Nock v Maddern

1. [1]

   LEEMING JA: I agree with White JA.

2. [2]

   WHITE JA: This is an appeal from orders of the District Court (Mahony SC DCJ) in which judgment was given in favour of Mr Nock (plaintiff in the District Court), against Dr Maddern (defendant in the District Court), for $109,800, inclusive of pre-judgment interest. Dr Maddern was ordered to pay Mr Nock’s costs.

3. [3]

   The appellant filed a document entitled “Summons Commencing an Appeal (Part 50)”, purportedly pursuant to Uniform Civil Procedure Rules 2005 (NSW) (UCPR) r 50.4. The summons sought orders that the appeal be allowed and that the judgment sum awarded be increased to $240,000 plus “pre-trial” interest. UCPR 50.4 is concerned with appeals to the Court other than an appeal assigned to the Court of Appeal. At the outset of the hearing, the Court indicated that it would treat the summons as a notice of appeal.

4. [4]

   By his notice of appeal Mr Nock seeks an order that judgment be entered in his favour in the sum of $240,000 plus “pre-trial” interest.

5. [5]

   On 2 April 2014 Mr Nock sued for agistment fees he claimed were payable from 2004 for his allowing Dr Maddern to agist cattle on his land. Dr Maddern admitted that some agistment fees were due but disputed Mr Nock’s entitlement to agistment fees before 2 April 2008, the quantum of agistment fees claimed by Mr Nock to be payable after 31 March 2010 and Mr Nock’s claim for contractual interest. The issues before the primary judge were:

6. [6]

   The primary judge rejected Mr Nock’s claim that he was entitled to agistment fees from 31 March 2010 at the rates Mr Nock had proposed in his email of 11 January 2010 and that he was entitled to a contractual rate of interest of 10 per cent per annum on unpaid fees. His Honour also found that the claim for agistment fees owing before 2 April 2008, being six years before proceedings were commenced, was barred by s 14 of the Limitation Act 1969 (NSW).

7. [7]

   For the reasons which follow, none of the challenges to the primary judge’s conclusions and reasons succeeds. The appeal should be dismissed.

Background facts

1. [8]

   Mr Nock’s claim arose from arrangements for the agistment of Dr Maddern’s cattle on Mr Nock’s farm at Fort Gunning, Collector Road, Gunning. Dr Maddern started agisting cattle on the property in 1986. The property was then owned by Mr Nock and his sister. Following a falling out between Mr Nock and his sister, Mr Nock became the sole proprietor of the Gunning property in 1999 and the agistment arrangement continued between him and Dr Maddern. It was admitted on the pleadings that it was a term of the agistment arrangement that Dr Maddern would pay agistment fees calculated at $2.50 per head per week for yearlings and older cattle, and $1.50 per head per week for calves older than six months. That price was agreed in 1986.

2. [9]

   Dr Maddern paid agistment fees up to the financial year ended 30 June 2004. After 30 June 2004 he made no further payments, other than two payments totalling $2,200 in about June or July 2010. He said that he did work and provided materials on the property for which he was unremunerated and which he was not required to do under any term of the agistment arrangements. He contended that he made payments in kind. Mr Nock disputed this. Dr Maddern said that he stopped making payments in 2004 for cattle agistment because he was having financial difficulties due to the drought and that he asked that agistment fees be waived while he was handfeeding because of drought. He said that he asked for Mr Nock’s consideration to waive agistment fees until seasons got better.

3. [10]

   On 11 January 2010 Mr Nock sent a long email to Dr Maddern. He said that the agistment rate had remained unchanged since the rates were set in the 1980s, but what had changed was that Dr Maddern had not paid anything since early 2004. He asserted that Dr Maddern was his largest debtor. He did not attempt to quantify the debt. Part of the difficulty in quantifying the debt is that only Dr Maddern knew the numbers of cattle that were agisted on the property from time to time. Mr Nock proposed that a new agistment rate be set at close to a “real commercial rate”. He proposed that he allow a 20 per cent discount if monthly agistment were paid within two weeks of the end of the month, but that agistment outstanding for more than one month should accrue at the full commercial rate and should be subject to an interest rate of 10 per cent per annum. Mr Nock’s email concluded as follows:

4. [11]

   Dr Maddern replied on 24 January 2010 as follows:

5. [12]

   The discussion to which both parties had referred did not happen. 31 March 2010 came and went with no discussion between the parties about new agistment arrangements. Dr Maddern continued to agist his cattle on Mr Nock’s land.

