William Grenville Pierce v Kerri Lynne Stromberg and Charles Filgate Giles [1987] ACTSC 47 (10 July 1987)

SUPREME COURT OF THE ACT

WILLIAM GRENVILLE PIERCE v. KERRI LYNNE STROMBERG and CHARLES FILGATE GILES
S.C. No. 1111 of 1985
Appeal from Court of Petty Sessions (Magistrates Court)

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Appeal from Court of Petty Sessions (Magistrates Court) - Oral contract alleged - Whether void for uncertainty - Release on dissolution of partnership - Whether effective to discharge second respondent from alleged obligation to partnership.

HEARING

CANBERRA
10:7:1987

ORDER

The appeal be dismissed with costs.

DECISION

This is an appeal from a judgment of the Court of Petty Sessions (as it then was) of the Australian Capital Territory whereby the learned presiding Special Magistrate dismissed an action brought by the appellant as plaintiff against the respondents as defendants claiming an amount of $3,491.90 from each.

2. For the better understanding of the way in which the plaintiff brought his action it is desirable to set out particulars of his amended claim. Those particulars were in the following terms:-

"1. In about March 1979 Michael Alexander

Gordon Emmett and Charles Filgate Giles,
practising as Emmett & Giles, in
consideration of money payment therefor,
agreed to do certain legal work for the
defendant.

2. Pursuant to the said agreement the firm
Emmett & Giles performed the said legal work.

3. In November 1979 the plaintiff entered
into partnership with the second defendant in
a law practice which took over the work
previously conducted by the said Emmett &
Giles, and in early 1980 that partnership was
dissolved whereby the plaintiff acquired all
the assets thereof and the right to payment
of fees for work done by the firm Emmett &
Giles and by the second defendant personally.

4. Subsequently, in early 1980, the plaintiff
agreed to and did act for the first defendant
in her several matters, and the first
defendant agreed to make payment therefor to
the plaintiff, both for that work and for the
work referred to in paragraph 2 above, for
which the plaintiff has rendered to her
accounts totalling $3,491.90.

5. In breach of the agreements referred to in
paragraphs 1 and 4 above, the defendant has
refused and failed to pay for the said legal
work.

6. Alternatively, the plaintiff repeats
paragraphs 1 - 4 above, and says that by
accounts stated in writing dated 22nd and
23rd May 1980 the sum of $3,491.90 was found
to be due by the first defendant to the
plaintiff in respect of the aforesaid legal
work

Particulars of Accounts Stated

(a) 22nd May 1980 re General Credits $492.00

(b) 22nd May 1980 re Carter Dombromski,
Stewart & Co. Baxter & Hart, and
Challen Draughting 112.00

(c) 23rd May 1980 re: Australian
Guarantee Corporation 50.00

(d) 23rd May 1980 re: National Bank 80.00

(e) 23rd May 1980 re: A.J. Auto Electrical 88.00
Services.

(f) 23rd May 1980 re: C.C. Tyre Service 2,380.90

(g) 23rd May 1980 re: Corkhill Bros. 289.00

$3,491.90

7. The plaintiff claims against the first
defendant $3,491.90.

8. Further in the alternative, the plaintiff
as against the second defendant, repeats
paragraphs 1-4 above, and says that by an
agreement in writing made on the 18th day of
April 1980 the second defendant agreed to
transfer to the plaintiff all his right,
title and interest in the aforesaid law
practices and any assets associated
therewith.

9. It was an express or implied term and
condition of such agreement that the second
defendant would not accept payment whether in
cash or kind for legal work done by any of
the members of the aforesaid law practices,
in breach whereof the second defendant in
about mid 1980 accepted from the first
defendant and her then husband certain pigs,
livestock and insulation materials, in
payment for the aforesaid legal work.

10. In consequence of the breach referred to
in paragraph 9 above the plaintiff has
suffered loss and damage in the said amount
of $3,491.90.

11. And the Plaintiff claims as against the
second defendant damages in the sum of
$3,491.90."

3. The first respondent, after receipt of the original particulars of claim, filed a defence in consequence whereof the appellant joined the second respondent as second defendant. The first respondent did not file a defence to the amended particulars of claim but her defence as filed originally was treated as though it were a defence to the claim as amended. In particular, she pleaded as follows:-

"1. The Defendant denies that she retained
the Plaintiff to carry out the work
alleged on her behalf as alleged and
denies that there was any contract
between her and the Plaintiff whereby
she would become liable to pay any
money to the Plaintiff for the provision
of the Plaintiff's services or
otherwise.

