Nohra v Nando's Quality Meats Pty Ltd

Supreme Court of NSW|2021-09-16|Before: Gleeson J

Solicitors: Michael Vaughan & Co (Plaintiff) Nightingale Lawyers (Defendant) File Number(s): 2021/152068 Decision under appeal Court or tribunal: Local Court of New South Wales (at Penrith) Date of Decision: 17 March 2021 Before: Magistrate van Zuylen File Number(s): 2019/302960

Background

Nando's claim against Ms Nohra was to recover an alleged debt of $38,500 in respect of the supply of meat. Nando's also made a claim against two other defendants as alleged guarantors of Ms Nohra's debt: one was Mr Salvatore Cantarella, Ms Nohra's business partner; the other was Mamma Rosa's Kitchen Pty Ltd (Mamma Rosa), a company of which Ms Nohra and Mr Cantarella were directors, which carried on the business of producing pasta products and had supplied some of these pasta products to Nando's since 2009.
In October 2011, Ms Nohra and Mr Cantarella commenced a supermarket business at St Marys in Western Sydney using various business names until the shop closed in October 2015. Initially, the business name was Jardin Fresh Life. In August 2012 the name changed to Costless Supermarket for a short period, and in November 2012 the name changed to Sam's Fresh Food Barn.
Nando's pleaded claim was that the alleged contract with Ms Nohra to supply meat to the St Marys shop was partly oral and partly in writing and had been formed at a meeting in October 2011 attended by Ms Nohra, Mr Cantarella, and Mr Fedinand Inzitari, the owner and a director of Nando's. Nando's alleged that it was a term of the agreement that invoices would be issued by Nando's to the entity nominated by Ms Nohra or Mr Cantarella. The guarantees were alleged to be oral and also given at the October 2011 meeting. In closing submissions at trial, Nando's contended that the alleged contract with Ms Nohra was wholly oral.
Nando's issued invoices for the supply of meat to Jardin Fresh Life from October 2011 to August 2012, to Costless Supermarket from August 2012 to November 2012, and to Sam's Fresh Food Barn from November 2012 to May 2014. There was unchallenged evidence from Mr Cantarella that the business at the St Marys shop was owned by Boombell Pty Ltd which traded sequentially under the three business names as indicated.
The central issue in the Local Court was whether the contract for the supply of meat was between Nando's and Ms Nohra, or Nando's and Boombell. The magistrate concluded that on the balance of probabilities Nando's had proved its claim against Ms Nohra in the sum of $38,500. The magistrate dismissed Nando's claims against Mr Cantarella and Mamma Rosa.

Appeal from the Local Court

Ms Nohra has a right of appeal on a question of law pursuant to s 39 of the Local Court Act 2007 (NSW). She has a right of appeal with leave on a question of mixed fact and law pursuant to s 40(1) of the Local Court Act. There is no right of appeal on a question of fact.
The four grounds of appeal relied upon by Ms Nohra are set out below at [34]. Counsel for Ms Nohra submitted that if the appeal is successful on ground 1 (adequacy of reasons), ground 3 (constructive failure to exercise jurisdiction) or ground 4 (finding not reasonably open), the appropriate relief is that the judgment of the Local Court be set aside and the proceedings be remitted to the Local Court. Counsel further submitted that if the appeal is successful on ground 2 (construction of contract), the appropriate relief is that the judgment of the Local Court be set aside and the proceedings in the Local Court be dismissed, and Nando's be ordered to pay Ms Nohra's costs in the Local Court.
Despite the different issues raised by the four grounds (and different consequences in terms of available relief under s 41 of the Local Court Act), the appeal essentially turns on the question of who the parties to the contract were.

Extension of time

Ms Nohra requires an extension of time as her summons was filed out of time: Uniform Civil Procedure Rules 2005 (NSW) (UCPR), r 50.3(1). The principles governing the discretion to extend time for the filing of a notice of appeal are discussed by McColl JA in Jingalong Pty Ltd v Todd [2014] NSWCA 330 at [39]-[40]. Four factors of general relevance are the length and reason for the delay, whether the applicant has a fairly arguable case, and the extent of any prejudice suffered by the respondent to the application: Tomko v Palasty (No 2) (2007) 71 NSWLR 61; [2007] NSWCA 369 at [55] (Basten JA, Hodgson and Ipp JJA agreeing).
Here, the delay of about six weeks is relatively short and is adequately explained in the affidavits of Mr Michael Vaughan, Ms Nohra's solicitor. The delay was mainly occasioned by the time taken to obtain the transcript of the proceedings below and a copy of the sound recordings to check the accuracy of the transcript. Nando's has not identified any specific prejudice. Although the amount in issue is relatively small, there should be an extension of time insofar as any of the grounds involve a clear error causing demonstrable unfairness to Ms Nohra.