6. [13]

   Between 13 July 2012 and 9 November 2012 Mr Nock sent four emails to Dr Maddern expressing concern about the accumulated debt and, according to Mr Nock, the interest accruing on that debt. On 13 July 2012 Mr Nock said that he did not know how Dr Maddern proposed to pay the debt and he was uncomfortable having such a substantial debt outstanding. On 25 October 2012 Mr Nock complained about Dr Maddern’s refusal to respond to messages. He said:

7. [14]

   Dr Maddern did not answer these emails.

8. [15]

   On 28 January 2013 Mr Nock sent a letter of demand. He did not attempt to quantify the outstanding debt. In the letter Mr Nock wrote:

9. [16]

   Mr Nock said that Dr Maddern had not proposed any arrangement by which he might be able to repay the debt and Mr Nock thought that he lacked the ability to do so. He foreshadowed bringing court proceedings but raised the possibility of Dr Maddern’s providing a mortgage over some properties owned by him to carry the debt and its accumulation until such time as Dr Maddern wished no longer to operate his cattle-raising business.

10. [17]

    Dr Maddern replied to this email on 20 February 2013. In that email Dr Maddern referred to health difficulties he said he had experienced and assistance he said he had provided in the past to Mr Nock. Relevantly Dr Maddern said:

11. [18]

    Notwithstanding this assurance Dr Maddern did not make any further payments.

12. [19]

    Mr Nock replied promptly on 20 February 2013 saying that the parties needed to talk, and sooner rather than later, about options. In that email Mr Nock said that he had been very conscious of the prevailing agricultural conditions which in part was why he had not chased after Dr Maddern.

13. [20]

    However, matters were not further discussed. Mr Nock wrote again on 28 August 2013 stating that he had rejected opportunities to have other people agist animals on the property. He threatened legal action. He attached a calculation of a debt claimed from 30 June 2003 to 31 March 2010 totalling $158,724 inclusive of interest and a debt calculated as at the end of December 2013 in the sum of $262,877.60 inclusive of interest. There was no response to that email.

14. [21]

    On 12 November 2013 Mr Nock gave notice terminating the agistment arrangements for the Gunning property as of 31 December 2013. Mr Nock stated he expected Dr Maddern to arrange for all of his animals to be removed from the property by that date.

15. [22]

    Further demands followed in September, November and December 2013.

16. [23]

    On 19 December 2013 Mr Nock provided a worksheet showing an accumulated debt as at the end of December 2013 of $262,401.15 and an estimated debt as at 31 March 2014 of $265,045.15.

17. [24]

    On 7 January 2014 Dr Maddern wrote:

18. [25]

    The modified spreadsheet repeated the numbers included in the spreadsheet sent by Mr Nock on 19 December 2013, but extracted from it the amounts claimed by way of agistment ($170,003) and said “Ongoing interest at 5% say pa $13,252.26. At five per cent per annum that suggests interest on a debt of $265,040.”

19. [26]

    Mr Nock’s email of 28 August 2013 was the first attempt by either party to quantify a debt owed by Dr Maddern.

20. [27]

    The calculations provided by Mr Nock are inconsistent with his email of 11 January 2010 in two respects. They provide for interest on outstanding debts to be charged at the rate of nine per cent rather than ten per cent. They also provide for interest to be compounded yearly. There was no provision in the email of 11 January 2010 for the compounding of interest. They assume agistment would be payable for 60 cows, four bulls and 54 calves.

The pleaded claim

1. [28]

   Mr Nock filed a statement of claim in the District Court on 2 April 2014. The claim was amended on 14 April 2016. The statement of claim pleaded what were described as causes of action for breach of contract and promissory estoppel.

2. [29]

   Mr Nock pleaded that Dr Maddern by his email of 24 January 2010 had accepted the new terms of agistment arrangements proposed by Mr Nock on 11 January 2010, or alternatively, Dr Maddern “... by his email dated 24 January 2010 and by his subsequent conduct in continuing to agist cattle at Fort Gunning made representations that he agreed to the new terms.” This was a pleading that Dr Maddern accepted the terms proposed by Mr Nock either by his email of 24 January 2010 or by his subsequent conduct in continuing to agist cattle on the property, or both.

