Yarraford Pastoral Co Pty Ltd v Lewington

The Pleaded Cases

1. It was common ground that Yarraford owns and works a rural property near Gunnedah. To that end, it owns various pieces of machinery, including an excavator and a Bobcat. It was also common ground that Mr Lewington had worked as a contractor and, in particular, had provided services to Yarraford from time to time between 2006 and 2011.
2. In its further amended statement of claim, Yarraford pleaded that, on or about June 2010, Mr Lewington had a conversation with a director of the plaintiff, namely Dr Wainberg, to the effect that he wished to borrow the excavator and use it for his own purposes. It pleaded that he agreed to pay commercial rates for "having the excavator" and an associated loader.
3. It was common ground that, during July 2010, Mr Lewington had possession of the excavator for sixteen days and had made use of the loader. Yarraford pleaded that later in 2010, apparently after Dr Wainberg had returned from overseas, Mr Lewington "represented to the plaintiff that he had had the excavator for three days and low loader for two return trips" (the "Representation").
4. Yarraford alleged that, relying on the representation, it had via Dr Wainberg agreed with Mr Lewington that he would be charged $1,300 per day inclusive of GST for the use of the excavator, and $300 inclusive of GST for each round trip on the loader. This amount totalled $4,500. It was applied against moneys owing by Yarraford to Mr Lewington. Yarraford pleaded that the representation was conduct that was misleading or deceptive, or likely to be misleading and deceptive, contrary to s 42 of the Fair Trading Act 1987.
5. At the hearing in the Local Court, Yarraford formulated a case for damages based upon an alleged lost opportunity to negotiate a superior deal with Mr Lewington for the cost of his using the excavator. It relied upon the judgment in Jacfun Pty Ltd v Sydney Harbour Foreshore Authority [2012] NSWCA 218 ("Jacfun"), especially at [55] and [65] to [67] (per Allsop P).
6. In his defence, Mr Lewington contended that, in June 2010, he agreed to pay Yarraford "the going hourly rate for using" the excavator. He specifically denied that later in the year he told Dr Wainberg that "he had the excavator for three days". Instead, he pleaded that, upon Dr Wainberg's return from overseas, he and Dr Wainberg had agreed upon a charge of $4,500, representing a usage of 42 hours, and the cost of transporting the loader. Thus, at the very least, it was common ground that the amount agreed to be paid for the use of the excavator and the loader was $4,500.
7. In relation to the Bobcat, Yarraford pleaded that, in September 2010, it had via an agent agreed to hire the Bobcat and some associated equipment to Mr Lewington, "with the precise cost of the hire to be agreed" on Dr Wainberg's return from overseas. It further pleaded that Mr Lewington used the Bobcat "for not less than 30 days", but failed to pay for its hire. It sought recovery on an unjust enrichment basis. In its particulars it alleged that "a reasonable daily rate for the hire of the Bobcat and its associated equipment is not less than $500 per day plus GST".
8. In his defence, Mr Lewington contended that the agreement with Yarraford's agent was reached in September 2011, and it was only for the use of the equipment at a reasonable rate of hire. He pleaded that a reasonable hourly rate of use was $100 per hour, and that the equipment was only used for twelve hours. He pleaded that an amount representing the reasonable cost of hire was offset against an amount owing to him by Yarraford and that no further amount was owing.

