Kennedy -v- Newman [2014] NTCA 2

 

PARTIES:                                         KENNEDY, ROBERT

 

                                                         v

 

                                                         NEWMAN, PETER

 

TITLE OF COURT:                           COURT OF APPEAL OF THE NORTHERN TERRITORY

 

JURISDICTION:                               CIVIL APPEAL FROM THE SUPREME COURT EXERCISING TERRITORY JURISDICTION

 

FILE NO:                                          21217570

 

DELIVERED:                                   10 FEBRUARY 2014

 

HEARING DATES:                           10 FEBRUARY 2014

 

JUDGMENT OF:                              RILEY CJ, BLOKLAND & HILEY JJ

 

APPEAL FROM:                               SOUTHWOOD J

 

CATCHWORDS:

 

APPEAL –Sale of Goods Act (NT) – Consistent with common law – Detinue and conversion do not arise on the facts – Respondent had not interfered with goods to deny plaintiff’s right to possession – Appeal dismissed.

 

REPRESENTATION:

 

    Appellant:                                    Self represented

    Respondent:                                 Self represented

 

Judgment category classification:   B

Judgment ID Number:                      BLO1402

Number of pages:                            14


IN THE COURT OF APPEAL

OF THE NORTHERN TERRITORY

OF AUSTRALIA

AT DARWIN

 

Kennedy -v- Newman [2014] NTCA 2

No. 21217570

 

 

                                                     BETWEEN:

 

                                                     Robert Kennedy

                                                         Appellant

 

                                                     AND:

 

                                                     Peter Newman

                                                         Respondent

 

CORAM:    RILEY CJ, BLOKLAND & HILEY JJ

 

EX TEMPORE

 

REASONS FOR JUDGMENT

 

(Delivered 10 FEBRUARY 2014)

 

The Court

Introduction:

[1]       On 17 July 2013, a Judge of the Supreme Court dismissed an appeal brought by Robert Kennedy, (the appellant) in which he sought to have a judgment of the Local Court dismissing his claim against Peter Newman, (the respondent) set aside. 

[2]       The appellant now appeals to this Court in respect of the order made on 17 July 2013, dismissing his appeal. 

 

 

Proceedings in the Local Court

[3]       The Particulars of Claim filed by the appellant, in brief, alleged the appellant had sold the respondent a furniture pantechnicon and trailer but not the contents of the pantechnicon.  So much was not disputed.  The contents comprised the appellant’s workshop equipment and tools and, according to the appellant, storage racks that were built into the pantechnicon.  The appellant relied upon a written “sales agreement” dated 29 October 2010, drafted by him, which referred back to an agreement struck between the parties on 23 September 2010.

[4]       The sale agreement included a list of “unfinished work” to be done to the pantechnicon by the appellant and a term that “unfinished work and handover to Mr Newman to be completed in early 2011.”

[5]       At the time of the sale agreement, and until late 2011, the pantechnicon and trailer, and also a caravan and a container belonging to the appellant, were kept on a block of land owned by a third party, Mr Smith. In late 2011, Mr Smith sold the land to Mr Riley, who was not willing for the pantechnicon and trailer, and the appellant’s caravan and container, to remain on the land.

[6]       The appellant alleged that under the sale agreement the contents were to be “transferred before the departure of the pantechnicon from its normal place”, namely from Mr Smith’s land. He acknowledged that he had to do certain repair work to the pantechnicon before the sale was completed, although he had already been paid in full for the pantechnicon and trailer. He claimed that on about 5 September 2011, without notice, the respondent “towed the unfinished ‘work in progress’ pantechnicon away still containing” his property. He also alleged that the respondent refused to “return it to the place agreed”, namely to the caravan and container on Mr Smith’s land. The appellant contended that because of the respondent’s delay in returning his property earlier, and because he was no longer able to use the land after it was sold to Mr Riley, he could no longer afford to store the contents. He said that, consequently, he had been buying replacements. He sought “financial restitution of $23,000 as a fair replacement value of the property taken by the Defendant”.

[7]       The respondent agreed that he purchased the pantechnicon and trailer, but not the contents.  He defended the claim on the basis that the appellant had not completed the unfinished work on the pantechnicon as agreed between them and that the appellant had refused to remove the contents from the pantechnicon when requested to do so.  The respondent argued that until he removed the pantechnicon from Mr Smith's land, the appellant was able to remove the contents belonging to him; this was evident through the fact that the appellant at all relevant times held the keys to the lock on the pantechnicon.  The respondent said he moved the pantechnicon from the land in about December 2011 because the new owner, Mr Riley, demanded its removal. 