3. [30]

   Mr Nock also pleaded that by his conduct Dr Maddern represented that he agreed to the new terms. Mr Nock then pleaded that he relied upon that representation to his detriment by not commencing proceedings to recover the debt that had accrued from 2004, by not requiring Dr Maddern to remove his cattle from the property, by not arranging for alternative agistment and by continuing to pay maintenance and upkeep costs for the property. Mr Nock pleaded that it would be unconscionable for Dr Maddern not to be held to the representations pleaded (viz. that Dr Maddern agreed to the new terms).

4. [31]

   Mr Nock also pleaded that he relied upon the representations contained in Dr Maddern’s email of 20 February 2013 (see [17] above) by not commencing proceedings to recover the debt earlier than he did, by not requiring Dr Maddern to remove his cattle from Fort Gunning, by not arranging for alternative agistment at Fort Gunning and by continuing to pay maintenance and upkeep costs for the property. He alleged that it would be unconscionable for Dr Maddern not to be held to the representations contained in that email.

5. [32]

   Mr Nock claimed a debt for the sum of $755,797.60, being agistment fees of $367,296 and pre-judgment interest of $387,835 plus filing and service fees. Alternatively, he sought damages for breach of contract and alternatively again, equitable compensation.

6. [33]

   Mr Nock did not bring a quantum meruit claim, that is, a claim in restitution, for reasonable agistment fees for having allowed Dr Maddern to agist his cattle on the Fort Gunning property at Dr Maddern’s request (compare the indebitatus counts given for agistment in Bullen & Leake, Precedents of Pleadings, 3rd ed (1868) at p 68). Implicitly he acknowledged that the parties continued in contractual relations. The question was whether the original contractual terms had been varied or replaced by terms Mr Nock said had been accepted in 2010 or whether Dr Maddern was estopped from denying that that was so.

7. [34]

   No issue was raised before the primary judge (nor on appeal) as to the District Court’s jurisdiction to award equitable compensation by holding Dr Maddern to the alleged representations. One might doubt that the causes of action pleaded as being based on promissory estoppel, would be available in the District Court. It is not clear that it is an action of a kind which, if brought in the Supreme Court, would be assigned to the Common Law Division (District Court Act 1973 (NSW), s 44(1)(a)) and does not fall within the equitable jurisdiction conferred on the District Court by Div 8 of Pt 3 of the District Court Act. Prima facie, the Law Reform (Law and Equity) Act 1972 (NSW) would be of no avail (s 7).

8. [35]

   Moreover the District Court was bound by this Court’s decision in Saleh v Romanous (2010) 79 NSWLR 453; [2010] NSWCA 274 in which Handley AJA (with whom Giles JA and Sackville AJA agreed) held that a promissory estoppel is a restraint on the enforcement of rights and must be negative in substance (at [74]).

9. [36]

   Counsel for Dr Maddern candidly said that the case was litigated before the primary judge on the basis of Dr Maddern’s acceptance that the District Court had jurisdiction to entertain the appellant’s claim for equitable relief and that the cause of action based on promissory estoppel could be affirmatively advanced, as opposed to being purely a defence to a claim to exercise a legal right. Because, for the reasons which follow, the appellant’s claim fails in any event, it is unnecessary to pursue these questions.

Reasons of the primary judge

1. [37]

   Mr Nock served a Notice to Admit Facts to which there was no response from Dr Maddern. The primary judge recorded that various facts were taken to be admitted pursuant to UCPR, r 17.3(2), including:

2. [38]

   The primary judge made the following findings:

3. [39]

   His Honour considered the parties’ submissions as to whether or not based on the principles stated in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 a reasonable bystander would regard the conduct of Dr Maddern, by continuing to agist his cattle on the land without any protest about the proposed terms, as indicating his acceptance of the terms stipulated by Mr Nock in his email of 11 January 2010. The primary judge concluded that no contract had been established between Mr Nock and Dr Maddern following Mr Nock’s email of 11 January 2010 and that that email should properly construed as an invitation to treat by Mr Nock’s proposing new agistment rates, which Dr Maddern at no time accepted. The primary judge concluded that in the absence of a concluded agreement the continued agistment of cattle on the property should be construed as being done pursuant to the previous arrangement between the parties which had been waived by the plaintiff during drought years between 2004-2009 by which otherwise continued (at [92]).