The evidence below

In the Local Court, the parties agreed the following facts which provide some background to the dispute: [1] The plaintiff and the first and third defendants were known to each other because of the supply by the second defendant to the plaintiff of pasta products starting in approximately 2009. [2] Between November 2011 and December 2014, the plaintiff and the first and third defendants have had dealings with each other. [3] The plaintiff made deliveries of meat products to a shop at St Marys at Station Plaza, Station Street between 2011 and 2014 inclusive. [4] Originally the shop was called Jardin Fresh Life, then Costless Supermarket, and then Sam's Fresh Food Barn. [5] The plaintiff issued invoices to Jardin Fresh Life, Costless Supermarket and Sam's Fresh Food Barn for the meat which the plaintiff delivered to the shop. [6] There were some disputes about the quality of meat delivered and some meat was returned. … [9] The shop ceased trading in October 2015. [10] Boombell Pty Ltd was deregistered in 2017.
Each of Mr Inzitari, Ms Nohra and Mr Cantarella gave affidavit evidence and were cross-examined in the Local Court.
Mr Inzitari deposed in his May 2020 affidavit to a conversation at a meeting with Ms Nohra and Mr Cantarella on about 19 October 2011 as follows: [8] … I was approached by the First Defendant (HS) and Third Defendant (SC) from the Second Defendant to supply them with meat products. We had a conversation with words to the following effect: HS: I want you to deliver meat to us and then we will sell it at our shops. Me: Sounds great. HS: I need you to invoice when you deliver the meat. Me: Ok? HS: Don't worry all the companies are [sic] same. Either way you are going to get paid for what you deliver. SC: We're are [sic] friends and I guarantee what Helen is saying. Me: Ok whatever you say. [9] The contract with the Defendants was oral in nature and was executed by way of a handshake. I trusted what they said to me. [10] The terms of the oral contract were that I would supply goods to the Defendants who would then sell the goods received at a profit as determined by the Defendants. … [15] At all material times my understanding from my conversation with the with [sic] First and Third Defendants that it was dealing with the Second Defendants and I had no knowledge of other entities at the time of making the contract with them. … [21] The plaintiff agreed to numerous requests for extension of the payment on debt incurred under Boombell Pty Ltd.
The second defendant in the Local Court was Mamma Rosa. Although no objection was taken to par [15] of Mr Inzitari's affidavit, evidence of his subjective understanding was irrelevant as such evidence was inadmissible: see [37] below.
While the magistrate accepted that Mr Inzitari was a credible witness, he did not accept Mr Inzitari's recollection of the oral discussion in 2011, given the passage of time.
Mr Inzitari gave evidence that Ms Nohra asked him to make out the invoices to Jardin Fresh Life from around 19 October 2011 to August 2012 and Costless Supermarket from around 18 October 2012 to 7 November 2012. He said he was instructed by Ms Nohra in a later conversation to invoice "Boombell Pty Ltd trading as Sam's Fresh Food Barn St Marys" up until 21 May 2014 (the date of the last invoice).
Mr Inzitari also gave evidence that he supplied meat on a line of credit. He annexed to his affidavits documents from Sam's Fresh Food Barn confirming the amount of the debt as at various dates, together with a letter of demand from Nando's to Mamma Rosa, as follows: 1. a summary headed "Sam's Fresh Food Barn St Marys old account" dated 7 February 2013 provided by Mr Dominic Strati, the manager of the St Marys shop, which included a schedule of invoices for meat supplied to Sam's Fresh Food Barn and pasta products supplied by Mamma Rosa, and showing a debt owing by Sam's Fresh Food Barn of $78,850.65 as at 5 February 2013. The summary contained the statement that "[a]ll future invoices as from 6.2.13 will be paid on delivery". (This document is referred to as Annexure D in the magistrate's judgment); 2. a letter from "Sam's Fresh Food Barn (Boombell Pty Ltd)" dated 14 February 2014 and signed by Ms Nohra above the typed words "Helen Nohra Director", confirming the balance of the debt then owing as $61,083.33 and stating that "[a]ll new meat deliveries will be paid in COD". (This document is referred to as Annexure A in the magistrate's judgment); 3. a facsimile from Ms Maria Perre of "Sam's Fresh Food Barn (Boombell Pty Ltd)" to Annette at Nando's dated 16 May 2014, confirming the amount of the debt owing as $48,317.04; 4. a facsimile on the letterhead of "Sam's Fresh Food Barn (Boombell Pty Ltd)" from Ms Perre to Annette at Nando's dated 8 August 2014, stating that the balance owing after set-off of Mamma Rosa invoices was $45,995.55. (This facsimile is referred to as Annexure B in the magistrate's judgment); and 5. a letter of demand from Mr Inzitari to Mamma Rosa (for the attention of Ms Nohra) dated 10 February 2015, claiming an amount of $40,000. (This document is referred to as Annexure C in the magistrate's judgment).
