griffith Hack

Counsel for the First Respondent: Mr JE Rowe with Mr M Dempsey

Solicitor for the First Respondent: Peter Long & Co

Counsel for the Second Respondent: Mr PM Donohoe QC

Date of Hearing: 30 January 2001