The hearing

1. The hearing of the proceedings before the Local Court occupied four days. Thankfully it is only necessary to describe some discrete aspects of that hearing.
2. Dr Wainberg gave evidence that was broadly consistent with the pleaded case in respect of the excavator. In his affidavit, he recounted a conversation with Mr Lewington in June 2010, in which Mr Lewington had asked to "hire the excavator for a couple of days" as well as a motor vehicle and a low loader. He said that Mr Lewington had stated that he just needed "to do a few quick jobs". Dr Wainberg said that he replied, "Okay, but at commercial rates".
3. Dr Wainberg stated that, after his return from overseas, he had a conversation with Mr Lewington in which he asked him, "How long did you have the excavator for?" and that Mr Lewington replied, "Three days". He asserted that, based on that statement, Yarraford had sent Mr Lewington an account for $4,500.
4. In cross-examination, Dr Wainberg's evidence was challenged as was his credit generally. At one point, he was asked about the first conversation in June 2010, as follows: "Q. What he said to you was at the going hourly rate? A. Yes, that's right."
5. Mr Lewington swore an affidavit that was difficult to follow, but it included a specific denial that "a period of three days was ever mentioned" during the conversation with Dr Wainberg after his return from overseas. Any uncertainty about his evidence was removed by the answers he gave in cross-examination. Thus he was asked as follows: "Q. In June when rang him you asked if you could borrow the machine, correct? A. I asked him could I borrow the excavator to put a road into my property as I had a transportable house arriving and they needed a five metre wide road to bring it in and he agreed and I said I was happy to pay the hourly going rate."
6. Mr Lewington was asked about the conversation he had with Dr Wainberg about the excavator after Dr Wainberg returned from overseas. His answers included the following: "Q. Sorry, 2010. You had another conversation with him about your hiring of the machine? A. Approximately two weeks after Mr Wainberg returned from overseas, yes. Q. And in that conversation Dr Wainberg asked you how long you'd had the excavator for, correct? A. It was more to the point that I approached Mr Wainberg and told him how long I had the machine for, I wished to settle the bill. Q. You replied that you'd had it for three days? A. I never replied that I had it for three days. Three days was never mentioned."
7. The cross-examiner continued on this theme. Later, Mr Lewington was asked and answered as follows: "Q. And when you and Dr Wainberg spoke about the machine, on his return from overseas, you spoke about how much you were going to pay Yarraford for the use of the machine. Correct? A. I asked Mr Wainberg how much he wanted for the 42 hours of use that I'd used the machine for. He gave me an answer and then I asked him did that include the float, which he said 'Yes, that will be okay.'"
8. In relation to the use of the Bobcat in 2011, Mr Lewington was taken in cross-examination to various witness statements that had been tendered on behalf of the plaintiff which were said to show that he had used the Bobcat extensively, and that he had otherwise possessed it for a sustained period. He denied that evidence. He maintained that he had used the Bobcat for twelve hours. He was also asked and answered as follows: "Q. Do you agree that an hourly rate of $110 per hour inclusive of GST is reasonable? A. That's reasonable, yes. Q. Would you agree that a daily rate of $500 per day was reasonable for a bobcat? A. For a bobcat, yes. Q. If you were charged that daily rate of $500 per day plus GST that would also be reasonable? A. If that was the agreement. Q. So putting aside your evidence about using the Bobcat for 12 hours, how many days did you actually have it on your farm? A. It was sitting on my farm for 15 days from when it arrived in the evening of 1 September."