A bundle of invoices from Nando's addressed to "Sam's Food Barn" for the supply of meat dated between 3 January 2014 and 5 February 2014 were tendered in evidence as Exhibit 3.
In cross-examination, Mr Inzitari gave the following evidence: … So Mamma Rosa's supplied my business with their goods. Correct? And then they approached me for their … business that they opened up in St Marys. It was never any other deal.
After being shown Nando's invoices issued between 2012 and 2014, Mr Inzitari agreed that when Mr Cantarella started operating the shop in 2011, it was first called "Jardin Fresh Life", followed by "Cost Less [sic] Supermarket" and then "Sam's Fresh Food Barn". Mr Inzitari agreed that he did not send any invoices addressed to Ms Nohra.
It was also put to Mr Inzitari that he addressed the invoices to the shop and that the invoices were attended to by Maria (being a reference to Ms Perre), who was the office administrator of Boombell. Mr Inzitari responded: Well, Sam was sometimes there or Helen was there or Joe, her husband, was there. It didn't make a difference. It was delivered, that's all we wanted. Our stuff was delivered and they checked it off and we went on with our job.
Mr Inzitari accepted that he was aware that the company that owned the business "Sam's Fresh Food Barn" was Boombell Pty Ltd. He said: Well, yeah. I mean, I was aware one was Boombell, one was Jardin Fresh, one was Cost Less [sic]. What do you want me to do? Like, basically, you know, they would have put their own names on it. It's up to them what they've done with their business. It was up to me to just supply them their meat and get paid for it. That's all my deal was. There's nothing else about the rest of the names.
Ms Nohra gave affidavit evidence: I am the director of Boombell Pty Ltd t/as Sam's Fresh Food Barn at the premises known as shop M02-M03 5 Station Street, St Mary's [sic] NSW 2760 and also a business partner with the Third Defendant, Sam Cantarella but I did not actively operate or make decisions with respect to Boombell Pty Ltd because the company was operating solely under the Third Defendant's Management. I was a silent partner only in Boombell Pty Limited.
Ms Nohra explained the arrangements between Mamma Rosa, Nando's and Boombell in her affidavit: As a director of the Second Defendant [Mamma Rosa's Kitchen Pty Ltd], I would issue invoices to the Plaintiff for products sold and delivered and the account would then be turned into credit and offset against the amount owed by Boombell Pty Ltd to the Plaintiff. A copy of an invoice and note made by me is attached and marked "A".
The invoice marked A referred to by Ms Nohra was from Mamma Rosa to Nando's dated 23 September 2013 for the supply of pasta products totalling $188 and contained a handwritten note signed by Ms Nohra that read "no need for payment. Take off St Marys Account".
Ms Nohra admitted in her defence to paying or causing to be paid to Nando's ten payments between 5 March and 31 October 2015 totalling $6,751.55 (par [9]). She deposed that at the time of deregistration of Boombell in October 2017, she was not aware of any amount claimed by Nando's against Boombell.
In response to a question asked by the magistrate, Mr Cantarella explained why there were three different names for the St Marys shop. He said: … Because Jardin Fresh Life was like a franchise and didn't work out, so we got out of it, and because we had a lease there we called the store Cost Less [sic] Supermarket. Then we had a dispute with Coles because Coles said - because Coles were in the same centre and Coles said, "You can't use that name", and they were taking us to court, so to alleviate those dramas we just called it Sam's Food Barn.
In re-examination, Mr Cantarella gave evidence as to the corporate arrangement involving the three separate business names. He said they were all operating under the one company Boombell, "so Boombell trading as Jardin Fresh, then Boombell trading as Cost Less [sic], then Boombell trading as Sam's Fresh".

