Nock v Maddern

Court of Appeal (NSW)|2018-03-22|Before: Leeming JA, White JA

Background facts

Mr Nock's claim arose from arrangements for the agistment of Dr Maddern's cattle on Mr Nock's farm at Fort Gunning, Collector Road, Gunning. Dr Maddern started agisting cattle on the property in 1986. The property was then owned by Mr Nock and his sister. Following a falling out between Mr Nock and his sister, Mr Nock became the sole proprietor of the Gunning property in 1999 and the agistment arrangement continued between him and Dr Maddern. It was admitted on the pleadings that it was a term of the agistment arrangement that Dr Maddern would pay agistment fees calculated at $2.50 per head per week for yearlings and older cattle, and $1.50 per head per week for calves older than six months. That price was agreed in 1986.
Dr Maddern paid agistment fees up to the financial year ended 30 June 2004. After 30 June 2004 he made no further payments, other than two payments totalling $2,200 in about June or July 2010. He said that he did work and provided materials on the property for which he was unremunerated and which he was not required to do under any term of the agistment arrangements. He contended that he made payments in kind. Mr Nock disputed this. Dr Maddern said that he stopped making payments in 2004 for cattle agistment because he was having financial difficulties due to the drought and that he asked that agistment fees be waived while he was handfeeding because of drought. He said that he asked for Mr Nock's consideration to waive agistment fees until seasons got better.
On 11 January 2010 Mr Nock sent a long email to Dr Maddern. He said that the agistment rate had remained unchanged since the rates were set in the 1980s, but what had changed was that Dr Maddern had not paid anything since early 2004. He asserted that Dr Maddern was his largest debtor. He did not attempt to quantify the debt. Part of the difficulty in quantifying the debt is that only Dr Maddern knew the numbers of cattle that were agisted on the property from time to time. Mr Nock proposed that a new agistment rate be set at close to a "real commercial rate". He proposed that he allow a 20 per cent discount if monthly agistment were paid within two weeks of the end of the month, but that agistment outstanding for more than one month should accrue at the full commercial rate and should be subject to an interest rate of 10 per cent per annum. Mr Nock's email concluded as follows: "Putting such possibilities aside I want to reach a workable arrangement with you in respect of both settlement of the outstanding debt and ongoing payment of agistment as the debt occurs into the future. The establishment of a new arrangement will provide a trigger for recovery of interest on outstanding debts. I think it would be quite fair for the new arrangement to impose the 10% interest on outstanding agistment debt for new debts, as well as for past debts remaining unpaid at the commencement of the new agreement on 1 April 2010. Clearly you are in serious default of any reasonable understanding of our agreement and it is my view that any lead time rights which I might otherwise like to apply to changes to the agistment agreement are negated by the default. Unless we agree on some alternative arrangement, the agistment arrangements for Gunning will change as from 31 March 2010. I am prepared to consider other arrangements which might be more workable for you. Otherwise, the arrangement from 31 March 2010 will be that any outstanding amounts owing from that time onwards and including existing outstanding payments, will accrue interest liability at the rate of 10% per annum or such higher amount as might from time to time be applicable to unpaid debts in judgements handed down by NSW Local Courts. Agistment debt will accrue at the rate of $5 per head per week for yearlings and older cattle including bulls. Calves over 3 months old will accrue agistment at the rate of $3.50 per head per week. If agistment due is paid within one month of the end of the month in which the debt accrued, a discount of 20% will be applied and applied as an offset against the following month's agistment liability."