The Local Court Judgment

1. In her judgment, the presiding magistrate set out the background of the proceedings. Her Honour then outlined the nature of the plaintiff's claims. Under the heading "The Representation", her Honour identified the relevant statutory provisions as well as the principles applicable to determining whether conduct was misleading and deceptive or likely to mislead and deceive. Her Honour then referred to the judgment of Allsop P in Jacfun.
2. Her Honour summarised Dr Wainberg's evidence concerning the excavator. In particular, her Honour noted that Dr Wainberg's evidence "was that he was specifically told by the defendant that the defendant had the excavator for three days", and that, "in agreeing to offset the hire cost of the excavator against the defendant's invoice, Dr Wainberg said he relied on the defendant saying he had the excavator for (only) three days".
3. Her Honour then noted Mr Lewington's evidence on this topic as follows: "The defendant's evidence is that the agreement for the charge for use of the excavator was based on his actual use (42 hours) and on an hourly basis only."
4. Her Honour then further outlined the submissions of the respective parties. As part of that process, her Honour noted a submission made on behalf of Mr Lewington that an employee of Yarraford "well knew the dates [the excavator] was in the defendant's possession" because that employee had transported the excavator to and from Mr Lewington's property.
5. Her Honour then summarised the evidence concerning the use of the Bobcat in terms that it is not necessary to outline.
6. Next, under the heading "Conclusion", her Honour restated the heads of damage and restitution sought by the plaintiff, as well as Mr Lewington's response. As part of that recitation, her Honour noted that, in relation to the Bobcat, Mr Lewington's position was that the charge for the Bobcat should be on the basis of twelve hours at $110 per hour inclusive of GST, "but if the Court determines a daily rate for the period of possession is reasonable, it should be no more than fifteen days at $550, that is $8,250".
7. Her Honour then addressed the evidence of various witnesses. In relation to Dr Wainberg, her Honour stated: 36. Over the period since the Statement of Claim was originally filed, the plaintiff's assertions have changed, particularly as Dr Wainberg reconsidered his initial claims in the light of evidence of other witnesses, and his memory of events appeared to unfold in an evolutionary fashion. In cross examination he was both evasive and belligerent, and his 'memory' of events was clearly based on what he was certain he 'would have done' or 'would not have done', and not on actual details of communication and conversations with the defendant or indeed with other parties, including his own employees. This deep-seated and widespread distrust for people working on his property clearly influences his perceptions and priorities in asserting the claims of the plaintiff. His claims as to matters of fact have differed on many matters from SofC, to ASofC, to FASofC, in his statements, and under cross-examination."
8. Her Honour then referred to witnesses called by the plaintiff who were employed by it. Her Honour described those witnesses as "biased".
9. In relation to Mr Lewington's evidence, her Honour stated: "38. The defendant himself gave consistent evidence and was unshaken in cross-examination, but of course his evidence as to precise conversations with Dr Wainberg before taking use of the excavator and after using the bobcat and with Messrs Wise, Margery and Jones, and as to dates and times he had used the equipment, and of the conversations themselves, were not generally the subject of any contemporaneous notes, and concerned matters he was in some cases seeking to remember and recount after several years."
10. Finally, her Honour addressed the competing positions of the parties and set out her conclusions. Her Honour prefaced her conclusions by noting the need to be "very cautious in determining specific facts".
11. In relation to the excavator, her Honour stated as follows: "… the court is not persuaded that the incomplete arrangement between the parties necessarily lead to the conclusion that the reasonable commercial rate of use of the equipment should be determined on possession rather than use, and the court does not agree that the defendant's account to Dr Wainberg of his use, (particularly having regard to his knowledge of the other ways Dr Wainberg would be aware of the dates he actually had possession), amounted to deceptive conduct on his part. In these circumstances the court considers that there is insufficient evidence for it to disturb the agreement previously reached and implemented." (emphasis added)
