Stevenson v Hunt

Supreme Court of NSW|2011-05-18|Before: Schmidt J

Judgment 1By summons filed in March 2011 the plaintiff, Mr Stevenson, seeks to appeal a question of law pursuant to s 39 of the Local Court Act 2007 from a decision given by Walker LCM on 2 February 2011. He also seeks leave to appeal pursuant to s 40(2) of that Act. His Honour concluded that the defendant, Mr Paul Hunt, was not prohibited from bringing the proceedings brought in the Local Court, by reason of a deed of settlement which had resulted in the dismissal of earlier Local Court proceedings in November 2008 ('the Deed'). Mr Stevenson complains that his Honour fell into error as to the construction of the Deed and by failing to give reasons for his conclusions. The plaintiff also seeks declaratory relief under s 79 of the Supreme Court Act 1970, as to the construction of the Deed.

The District Court proceedings brought by Mr Hunt which were settled 2In June 2008, Mr Hunt brought proceedings against Mr Stevenson in the District Court under s 93(1)(a) of the Civil Procedure Act 2005, claiming delivery of a boat and trailer. 3It was alleged that the boat was being restored by Mr Hunt at premises rented by his son, Mathew Hunt, which Mr Hunt understood were shared by Mr Stevenson. Mathew Hunt was locked out of the premises in March 2008 and a short time later, Mr Stevenson removed the boat, refusing to return it to Mr Hunt, until Mathew Hunt paid outstanding rent. Mr Stevenson had also refused to return the boat, unless Mr Hunt was able to establish his ownership. Despite 'proof' of ownership having been provided, still Mr Stevenson retained the boat. It was claimed that the boat had a value of some $300,000. 4The proceedings were settled, with Mr Paul Hunt and Mr Stevenson agreeing: "1. The matter be dismissed. 2. Each party to pay their own costs of the proceedings. 3. Note - a. The Defendant undertakes to make the boat and trailer available to the Plaintiff within 7 days of the making of these orders. b. The Plaintiff makes no claim for damages arising from the alleged detention of the said boat and trailer. c. The intention of the parties is that the dismissal of the proceedings effects a full and final resolution of the Plaintiff's claim."

The initial Local Court proceedings brought against Mathew Hunt, which were settled 5In July 2008, Teela Enterprises Pty Limited ('Teela Enterprises') brought proceedings in the Local Court against Mathew Hunt, seeking to recover unpaid rent of some $28,250. Mathew Hunt brought a cross claim against Mr Stevenson, seeking to recover unpaid wages or labour hire monies, money due under a sponsorship agreement, unpaid superannuation, unpaid holiday pay and $2,000 for replacement tools. Mr Hunt was not a party to these proceedings. 6Teela Enterprises claimed that as trustee of the Stevenson Family Property Trust, it was the owner of a property which was leased to Mathew Hunt. The tenancy was terminated when it took possession, after the rent fell into arrears. Mathew Hunt claimed that he had worked for Mr Stevenson, or entities associated with him, in a business known as Sureflo Exhaust, and that he was locked out of the premises, after he decided to terminate the employment relationship. Earlier it had been agreed that Sureflo Exhaust would have naming rights to Mathew Hunt's racing car, for a fee of $33,000. Mr Stevenson failed to pay the entire amount agreed. Matthew Hunt also claimed that when he was locked out of the premises, he had to purchase replacement tools for a sum of $2,000. 7The proceedings were settled in November 2008 by terms of settlement and the Deed executed on 21 November 2008. The terms of settlement provided: "1. The claim and the cross claims be discontinued. 2. Each party to pay their own costs of the proceedings. 3. Note - a. The parties have entered into a Deed of Release and Confidentiality in connection with the issues arising in the proceedings." 8The parties to the Deed were Teela Enterprises, Mr Stevenson, Mathew Hunt and Mathew Hunt Car Racing. Recital F to the Deed referred to a notice of demand issued by Mathew Hunt on 12 November 2008, where demand was made for the return of identified goods. The operative part of the Deed provided: "1. This Deed is binding on the heirs, executors, administrators and assigns of each party hereto respectively. 2. Each party hereby releases the other from all actions, suits, claims and demands, save mediation as to the matters referred to in recital F, which it or they may, but for the execution of this Deed, have against the other in respect of any act, a cause, matter or thing arising out of the Proceedings and the Notice of Demand issued by Matt to Greg and Teela on 12 November 2008. 3. Each party agrees to do all acts and things and sign all documents necessary to cause the Claim to be discontinued and for the Cross-Claims to be discontinued, both on the basis that each party shall bear its own costs of the Proceedings. 4. Each party agrees that the terms of this compromise are confidential and are not to be disclosed."