The pleaded claim

Mr Nock filed a statement of claim in the District Court on 2 April 2014. The claim was amended on 14 April 2016. The statement of claim pleaded what were described as causes of action for breach of contract and promissory estoppel.
Mr Nock pleaded that Dr Maddern by his email of 24 January 2010 had accepted the new terms of agistment arrangements proposed by Mr Nock on 11 January 2010, or alternatively, Dr Maddern "... by his email dated 24 January 2010 and by his subsequent conduct in continuing to agist cattle at Fort Gunning made representations that he agreed to the new terms." This was a pleading that Dr Maddern accepted the terms proposed by Mr Nock either by his email of 24 January 2010 or by his subsequent conduct in continuing to agist cattle on the property, or both.
Mr Nock also pleaded that by his conduct Dr Maddern represented that he agreed to the new terms. Mr Nock then pleaded that he relied upon that representation to his detriment by not commencing proceedings to recover the debt that had accrued from 2004, by not requiring Dr Maddern to remove his cattle from the property, by not arranging for alternative agistment and by continuing to pay maintenance and upkeep costs for the property. Mr Nock pleaded that it would be unconscionable for Dr Maddern not to be held to the representations pleaded (viz. that Dr Maddern agreed to the new terms).
Mr Nock also pleaded that he relied upon the representations contained in Dr Maddern's email of 20 February 2013 (see [17] above) by not commencing proceedings to recover the debt earlier than he did, by not requiring Dr Maddern to remove his cattle from Fort Gunning, by not arranging for alternative agistment at Fort Gunning and by continuing to pay maintenance and upkeep costs for the property. He alleged that it would be unconscionable for Dr Maddern not to be held to the representations contained in that email.
Mr Nock claimed a debt for the sum of $755,797.60, being agistment fees of $367,296 and pre-judgment interest of $387,835 plus filing and service fees. Alternatively, he sought damages for breach of contract and alternatively again, equitable compensation.
Mr Nock did not bring a quantum meruit claim, that is, a claim in restitution, for reasonable agistment fees for having allowed Dr Maddern to agist his cattle on the Fort Gunning property at Dr Maddern's request (compare the indebitatus counts given for agistment in Bullen & Leake, Precedents of Pleadings, 3rd ed (1868) at p 68). Implicitly he acknowledged that the parties continued in contractual relations. The question was whether the original contractual terms had been varied or replaced by terms Mr Nock said had been accepted in 2010 or whether Dr Maddern was estopped from denying that that was so.
No issue was raised before the primary judge (nor on appeal) as to the District Court's jurisdiction to award equitable compensation by holding Dr Maddern to the alleged representations. One might doubt that the causes of action pleaded as being based on promissory estoppel, would be available in the District Court. It is not clear that it is an action of a kind which, if brought in the Supreme Court, would be assigned to the Common Law Division (District Court Act 1973 (NSW), s 44(1)(a)) and does not fall within the equitable jurisdiction conferred on the District Court by Div 8 of Pt 3 of the District Court Act. Prima facie, the Law Reform (Law and Equity) Act 1972 (NSW) would be of no avail (s 7).
Moreover the District Court was bound by this Court's decision in Saleh v Romanous (2010) 79 NSWLR 453; [2010] NSWCA 274 in which Handley AJA (with whom Giles JA and Sackville AJA agreed) held that a promissory estoppel is a restraint on the enforcement of rights and must be negative in substance (at [74]).
Counsel for Dr Maddern candidly said that the case was litigated before the primary judge on the basis of Dr Maddern's acceptance that the District Court had jurisdiction to entertain the appellant's claim for equitable relief and that the cause of action based on promissory estoppel could be affirmatively advanced, as opposed to being purely a defence to a claim to exercise a legal right. Because, for the reasons which follow, the appellant's claim fails in any event, it is unnecessary to pursue these questions.

Reasons of the primary judge

Mr Nock served a Notice to Admit Facts to which there was no response from Dr Maddern. The primary judge recorded that various facts were taken to be admitted pursuant to UCPR, r 17.3(2), including: "(13) Since the Plaintiff became the owner of the Gunning property, the Defendant paid or arranged for payment of amounts, to the Plaintiff for agistment as follows: 1999/2000 $19500 2000/2001 $0 2001/2002 $26921.59 2002/2003 $14992.846 2003/2004 $14285.81 (14) The Defendant paid all agistment due up until 30 June 2004. ... (17) Since 30 June 2004 the Plaintiff has made a number of requests to the Defendant to provide full details of the number of animals the Defendant was agisting on the Plaintiff's property. (18) The Defendant has not provided specific details of the number of animals he has had on agistment on the Plaintiff's Gunning property since 30 June 2004."
The primary judge made the following findings: "(1) From 1999, the parties operated on an agistment agreement involving the defendant to pay an agistment fee of $2.50 per week for an adult cow more than 12 months old, and $1.50 per week for animals up to 12 months old. (2) I find that the defendant paid all outstanding agistment fees up until June 2004. (3) I find that the defendant made no payments to the plaintiff for agistment between June 2004 and 1 April 2010, by agreement because of drought conditions which affected the property. (4) I find that the average number of animals owned by the defendant, agisted on the plaintiff's property, was at all material times 60 cows. (5) On 11 January 2010 the plaintiff sent an email to the defendant proposing changes to the agistment arrangements with effect from 1 April 2010. (6) The defendant received that notice and responded to it on 24 January 2010. He did not accept the proposed new rates for agistment in that email. (7) The defendant continued to agist animals on the plaintiff's property after 31 March 2010. (8) The defendant made two agistment payments totaling $2,200.00 to the plaintiff in 2010."
His Honour considered the parties' submissions as to whether or not based on the principles stated in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 a reasonable bystander would regard the conduct of Dr Maddern, by continuing to agist his cattle on the land without any protest about the proposed terms, as indicating his acceptance of the terms stipulated by Mr Nock in his email of 11 January 2010. The primary judge concluded that no contract had been established between Mr Nock and Dr Maddern following Mr Nock's email of 11 January 2010 and that that email should properly construed as an invitation to treat by Mr Nock's proposing new agistment rates, which Dr Maddern at no time accepted. The primary judge concluded that in the absence of a concluded agreement the continued agistment of cattle on the property should be construed as being done pursuant to the previous arrangement between the parties which had been waived by the plaintiff during drought years between 2004-2009 by which otherwise continued (at [92]).
There was no appeal from the primary judge's rejection of Mr Nock's claim that by his conduct Dr Maddern had accepted the terms stipulated in his email of 11 January 2010.
The primary judge found that the agreed rates for agistment were $2.50 per week per cow, and $1.50 per week per weaner. His Honour found that a claim for payment of those fees was not maintainable prior to April 2008 by reason of s 14 of the Limitation Act 1969 (at [94]). His Honour found that any claim for equitable relief would also be barred by the application of the statute by analogy, applying Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 at [70]-[76]). His Honour found that the claims for a promissory estoppel were not made out. Neither Dr Maddern's email of 24 January 2010 nor his email of 20 February 2013 contained clear representations upon which equitable relief could be based. The primary judge found that Mr Nock did not rely on any such representation to his detriment and no prejudice arose by way of his altering his position as a result of any representation by Dr Maddern. Instead, what occurred was procrastination by Mr Nock in enforcing a debt acknowledged by Dr Maddern (at [97]). The primary judge found that the actual cattle numbers were incapable of precise calculation. The primary judge concluded that Mr Nock was entitled to recover agistment fees for the period of six years from April 2008 to April 2014 at an average yearly amount of $14,500. This was based upon the figures for 2002-03 and 2003-04 where the same rates applied. After making allowance for a sum of $2,200 paid by Dr Maddern in 2010 the total amount found to be owing was $84,800 before pre-judgment interest.