12. Her Honour then dealt with the claim in respect of the Bobcat. Her Honour's ultimate conclusion in respect of that claim was as follows: "On balance, the court concludes the amount due should be based on a reasonable daily rate (of $550), and in determining the number of days to be applied, the court finds the defendant's evidence as to dates he had the equipment more convincing than the less reliable evidence of the relevant dates of the plaintiff's witnesses. For these reasons, the Court concludes that the claim for the Bobcat should be calculated at $550 for each of 15 days, that is $8,250."
13. It has been necessary to set out these extracts from her Honour's judgment because of the criticism directed to them and their alleged inadequacy by Yarraford.
14. The particular focus of its complaint concerns her Honour's rejection of the claim in respect of the excavator. Considered in isolation, that aspect of her Honour's reason is somewhat Delphic. However, when they are read with the rest of the judgment and in the context of the issues that were raised at the hearing, the relevant findings can be identified.
15. In particular, the reference to the "incomplete arrangement" in the above extract (at [31]) is to the position prevailing at June 2010 prior to Mr Lewington actually using the excavator. On either version of the evidence the agreement between the parties at that time was incomplete in that no price had been agreed nor even any specific rate set.
16. The reference to the "agreement previously reached and implemented" in the last part of that conclusion is to the agreement the parties later reached to pay $4,500 for the use of the excavator. That was concluded after Dr Wainberg returned from overseas. Again, on either version of the evidence, there was an agreement to pay that amount.
17. The reference to "the defendant's account to Dr Wainberg of his use" was a reference to Mr Lewington's evidence recounted by her Honour earlier in the judgment, which reflected his version of events, namely, that he advised Dr Wainberg that he had used the excavator for 42 hours, and that an agreement had been struck on that basis. It is clear that her Honour accepted that version of events. Implicit in that acceptance is an acceptance of Mr Lewington's denial that he told Dr Wainberg that he had had possession of the excavator for three days. This acceptance reflects her Honour's observations on the respective credibility of Dr Wainberg and Mr Lewington.
18. In view of the way that Yarraford put its case on this matter, an acceptance of Mr Lewington's account was a complete answer to the allegation that he had engaged in misleading and deceptive conduct. Yarraford did not make any case to the effect that, even if Mr Lewington's version of events was accepted, he had nevertheless engaged in misleading and deceptive conduct.
19. Thus it followed from her Honour's acceptance of Mr Lewington's evidence and the consequential rejection of Yarraford's case of misleading and deceptive conduct that there was no basis established for "disturbing" the agreed rate of $4,500 for the hire of the excavator. A colloquial description of Yarraford's damages case, based as it was on Jacfun, was that it was indeed seeking to "disturb" that agreement, in that it was seeking to obtain further monies for the use of the excavator by Mr Lewington.
20. In his written submissions, counsel for Yarraford contended that a reading of her Honour's judgment reveals that her Honour accepted Dr Wainberg's version of what Mr Lewington stated concerning possession of the excavator after he returned from overseas. Counsel pointed to the absence of any reference in the judgment to Mr Lewington's outright denial that he stated that. Counsel also pointed to the fact that her Honour did not set out precisely what the "defendant's account to Dr Wainberg of his use" might have been.
21. I do not accept those contentions. Her Honour clearly considered Dr Wainberg to be an unreliable witness, and clearly considered Mr Lewington's evidence to be generally reliable. As noted, Mr Lewington's "account to Dr Wainberg of his use" was that set out earlier in her Honour's judgment and which has been extracted above, namely, an "actual use" for "42 hours". It was that account that her Honour accepted, and that account was fundamentally inconsistent with Yarraford's case.
22. It is also appropriate at this point to note the basis upon which her Honour dealt with the claim by Yarraford for unjust enrichment in respect of Mr Lewington's use or possession of the Bobcat. Consistent with what I have already noted, her Honour accepted Mr Lewington's evidence as to the number of days he stated he possessed the Bobcat, namely 15 days, and rejected the evidence of Yarraford's witnesses that suggested the contrary. Her Honour then applied the measure of damages that was suggested by Yarraford for its unjust enrichment case, namely, $550 per day inclusive of GST for the days that her Honour accepted, based on Mr Lewington's evidence, that he possessed the Bobcat.
23. Her Honour's acceptance of Mr Lewington's evidence in relation to the Bobcat claim is consistent with her Honour having accepted Mr Lewington's evidence in relation to the excavator claim.