4. [40]

   There was no appeal from the primary judge’s rejection of Mr Nock’s claim that by his conduct Dr Maddern had accepted the terms stipulated in his email of 11 January 2010.

5. [41]

   The primary judge found that the agreed rates for agistment were $2.50 per week per cow, and $1.50 per week per weaner. His Honour found that a claim for payment of those fees was not maintainable prior to April 2008 by reason of s 14 of the Limitation Act 1969 (at [94]). His Honour found that any claim for equitable relief would also be barred by the application of the statute by analogy, applying Gerace v Auzhair Supplies Pty Ltd (in liq) (2014) 87 NSWLR 435; [2014] NSWCA 181 at [70]-[76]). His Honour found that the claims for a promissory estoppel were not made out. Neither Dr Maddern’s email of 24 January 2010 nor his email of 20 February 2013 contained clear representations upon which equitable relief could be based. The primary judge found that Mr Nock did not rely on any such representation to his detriment and no prejudice arose by way of his altering his position as a result of any representation by Dr Maddern. Instead, what occurred was procrastination by Mr Nock in enforcing a debt acknowledged by Dr Maddern (at [97]). The primary judge found that the actual cattle numbers were incapable of precise calculation. The primary judge concluded that Mr Nock was entitled to recover agistment fees for the period of six years from April 2008 to April 2014 at an average yearly amount of $14,500. This was based upon the figures for 2002-03 and 2003-04 where the same rates applied. After making allowance for a sum of $2,200 paid by Dr Maddern in 2010 the total amount found to be owing was $84,800 before pre-judgment interest.

Grounds of appeal

1. [42]

   There are three grounds of appeal, namely:

   1. (1)

      that the Court below failed to give effect to an admission of the quantum owing to the plaintiff made by the defendant in writing on 7 January 2014;

   2. (2)

      that the Court below erroneously found that debts incurred prior to April 2008 were statute-barred, when those debts were revived by later agreement between the parties; and

   3. (3)

      that the Court below erroneously found that the respondent’s email correspondence and conduct did not give rise to promissory estoppel.

Alleged admission of 7 January 2014

1. [43]

   Mr Nock submits that Dr Maddern admitted the quantum of the debt owing on 7 January 2014 in his email of that date quoted at [24] above.

2. [44]

   In that email Dr Maddern admitted owing a debt to Mr Nock, a position he maintained in the hearing before the District Court. He did not admit owing any particular amount. The email was said to have been sent on a without prejudice basis. There was no objection to its admission into evidence. Nonetheless, a statement that something is said or offered “without prejudice” will be taken to mean that it is made without prejudice to what the position of the maker of the statement or offer would be, if the statement or offer is not accepted (Walker v Wilsher (1889) 23 QBD 335 at 337). Dr Maddern stated that the debt claimed by Mr Nock of $265,045 “is very large in relation to the agistment money owing”. He noted that the agistment money Mr Nock was “asking for is $170,003”. He did not admit that the amount of agistment that Mr Nock was asking for was the amount that was owing. He concluded his statement by saying that “The annual rate has fluctuated around $12,000 to $14,000 being at the high end.” That may be an admission that between $12,000 to $14,000 per annum of agistment was owing. The primary judge gave judgment in favour of Mr Nock on the basis of yearly agistment fees having been owed of $14,500.

3. [45]

   The spreadsheet attached to Dr Maddern’s email of 7 January 2014 was not a statement of amounts that Dr Maddern admitted he owed. Rather, it was modification to Mr Nock’s spreadsheet made to seek to demonstrate how much of Mr Nock’s claimed debt was for agistment and how much for interest. Dr Maddern rejected the sum claimed by Mr Nock to be owing as being a reasonable compromise. The primary judge described the email as a “discussion point for a settlement arrangement” (Judgment at [50]). This assessment was correct. The primary judge did not err in failing to give effect to the alleged admission of the amount owing by Dr Maddern on 7 January 2014.

“Revival” of debts

1. [46]

   Mr Nock submitted that debts incurred prior to April 2008 were not statute-barred because the debts had been “revived” by representations made by Dr Maddern in his emails of 24 January 2010 and 20 February 2013.