The issues at trial

On the first day of the hearing, the parties formulated the issues for resolution as follows: A. Whether the October 2011 agreement occurred? B. Whether the alleged agreement reached in October 2011 involved personal liability (as distinct from company liability) on part of [First Defendant] and [Third Defendant]? C. If there was an agreement arising out of the alleged meeting, what were the terms?
In closing submissions, counsel for Ms Nohra submitted that it was improbable that Ms Nohra would have entered into any agreement with a supplier to the shop at St Marys which made her personally liable for debts that might have accrued.

The judgment in the Local Court

In concluding that Nando's claim against Ms Nohra had been proved, the magistrate made the following findings (paragraph numbers have been added for ease of reference): [7] What were the terms of the contract? Mr Inzitari in his affidavit, he said that from around 18 October 2012 to 7 November - I am quoting directly from his affidavit - 7 November 2012, the plaintiff was instructed to invoice Cost Less [sic] Supermarket Pty Ltd at the request of the first defendant. He also says the plaintiff was instructed in a similar conversation to invoice Boombell Pty Ltd trading as Sam's Fresh Food Barn, St Mary's [sic] up until 21 May 2014. He said he invoiced the entity of the first defendant, "He told me to because we were delivering the meat to her anyway and I was getting paid, we had a good relationship. At all times I believed I was delivering the meat at the request of the first defendant". [8] The Court notes that there are a number of different entities. There was Nando's Fresh Meat, or Mr Inzitari, delivering the meat and there are a number of different names of entities which appeared to be operating on behalf of the store at St Mary's [sic]. There is Jardin Fresh Life, there is Cost Less [sic] Supermarket, Boombell Pty Ltd. Mr Inzitari at one stage says that he made purchases from Mamma Rosa's Kitchen. Given at that time the friendship and business relationship between Mr Inzitari, Ms Nohra, and Mr Cantarella, the Court is of the view that the meat delivery arrangement was or appeared to be in the Court's view a contract involving all the different parties but essentially Mr Inzitari on Nando's Meat delivering the meat and him receiving payment. [9] The Court is of the view that there was a contract between Mr Inzitari and, given the oral agreements, the friendship, the different invoicing arrangements, that all the parties named or all the organisations, Boombell Pty Ltd, Sam's Fresh Food Barn, Jardin Fresh Life, Ms Nohra herself and to some extent Mr Cantarella, they were involved in a contract to simply pay Nando's Meat for delivery of the meat. The Court has not been able to separate one particular entity from the other. It is of the view that there was a contract to supply meat by Mr Inzitari or Nando's Fresh Meats to that store and to be simply paid by some entity either directly by Ms Nohra or the other entities named in the various documents and that the Court has recited earlier. [10] From the Court's evaluation of the evidence, it finds that annexure A of Mr Inzitari's statement exhibit 1 a convincing and persuasive document going to evidence that there was a debt between the defendant and Helen Nohra. Whilst the court notes that it is undated, it gives an outstanding debt at that moment as at 14 February 2014 as 61,083.33. The Court notes that Ms Nohra clearly and emphatically denied that she had anything [sic] do with annexure A which was that letter detailing the debt in her name and her signature at the bottom. … [14] … The Court has come to the view that Sam's Fresh Food Market, Boombell Pty Ltd, Cost Less [sic] Supermarket are all interchangeable entities which were in a contract with Mr Inzitari or Nando's Meat to be supplied meat at the store at St Mary's [sic] and to be paid for delivery of that meat. Therefore I am satisfied on the balance of probabilities that [Nando's] has proved its claim against [Ms Nohra] in the sum of $38,500. [15] In coming to this view, the Court formed the impression that Mr Inzitari was a truthful and believable witness. His description of the business arrangements of supplying meat and being paid were both convincing and persuasive. The Court found particularly annexures A, B and C as convincing corroboration of the contract and the state of the debt and the supply of the meat at that time. (Emphasis added.)
In rejecting Nando's claim against Mr Cantarella and Mamma Rosa on the alleged oral guarantees, the magistrate found: [18] Whilst I have already found that Mr Inzitari was a convincing and believable witness, I have also come to the view that he is also partly an unsophisticated man who is doing his best to recall what happened back in 2011. And the Court accepts that back then, when all of them were on friendly and amicable terms and friendly and amicable business relationships, that given the passage of time being eight and a half years between the original conversation [in] 2011. [sic] And Mr Inzitari's recollection of the words used in his affidavit of May 2020, that the Court cannot accept or cannot be persuaded on the balance of probabilities what precise words of any agreement or any agreement for guarantee may have or possibly were. (Emphasis added.)