Grounds of appeal

There are three grounds of appeal, namely: 1. that the Court below failed to give effect to an admission of the quantum owing to the plaintiff made by the defendant in writing on 7 January 2014; 2. that the Court below erroneously found that debts incurred prior to April 2008 were statute-barred, when those debts were revived by later agreement between the parties; and 3. that the Court below erroneously found that the respondent's email correspondence and conduct did not give rise to promissory estoppel.

Alleged admission of 7 January 2014

Mr Nock submits that Dr Maddern admitted the quantum of the debt owing on 7 January 2014 in his email of that date quoted at [24] above.
In that email Dr Maddern admitted owing a debt to Mr Nock, a position he maintained in the hearing before the District Court. He did not admit owing any particular amount. The email was said to have been sent on a without prejudice basis. There was no objection to its admission into evidence. Nonetheless, a statement that something is said or offered "without prejudice" will be taken to mean that it is made without prejudice to what the position of the maker of the statement or offer would be, if the statement or offer is not accepted (Walker v Wilsher (1889) 23 QBD 335 at 337). Dr Maddern stated that the debt claimed by Mr Nock of $265,045 "is very large in relation to the agistment money owing". He noted that the agistment money Mr Nock was "asking for is $170,003". He did not admit that the amount of agistment that Mr Nock was asking for was the amount that was owing. He concluded his statement by saying that "The annual rate has fluctuated around $12,000 to $14,000 being at the high end." That may be an admission that between $12,000 to $14,000 per annum of agistment was owing. The primary judge gave judgment in favour of Mr Nock on the basis of yearly agistment fees having been owed of $14,500.
The spreadsheet attached to Dr Maddern's email of 7 January 2014 was not a statement of amounts that Dr Maddern admitted he owed. Rather, it was modification to Mr Nock's spreadsheet made to seek to demonstrate how much of Mr Nock's claimed debt was for agistment and how much for interest. Dr Maddern rejected the sum claimed by Mr Nock to be owing as being a reasonable compromise. The primary judge described the email as a "discussion point for a settlement arrangement" (Judgment at [50]). This assessment was correct. The primary judge did not err in failing to give effect to the alleged admission of the amount owing by Dr Maddern on 7 January 2014.

