Ah Sam v Mortimer

Case [2021] NSWCA 327

Court of Appeal


Supreme Court


New South Wales

  • Summary available
Medium Neutral Citation: Ah Sam v Mortimer [2021] NSWCA 327
Hearing dates: 17 August 2021
Date of orders: 17 December 2021
Decision date: 17 December 2021
Before: Basten JA at [1];
Payne JA at [2];
Brereton JA at [3].
Decision:

Appeal dismissed with costs.

Catchwords:

CONTRACTS – Unconscionable conduct – Special disadvantage – Contract for sale of 50% of real property – Advertisement by respondent for $300,000 – One page agreement for $250,000 presented by appellant – Other terms of agreement improvident – Respondent suffering from very poor eyesight – Appellant aware or ought to have been aware of such facts – Appellant unable to surmount high bar for overturning demeanour-based findings that respondent could not read agreement and was unaware of different price – Special disadvantage established – Agreement void – Appeal dismissed

CONTRACTS – Remedies – Specific performance – Appellant unable to demonstrate that ready, willing, and able to complete – No entitlement to specific performance in alternative that agreement not void

EQUITY – Equitable remedies – Equitable compensation – Order setting aside agreement for unconscionability conditional upon party obtaining relief doing equity – Insufficient evidence of appellant’s expenditure on property or of enhancement to property’s value – Any entitlement offset by appellant’s rent-free enjoyment of property despite void agreement – No compensation payable

APPEALS – Procedural fairness – Bias or apprehension of bias – Interventions by primary judge during appellant’s questioning of witnesses – Rejection of evidence and strong adverse findings – Allegations that primary judge lied – Late grant of leave to respondent to amend pleadings – No bias demonstrated

CIVIL PROCEDURE – Hearings – Adjournment – Appellant received material from respondent shortly before taking of evidence – Evidence had been served long before – Submissions did not commence for another three weeks – Ample time to respond – No injustice identified

CIVIL PROCEDURE – Hearings – Procedural Fairness – Use of audio-visual link – Technology imperfect but no resulting injustice identified

CIVIL PROCEDURE – Pleadings – Amendment – Late application for amendment – Primary judge suggested that respondent amend originating process to explicitly plead unconscionability – Case always conducted on basis of unconscionability – No injustice identified

Legislation Cited:

Civil Procedure Act 2005 (NSW), ss 56-58, 64

Cases Cited:

Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27

Babic v Williams (1974) 5 BPR 11,242

Beaton v McDivitt (1985) 13 NSWLR 134; 3 BPR 9,576

Blomley v Ryan (1956) 99 CLR 362; [1956] HCA 81

Bridgewater v Leahy (1998) 194 CLR 457; [1998] HCA 66

Brien v Dwyer (1978) 141 CLR 378; [1978] HCA 50

Charisteas v Charisteas (2021) 95 ALJR 824; [2021] HCA 29

Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447; [1983] HCA 14

Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337; [2000] HCA 63

Knaggs v Director of Public Prosecutions

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Details
AGLC
Ah Sam v Mortimer [2021] NSWCA 327
Case
[2021] NSWCA 327
Decision Date

CaseChat Overview and Summary

The appeal concerned a contract for the sale of a 50% interest in real property between Ah Sam (the appellant) and Mortimer (the respondent). Mortimer had advertised his interest for $300,000, but Ah Sam presented a one-page agreement for $250,000, which contained other improvident terms. Mortimer, who suffered from very poor eyesight, alleged he could not read the agreement and was unaware of the different price. Ah Sam was aware or ought to have been aware of Mortimer's visual impairment. The primary judge found that Mortimer could not read the agreement and was unaware of the price difference, establishing a special disadvantage. The agreement was consequently deemed void.

The legal issues before the Court of Appeal were whether the primary judge erred in finding a special disadvantage and unconscionable conduct, whether Mortimer was entitled to specific performance of the agreement (in the alternative to it being void), and whether Ah Sam was entitled to equitable compensation for expenditure on the property. The court also considered allegations of bias and procedural unfairness against the primary judge, including interventions during witness questioning, rejection of evidence, strong adverse findings, and the late grant of leave to amend pleadings. Further issues included the refusal of an adjournment, the use of audio-visual links, and the amendment of pleadings.

The Court of Appeal dismissed the appeal, upholding the primary judge's findings. The court found that Ah Sam had failed to surmount the high bar for overturning demeanour-based findings regarding Mortimer's inability to read the agreement and his lack of awareness of the price difference. This established a special disadvantage, rendering the agreement void due to unconscionable conduct. The court found that Ah Sam had not demonstrated he was ready, willing, and able to complete the contract, thus disentitling him to specific performance. Regarding equitable compensation, the court found insufficient evidence of Ah Sam's expenditure or enhancement of the property's value, and any potential entitlement was offset by his rent-free enjoyment of the property. The court found no bias or procedural unfairness, noting that the case had been conducted on the basis of unconscionability and that Ah Sam had ample time to respond to late-served material.

The appeal was dismissed with costs.

Orders

Orders of the court

Appeal dismissed with costs.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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