Husain & Ors v O & S Holdings (Vic) Pty Ltd [2007] HCATrans 399 (3 August 2007)

Last Updated: 21 August 2007

[2007] HCATrans 399

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M48 of 2007

B e t w e e n -

IFTIKHAR HUSAIN AND ZULFIQUAR HUSAIN AND ASHRAF HUSAIN AND REHANA MANSOOR AND SALEHA HUSAIN AND NABEEL HUSAIN

Applicants

and

O & S HOLDINGS (VIC) PTY LTD

Respondent

Application for special leave to appeal

CALLINAN J
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 3 AUGUST 2007, AT 12.29 PM

Copyright in the High Court of Australia

MR J.D. WILSON: If the Court pleases, I appear for the applicants. (instructed by Aitken Walker & Strachan)

MR P.J. RIORDAN, SC: If the Court pleases, I appear with MS M.A. TRAN for the respondent. (instructed by Deacons Lawyers)

CALLINAN J: Yes, Mr Wilson.

MR WILSON: If the Court pleases. At the heart of this application is a short and very discrete point, namely, whether my clients, who are described in the papers as Zazman, should be fastened with a judgment on a point not pleaded, no evidence led about it, nor submissions advanced in respect of it and which is described as the 20 Series point. The application is made principally on the administration of justice ground for the - - -

CALLINAN J: Mr Wilson, if I can just understand this, if you can assist me, this was the second time the matter was before the Court of Appeal, is that correct?

MR WILSON: Yes.

CALLINAN J: There had been an application for special leave to appeal to this Court?

MR WILSON: That is right, your Honour.

CALLINAN J: What then do you say was the issue when the matter came before the Court of Appeal the second time?

MR WILSON: I was hoping to get to that in a moment, your Honour. The chronology is relevant to all of this because the point in respect of what is called the 20 Series only emerged after this case had been to the Court of Appeal and had been to this Court, and only after the assessment of damages commenced.

CALLINAN J: Yes, by the Master, was it not? Then the matter eventually came in the form of the case stated.

MR WILSON: Yes.

CALLINAN J: Where do I see the question that was stated, do you know? It was stated by the judge, was it not, not by the Master, but by the judge, was it not?

MR WILSON: My learned friends and I appeared before Justice Dodds-Streeton on 11 April and the Court will find reference to that in pages 12 and 13 of the application book where “Pursuant to s. 17B(2) of the Supreme Court Act 1986 the following question” was posed in those terms.

HEYDON J: It is not actually a question.

MR WILSON: Your Honour, you are probably right about that, but my learned friends and I had a bit of trouble formulating it. Her Honour, in fact, occupied some time and we ultimately found a vehicle by which we could have the matter brought back before the Court of Appeal. That was the best we could come up with.

CALLINAN J: There should be a verb in there, is that correct, “Pursuant to the terms of the Contract was Oliver Footwear”? Would that be the way to read it?

MR WILSON: Maybe even the word “whether” before the word “Oliver Footwear”.

CALLINAN J: Yes, “whether Oliver Footwear was required”. Where do we find the precise answer to that question?

MR WILSON: The Court of Appeal answered that question in paragraph 2. If the Court flips over to page 14 of the application book the Court will see how the question was answered.

CALLINAN J: Yes, you go ahead with your oral submissions.

MR WILSON: Thank you, your Honour. The Court will observe that the question was answered upon it being posed in those terms after the liability and quantum had been split. After the trial on liability had been heard, the appeal to the Court of Appeal and the application before this honourable Court, we then began damages and thus the point emerged. Now, importantly and central, in my respectful submission, to the applicant’s case before this Court is the fact that this point about the 20 Series never emerged at trial in any shape or form. Not a single question was put to any of the plaintiff’s witnesses on this point. That is important for our submission because had the point been squarely raised, an opportunity would have presented itself to call some evidence on this very point. It never was. The case proceeded through intermediate appellate level to this honourable Court and then began on the quantification side of things before the point emerged.

HEYDON J: Can I just interrupt. On page 38 of the application book, the respondent says in paragraph 24 that:

the particulars to paragraph 3 –

of the further amended statement of claim –

and the evidence of Mr Husain and Mr Angelovski were clear that the conversations, which were relied upon as forming the contract, were related to Series 20 footwear.

What do you say to that?

MR WILSON: That is a submission and the Court will see unsupported by any reference to the transcript evidence.

HEYDON J: It is a question of affidavit evidence, is it?