Extension of Time

1. These proceedings were commenced on 15 September 2014 which was 31 days after the "material date", being the date of her Honour's judgment (UCPR 50.3(1)(a)). For that reason, Yarraford seeks a three day extension of time in which to bring its appeal.
2. Even though there was no explanation for the delay, the Court will grant the extension. The period of the extension is short. Full argument has been heard, and no prejudice is apparent from allowing the extension.

Yarraford's Appeal

1. Yarraford's amended summons identified six alleged errors of law on the part of her Honour. The written submissions from its counsel grouped these errors into pairs.
2. Grounds one and six provided as follows, namely: "1. Her Honour erred at law in holding that even though the arrangement between the parties in respect of the excavator was found to be 'incomplete' there was 'insufficient evidence' to 'disturb it'. … 6. Her Honour erred at law in giving no reasons, or no adequate reasons, for her inconsistent findings that: (a) the Court was 'not persuaded that the reasonable commercial rate of use of the equipment should be determined on possession rather than use' in respect of the Excavator, and (b) that, in respect of the Bobcat, 'the amount due should be based on a reasonable daily rate', as applied to the dates the defendant 'had the equipment'."
3. All of the complaints made on these grounds have largely been addressed by the above discussion. In my view, they mischaracterise her Honour's reasons.
4. In relation to ground one, as I have stated, the reference to "incomplete agreement" in the relevant part of her Honour's judgment was to the position prevailing prior to Dr Wainberg's departure overseas in 2010. As at that time, no agreement had been arrived at concerning either the price to be paid for the use of the excavator or even the rate to be applied. The reference to the agreement later reached and implemented is to the position arrived at upon Dr Wainberg's return. Thus, there was no inconsistency in this aspect of her Honour's judgment. This complaint does not involve or raise any error of law.
5. Ground 6(a) concerns the observation of her Honour at the commencement of the passage that has been extracted at [31]. In that passage, her Honour was simply observing that the events of June 2010 did not provide any, or at least much, support for Dr Wainberg's version of events concerning the basis upon which Mr Lewington would be charged for the excavator. In particular, in light of the concession by Dr Wainberg in cross-examination, it appears that her Honour considered it unlikely that the parties moved from discussing an hourly rate to some other basis for payment on Dr Wainberg's return.
6. In relation to ground 6(b), her Honour's finding that the "amount due should be based on a reasonable daily rate" in respect of the Bobcat, simply involved an acceptance of that part of Yarraford's case based on unjust enrichment. Her Honour's use of the dates that Mr Lewington actually "had the equipment" simply reflects her Honour's acceptance of his evidence on that topic in preference to that of Yarraford's witnesses.
7. Two further matters should be noted. First, so much of her Honour's judgment as involved an acceptance of Mr Lewington's evidence in preference to that of Dr Wainberg and Yarraford's other witnesses does not involve or raise any question of law, nor of mixed law and fact, but simply a question of fact. This aspect of her Honour's function involved an assessment of the credibility of witnesses which is a function par excellence of the tribunal of fact.
8. In A.V. Jennings Properties Limited v Kam Civil Pty Ltd [2013] NSWSC 1900 at [21]ff, I addressed the scope of the duty upon a Local Court magistrate to give adequate reasons for a finding of fact in an appeal concerning a question of law. The relevant principles were enunciated by McHugh JA in Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 281 to 282. In particular, in discussing a finding of fact that was alleged to be perverse, in Soulemezis (at p 282) McHugh JA stated as follows: "It is not to the point that his Honour's finding was erroneous, or as counsel for the applicant claimed, perverse. An erroneous or perverse finding of fact raises no question of law and cannot be challenged by way of appeal. What is decisive is that his Honour's judgment reveals the ground for, although not the detailed reasoning in support of, his finding of fact. But that is enough in a case where no appeal lies against the finding of fact. Accordingly, there was no failure to give reasons sufficient to constitute an error of law."
9. Her Honour's reasons for accepting Mr Lewington's evidence in preference to that of Dr Wainberg was more than sufficient to meet the standard identified by McHugh JA in Soulemezis, namely, one that requires only the specification of the "ground for" the relevant finding of fact.
10. Second, in the submissions of counsel for Yarraford, it is contended that there was an inconsistency between her Honour accepting that Mr Lewington should pay for the possession of the Bobcat on a daily rate, and her Honour not accepting that a similar arrangement was applicable for the use of the excavator. There is no inconsistency.
11. In respect of the excavator, Mr Lewington said he paid for its use on an hourly rate because that is what he specifically agreed with Dr Wainberg. Her Honour accepted that evidence. In relation to the Bobcat, Mr Lewington did not state that he had any similar arrangement with Yarraford. Thus, in the absence of any express agreement, her Honour accepted Yarraford's case that the appropriate measure for restitution was by reference to a daily rate.
12. It follows that I reject grounds one and six.
13. Grounds two and five are as follows: "2. Her Honour erred at law in […] expressing no reasons, or no adequate reasons, for her finding that the defendant's account to the plaintiff of his use of machinery did not amount to deceptive conduct. … 5. Her Honour assumed, without proper basis, that the plaintiff could have obtained information that would have informed as to the misleading or deceptive nature of the defendant's representations in respect of his use of the Excavator."
14. The submissions made in support of these grounds either assumed or contended that her Honour accepted Dr Wainberg's evidence in preference to that of Mr Lewington. I have already addressed and rejected that contention.
15. Once her Honour accepted Mr Lewington's version of events, it was inevitable that Yarraford's allegation that he engaged in misleading and deceptive conduct had to fail. As I have stated, Yarraford did not attempt to frame any case that he engaged in misleading and deceptive conduct, even if the Court accepted Mr Lewington's version of events. For example, Yarraford did not attempt to demonstrate that Mr Lewington used the excavator for more than the 42 hours he stated.
16. In his submissions in this Court, counsel for Yarraford contended that her Honour was in fact obliged to make specific findings about precisely what words were said between Dr Wainberg and Mr Lewington about the excavator after Dr Wainberg returned from overseas in 2010.
17. I reject that contention. The obligation of her Honour was to determine if Yarraford had made out its case that the representation was made. Her Honour found that it had not made out that aspect of its case. It was not incumbent upon her Honour to make any particular findings about what was specifically stated. That said, it is clear that her Honour accepted the import of Mr Lewington's evidence about what was discussed.
18. Ground five misstates the relevant part of her Honour's reasons. In recording its acceptance of Mr Lewington's evidence, her Honour referred to "his knowledge of the other ways Dr Wainberg would be aware of the dates that he actually possessed" the excavator. As recounted earlier in her Honour's judgment, this reflects evidence that Mr Lewington gave to the effect that he believed that Dr Wainberg had the means of ascertaining the dates that he possessed the excavator. This bore upon the likelihood as to whether he would have made a false statement to Dr Wainberg about that matter.
19. These were aspects of her Honour's reasoning that went towards an overall acceptance of Mr Lewington's evidence. They are all matters of fact. They do not raise any question of law. I reject grounds two and five.
20. In his written submissions, Counsel for Yarraford reduced grounds three and four of the appeal to the following contention: "3. Her Honour erred at law by failing to properly apply or consider Jacfun Pty Limited v Sydney Harbour Foreshore Authority [2012] NSWCA 218 and s 42 of the Fair Trading Act 1987 NSW."
21. This complaint concerns the alleged failure of her Honour to expressly address Yarraford's case on reliance and on damages, and specifically its reliance on the approach stated in Jacfun, namely, the determination of whether it had lost some commercial opportunity to negotiate with Mr Lewington without the influence of the allegedly inaccurate statement concerning the number of days he possessed the excavator.
22. It is correct that her Honour did not address this aspect of Yarraford's case. Mr Lewington contends that her Honour should not have addressed this aspect of Yarraford's case as it was not properly pleaded or raised before the Local Court in a timely manner. Even if it was, her Honour's rejection of Dr Wainberg's evidence and acceptance of Mr Lewington's evidence meant that there was no case based on Jacfun for her Honour to address.
23. I reject grounds three and four. It follows that Yarraford's appeal will be dismissed.