Grounds of appeal

The four grounds of appeal advanced in the summons are: 1. his Honour failed to provide adequate reasons; 2. his Honour erred in law in finding that there was a partly oral and partly written contract between Ms Nohra personally and Nando's; 3. his Honour failed to address Ms Nohra's material argument that it was improbable in the circumstances that Ms Nohra would enter into the alleged contract personally, as opposed to on behalf of the corporate entity in her capacity as director; and 4. the conclusion reached by his Honour, being judgment in the sum of $38,500, was not reasonably open on the evidence.
It is convenient first to address ground 2. Counsel for Ms Nohra accepted that the other grounds are in effect alternatives, given that success on those grounds would only lead to a remitter to the Local Court.

Ground 2 - The parties to the contract

The answer to the question "who are the parties to the contract?" involves the construction of the contract: Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 at 174 (Brownie J), citing Protean (Holdings) Ltd (Receivers and Managers Appointed) v American Home Assurance Co (1985) 4 ANZ Insurance Cases 60-843 at 74,055-74,056. It is often said that the construction of a contract is a question of law: Cripps v G & M Dawson Pty Ltd [2006] NSWCA 81 at [46] (Santow JA). However, usually the context of such statements is contracts wholly in writing. The position is different where the contract is partly oral or, as in this case, wholly oral. In such cases, the identity of the parties to the contract is a question of mixed fact and law: Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 at [127] (Campbell JA, Basten JA and Sackar J agreeing). As such, leave to appeal is required in this case.
Identification of the parties to the contract must be made in accordance with the objective theory of contract: Ryledar Pty Ltd v Euphoric Pty Ltd (2007) 69 NSWLR 603; [2007] NSWCA 65 at [262]-[266] (Campbell JA). As Allsop P and Handley AJA stated in Air Tahiti Nui Pty Ltd v McKenzie (2009) 77 NSWLR 299; [2009] NSWCA 429 at [28]: The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract. This is, to a point, a process of construction similar to the task of identifying whether a clearly contractual document (such as a bill of lading) is made with one party or another (such as a shipowner or time charterer): Homburg Houtimport BV v Agrosin Private (at 770) … Where the documents are silent or ambiguous, but there is undoubtedly a contract, the identity of the parties must be determined objectively from the surrounding circumstances: see Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 at 174; Protean (Holdings) Ltd (receivers and managers appointed) v American Home Assurance Co (1985) 4 ANZ Insurance Cases 60-683 at 74,055-74,056; Coulls v Bagot's Executor and Trustee Company Ltd (1967) 119 CLR 460 at 477, 478-479 and 486.
Nando's bore the legal onus of proving that Ms Nohra was the other party to the contract that had been entered into for the supply of meat to the business at St Marys. To the extent that Nando's relied upon Mr Inzitari's evidence of the alleged conversation at the October 2011 meeting, the magistrate did not accept Mr Inzitari's recollection of that meeting, either as to the alleged oral agreement (with Ms Nohra) or oral guarantees (allegedly given by Mr Cantarella and Mamma Rosa): see J [18], which is set out at [33] above.
In finding that Ms Nohra was a party to the contract with Nando's, the magistrate reasoned as follows:

the meat delivery arrangements were a contract "involving all the different parties": at J [8];
all the parties named - Boombell, Sam's Fresh Food Barn, Jardin Fresh Life, Ms Nohra, and to some extent Mr Cantarella - "were involved in a contract to simply pay Nando's Meat for delivery of the meat": at J [9];
Boombell, Sam's Fresh Food Barn and Costless Supermarket were "all interchangeable entities which were in a contract with Mr Inzitari or Nando's Meat to be supplied meat at the store at St Mary's [sic]": at J [14];
on balance, Nando's had proved its claim against Ms Nohra as she was a party to the contract: at J [14]; and
this conclusion was supported by the post contractual conduct in Annexures A, B and C to Mr Inzitari's May affidavit: at J [15].

This reasoning is, with respect, erroneous, both as to the objective construction of the parties' "dealings" and the use made of post-contractual conduct.