[8]       Both parties gave evidence before the Local Court and a number of relevant documents, including the contract of sale, were tendered.  The appellant was not represented before the Local Court. 

[9]       The magistrate made a number of findings, contrary to the appellant’s case. His Honour concluded that the terms of the contract of sale governing the removal and relocation of items in the pantechnicon were incomplete.  He found that under the contract of sale the removal and relocation of the appellant’s items were to be the subject of further agreement, and he concluded that that part of the contract was unenforceable.  His Honour dismissed the claim on the basis that the only cause of action pleaded by the appellant was breach of contract. He also concluded that the appellant did not plead a cause of action in either detinue or conversion.[1] 

Proceedings on appeal in the Supreme Court

[10]    The appeal judge, summarised the principal grounds of appeal as follows:

“1. The trial magistrate erred in holding there was no agreement to transfer the appellant’s items out of the pantechnicon before the pantechnicon left the appellant’s allocated tenancy site.

2. The trial magistrate erred in failing to find that it was a term of the sale agreement that the appellant’s items would be transferred out of the pantechnicon, at the site where it had been parked since 2010, before the pantechnicon could be delivered to the respondent.”

[11]    His Honour noted, and we agree, that the other grounds of appeal merely pleaded certain evidentiary matters which were of little or no relevance to the substantive grounds of appeal.

[12]    Neither party was represented in the appeal to the Supreme Court.  The appeal judge heard oral submissions from both parties and assisted both parties by, amongst other procedural steps taken, arranging for copies of Halsbury’s, “Laws of Australia” commentary on the Sale of Goods Act to be given to them for their consideration.[2]  

[13]    His Honour found that the evidence before the Local Court strongly supported the findings made by the learned magistrate.[3]  We see no reason to depart from the approach taken by his Honour.  There was substantial agreement between the parties in relation to the facts.  It is clear, as found by both the magistrate and the judge on appeal that the respondent paid the whole of the purchase price of $19,500 in 2010; that the appellant failed to complete all of the unfinished work (the subject of the agreement between the parties) by early 2011 or at all; that the appellant failed to deliver the pantechnicon and trailer to the respondent by early 2011 and that the respondent removed the pantechnicon and trailer from the land owned by Mr Riley in September or October 2011 and took it to the yard of a truck repairer in about December 2011. 

[14]    Other findings of relevance were that the respondent was at all times willing to deliver up the contents of the pantechnicon[4]; that there was no evidence of detinue or conversion; that there had been no disposal or sale of the equipment and other items in the pantechnicon and there had been no withholding of possession or failure to return the goods contrary to the appellant’s rights.  Further, it was found that the respondent had taken reasonable care of the appellant’s goods and at all material times had been willing to have the goods returned to the appellant.  The appellant, however, declined to accept the offer on the grounds that at the time the offer of return was made, he was not in a position to take the goods back as he did not have the capacity to store the items, nor the capacity to remove the items from where they were located. 

[15]    In short, the judge on appeal found that it was the appellant who had breached the contract of sale by failing to complete the unfinished work and deliver the pantechnicon to the respondent in a deliverable state by early 2011.  His Honour noted that the respondent did not repudiate the contract of sale as a result of the appellant’s breach, but rather waived the condition requiring the appellant to complete the unfinished work.  He concluded the respondent did not breach the contract of sale by removing the pantechnicon and trailer from Mr Riley’s land.  Property in the pantechnicon and trailer had passed to the respondent by the time he removed the pantechnicon and trailer from Mr Riley’s land.  The respondent had paid the purchase price in full and had waived the condition that the unfinished work be completed by the appellant and he had accepted delivery of the pantechnicon.

[16]    His Honour also noted that during evidence in the Local Court the appellant had stated that property in the pantechnicon had passed to the respondent and he had signed a transfer of registration document.  The respondent had done what he legally could do and as the property had passed, the respondent was entitled to exercise his rights over the pantechnicon and have it repaired so that he could use it for the purpose for which it was purchased.  The respondent became a bailee at will of the contents. 

[17]    His Honour concluded that the appellant had no right to require the respondent to return the pantechnicon to Mr Riley's land until the appellant completed the work as agreed so that the goods could be removed.  His Honour found that the appellant's argument in relation to this aspect of the appeal was totally misconceived as the appellant was required to remove the goods from the pantechnicon by 30 June 2011 at the latest (ie early 2011); he should have completed any work required prior to 30 June 2011; and he should have ensured his goods were removed from the pantechnicon and relocated prior to 30 June 2011.  His Honour found it was the appellant’s own breach of the contract of sale that resulted in him losing his capacity to store his equipment in the manner he had anticipated. 