Application For Leave to Appeal

1. As noted, Yarraford also sought leave to appeal on a mixed question of law and fact (Local Court Act 2007, s 40(1)). Yarraford's written submissions identified the basis upon which it sought a grant of leave as being success on the grounds of appeal noted above.
2. As those grounds were unsuccessful, it follows that leave will be refused.
3. Against the contingency that there was some wider basis upon which leave was sought, I note two further matters.
4. First, the maximum amount recoverable by Yarraford in respect of the excavator claim appears to be $13,700. It was most probably less given that Yarraford was only seeking to establish a case based on a loss of commercial opportunity. The fact that such a small amount is at issue strongly militates against a grant of any leave to appeal.
5. Second, given the findings that were made on credit, to grant leave to appeal on a mixed question of fact and law would be an exercise in futility. The grant of such a leave would still not enable this Court to reconsider her Honour's credit findings, and that position would not be altered by any reliance on s 75A of the Supreme Court Act 1970 (see Lesley-Swan v Owners SP 32735 [2013] NSWSC 1635 at [70] to [75]).

Notice of Contention

1. In light of the conclusions I have reached, it is not necessary to consider Mr Lewington's notice of contention. I otherwise adhere to the statements I made concerning notices of contention in Local Court appeals in Ken Wolf Real Estate Pty Ltd v O'Halloran [2012] NSWSC 993 at [53].

Conclusion

1. Accordingly the Court orders: 1. Pursuant to UCPR 50.3(1)(c) extend the time to commence these proceedings until 15 September 2014. 2. The plaintiff's amended summons be dismissed. 3. The plaintiff pay the defendant's costs of the proceedings.

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: 11 May 2015