Construction of the contract

First, that Ms Nohra was involved in the "dealings" with Nando's did not make her a party to the contract for the supply of meat to the St Marys shop. Giving instructions to Mr Inzitari that Nando's should invoice the business name of the St Marys shop for the meat did not evidence an intention on Ms Nohra's behalf to accept personal liability for the debt unless she was the owner of the business conducted under that name, which she was not.
Second, it does not follow from the finding that Boombell, Sam's Fresh Food Barn and Costless Supermarket were "all interchangeable entities which were in a contract with Mr Inzitari or Nando's Meat to be supplied meat at the store at St Mary's [sic]" that Ms Nohra was a party to that contract.
Third, it was relevant for the purpose of identifying the parties to the contract to determine who was carrying on business under the various names, including the name "Sam's Fresh Food Barn". This is because a reasonable observer of the communications which led to the invoices being issued by Nando's for the supply of meat to the St Marys shop, together with the background facts known to the parties, including the names of the St Marys shop, would conclude that the parties intended that the contract would be with whomever it was that was carrying on business under the names "Jardin Fresh Life", "Costless Supermarket", and "Sam's Fresh Food Barn": Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 at [54] (Campbell JA).
The objective evidence was that Nando's had issued invoices from October 2011 to May 2014 at the direction of Ms Nohra or Mr Cantarella to the name of the supermarket at the St Marys shop from time to time. Mr Cantarella gave unchallenged evidence that Boombell carried on the supermarket business sequentially under those three business names. There was corroborative evidence from Mr Inzitari that Ms Nohra instructed him to invoice "Boombell Pty Ltd trading as Sam's Fresh Food Barn St Mary's [sic]" (4 May 2020 affidavit, par [18]). Further, Mr Inzitari accepted in cross-examination that he was aware of the corporate entity, Boombell, as its name appeared on the correspondence from Sam's Fresh Food Barn relating to the outstanding debt.