2. [47]

   Those emails are referred to at [11] and [17] above. Mr Nock’s counsel submitted that the 2010 email gave rise to “... an agreement which included a reinvigoration, for lack of a better term, of existing debt.”

3. [48]

   The email dated 24 January 2010 was not an acceptance of the terms proposed in Mr Nock’s email of 11 January 2010. It was not an agreement to pay or revive debts payable for agistment fees. The email of 20 February 2013 constituted an acknowledgment that Dr Maddern was indebted to Mr Nock, but contained no agreement as to the amount of debt owed, nor what would be paid, nor when it would be paid, nor what debts were then owing.

4. [49]

   On appeal, counsel for Mr Nock sought to contend that the email correspondence was a confirmation under s 54 of the Limitation Act 1969 (NSW). Section 54 relevantly provides:

5. [50]

   Mr Nock did not plead in reply to the defence that placed reliance on s 14 of the Limitation Act that the statute-barred debts had been confirmed by Dr Maddern or had been revived by agreement. In any event, the email of 24 January 2010 contains no confirmation of an existing debt. The email of 20 February 2013 contains no acknowledgment that Dr Maddern owed debts to Mr Nock in respect of agistment fees for any particular times or in any particular amounts, or in respect of any particular number of cattle. It was not confirmation of any particular cause of action that could stop time running pursuant to s 54, even if it were open to Mr Nock to rely upon that provision.

Promissory estoppel

1. [51]

   The estoppel relied upon was an estoppel by representation. Mr Nock pleaded that by his email of 24 January 2010 and his subsequent conduct in continuing to agist cattle at the property, Dr Maddern represented that he agreed to the new terms contained in Mr Nock’s email of 11 January 2010. The further promissory estoppel alleged was that Dr Maddern, by his email of 20 February 2013 represented to Mr Nock that he acknowledged “the debt” and indicated that he would resume payments. Mr Nock pleaded that in reliance upon both such representations and suffered detriment in the ways outlined at paras [28] and [31] above.

2. [52]

   An estoppel by representation does not arise unless the representation is clear and unequivocal (Legione v Hateley (1983) 152 CLR 406 at 435-7; Foran v Wight (1989) 168 CLR 385 at 410-11, 435-6). The primary judge was correct in finding that in neither email did Dr Maddern make any clear representation of fact to Mr Nock upon which equitable relief could be based (Judgment at [97]). Nor was there any clear representation of intention.

3. [53]

   If as Mr Nock alleged, Dr Maddern, by his email of 24 January 2010 and his subsequent conduct in continuing to agist cattle on the property, represented that he agreed to the terms proposed by Mr Nock in Mr Nock’s email of 11 January 2010, then that representation would have amounted to an acceptance of the terms proposed by Mr Nock and would have given rise to a contract. No question of estoppel would arise. The same conduct was relied upon as giving rise to a contract, but there was no appeal from the primary judge’s rejection of that claim. If Dr Maddern’s conduct including his email of 24 January 2010 did not amount to an acceptance of those terms, and on appeal it was not contended that it did, then that conduct could not have amounted to a representation that he agreed to the terms proposed.

4. [54]

   The primary judge also found that Mr Nock did not rely upon any of the alleged representations to his detriment and did not alter his position as a result of any representation by Dr Maddern. Those findings of fact are not challenged and are fatal to the claim based on a promissory estoppel, even if such a claim could give rise to a positive cause of action for equitable compensation. That is not a question that need be decided.

Conclusion and proposed orders

1. [55]

   If, as Mr Nock asserted in his correspondence, the agistment rates that had been agreed in 1986 were no longer reasonable market rates for agistment in 2010, the result of the litigation might be regarded by Mr Nock as being unfair. However, parties are bound by the way their cases are conducted at trial. Mr Nock did not pursue a claim that if there were no new concluded contract in 2010 on the terms proposed by Mr Nock, nonetheless he had a claim in quantum meruit for reasonable agistment fees. Nor was there any evidence adduced that reasonable agistment fees would have been higher than the fees agreed upon in 1986.

2. [56]

   For these reasons, each of the grounds of appeal fails. I propose that the appeal be dismissed with costs.

3. [57]

   SACKVILLE AJA: I agree with White JA.