Bowman & Bowman v Smith [1994] QCA 381

IN THE COURT OF APPEAL [1994] QCA 381 SUPREME COURT OF QUEENSLAND Appeal No. 61 of 1994 Brisbane Before Pincus J.A. Davies J.A. McPherson J.A. [Bowman v. Smith] BETWEEN DESMOND PERCIVAL BOWMAN and ELAINE RUBY BOWMAN (Plaintiffs) Appellants AND WARREN GORDON SMITH (Defendant) Respondent REASONS FOR JUDGMENT - THE COURT Judgment delivered the 30th day of September 1994 The defendant Smith agreed with the plaintiffs Bowman that he would use his prime mover to tow the plaintiffs' trailer tanker full of molasses from the Isis sugar mill to Hemmant in Brisbane. On 3 September 1991, Smith was drawing the prime mover and tanker when he lost control of it on a roundabout and it left the road near the Gateway Bridge. The tanker was damaged and cost $19,000 to repair. The present action was brought in the name of the plaintiffs by the insurer of their tanker to recover that amount from the defendant as damages for negligence. At the trial in the District Court the learned judge found negligence on the part of Smith in driving the trailer. That might have been expected to lead to judgment -- 1 of 8 -- 2 against him for the amount expended in repairing the tanker. However, her Honour also found that, in the course of arranging for the tanker to be towed, the male plaintiff Desmond Bowman had been guilty of misleading and deceptive conduct under s.38 of the Fair Trading Act 1989 and, in the exercise of the powers conferred by s.100(1), she ordered that the damages payable by the defendant be reduced to nil. Judgment in the action followed against the plaintiffs with costs. This is the plaintiffs' appeal against that judgment. The deceptive or misleading conduct was found to have occurred on 2 or 3 September 1991 when Smith came to collect the tanker from Bowman. A conversation took place between them, in which, as her Honour found, Smith said to Bowman that he hoped "this bloody thing's insured", to which Bowman replied, "Of course it is", or words to that effect. In consequence, Smith coupled the tanker to the prime mover and took it on its journey. The trial judge considered that the proper interpretation of this conversation was that Smith was asking whether he was "covered for the tanker", and that Bowman's reply "induced him to believe (wrongly) that he was". She also found that Smith relied on Bowman's response, and as a result towed the tanker "uninsured", which he would otherwise not have done. On appeal, the substantial questions are, we think, whether it was open to the judge to find that Bowman's answer was capable of amounting to deceptive and misleading -- 2 of 8 -- 3 conduct under s.38 of the Act, and that it caused the loss and damage of which Smith was ultimately relieved by the order made at the trial. Section 100(1) of the Act requires as a prerequisite to such relief that loss or damage be suffered "because of a contravention of this Act". Taken by itself, it does not seem possible for the statement by Bowman affirming that the tanker was insured to be considered as either deceptive or misleading. The tanker was in fact insured, and the statement by Bowman was therefore literally true. In interpreting it as meaning that Smith was "covered for the tanker", the judge must therefore have been construing Bowman's answer in the context in which it was made as implying that the plaintiffs' insurance on the tanker extended to and indemnified Smith in respect of claims for damage to the tanker caused by his own negligence in the course of towing it. The only reason her Honour gave for so interpreting it was that it was "unlikely Smith would have asked the question he did if he believed that his policy covered him for the tanker". It was submitted that, in arriving at her interpretation of Bowman's statement, her Honour was entitled to take and had taken into account the surrounding circumstances of the conversation. There may be cases in which surrounding circumstances are capable of sustaining such an interpretation; but we do not consider they existed here. The plaintiffs were farmers who, for some 18 years, had conducted a bulk haulage business from Bowenville, east -- 3 of 8 -- 4 of Dalby, where they lived. They owned two prime movers and three tankers which were used to carry molasses. There was no reason to suppose that they, and in particular Mr Bowman, knew more about insurance than did Smith himself, or that they and not he were aware of the existence of their insurer's right of subrogation under the general law. In the course of cross-examination, Bowman said he believed that, because his vehicles were insured, the plaintiffs' insurer and not Smith would pay for repairs if the tanker was damaged while in Smith's custody. However, his impression that this was so was never communicated to Smith. It was, as Bowman said, simply that "anybody would just think that". Smith's impression was the same. He did not claim to have