Post-contractual conduct

In Johnston v Brightstars Holding Company Pty Ltd [2014] NSWCA 150, I agreed with the statements of Basten JA at [120]-[122] concerning the difficulties attending the use of post-contractual statements to construe a contract, and the qualification that where a statement provides evidence of facts, the assertion of which is against the interests of one party, that statement may be admissible as an admission by that party. Basten JA said at [120]-[122]: [120] There are difficulties attending the use of post-contractual statements to construe the terms of a contract. It is an accepted principle that anything which the parties said or did after a contract was made cannot be used "as an aid in the construction of" the contract: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; 238 CLR 570 at [35] (Gummow, Hayne and Kiefel JJ), referring to the statement of Lord Reid in James Miller & Partners Ltd v Whitworth Street Estates (Manchester) Ltd [1970] AC 583 at 603. That principle derives from the "objective" theory of contract, which provides that the legal obligations of the parties to the contract do not depend upon their subjective beliefs but upon the view of the reasonable bystander informed as to the surrounding context and circumstances, which in practice means the view of the court based on the evidence before it: Mannai Investment Co Ltd v Eagle Star Life Assurance Co Ltd [1997] AC 749 at 775 (Lord Hoffmann); Wilson v Anderson [2002] HCA 29; 213 CLR 401 at [8] (Gleeson CJ); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ); Attorney General of Belize v Belize Telecom Ltd [2009] 1 WLR 1988 at [16] (Lord Hoffmann, PC); and see Lewison and Hughes, The Interpretation of Contracts in Australia (Law Book Co, 2012) at [2.04]-[2.05]. [121] On the other hand, where it provides evidence of facts, the assertion of which is against the interests of one party, it may be admissible as an admission by that party. However, to the extent that the evidence reveals an opinion as to a question of law rather than fact, the admission may be irrelevant or valueless. (The relevant authorities were collected by Campbell JA in Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2009] NSWCA 234; 261 ALR 382 and in Lym International Pty Ltd v Marcolongo [2011] NSWCA 303.) Alternatively, the evidence may establish contextual facts in existence at the time the contract was executed. [122] These principles apply to the determination of the meaning of a written document. However, in this case, as succinctly stated by Spigelman CJ in County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [7]: The issue is not one of interpretation, because there are no words to interpret. The issue is one of fact: what did the parties agree?
As noted in the above quote from Spigelman CJ in County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193 at [7], the position is different where a contract is not wholly in writing. As Campbell JA explained in Lym International Pty Ltd v Marcolongo at [143], where a contract is not wholly in writing, the parties' post-contractual conduct is relevant in ascertaining what the parties agreed as well as who the parties to the contract were: By contrast, the task in ascertaining what are the terms of a contract that is not wholly in writing is quite different - the task is finding as a fact what the parties have agreed. A range of post-contractual conduct could be relevant to ascertaining what the parties have agreed. For example, their conduct in carrying out the contract could itself be objective evidence of what they had agreed, an admission of one of the parties could assist in ascertaining what they have agreed, and business records created to record or report on the contract rather than carry it out could also assist in that task.
In this case, where the contract was wholly oral, the post contractual conduct which was relevant to the identification of the parties to the contract included: (a) Nando's conduct in carrying out the contract by supplying meat to the St Marys shop at which Boombell, not Ms Nohra, conducted the supermarket business, and (b) the business records created by Nando's, at least from November 2012, recording that the delivery of meat to "Sam's Food Barn". The magistrate erred in failing to have regard to this evidence, which was undisputed, and erroneously relied upon other post-contractual conduct, being Annexures A, B and C.
Annexure A, the letter dated 14 February 2014 and signed by Ms Nohra as a "director" of Boombell, was not an admission by Ms Nohra that she was personally indebted to Nando's in the amount of $61,083.33, nor implicitly that she was a party to the contract. The admission made in the letter was that a debt was owed to Nando's by Boombell; this admission was made on behalf of Boombell by Ms Nohra in her capacity as a director of Boombell. The magistrate erred in finding that Annexure A was "a convincing and persuasive document going to evidence that there was a debt between [Nando's] and Helen Nohra": at J [10].
Annexure B, the facsimile from Ms Perre to Nando's dated 8 August 2014, and the earlier facsimile from Ms Perre to Nando's dated 16 May 2014, did not include admissions made by, or on behalf of, Ms Nohra. They contained admissions by Ms Perre on behalf of Boombell of the debt owed by Boombell to Nando's in the amounts stated in those facsimiles, respectively, $48,317.04 (on 16 May 2014) and $45,995.55 (on 8 August 2014).
Annexure C, the letter of demand from Nando's to Mamma Rosa dated 10 February 2015, contained an assertion by Nando's that a debt was owing by Mamma Rosa. That said nothing about whether Ms Nohra was a party to the contract. Further, the letter of demand was only indicative of Nando's subjective belief as to the parties to the contract, being Nando's and Mamma Rosa.
For completeness, Annexure D, the summary of account dated 7 February 2013, was not an admission by Ms Nohra. Mr Inzitari gave evidence that this document was provided to Nando's by Mr Strati, the St Marys shop manager. The admission that Boombell, trading as Sam's Fresh Food Barn, owed a debt to Nando's as at 5 February 2013 of $78,850.65 was made by Mr Strati on behalf of Boombell.
To the extent that the magistrate found that Annexures A, B and C were "convincing corroboration of the contract and the state of the debt and the supply of the meat at that time" (J [15]), the finding was correct as to the state of the debt owing by Boombell to Nando's, but incorrect insofar as the magistrate concluded that "the contract" is to be understood as a contract between Nando's and Ms Nohra.

Conclusion

Looking at the matter objectively, the parties to the contract for the supply of meat to the St Marys shop were Nando's and Boombell, the owner of the business conducted at that shop. There is a clear case of misapplication of principle by the magistrate and the error has resulted in an injustice to Ms Nohra. Accordingly, leave to appeal is granted on ground 2. The question of relief is addressed below.
Given this conclusion, the other grounds do not strictly arise. However, I have considered whether to address these grounds in light of the remarks of the High Court in Kuru v State of New South Wales (2008) 236 CLR 1; [2008] HCA 26 and Boensch v Pascoe (2019) 268 CLR 593; [2019] HCA 49. I am satisfied that there are good reasons not to do so in this case.
First, the identification of the parties to the contract is dispositive of the appeal. On the other hand, grounds 1 and 3, which were said to raise questions of law, were, practically speaking, different ways of complaining that the magistrate's decision on the central question of the identification of the parties to the contract was wrong.
Second, although ground 4 was said to be a question of mixed fact and law (Orr v Cobar Management Pty Ltd (2020) 103 NSWLR 36; [2020] NSWCCA 220 at [59] (Bathurst CJ and Bell P)), there is arguably a contrary view that the question whether a conclusion is reasonably open on the evidence is a question of law (see Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32). It is preferable to decide that issue in an appeal where the issue has practical significance. This is not that case.
Third, no purpose would be served addressing grounds 1, 3 or 4 as success on these grounds would only result in a remitter.