The further Local Court proceedings brought by Mr Hunt, out of which this appeal arose 9In November 2009, Mr Hunt brought further proceedings against Mr Stevenson in the Local Court, seeking the delivery of goods identified in a demand he had earlier made of Mr Stevenson and Teela Enterprises on 21 September 2008. The September demand referred to an earlier demand which had been made by Mr Hunt in April 2008, as well as to a demand made by Mathew Hunt in September 2008, which it was noted referred to 'goods substantially the same as those listed' in Mr Hunt's April demand. 10Fifteen items were pursued, including identified tools, to which Mr Hunt claimed a right of immediate possession. The orders sought were: "1. An order pursuant to s93(1)(a) of the Civil Procedure Act for the delivery of the goods to the plaintiff within 7 days of the date of the order. 2. Costs 3. Leave to re-list the matter for directions under s93(3) and s93(5) of the Civil Procedure Act if the defendant fails to deliver the goods. 4. In addition, or alternatively, damages for trespass to goods. 5. In the alternative to the preceding order 4, damages for conversion. 6. In addition to any other remedy granted by the court, damages for detention pursuant to CPA s93(1)." 11Mr Stevenson defended the claim by a defence which did not dispute Mr Hunt's ownership of the goods in question, but he denied that they were in his possession. He also claimed that the goods had already been the subject of the earlier Local and District Court proceedings, which had been settled.