MR WILSON: The evidence-in-chief was led in the customary way by witness statement and no point was directed to the 20 Series for the simple reason that the parties were concerned at trial with a threshold issue, namely, whether an agreement was made at all. In other words, as the Court may have seen in the papers, it is described as an all or nothing point. Ultimately, at trial that point was found against Zazman, my clients, that particular matter was overturned by the Court of Appeal, but the issue is whether the agreement per se had been made. It was rejected at trial, ultimately found to have been made by the Court of Appeal, but the content of the agreement and expressly whether the agreement imported a reference to the 20 Series was not agitated before the trial judge, in my submission, not before the Court of Appeal and only emerged as a point that has been taken by our learned friends in the hearing of the assessment.

It came as a surprise to see this point taken, particularly having regard to the authorities of the likes of Whisprun where a point that is raised so late heightens a sense of injustice to a litigant, as indeed is the state of affairs in the applicants’ camp. So it is really a very discrete threshold point that we seek to advance before this honourable Court and that is whether Zazman should be locked in with significant financial consequences to a point in respect of which it led no evidence, it was not challenged in any shape or form by the respondent, there has been no serious agitation of the point? My learned friends point up one or two references in a question expressed by me that touches on the word the “20 Series.” That is all. Having regard to the fact that it is a very real moment in the damages assessment, in my respectful submission, this squarely attracts the administration of justice jurisdiction of this honourable Court.

The point is extremely shortly stated. I have done my best to articulate it in those terms. The Court will have observed among the papers a line of the learned trial judge to the effect that had his Honour been persuaded that the agreement alleged was made, his Honour – I better take the Court to the exact passage. May I invite the Court to turn to page 29 of the application book where it quotes a finding of the learned trial judge to this effect:

“If I were satisfied that the agreement as pleaded had been made out, the obligation of Zazman Exports with respect to stock was to have sufficient on hand to meet orders to be placed in April to September 2003.”

In other words, the short point there is that although the learned trial judge found against the plaintiffs, had his Honour been persuaded that the agreement contended for had in fact been made out – ultimately the Court of Appeal did – his Honour would have gone that step and found that the obligation was not limited in the way that the Court of Appeal has subsequently limited it. Again, this is a point of very real moment in terms of its relevance to the damages assessment.

HEYDON J: What is the difference in damages between the way things lie now and where you say they should be lying now? How much money?

MR WILSON: If the Court will hear from me essentially as evidence from the Bar table, it is in the vicinity of a million dollars.

HEYDON J: So what will you get if you fail today? What are you likely to get if you fail today?

MR WILSON: Around $200,000 to $300,000.

HEYDON J: And if you win ultimately you get 1.2 to 1.3?

MR WILSON: Yes.

CALLINAN J: It is on a six months basis?

MR WILSON: That is right. The implied term that the Court of Appeal found breached was an obligation to give notice of not less than six months of an intention to terminate.

CALLINAN J: Take, for example, page 9 in your particulars. Those are your particulars, are they not? Paragraph (d) on page 9 of the supplementary book.

MR WILSON: Is your Honour looking at the supplementary?

CALLINAN J: Yes.

MR WILSON: Pardon me. The page, please?

CALLINAN J: Page 9. There is particulars of performance of the agreement, is it, or the particulars of the implied term? You do not refer there to 20 Series.

MR WILSON: No, that is right, your Honour.

CALLINAN J: You refer to a number of different type:

(ii) of such styles or styles;

(iii) at such price per pair –

Paragraph (f) is stated in general terms.

MR WILSON: Yes.

CALLINAN J: Any particulars of damages pleading?

MR WILSON: The case was split, your Honour.

CALLINAN J: I understand that, but I am just saying - - -

MR WILSON: Yes, there were. Prior to the split, there is no doubt there were particular - - -

CALLINAN J: Do we have the pleadings with respect to damages?

MR WILSON: It is not among the material before the Court.

CALLINAN J: Not before the Court?

MR WILSON: It is not among the material before the Court.

CALLINAN J: All right.

MR WILSON: For the simple reason that fundamental to the Zazman case is that we argued hotly over whether the agreement existed at all. Really, that has up until the assessment been the arena of debate in the case. In our submission, at the risk of repetition, having gone down that path in that way, it works a manifest miscarriage of justice - - -

CALLINAN J: We understand that. On page 38 of the actual application book, Justice Heydon referred you to paragraph 24.

MR WILSON: Yes.

CALLINAN J: I cannot see anywhere in the particulars to paragraph 3 any reference to a Series 20 footwear. Am I wrong about that?

MR WILSON: No, your Honour is correct, with respect.

CALLINAN J: We do not have before us, the respondent has not attempted to put before us any of the oral evidence of the affidavits which he says would make clear, taken with the particulars to paragraph 3, that the conversations were confined to Series 20 footwear.

MR WILSON: Yes.

CALLINAN J: What do you say? I heard you say before that you have made a couple of references to that in cross-examination.

MR WILSON: Yes.