Relief

This Court can determine an appeal under ss 39(1) or 40 in one of four ways. Section 41(1) of the Local Court Act provides: 41 Determination of appeals (cf LCA 1982, section 75) (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.
This appeal turned on the identification of the parties to the contract. In light of the conclusion that the magistrate erred in finding that Ms Nohra was a party to the contract, the appropriate order is to set aside the judgment in the Local Court. In the circumstances, no occasion arises to consider Nando's application in its notice of motion filed 2 September 2021 seeking an award of pre-judgment interest, relying on the slip rule: UCPR, r 36.1.
The parties agreed that this Court should finalise the matter in the Local Court if ground 2 was upheld. The question which arises is whether this Court can make further orders disposing of the proceedings below and dealing with the question of costs in the Local Court.
If no new findings of fact are required to be made, this Court should exercise the power of the Supreme Court conferred on it by s 41(1) of the Local Court Act and s 75A(10) of the Supreme Court Act 1970 (NSW) and dispose of the proceedings below, including by exercising the discretionary power of the Local Court with respect to costs: Thaina Town (on Goulburn) Pty Ltd v City of Sydney Council (2007) 71 NSWLR 230; [2007] NSWCA 300 at [104] (Spigelman CJ, Mason P, Beazley, Giles and Ipp JJA agreeing), a case involving leave to appeal from a decision of the Land and Environment Court with respect to costs, where appeals to the Court of Appeal were only permitted on a question of law and the Court of Appeal re-exercised the discretionary power of the Court below with respect to costs. See also: Drive My Car Rentals Pty Ltd v Gabriel [2021] NSWCA 73, where I said at [112]: [112] … In Rose v Tunstall [2018] NSWCA 241, Payne JA (Basten JA and Simpson AJA agreeing) referred with approval to Lesley-Swan v Owners SP 32735 [2013] NSWSC 1635, where Beech-Jones J said: [72] …In Thaina Town, Spigelman CJ, with whom Mason P, Beazley, Giles and Ipp JJ [sic] agreed, held that, with the assistance of s 75A, the Court of Appeal could on an appeal on a question of law exercise a discretionary power vested in the body appealed from when no further factual findings were required (at [104]). In so stating the Court in Thaina Town overruled an earlier authority (Maurici v Chief Commissioner of State Revenue [2001] NSWCA 78; 51 NSWLR 673) which appeared to preclude the exercise of such discretionary powers but nevertheless affirmed the status of the Maurici so far it [sic] held that the Court of Appeal was precluded from making findings of fact (Thaina Town at [110]). …
Since there was unchallenged evidence that Boombell was the owner of the business conducted at the St Marys shop, including under the business name "Sam's Fresh Food Barn", the Court's decision on the question of identification of the parties to the contract leaves only one possible outcome. It would be entirely unsatisfactory in terms of additional costs and court time to remit the matter to the Local Court to make orders to dispose of the matter in accordance with my conclusion. I am satisfied that the matter can be disposed of on the basis of the undisputed facts concerning the owner of the business conducting the supermarket at the St Marys shop: Kostas v HIA Insurance at [30] (French CJ). The appropriate order is to set aside the judgment below and make an order dismissing the proceedings in the Local Court against Ms Nohra.
As to the costs below, although no order was made by the magistrate, again no new findings of fact are required to be made and this Court should exercise the power conferred on it by s 41(1) of the Local Court Act and by s 75A(10) of the Supreme Court Act and exercise the discretionary power of the Local Court with respect to costs: Drive My Car Rentals v Gabriel at [112]. In light of the different outcome on appeal, the appropriate order below is that Nando's pay Ms Nohra's costs of the proceedings in the Local Court.
There is no reason why costs of the appeal should not follow the event in this Court: UCPR, r 42.1.

Orders

Accordingly, the Court makes the following orders: 1. Grant an extension of time to the plaintiff to file the summons seeking leave to appeal. 2. Grant leave to appeal on ground 2 only. 3. Allow the appeal and set aside the orders of the Local Court made on 17 March 2021 against the first defendant (Helen Nohra). 4. Order that the proceedings in the Local Court against the first defendant be dismissed and the plaintiff pay the first defendant's costs in the Local Court. 5. Dismiss the balance of the defendant's notice of motion filed 2 September 2021. 6. The defendant pay the plaintiff's costs of the appeal in this Court.

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: 24 September 2021

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