[18]    His Honour did find that the Local Court erred in finding that the contract of sale was incomplete in the sense that the removal and relocation of the workshop equipment and tools was to be the subject of further agreement. However there was no error in holding that there was no agreement to transfer the appellant’s items out of the pantechnicon before the pantechnicon left the original site.  He also held that the Local Court was correct in finding that the respondent had not unlawfully dealt with the appellant’s workshop equipment and tools which were in the pantechnicon.

[19]    His Honour concluded that as a result of the appellant’s own failure to remove and relocate the items by early 2011 he had breached a term of the contract of sale and suffered the consequences of doing so.  He found that the appellant could still collect the goods but would incur the costs of making arrangements to do so as he would need to find an alternative place to store his goods. 

The appeal before this Court

[20]    Both parties represented themselves before this Court. 

[21]    The appellant now seeks that the order of the Supreme Court be quashed and the matter be heard de novo; “on the tort grounds of detinue and conversion”.[5]  The notice of appeal implies that claims in detinue and conversion were relied on in both the Local Court and in the Supreme Court on appeal.  The grounds of the appeal are as follows:

“1. The appellant appeals the judgment mis-trial. 

2. The respondent through his solicitor in the lower court into proceedings withdrew all notions of sale of goods or any other defence.  The matter left the lower court and entered the Court of Appeal solely on the applicant/appellant’s grounds of detinue and conversion unchallenged. 

3. The Justice erred by wrongly holding throughout to the sale of goods act (solely about “the vehicle”) on his own advocacy on behalf of The Respondent.  The Judge did not address the appeal as filed by The Appellant solely on torts of detinue and conversion (solely about the appellant’s property “still within the vehicle” beyond bailment)”. 

[22]    We interpret these rather confusing grounds of appeal as alleging that the Supreme Court should not have had regard to contract of sale or the Sale of Goods Act (NT); and that the matter should have been determined on the basis of claims in detinue and conversion.  The appellant’s written submissions additionally allege lack of procedural fairness and an apprehension or perception of bias in the Supreme Court. 

(i)          The Sale of Goods Act (NT)

[23]    In relation to the apparent Sale of Goods Act issue, his Honour ensured both parties had relevant commentary on the Sale of Goods Act.  Prior to providing that commentary, his Honour referred both parties to relevant sections of the Sale of Goods Act and explained the relevance in terms of the appeal.  On 4 January 2013 the appeal was adjourned to 11 January 2013 when his Honour raised again the provisions of the Sale of Goods Act and noted it did not appear to have been considered by the learned Magistrate.  His Honour advised the parties that he had not made up his mind about those matters.  In our opinion his Honour gave more than ample opportunity for both parties to address any issues that may arise by reference to the provisions of the Sale of Goods Act

[24]    His Honour’s observations in relation to the Sale of Goods Act (NT) were as follows[6]:

       Section 22 of the Sale of Goods Act (NT) provides, where there is a contract of sale for specific goods, the property in them is transferred to the buyer at such time as the parties to the contract intend it to be transferred.  For the purpose of ascertaining the intention of the parties regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case.  Section 23, Rule 2 of the Sale of Goods Act (NT) provides that unless a different intention appears, where there is a contract for the sale of specific goods, and the seller is bound to do something to the goods for the purpose of putting them in a deliverable state, the property does not pass until such thing be done and the buyer has notice thereof.[7]  

       In my opinion, no different intention to that specified in s 23, Rule 2 of the Sale of Goods Act (NT) appears in the contract of sale the subject of this appeal.[8]  Handover to the respondent was to occur upon the completion of the unfinished work and the balance of the purchase price was to be paid at handover.  Clauses 3 and 8 state that “unfinished work and handover to Mr Newman to be completed in early 2011” and clauses 4 and 9 state, “further progress payments as agreed and balance at handover early 2011 or before if it can be achieved and mutually agreed.”

       Further, time is prima facie of the essence with respect to delivery in the contract of sale that is the subject of this appeal.   If the time for delivery is fixed by the contract, then failure to deliver at that time will be a breach of a condition, which justifies the buyer in refusing to take the goods.  The time for delivery under the contract of sale was fixed as “early 2011”.  The ordinary meaning of ‘early’ is within the first part of the relevant division of time, which, in this case, would mean within the first half of 2011.  However, under s 16(1) of the Sale of Goods Act (NT) where a contract of sale is subject to any condition to be fulfilled by the seller, the buyer may waive the condition or may elect to treat the breach of such a condition as a breach of warranty and not as a ground for treating the contract as repudiated.