2. The Defendant denies that the Plaintiff
did the work alleged at her request or
as alleged at all.

. . .

5. The Defendant states that full payment
of any and all amounts due to the firm
known as Messrs. Giles and Pierce was
made by agreement with Mr Charles
Filgate Giles who offered to accept
certain livestock and insulation
materials in full payment of all amounts
due."

Particulars of the livestock and insulation material were furnished. The first respondent also alleged that the appellant had not complied with s.110 of the Legal Practitioners Ordinance 1970. I am satisfied that that defence was not made out. She alleged too that the amount claimed by him was excessive and unreasonable and that he had not supplied full particulars of his claim but these defences were not pursued.

4. Section 109(1) of the Magistrates Court (Civil Jurisdiction) Ordinance 1982 reads as follows:-

"Subject to sub-section (3), an allegation of
fact made by a party to proceedings in his
pleadings shall stand admitted by an opposite
party unless it is traversed by that opposite
party in his pleading or an implied joinder
of issue under section 110 operates as a
denial of it."

5. The appellant alleges that the first respondent did not traverse the allegations made in paragraph 3 of his particulars of claim and that therefore all that is alleged in that paragraph is deemed to have been admitted. Accepting that this was so, the failure to traverse that paragraph meant only that the appellant did not have to prove, should it have been necessary to do so, that he entered into a partnership with the second respondent in November 1979 in a law practice which took over the work previously conducted by the firm practising as Emmett & Giles which had consisted of Michael Alexander Gordon Emmett and Charles Filgate Giles, that that partnership was dissolved in 1980 and that the appellant acquired all its assets and the right to payment of fees for work done by the firm Emmett & Giles and by Mr Giles personally.

6. The appellant sought to make use of the failure referred to to establish that, by virtue of his acquisition of the assets and the right to payment of fees, he was entitled on the pleadings to recover from the first respondent any fees due for work done for her by the firm Emmett & Giles, by the partnership consisting of the appellant and the second respondent which began in November 1979 and for work done by the second respondent personally on her behalf.

7. Section 12 of the Conveyancing Act 1919 of the State of New South Wales, applicable in the Australian Capital Territory by virtue of the provisions of the Conveyancing Ordinance 1958, provides that any absolute assignment by writing under the hand of the assignor of a debt, of which express notice in writing has been given to the debtor, shall be deemed effectual in law to pass and transfer the legal right from the date of such notice to the assignee. The only documents to which the appellant could point as possibly satisfying the requirement of express notice by him to the first respondent were accounts rendered by him to the first respondent and her husband which incorporated as part of their heading, "William G. Pierce succeeding the partners of Michael A.G. Emmett".

8. In my opinion these words did not constitute express notice of an assignment of any debts which might have been due to the earlier partnerships or to Mr Giles personally.

9. The agreement referred to in paragraph 4 of the particulars is said to have been made in a conversation between the appellant and the first respondent. The learned Magistrate found that the conversation took place on 30 April 1980 in the appellant's office. The first respondent had called following a phone call from the appellant about a pending court case. His Worship described what happened then as follows:-

"As the (appellant) recalled it, the
conversation was along these lines:

Pierce: 'It is coming up soon. We
will need to prepare for it.
What can be done about fees
owing? There has been a good
deal of work done.'

Mrs Stromberg: 'We are a bit broke at the
moment.'

Pierce: 'Are you prepared to pay off
the fees that are owed to the
firm for various matters?'

Mrs Stromberg: 'Yes.'

Pierce: 'Okay. We will do it on that
basis.'

The learned Magistrate went on to say:-

"Apparently at the time Mrs Stromberg was
pregnant and was separated from her husband
and the (appellant) asked her if she would
like him to prepare papers for a maintenance
application and she agreed."

10. In my opinion it is impossible to derive from that conversation an agreement by the first respondent to pay the fees owing in respect of the legal work referred to in paragraphs 1 and 2 of the particulars of claim. Taking the interpretation of the conversation most favourable to the appellant, it seems to me improbable that the first respondent was agreeing to pay any moneys outstanding for fees due to a firm or firms of which the appellant had never been a member. At best, the conversation could relate only, I think, to a firm of which he had been a member. This would limit any amounts that might be claimed to those in respect of work done on or after 5 November 1979.