derived it from anything said by Bowman in the course of the critical conversation on 2 or 3 September 1991, when he came to collect the tanker. He could not remember the details of the conversation on that occasion. He had known the plaintiffs since about 1986. Like them, he lived near Dalby and was a farmer or grazier, who operated a small transport business using two prime movers and possibly some trucks. He had driven for the plaintiffs on one or more occasions before September 1991. At different points in his evidence Smith said he believed he was covered for the tanker by his own insurance, or by Bowman's insurance, or by both. Perhaps the only conclusion that could be drawn from this was, her Honour said, "that Mr Smith was confused about his insurance -- 4 of 8 -- 5 cover". She went on to find specifically that Smith: "... believed (wrongly) that he was covered under Bowman's policy, but this belief was based on what his understanding was of his cover, and in particular his instructions to his brokers when he first took out insurance, not anything said by the Bowmans. I find that the defendant was not misled by anything said or done by the Bowmans prior to the conversation." If Smith was not misled by anything previously said or done by the plaintiffs, then it is difficult to identify what it was about the conversation of 2 or 3 September 1991 that could have misled him or contributed to his being misled. The only tenable conclusion is that all times his mistaken belief that he was covered by Bowman's policy resulted from his own prior understanding of the scope and effect of that cover and not from anything that was said or took place on that occasion in September 1991. Because the amount sued for in the action is less than $20,000, the effect of s.92(3)(a) of the District Courts Act 1967 is that for appeal purposes the decision must be treated as having the status and character of a jury verdict : Clark v. Trevilyan [1963] Q.W.N. 11; McAntee v. Webb [1966] Q.W.N. 35. Such a decision is, however, liable to be set aside as one that no reasonable jury could on the evidence have arrived at : Hocking v. Bell (1945) 71 C.L.R. 430, 497-499. That is the view we take of the finding that Smith was misled by what was said by Bowman in the critical conversation in September 1991. In addition, that finding is essentially inconsistent with the further finding that Smith's belief that he was covered by Bowman's policy -- 5 of 8 -- 6 resulted from his own understanding formed before that conversation took place. For either or both of these reasons, the conclusion that Smith towed the tanker "uninsured" because of conduct on the part of Bowman that was misleading or deceptive cannot stand. With those findings out of contention, there is no evidence on which the judgment in favour of the defendant can be sustained. Under s.93(2)(b) of the District Courts Act, this Court has power to enter the judgment that ought to have been given for the plaintiffs. An alternative justification given in the reasons of the trial judge for her judgement in favour of the defendant was that the plaintiffs were estopped from asserting that the defendant was not covered by their insurance. However, on appeal it was accepted on both sides that, in the absence of any misleading conduct on the plaintiffs' part which caused or contributed to the defendant acting as he did, there was no foundation for an estoppel. This means that the decision to that effect is also incapable of being sustained. It follows that the appeal must be allowed with costs and the judgment below set aside. There must be judgment in the action in favour of the plaintiffs for $19,000 together with the costs of the action. -- 6 of 8 -- IN THE COURT OF APPEAL SUPREME COURT OF QUEENSLAND Appeal No. 61 of 1994 Brisbane [Bowman v. Smith] BETWEEN DESMOND PERCIVAL BOWMAN and ELAINE RUBY BOWMAN (Plaintiffs) Appellants AND WARREN GORDON SMITH (Defendant) Respondent Pincus J.A. Davies J.A. McPherson J.A. Judgment delivered 30/09/94 Reasons for judgment by the Court APPEAL ALLOWED WITH COSTS. JUDGMENT BELOW SET ASIDE. IN LIEU ORDER THAT JUDGMENT IN THE ACTION BE AWARDED IN FAVOUR OF THE PLAINTIFFS FOR THE SUM OF $19,000 TOGETHER WITH THE COSTS OF THE ACTION. CATCHWORDS NEGLIGENCE - DAMAGES - Fair Trading Act 1987 - Accident by Respondent haulage contractor damaged appellant's trailer - Pre-accident conversation in respect of insurance - Trial judge found Appellant breached s.38 Fair Trading Act - Damages reduced to nil under s.100(1) - Whether statement deceptive or misleading - Less than $20,000 sought - Application of s.92(3)(a) District Courts Act 1967 - Whether reasonable jury would have reached trial judge's conclusion. Counsel: R. Douglas for the appellants G. Mullins for the respondent -- 7 of 8 -- Solicitors: Baker Johnson for the appellants McInnes Wilson and Jensen for the respondent Hearing Date: 22 September 1994 -- 8 of 8 --