[25]    In our opinion this is not a situation where failure to specifically plead the Sale of Goods Act (NT) prevented reliance on its terms for the purpose of determining the appeal.  Rather, one would expect such legislation to be referred to in a matter such as this which clearly involves a contract for the sale of goods. It has long been accepted that the Sale of Goods Act (NT) codified older relevant case law and that “the rules of the common law” continue to apply, so long as the common law is not inconsistent with the Sale of Goods Act (NT).[9]  The sections of the Sale of Goods Act (NT) referred to by his Honour reflect the common law and are not controversial.  The same result would be achieved by the application of common law principles.  In any event, his Honour gave every reasonable opportunity to both parties to address the principles reflected in the Sale of Goods Act (NT) on which he indicated he may rely.  In as much as reliance on the Sale of Goods Act (NT) is sought to form the basis of this appeal, we consider that it is misconceived and we would not allow the appeal on that basis. 

 

(ii)        Detinue and Conversion

[26]    We agree with the conclusions reached in both the Local Court and Supreme Court that neither detinue nor conversion were pleaded and neither cause of action arose on the facts of the case.  The appellant’s claim was based upon the contract of sale drawn by the appellant and sought damages for breach of that contract. It would be inappropriate and fundamentally unfair for this Court to order a retrial on causes of action that were not alleged.  The appellant’s submissions appear to indicate that having raised those issues in argument in the Supreme Court, he should be entitled to relief in either conversion or detinue.  We disagree. 

[27]    While the tort of conversion encompasses a wide range of interferences, the essence of conversion is a dealing with a chattel in a manner repugnant to the immediate right of possession of the person who has property or special property in the chattel.[10]  In the circumstances, it could not be said that the respondent has dealt with goods in a way that expressly or impliedly denies the plaintiff’s right to possession.  On the contrary, the respondent has done everything reasonably possible to ensure the appellant’s right to possession of the goods.  It has been the appellant’s failure to exercise his rights over the goods in contravention of his contract with the respondent that has brought about this state of affairs. 

[28]    No action in detinue could lie as there was no wrongful refusal to return the goods.  No fault can be attributed to the respondent in this instance even if the goods were found to be in his wrongful detention.  The respondent’s possession of the goods was unintentional and there was no lack of care.  In those circumstances detinue will not lie.[11] 

(iii)      Additional issues raised in the appellant’s written submissions

[29]    Related to the appellant’s argument that his Honour should not have determined the issues by reference to the Sale of Goods Act (NT), the appellant has submitted there was a lack of procedural fairness and a perception of bias resulting in a “mis-trial”.  The issue of reference to the Sale of Goods Act (NT) has been dealt with above.[12]  We see no merit in the suggestion of a lack of procedural fairness.  On the contrary, the steps taken by his Honour more than adequately satisfied procedural fairness. 

[30]    The test for apprehended bias is whether a fair minded lay observer might reasonably apprehend that a judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is to decide.[13] 

[31]    A review of the transcript reveals his Honour’s approach was to question both parties in order to ensure the core issues, shorn of irrelevancies, were dealt with on appeal.  His Honour also encouraged both parties to work towards settlement of the issues outstanding between them.  Far from creating a perception of bias in the eyes of a fair minded observer, the approach taken, in our opinion facilitated efficiency and encouraged the resolution of issues.  Such an approach is to be expected in cases of this kind. 

[32]    We see no merit in the appeal.  The appeal is dismissed. 

 

 



[1] Transcript of Reasons, Lowndes SM, (as he then was), 12 November 2012; summarised in Kennedy v Newman, [2013] NTSC 39 at para [7]. 

[2] Transcript of proceedings, January 2013, especially at [11]. 

[3] Kennedy v Newman [2013] NTSC 38 at [24]. 

[4] Kennedy v Newman [2013] NTSC 38, at [8]; save for one period discussed by his Honour not relevant for present purposes. 

[5] Notice of Appeal, filed 6 July 2013. 

[6] Kennedy v Newman [2013] NTSC 38, [14] – [16]. 

[7] Wallace v Safeway Caravan Mart Pty Ltd (1975) QL 224.

[8] Hartley v Hymans [1920] 3 KB 475 at 484.

[9] s 4(2) Sale of Goods Act (NT).  See Vermeesch and Lindgren’s, “Business Law of Australia” Lexis Nexis Butterworths Australia (2011) at [758]

[10] Penfold Wines Pty Ltd v Elliott (1946) 74 CLR 204, per Dixon J at 229. 

[11] Houghland v RR Low (Luxury Coaches) Ltd.  [1962] 2 All ER 159 at 161 per Ormerod LJ. 

[12] Paras [16] – [17]. 

[13] Johnson v Johnson (2000) 201 CLR 488 at 492, per Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ, para [11].