11. On an intimation that that was the view I took of the conversation between the appellant and the first respondent, counsel for the appellant stated that the appellant would limit his claim to the work done by the firm of Giles & Pierce after 5 November 1979. By this statement I did not understand him to have relinquished his claim in respect of work said to have been done by the appellant alone on behalf of the first respondent after the dissolution of the partnership on 3 April 1980.

12. Subsequently, counsel for the appellant sought leave to amend paragraphs 1, 3 and 4 of the particulars of claim to the following form:-

"1. In about March 1979 Michael Alexander
Gordon Emmett and Charles Filgate Giles,
practising as Emmett & Giles, in
consideration of money payment therefor,
agreed to do certain legal work for the first
defendant, the first defendant's then husband
or such persons jointly.

3. In November 1979 the plaintiff entered
into partnership with the second defendant in
a law practice known as Giles and Pierce
which took over the work previously conducted
by the said Emmett & Giles, and on 3 April
1980 that partnership was dissolved whereby
the plaintiff acquired all the assets thereof
and the right to payment of fees for work
done by the firm Emmett & Giles by Giles and
Pierce and by the second defendant
personally.

4. Subsequently, in early 1980, the plaintiff
agreed to and did act for the first defendant
in her several matters, and the first
defendant agreed to make payment therefor to
the plaintiff, both for that work and for the
work referred to in paragraph 2 above, in
respect of which the plaintiff has rendered
accounts totalling $3,491.90."

13. In March 1979 Mr Emmett and Mr Giles were practising in partnership together as Emmett & Giles. It appears that by 5 November 1979 Mr Emmett had left the partnership and that Mr Giles was practising on his own as the successor of that partnership, the date of the dissolution of which does not appear. On 5 November 1979 the appellant joined Mr Giles as his partner. Subsequently, on 5 March 1980, Mr Crispin joined the firm as a third partner. The new partnership was dissolved on 3 April 1980. Accordingly, by the time the appellant had the conversation with the first respondent which is said to form the basis of the contract between them and of the claim for $3,491.90, the appellant was operating a practice in succession to three different partnerships and apparently Mr Giles practising on his own account.

14. The claim made in paragraph 6 of the amended particulars of claim on alleged accounts stated was not proceeded with. Analysis of paragraphs 1-5 of the particulars of claim (assuming the amendments referred to above) shows an allegation that the partnership of Emmett & Giles agreed to do and did legal work for the first respondent, her husband or both of them. Because of the lack of express notice in writing, the third paragraph may, in my opinion, be ignored.

15. The appellant's case depends upon the true construction of the agreement referred to in paragraph 4. If that agreement can fairly be construed as meaning that the first respondent promised to pay all the accounts outstanding in respect of the work commenced in March 1979, the appellant would have made out his case. Everything, therefore, turns, I think, on the conversation which took place on 30 April 1980.

16. Accepting that conversation as found by the learned Magistrate, it seems to me that there are three possibilities according to its terms. The first which I think can be dismissed out of hand is that the firm referred to in the conversation was all three firms, Emmett & Giles, Giles and Pierce and the firm of which Mr Crispin became a partner on 5 March 1980. The second is that the phrase included the firms Giles and Pierce as originally constituted and after Mr Crispin became a partner. This is a more acceptable interpretation because of the appellant's membership of both those firms and since it was he who engaged in the conversation with the first respondent. The third is that the firm consisted of the ultimate partnership, that consisting of Giles, Pierce and Crispin.

17. After careful consideration of the evidence, I am not persuaded that any one of the three possible interpretations is necessarily the correct one. I think, therefore, that the appellant has failed to prove with sufficient certainty the terms of the contract which he alleges. I accept that when parties make an arrangement apparently intended to have an effect upon the legal relations between them, the Court should try to give effect to those arrangements if it can reasonably do so. However, in the face of the ambiguity apparent in all the circumstances and having regard to the position occupied by the appellant vis a vis the first respondent, I am unable to be satisfied with the appropriate degree of certainty on the balance of probabilities of what the contract was. I do not think I should find that in any event a minimum amount must be due having regard to the possibility that the firm referred to was that which came into existence on 5 March 1980. Perusal of the accounts rendered, the totals of which make up the $3,491.90 claimed and all of which were addressed to Mr & Mrs Stromberg, shows that only one of them makes reference to work done on or after 30 April 1980. That refers to a matter concerning C.C. Tyre Service. The relevant items on the account are:-

"April 30 Attendance on Kerri Stromberg, 45 mins. $60.00
(1980)

May 12 Perusing letter from Court dated 9th May 5.00"

18. It is significant that of the first nine items in that account, eight relate specifically to attendances, personal or on the telephone, upon Mr Stromberg.