CALLINAN J: It is very difficult for us when we do not have the material before us. Perhaps it is not your problem, Mr Wilson, perhaps your opponent should put the material before us if he is going to rely on it.

MR WILSON: Your Honour, in terms of - - -

CALLINAN J: Because you dispute that, do you not?

MR WILSON: Exactly, your Honour.

CALLINAN J: There is no question that you are right about the particulars to paragraph 3. As presently advised, I cannot see anything that could be regarded as confining to Series 20 there.

HEYDON J: Another thing that would be useful, the Court of Appeal attributes to you submissions that:

any overarching arrangement between Oliver and Zazman for the supply and purchase of leather uppers for the 20 series boot was so lacking in certainty –

and this is page 62 of the supplementary application book. There is another reference on page 63. There was an earlier reference on page 61. Is your point that they got confused, as it were? The question is, was there any agreement, not, what was the subject of the agreement?

MR WILSON: Yes.

HEYDON J: But to get to the bottom of this, which is not a particularly attractive enterprise, I must say, one would need to look at the written submissions, the oral transcript, the transcript of the oral argument, to see how this misunderstanding, if it was one, arose.

MR WILSON: Fortunately, written submissions are there. They do not appear among the material that is before this honourable Court, but my learned friends no doubt will correct me if I am wrong, but, with the very greatest respect to Justice Nettle, who trawled through the factual material and undertook a searching review of whether the findings of the trial judge were open, his Honour did, we say this with the very greatest respect, confuse himself about whether the agreement was properly designated the 20 Series. It is fair to say that the 20 Series is merely a component of an enormous range of footwear that was supplied over the life of this agreement.

CALLINAN J: The 20 Series must have come from somewhere though. It seems difficult to imagine the Court of Appeal had no basis at all either on the argument or some evidence for confining it in that way.

MR WILSON: I can help your Honour with what is the origin of the Court of Appeal’s reference to the 20 Series. In the course of questions of the main witness for the defendant, a witness called Andrew Oliver, I put to Mr Oliver the date on which the agreement, which he denied, was formulated. The date of the agreement became important at trial, as did the place of it. I put to Mr Oliver that the date emerged in the context of a revitalisation of the 20 Series that was being reinstated by the respondent. So the 20 Series as a word or a phrase emerged from a question by me but in the context of - - -

HEYDON J: This is page 43 of the supplementary application book at the top?

MR WILSON: Yes. May I inquire, your Honours, I kicked something on the lectern and the light has come on. Has my time in fact expired?

HEYDON J: No, it expires when the light goes red. That is where the 20 Series came into it, you say?

MR WILSON: Yes, indeed. In the context of - - -

CALLINAN J: The heading there is “Uncertainty about dates”, the heading of that passage.

MR WILSON: Yes, your Honour. Your Honour will also have observed from the written material filed on behalf of Zazman that whatever might be meant by the expression the 20 Series has not been the subject of any judicial observation. So for assessment purposes Zazman is in a terrible conundrum because it does not know what the court had in mind when referring to the 20 Series. If the Court pleases, if I can respond to any questions from the Bench, I would be pleased to do so, otherwise those are our submissions.

CALLINAN J: Thank you. Yes, Mr Riordan.

MR RIORDAN: If the Court pleases.

CALLINAN J: Mr Riordan, in that paragraph that Justice Heydon drew your attention to - - -

MR RIORDAN: Which is?

CALLINAN J: I think it was paragraph 24 in your outline.

MR RIORDAN: Yes.

CALLINAN J: You assert that the particulars to paragraph 3 and evidence and questions, asked presumably by Mr Wilson at the trial, defined the issue of damages as being damages in relation to the 20 Series. Now, there is nothing, is there, in the particulars to paragraph 3 which is any way confining?

MR RIORDAN: The answer to that question is, no. You will not find reference to the words “20 Series”. You will find reference to the new series of polyutherane safety footwear.

CALLINAN J: Yes.

MR RIORDAN: Can I just explain why it is the same?

CALLINAN J: Yes.

MR RIORDAN: This was a claim where Oliver had been purchasing from Zazman since the 1980s and, in fact, when the claim was originally made it was suggested that there had been some overarching agreement since 1991. On the basis of conversations at that time, it was subsequently amended to be 1997. The claim that went forward in this claim was that there were conversations, which are particularised, in 1999. Those conversations arose by the introduction of a new series of safety footwear.

CALLINAN J: Let me understand this. In short, are you saying that polyutherane safety footwear really means Series 20 footwear, is that right?

