Bull v Lee

[2009] NSWCA 215

NEW SOUTH WALES COURT OF APPEAL

CITATION:
Bull v Lee [2009] NSWCA 215
This decision has been amended. Please see the end of the judgment for a list of the amendments.

FILE NUMBER(S):
40275/08

HEARING DATE(S):
16 July 2009

JUDGMENT DATE:
28 July 2009

PARTIES:
Brendan Alex Bull (First Appellant)
Kathleen Ann Bull (Second Appellant)
Heny Xueheng Lee (Respondent)

JUDGMENT OF:
Allsop P Campbell JA Young JA   

LOWER COURT JURISDICTION:
District Court

LOWER COURT FILE NUMBER(S):
18/06

LOWER COURT JUDICIAL OFFICER:
Delaney DCJ

LOWER COURT DATE OF DECISION:
4 June 2008

COUNSEL:
D Ash (Appellants)
FS Santisi (Respondent)

SOLICITORS:
Caldwell Martin Cox, Camden (Appellants)
JN Legal, Bankstown (Respondent)

CATCHWORDS:
CONTRACTS – Whether agreement void because terms unclear, ambiguous and internally inconsistent – construction of amount due under agreement – whether quoting a price “including interest” at a particular rate imposes obligation to pay interest at that rate – COSTS – of trial when District Court proceedings results in judgment for amount well within jurisdictional limit of Local Court – of appeal when parties sue on legally incoherent agreement and over-claim.

LEGISLATION CITED:
Civil Procedure Act 2005
Local Courts Act 1982
Suitors’ Fund Act 1951

CATEGORY:
Principal judgment

CASES CITED:
Brendan Alex Bull & Kathleen Ann Bull v Heny Xueheng Lee (NSW District Court, 4 June 2008, unreported)
Young v Queensland Trustees Ltd (1956) 99 CLR 560

TEXTS CITED:

DECISION:
Appellants entitled to judgment, for an amount much less than they sought, with costs of the trial not exceeding costs recoverable in Local Court.  Each party to bear own costs of appeal, respondent to have Suitors’ Fund certificate.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40275/08

ALLSOP P
CAMPBELL JA
YOUNG JA

28 JULY 2009

BRENDAN ALEX BULL & ANOR v HENY XUEHENG LEE

Judgment

1. ALLSOP P:  I agree with Campbell JA and Young JA.

2. CAMPBELL JA: 

   Nature of the Appeal

3. In and prior to March 1998 the Appellants, Mr and Mrs Bull were in partnership with Ms Sharon Koryzma in the operation of a business known as “Sydney Fried Chicken” in leased premises in Dumaresq Street, Campbelltown.  They sued the Respondent, Ms Heny Lee, in the District Court of NSW alleging, in broad terms, that Ms Lee had agreed to buy their share of the business from them, but had not paid all the money she was obliged to pay under the agreement for sale.  They also alleged that the Respondent had agreed with them to compromise their claim to the unpaid monies for the sum of $80,000.  The relief they sought in their Amended Statement of Claim was:

   “$80,000 or alternatively such amount as is found to be owing under the sale agreement after hearing or after the taking of an account”

   together with interest “as agreed or at the prescribed rate”.

4. His Honour Judge Delaney dismissed the Appellants’ claim:  Brendan Alex Bull & Kathleen Ann Bull v Heny Xueheng Lee (NSW District Court, 4 June 2008, unreported). 

5. Though the Notice of Appeal says that the Appellants appeal “from the whole of the decision below”, there are some aspects of the judgment that are not in dispute.  One of them is the judge’s rejection of the Appellants’ claim that there had been an agreement to compromise their claims arising under the agreement pursuant to which Ms Lee purchased their share of the business.  Another is the trial judge’s rejection of the evidence of the Appellants on the topic of how much the Respondent had paid of the amounts due under the agreement for sale of the business.

6. The Appellants contend that, even on the basis of the findings that the trial judge made about how much the Respondent had paid to them and when, they were still entitled to a judgment.

   The Pleadings

7. Much of the argument on this appeal concerned the conclusions that should be drawn from the pleadings.

8. The following table, adapted from one helpfully prepared by Mr D Ash, counsel for the Appellants (who also appeared for the plaintiffs in the court below) sets out verbatim the provisions of the pleading (other than the relief claimed, which I have already identified) that are relevant to the argument on this appeal:

