Better Sprinkler Systems P/L v Koussidis No. Scgrg-97-98 Judgment No. S6892

Better Sprinkler Systems P/L appealed against a decision by a Magistrate who held that the respondent, Mr George Koussidis, was not liable to pay a debt of $30,632.24 that had accrued and remained unpaid. The appellant claimed that it had supplied goods and services to the respondent, and that the account was charged to a running account. The respondent claimed that the account was originally in his name, but later became a company account for John Koussidis Homes Pty Ltd, which assumed the contractual obligations of the account. The learned Magistrate held that the company had taken over responsibility of the account and that the plaintiff and the company's behaviour suggested that that is what they believed to be the case. Therefore, the plaintiff had not proved the debt as against the defendant, and the claim was dismissed. The appellant argued on appeal that the learned magistrate was in error in finding that the contract had been novated. The appellant submitted that the learned Magistrate erred in making findings of fact which were inconsistent with a primary finding that the appellant was an honest witness. The respondent presented two arguments on the appeal. Firstly, it was argued that the learned Magistrate was not in error in finding that there had been a novation notwithstanding the description of the agreement as "informal". Secondly, or in the alternative, if this Court was of the opinion that the learned Magistrate was in error in finding a novation, the matter should be remitted to the Magistrates Court to resolve the issue of conflicting evidence as to an alleged oral conversation between the appellant and Mr John Koussidis as to an agreement that the contract be novated. Mr John Koussidis gave general evidence of a conversation he had with the appellant but the appellant denied any such conversation ever took place. The court held that the learned Magistrate was in error in finding that there had been a novation. There was no evidence indicating that there was an express agreement for novation. The respondent claimed in his particulars of defence that there was oral conversation in which the appellant agreed to a novation but no evidence of this conversation was adduced at trial. In the absence of any evidence of an express agreement the learned Magistrate must have found there to be an implied novation or inferred a novation from the surrounding facts. However, in the court's opinion, there was insufficient evidence to conclude that the appellant agreed to the novation of the contract. The court therefore allowed the appeal.

The court held that the learned Magistrate was in error in finding that there had been a novation. There was no evidence indicating that there was an express agreement for novation. The respondent claimed in his particulars of defence that there was oral conversation in which the appellant agreed to a novation but no evidence of this conversation was adduced at trial. In the absence of any evidence of an express agreement the learned Magistrate must have found there to be an implied novation or inferred a novation from the surrounding facts. However, in the court's opinion, there was insufficient evidence to conclude that the appellant agreed to the novation of the contract. The court therefore allowed the appeal. The court held that the matter should not be remitted to the Magistrates Court to resolve the issue of conflicting evidence as to an alleged oral conversation between the appellant and Mr John Koussidis as to an agreement that the contract be novated. The conversation was not an issue in the trial and there was simply no evidence led on that conversation by the respondent, the appellant was not cross-examined on the conversation. The court allowed the appeal and will hear the parties as to the judgment, including the question of interest and costs.