"Revival" of debts

Mr Nock submitted that debts incurred prior to April 2008 were not statute-barred because the debts had been "revived" by representations made by Dr Maddern in his emails of 24 January 2010 and 20 February 2013.
Those emails are referred to at [11] and [17] above. Mr Nock's counsel submitted that the 2010 email gave rise to "... an agreement which included a reinvigoration, for lack of a better term, of existing debt."
The email dated 24 January 2010 was not an acceptance of the terms proposed in Mr Nock's email of 11 January 2010. It was not an agreement to pay or revive debts payable for agistment fees. The email of 20 February 2013 constituted an acknowledgment that Dr Maddern was indebted to Mr Nock, but contained no agreement as to the amount of debt owed, nor what would be paid, nor when it would be paid, nor what debts were then owing.
On appeal, counsel for Mr Nock sought to contend that the email correspondence was a confirmation under s 54 of the Limitation Act 1969 (NSW). Section 54 relevantly provides: "54 Confirmation (1) Where, after a limitation period fixed by or under this Act for a cause of action commences to run but before the expiration of the limitation period, a person against whom (either solely or with other persons) the cause of action lies confirms the cause of action, the time during which the limitation period runs before the date of the confirmation does not count in the reckoning of the limitation period for an action on the cause of action by a person having the benefit of the confirmation against a person bound by the confirmation."
Mr Nock did not plead in reply to the defence that placed reliance on s 14 of the Limitation Act that the statute-barred debts had been confirmed by Dr Maddern or had been revived by agreement. In any event, the email of 24 January 2010 contains no confirmation of an existing debt. The email of 20 February 2013 contains no acknowledgment that Dr Maddern owed debts to Mr Nock in respect of agistment fees for any particular times or in any particular amounts, or in respect of any particular number of cattle. It was not confirmation of any particular cause of action that could stop time running pursuant to s 54, even if it were open to Mr Nock to rely upon that provision.

Promissory estoppel

The estoppel relied upon was an estoppel by representation. Mr Nock pleaded that by his email of 24 January 2010 and his subsequent conduct in continuing to agist cattle at the property, Dr Maddern represented that he agreed to the new terms contained in Mr Nock's email of 11 January 2010. The further promissory estoppel alleged was that Dr Maddern, by his email of 20 February 2013 represented to Mr Nock that he acknowledged "the debt" and indicated that he would resume payments. Mr Nock pleaded that in reliance upon both such representations and suffered detriment in the ways outlined at paras [28] and [31] above.
An estoppel by representation does not arise unless the representation is clear and unequivocal (Legione v Hateley (1983) 152 CLR 406 at 435-7; Foran v Wight (1989) 168 CLR 385 at 410-11, 435-6). The primary judge was correct in finding that in neither email did Dr Maddern make any clear representation of fact to Mr Nock upon which equitable relief could be based (Judgment at [97]). Nor was there any clear representation of intention.
If as Mr Nock alleged, Dr Maddern, by his email of 24 January 2010 and his subsequent conduct in continuing to agist cattle on the property, represented that he agreed to the terms proposed by Mr Nock in Mr Nock's email of 11 January 2010, then that representation would have amounted to an acceptance of the terms proposed by Mr Nock and would have given rise to a contract. No question of estoppel would arise. The same conduct was relied upon as giving rise to a contract, but there was no appeal from the primary judge's rejection of that claim. If Dr Maddern's conduct including his email of 24 January 2010 did not amount to an acceptance of those terms, and on appeal it was not contended that it did, then that conduct could not have amounted to a representation that he agreed to the terms proposed.
The primary judge also found that Mr Nock did not rely upon any of the alleged representations to his detriment and did not alter his position as a result of any representation by Dr Maddern. Those findings of fact are not challenged and are fatal to the claim based on a promissory estoppel, even if such a claim could give rise to a positive cause of action for equitable compensation. That is not a question that need be decided.

Conclusion and proposed orders

If, as Mr Nock asserted in his correspondence, the agistment rates that had been agreed in 1986 were no longer reasonable market rates for agistment in 2010, the result of the litigation might be regarded by Mr Nock as being unfair. However, parties are bound by the way their cases are conducted at trial. Mr Nock did not pursue a claim that if there were no new concluded contract in 2010 on the terms proposed by Mr Nock, nonetheless he had a claim in quantum meruit for reasonable agistment fees. Nor was there any evidence adduced that reasonable agistment fees would have been higher than the fees agreed upon in 1986.
For these reasons, each of the grounds of appeal fails. I propose that the appeal be dismissed with costs.
SACKVILLE AJA: I agree with White JA.

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: 25 October 2018

rimary judge held that there was no reliance or detriment - Appeal dismissed Legislation Cited: District Court Act 1973 (NSW), s 44(1)(a)) Law Reform (Law and Equity) Act 1972(NSW)

Common Law Division (District Court Act 1973(NSW)

Solicitors: Concorde Legal (Appellant) Creagh and Creagh (Respondent) File Number(s): 2017/290523 Decision under appeal Court or tribunal: District Court of New South Wales Jurisdiction: Civil Citation: [2017] NSWDC 216 Date of Decision: 28 July 2017 Before: Mahony DCJ File Number(s): 2014/101954

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