The decision below 12His Honour initially considered the background to the proceedings, in terms which it must be accepted involve some error, but nothing finally appears to turn on this. For example, his Honour observed that there had been earlier litigation between the parties in both the District and Local Courts. That was incorrect. The earlier proceedings in the Local Court did not involve Mr Hunt. 13His Honour first considered the question of estoppel, observing that following the hearing he had asked the parties to provide him with submissions addressing 'the possibility of the operation of Anshun Estoppel'. He noted that 'the reality in this matter is that the plaintiff and his son have raised the issue of the retained goods although not formally in the pleadings'. After referring to the terms of settlement in the first Local Court proceedings, he observed: "It is therefore clear that there was a dispute between the parties with regard to goods withheld by the defendant. It is also not in dispute that the mediation regarding the goods did not resolve and remained outstanding." 14After referring to the provisions of Rule 12.3 of the Uniform Civil Procedure Rules 2005 and s 91 of the Civil Procedure Act , he concluded: "I am of the view that the plaintiff Paul Hunt is not estopped from bringing his claim in Detinue for the return of certain goods held within the custody of the defendant, as there has never been any adjudication by the court as to the merits of the claim. In addition, I find that the delay in bringing the claim is not such that would warrant the court from allowing the proceedings or that the terms of settlement prevent such claim now being made. As to the principle applied in Anshun case I am of the view that the notices of demand are sufficient to satisfy the requirement that the plaintiff has properly brought forward every point at the time the matter was considered by the court. This is so even though the court did not make a judgment in the matter. The proceedings, including the claims for withheld goods were the subject of the terms of settlement even though they were referred to mediation." 15Again, these observations involve some factual error, but nothing turns on this either. His Honour then turned to consider the terms of settlement of the District Court proceedings, observing that they had placed Mr Hunt 'in a difficult position with regard to fresh litigation'. Nevertheless, he took the view that s 91 of the Civil Procedure Act did not preclude the proceedings which had been brought, but that the terms of settlement of the District Court proceedings: "... are explicit in their nature and are clear in their intention. The plaintiff is therefore prevented from making any claim for damages for the loss of the goods relating to the boat." 16Again, this conclusion is not consistent with the terms of clause 3 of the terms of settlement of the District Court proceedings. Nothing, however finally turns on this. His Honour then turned to consider the evidence as to the steps taken by Mr Stevenson after he received the notices of demand served by Mr Hunt and Mathew Hunt in respect of the goods the subject of the proceedings. On 14 October 2008, Mr Hunt and Matthew Hunt, together with the managing director of a security company, Mr Scott Baker were given access to certain premises to search for the missing items. Mr Stevenson did not supervise this access. Various photographs were in evidence, which Mr Stevenson claimed had been taken of the premises at various times, including on 13 October 2008. His Honour did not accept Mr Stevenson's evidence as to the dates that the photographs were taken. His Honour reviewed other evidence, before turning to resolve what he observed was a 'crucial issue', namely, who had access to the premises. His Honour concluded: "When the defendant's employee, Mr Kirk Redman gave his evidence he said that the defendant gave him the keys and that on occasions he would go to the factory by himself. This evidence proves that the defendant was not being truthful with regard to this crucial issue. In the circumstances I believe that the defendant has allowed others to attend the factory without supervision. His creditability with regard to this issue and the date of taking the photographs just cannot be accepted. I therefore conclude that on the balance of probabilities the items in dispute as listed as missing by the plaintiff in schedule "B", plus the fire extinguishers and the child's pram and doll's house were in the possession of the defendant and had been removed by parties unknown during the period the plaintiff was locked out of the premises." 17His Honour's final conclusion and order were: "I find judgment for the plaintiff pursuant to section 93(1)(a) of the Civil Procedure Act 2005 with leave to re list for assessment if the goods are not delivered or are damaged. I order the defendant to pay the costs of the plaintiff as agreed or assessed."