Plaintiff’s amended statement of claim	Defendant’s defence
1	In or around July 1999, the plaintiffs agreed to sell and the defendant agreed to buy the plaintiff’s share of a business known as “Sydney Fried Chicken”.	In answer to paragraph 1 of the Amended Statement of Claim, the Defendant: 1.1  admits entering into an agreement to buy the Plaintiffs[‘] share in a business; 1.2  says that the business was known as “Sydney Fried Chicken of Campbelltown”; 1.3  says that the Plaintiffs owned fifty percent (50%) of the business; 1.4  says that the agreement was made on 15 February 1998; 1.5  does not admit the balance of the allegations contained therein.
2	The sale agreement was in writing, comprising of a. A document headed “Agreement for Sale of Business – 1989 Edition”; b. “Trader’s/Ordinary Bill of Sale” c. “Attachment ‘A’ (Schedule – Bill of Sale) Agreement for purchase of half share of Sydney Fried Chicken, Campbelltown and associated financing by the vendors”; and d. A document headed “This is the annexure marked ‘A’ referred to in the Bill of Sale”.	In answer to paragraph 2 of the Amended Statement of Claim, the Defendant: 2.1 says that the agreement was partly oral and partly in writing; 2.2 says that the documents detailed in paragraphs 2(b) to 2(d) of the Amended Statement of Claim were annexed to the Agreement for Sale of Business and were not separate documents.
3	The sale agreement contained terms relevantly to the effect that: a. The sale price was $115,000.00. b. The deposit was $10,000.00. c. The balance of $105,000.00 was to be paid by instalments of $1,000 per month, including interest of 8.5% per annum. d. The defendant was also to pay additional weekly payments, at $200.00 per week until the balance reached $85,000.00, then at $150.00 per week until the balance reached $55,000.00, then at $100.00 per week until the balance reached $25,000.00, then at $50.00 per week until the sale price including interest was paid in full. e. By virtue of clause 9(f) of the said Bill of Sale, if the defendant later sold the share or any part of it, except by way of sale of the stock-in-trade in the ordinary course of business, any principal and interest then outstanding would in any event immediately become due and payable.	In answer to paragraph 3 of the Amended Statement of Claim, the Defendant: 3.1 admits sub-paragraphs 3(a) to 3(d); 3.2 says that sub-paragraph 3(e) does not fully or adequately describe clause 9(f) of the said Bill of Sale. 3.3 says that the said Bill of Sale was made pursuant ot the Bill[s] of Sale Act 1898 (NSW) and was not registered pursuant to that Act. 3.4 says that the Bill of Sale is uncertain as to its terms and is unenforceable.
4	In accordance with the sale agreement, the defendant paid the deposit of $10,000.00.	The Defendant admits paragraph 4 of the Amended Statement of Claim.
5	In accordance with the sale agreement, the plaintiffs performed their obligations and transferred the said share to the defendant.	The Defendant admits paragraph 5 of the Amended Statement of Claim.
6	However, in breach of the sale agreement, the defendant failed to perform her obligations, by paying only some and not all of the amounts due.	In answer to paragraph 6 of the Amended Statement of Claim: 6.1 the Defendant denies that she failed to perform her obligations pursuant to the agreement; 6.2 says that she is not in breach of the agreement; 6.3 says that she paid most, if not all, of the monies due by her to the Plaintiffs pursuant to the agreement. 6.4 does not admit the balance of the allegations contained therein.
…	…	…
10	In general answer to the Amended Statement of Claim, the Defendant: 10.1 denies being indebted to the Plaintiffs in the amount claimed or at all; 10.2 says that most, if not all of the monies due by her to the Plaintiffs have been paid.

The Judgment Below

1. The judge found that the Respondent, who had been an employee at the chicken shop, entered into a Management Agreement with the Appellants in 1998.  That Management Agreement included “some detail of the way she could purchase a share in the business.”

2. The judge found that the Appellants and the Respondent signed documents on 1 July 1999 that were part of Exhibit A in the proceedings.  They included:

   (a)an agreement for sale of the business in the form of the 1989 standard form contract of the Law Society of NSW and the Real Estate Institute of NSW;

   (b)          a printed form headed “Trader’s/Ordinary Bill of Sale”;

   (c)a document headed in handwriting “Attachment ‘A’ (schedule – Bill of Sale)”; and

   (d)a document headed “This is the annexure marked ‘A’ referred to in the Bill of Sale”.

3. The judge found that after execution of those documents, the Respondent made various payments to the Appellants in cash.  There was a significant dispute at the trial about what payments had been made and when.  The judge recorded the defendant’s evidence that she had paid $1,800 each month (at [14]) and held that in the event of a conflict the Respondent’s evidence was to be preferred to that of each of the Appellants (at [46] and [49]).  The Appellants accept that these parts of the judgment should be treated as a finding that the Respondent paid $1,800 each month.  The judge found that these payments continued until “either September or November 2004” (at [7]).

4. The judge also found that the Respondent had paid “at least $100,000” (at [34] and [50]). 

5. Though the judge does not explain the mathematics by which he arrived at this “at least $100,000”, there are 63 months from July 1999 to September 2004 inclusive, and 63 x $1,800 = $113,400.  Those monthly payments were in addition to the $10,000 deposit that it was common ground the Respondent had paid.  If the last payment had been made in November 2004, the Respondent would have paid 65 x $1,800 = $117,000 in addition to the deposit.