MR RIORDAN: Yes, that is right. That is what was being discussed in 1999 and that was common ground. Given the stage in a long series of relationship, our client went to Zazman’s and said, “We want to introduce a new range of polyutherane safety footwear which ultimately became known as the 20 Series. That is why we say the particulars related to the conversations about the new range of footwear. The pleading, not the particulars, the pleading was not so limited. We do not say it was, but we say the particulars upon which the pleading was based were limited. They were limited to that conversation because that was the only range of footwear being discussed in 1999. Zazman would have it that by reason of those conversations in 1999, there was obligations imposed upon Oliver to purchase some broader range of leather uppers from - - -

CALLINAN J: Was there evidence at the trial of actual purchases other than Series 20 type boots?

MR RIORDAN: There was evidence that there was more than just Series 20 boots purchased.

CALLINAN J: So there had been purchases of boots other than safety boots?

MR RIORDAN: Yes. Plainly before 1999 all of them had been other than Series 20 because Series 20 only got introduced in 1999 and subsequently there were other boots introduced. What occurred, your Honours, was that Zazman did go forward with a case and said on the basis of these conversations in 1999 on the introduction of the Series 20 there was a contract that “you had an obligation to purchase from us” – the way it was particularised was “as you ordered it” but leave that aside, the pleading point – and the judge rejected that point. In fact, the judge rejected all of the evidence of the plaintiffs and dismissed the claim as pleaded. The Court of Appeal said that the judge was entitled to do that by reason of matters that do not matter.

There were a lot of difficulties with the plaintiff’s evidence. What Justice Nettle said was that the trial judge made a mistake. The trial judge should have looked at the cross-examination and seen what conversations were conceded under cross-examination by our learned friend in determining whether or not any agreement at all was made out. Justice Nettle and Justice Ashley and Justice Chernov all refer to it.

It probably is simplest to go to the reasons of Justice Nettle and, in particular, if we pick up Justice Nettle analyses all the evidence and ultimately gets to page 41 of the supplementary application book which is page 9 of the Court of Appeal’s reasons. This is under the heading “Errors in the judge’s reasoning” and in paragraph 13 Justice Nettle has indicated that normally they would accept the credibility findings and the rejection of the principal witnesses for Zazman would mean the appeal would fail. At the bottom of the page, having noted what Justice Kirby said in State Rail Authority, in the last line, his Honour says:

In the way in which the case developed below it was not confined to the simple question of whether Mr Husain and Mr Angelovski were to be believed. Counsel for Zazman cross examined extensively and without significant objection on matters that were beyond the letter of the pleadings and, consistently with the evidence adduced by that process, put his final submissions to the judge on the basis that the agreement for which the appellants contended was that which was established by the cross examination.

So that is the way - - -

CALLINAN J: Yes, I see that, and then at paragraph 16 there is a specific reference to the 20 Series.

MR RIORDAN: Yes. Your Honours will see it starts down the bottom of that page. Our learned friend said:

“[Counsel for Zazman] Now, did production of that range, of the 20 series rubber footwear, commence as best you recall in response to an arrangement that Oliver Footwear struck involving you and Zazman Exports?---Yes.

Were you privy to discussions about the manufacture of stitched leather uppers for the production of the 20 series rubber range?---Yes.

Your Honours, it is replete – it is in paragraph 16 as your Honour pointed out – and that is why ultimately - - -

CALLINAN J: Yes. I do not think we need hear you any further, Mr Riordan. Thank you.

MR RIORDAN: Your Honour.

CALLINAN J: We might see which way the wind is blowing. Mr Wilson, is there anything you want to say?

MR WILSON: I did want to just answer one question that fell from the Court about, to the extent that it is important, a volume of materials and whether the materials took in matters beyond the 20 Series. Although it does not say it in express terms, may I invite the Court to turn to page 26 of
the application book where the Court will see that over the life of this agreement very considerable sums of money were exchanged for vast quantities of rubber shoes or even stitched leather uppers. In my submission, those were not confined to the 20 Series although I am unable to take the Court to a specific point on that issue.

The second thing is merely this. May I respectfully invite the Court not to place too much store in the exchange that my learned friends just took the Court to in the context of the reference to the 20 Series because that, after all, is nothing more than a temporal marking point. In other words, a point in time at which discussions began. Discussions began in the context of negotiations between these parties for the re-instigation of a range of footwear which included the 20 Series. It is no more than that. As it turns out, it seems that question and answer might be pivotal to that application. I respectfully urge the Court to see it in no more than a temporal context and nothing more. Those are my submissions, if the Court pleases.

CALLINAN J: Yes, we are of the view that there are insufficient prospects of success of an appeal if this Court were to grant special leave. Accordingly, the application is dismissed with costs.

Would you adjourn the Court to the next sittings, please, on Monday, 6 August 2007 at 2.15 pm in Adelaide.

AT 12.58 PM THE MATTER WAS CONCLUDED