The appellant's case on appeal must fail 18The complaint that his Honour failed to give reasons for the views which he reached may not be accepted. While those reasons involved certain errors, as I have noted, there is no basis for complaint that reasons were not given. 19It appears that the case put on appeal for Mr Stevenson departed significantly from that advanced below. It was complained that his Honour erred in law in finding that Mr Hunt was not precluded from bringing any claim based on the notices of demand which he had served in relation to the goods the subject of the second Local Court proceedings. This, it was submitted, followed from the terms of clause 2 of the Deed. Properly construed, that Deed prevented Mr Hunt from commencing, continuing or maintaining the further Local Court proceedings he had brought in relation to those goods. 20That was not an argument dealt with by his Honour in his decision, unsurprisingly, given that it was a claim neither raised in Mr Stevenson's defence, nor, it appears, one advanced in the arguments put below. Not all of the transcript of the proceedings was before me, but the written submissions advanced at the hearing were. There it was put: "Proceedings between the defendant in these proceedings and the son of the plaintiff and his company in the Local Court were resolved by way of the respective claim and cross-claim being discontinued and the defendant, his company and the plaintiff's son and his company entering into a Deed of Release. Such Deed of Release recited, inter alia, the Notice of Demand issued by the plaintiff's son in relation to items in almost identical terms to the claim made in the present proceedings by the plaintiff. The Deed of Release further provided for a release between the defendant and his company and the plaintiff's son and his company, "save mediation as to matters referred to (regarding the Notice of Demand)" (see Annexure H to the defendant's Statement of 23 April 2010). The defendant and his company gave up what they believed to be valid claims against the plaintiff's son and his company, and part of the consideration of such compromise was also having included in the subject Deed the Notice of Demand issued by the plaintiff's son which, as previously advised, is almost identical to the demand raised by the plaintiff in these proceedings." 21The submission was factually inaccurate. Mr Hunt was not a party to the Deed. On appeal it was argued that because of the similarity in the demands served on Mr Stevenson by Mr Hunt and Mathew Hunt and the fact that the initial Local Court proceedings and the District Court proceedings were all settled on 21 November, when all the parties were together, it would be concluded that Mr Hunt was bound by the Deed settling the Local Court proceedings, even though he was not a party to the Deed. 22The argument flies in the face of the privity rule, which provides that only a person who is a party to a contract can enforce the contract, or incur obligations under it. No authority which supported the conclusion urged was identified by counsel appearing for Mr Stevenson. The decision given by Einstein J in Shepherds Producers Co-operative Ltd v Lamont [2009] NSWSC 294, which was relied on, was of no assistance. There his Honour dealt with the way in which the construction of documents such as the Deed was to be approached, but he did not have to deal with circumstances such as those here in question. Nor do the views expressed in Masterton Homes Pty Ltd v Palm Assets Pty Ltd [2008] NSWSC 274 at [26] - [28] assist. What there arose for consideration was the question of how ambiguity of language in an agreement such as this, is to be resolved . 23There is no ambiguity which requires resolution in this case. To the contrary, the terms of the Deed are clear. They do not deal in any way with the claims advanced by Mr Hunt in the District Court proceedings, or with his claims in relation to the goods the subject of these proceedings. While he was present when the Deed which settled the earlier Local Court proceedings was executed by the parties to the Deed, Mr Hunt is not a party to the Deed, nor was he a party to those proceedings. 24The circumstances of its execution suggest that it was not intended that Mr Hunt would be a party to the Deed. It was an express term of the Deed that it was not to be disclosed by the parties. Had it been intended that Mr Hunt would be bound by the Deed, it would have been a simple matter for those present to ensure that was what the Deed provided. That such steps were not taken, suggests that it was not intended by anyone present, particularly the actual parties to the Deed, that Mr Hunt would be bound by the Deed. Nor was it suggested that other than by his presence when the Deed was executed, Mr Hunt took any steps to adopt the Deed, or otherwise agree to be bound by it. 25Contrary to the case advanced for Mr Stevenson in these proceedings, it is apparent that there was a live question at the time of the settlement of the District Court and earlier Local Court proceedings, as to the ownership of goods in respect of which both Mr Hunt and Mathew Hunt had served notices of demand on Mr Stevenson. Mathew Hunt did not pursue the return of those goods in the Local Court proceedings which he had brought. What he then sought was the payment of $2,000, claimed to represent the cost of unidentified replacement tools, which he alleged he had purchased, when he was locked out of the rented premises. Nevertheless, his claim for the return of the goods specified in the demand which he had earlier served on Mr Stevenson, was expressly settled by the terms of the Deed which was entered by way of settlement of those proceedings. There was no such agreement reached with Mr Hunt. 26Mr Hunt's claim to those goods was not resolved by that Deed or by the settlement of the District Court proceedings. The goods were not the subject of those proceedings. His demands for return of the goods were neither referred to in the Deed, nor resolved by it. The Deed does not refer to Mr Hunt or his claim to the goods. 27It follows that Mr Hunt is not bound by the Deed and that Mr Stevenson could not rely upon it, when defending the proceedings Mr Hunt later brought for the recovery of the goods in the Local Court. A recognition of this reality is to be found in the defence which Mr Stevenson filed in the second Local Court proceedings. The Deed is not there pleaded as a defence to Mr Hunt's claim. Nor was Mr Hunt's ownership of the goods which he sought to have returned put in issue. 28The complaints advanced for Mr Stevenson have not been established. It follows that leave to appeal must be refused and the appeal dismissed. The usual order as to costs is that Mr Stevenson must bear Mr Hunt's costs of the appeal, as agreed or assessed. If there is any disagreement as to that order, the parties should approach.

Orders 29Otherwise, for the reasons given, I order that leave to appeal be refused and the appeal dismissed.

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: 01 June 2011

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