19. Having regard to the way in which the claim is put in paragraph 4 of the amended particulars of claim, I am not prepared to make a finding against the second respondent on the basis of that paragraph. The $65.00 claimed in respect of the two items appears to have been in respect of work for the first respondent and her husband, not for herself in her own or one of her several matters.

20. The case against the second respondent depends upon there having been an express or implied term or condition as set out in paragraph 9 of the particulars of claim. No such evidence of any express term was given and I do not see how it can be implied in the absence of any suggestion of fraud. Certainly the arrangement was known to Mr Crispin before the dissolution of partnership on 3 April 1980. Counsel for the appellant disclaimed any suggestion of fraud on the part of Mr Giles. After the dissolution of the ultimate partnership on 3 April 1980 terms of settlement were agreed upon on 18 April 1980. They included the following:-

"Emmett and Giles, Pierce and Giles and
Crispin and Giles respectively release and
forever discharge each other from all suits
demands claims and rights of action which
they or any of them have or may have against
any others or other of them for any cause
whatsoever."

21. In the face of that, it is not possible to sustain the claim against the second respondent as it was sought to be made out. The appeal against the judgment in his favour is therefore dismissed.

22. However, it has a side effect. There was evidence placed before the learned Magistrate on behalf of the appellant concerning the arrangement regarding the acceptance of the pigs and insulation material as payment in kind on account of fees. The evidence so tendered is set out at length in the reasons for judgment given by the learned Magistrate.

23. In the answers to interrogatories delivered for her examination by the appellant, the first respondent said that her then husband had supplied 30 sucking pigs, 3 sows, 2 baconers, 1 killed sow and 4 rolls of insulation to Mr Giles as payment of accounts for legal work. She said the pigs were delivered at their location on a rural property owned by one, Hans Gephardt, between January 1980 and April 1980, she being then present with Mr Hans Gephardt. She said that she supplied the insulation material to Mr Giles at his residence. At the time of supply of the pigs she said there was a discussion of a general nature regarding Mr Giles' taking over the pigs as full payment for all legal work carried out by him on behalf of Mr and Mrs Stromberg.

24. Part of an affidavit sworn by Mr Giles was tendered in the appellant's case before the learned Magistrate. As well, some of the interrogatories delivered for his examination by the appellant and the answers thereto were tendered. One answer to those interrogatories said that it was agreed between Manfred Stromberg and the second respondent that Manfred Stromberg would give him the said pigs, that their value would be arrived at later and that that value would be credited to Manfred Stromberg's account with the partnership of Giles and Pierce.

25. The learned Magistrate did not make any finding as to which evidence concerning the agreement about the pigs he accepted.

26. In the state in which the evidence was left it was a possible conclusion that the supply of the pigs and the insulation material was to be in respect of all the work done for the first respondent and her husband.

27. There can hardly be any doubt that there was an arrangement between Mr Giles and Mr Stromberg concerning payment in kind in respect of the accounts outstanding. The evidence led by the appellant before the learned Magistrate did not, in my opinion, disprove what was said by the first respondent in her answers to interrogatories. That being the case, it seems to me that on the balance of probabilities her case was made out.

28. The appellant contended that the learned Magistrate had erred in rejecting some of the appellant's business records. Assuming that the learned Magistrate did err in rejecting those records, it seems to me that their reception would have made no difference to the claim made by the appellant having regard to the way in which I think that claim ought to be dealt with.

29. On the second day of the hearing I gave leave to the appellant to amend his particulars of claim, leave of which he took advantage. I subsequently expressed doubt as to whether I had power to grant such an amendment and heard submissions thereon. However, consideration of the actual amendments made to the particulars of claim leads to the conclusion that they did not effect any amendment of substance and I do not consider it necessary to decide whether there was power in the Court to allow such an amendment.

30. The appeal is dismissed with costs.