6. The judge’s decision in favour of the Respondent appears to have two independent bases.  The first of them was that the documents signed on 1 July 1999 were “unenforceable” because “the terms and conditions are unclear, ambiguous and internally inconsistent” (at [33], and to similar effect at [50]).

7. The judge was wrong to put his decision on this basis.  It had not been contended that the entirety of the documents executed on 1 July 1999 were unenforceable, only that the Bill of Sale was uncertain and unenforceable.  Quite apart from this, that the terms of a document are unclear, ambiguous and internally inconsistent is insufficient to show that the document is unenforceable – all it shows, by itself, is that the document is in need of construction. 

8. The judge also held (at [50]) that the documents executed on 1 July 1999 failed “to properly transfer the benefits alleged to have been so transferred”.  The basis for this finding appears to have been that the Appellants were partners with Ms Koryzma in the chicken shop, and had purported to assign their interest in the business without Ms Koryzma’s consent, when to do so was a breach of the partnership agreement.  The pleadings raised no such contention.  Indeed, the defence admitted (para 5) that the Appellants “performed their obligations and transferred the said share to the defendant”.

9. The judgment cannot be supported on the first ground on which the judge put it.

10. The second ground on which the judge put his judgment was that the Respondent’s payment of “at least $100,000” was “in discharge of any amount to which the plaintiffs may have been entitled under the agreement for sale of business.”  He does not say in so many words that it was a total discharge, nor did he carry out a reasoned comparison of the total amount the Respondent had paid and the amount that was due under the agreement.

    The Appellants’ Submissions

11. The Appellants submit that the court should reject the primary judge’s holding that there was no contract, but should accept findings that:

    (a)the payments might have gone on as long as November 2004;

    (b)          at least $100,000 was paid; and

    (c)          the Respondent paid $1,800 per month.

12. The Appellants submit that, on the basis of the admissions in the pleadings and these findings about payments, the Appellants are still entitled to a verdict. 

13. Mr Ash annexes to his submissions a table that shows the way he comes to that conclusion, and that leads to a conclusion that some $81,552.10 was still owing on 30 November 2004. 

14. The principle on which Mr Ash’s table operated was that he approximated the payments of $200 per week and $150 per week referred to in clause 3(d) of the Amended Statement of Claim to $800 and $600 per month respectively.  Those amounts were treated as a payment that was made for some other purpose than payment of the purchase price, and thus did not reduce the balance on which interest was accruing from time to time.  As will be seen, in my view it is erroneous to calculate the amount owing in this way.

    Construction of the Agreement

15. Both parties ultimately approached the appeal on the basis that it was to be resolved by a construction of the admissions made in the pleading concerning paras 3(a)-(d) of the Amended Statement of Claim.  Those paragraphs need to be construed in the context of the other admissions in the pleading, in particular the Respondent’s admission that she entered into an agreement to buy the Appellants’ share in a business whose title at least included the words “Sydney Fried Chicken”.

16. The word “balance” appears four times in paras 3(c) and (d).  It has the same meaning at each place where it occurs in those paragraphs.  It refers, as at any particular time, to the part of the sale price for the share in the business that was then unpaid.

17. There was no reason to treat the various payments referred to in para 3(d) as anything other than payments that reduced the outstanding purchase price – that is, it seems to me, the clear meaning of the language.

18. As the agreement in question was a commercial agreement, the court would strive to construe it in a way that gave it a sensible commercial operation.  It is possible to perceive a sensible commercial reason for the two separate types of payment that are provided for by paras 3(c) and (d).  When the purchase was first made, the interest that would accrue at the rate of 8.5% per annum in the first month would be less than $750.  Thus instalments of $1,000 per month would always be sufficient to not only pay the interest that accrued in that month, but also make a reduction of the principal.

19. Paragraph 3(d) required additional payments of principal to be made.  Those additional amounts were calculated on a weekly basis, rather than a monthly basis, and were on a graduated scale, so that the additional amounts required to be paid reduced as the balance outstanding reduced.  There seems to be nothing unusual about a vendor of a business who sells it on vendor finance terms wanting capital repaid sooner rather than later, but being prepared to accept a somewhat slower rate of repayment as the amount outstanding decreased.

20. On the judge’s findings about the amounts that the Respondent paid, the Respondent did not avail herself of the opportunity to reduce the amount paid under para 3(d) once the balance of loan outstanding had reached $85,000.  However that does not affect the construction of the admitted terms of the agreement. 

21. When the transaction was one of vendor finance of a sale, it is commercially quite usual for the amount outstanding from time to time to be treated as though it were a loan by the vendors to the purchaser, and thus to bear interest on whatever the balance outstanding from time to time was. 

22. There is a question of construction of paragraph 3(c) relating to the role that interest plays in the calculations.  There are some contexts in which an obligation to pay a price that is quoted as “including” a particular type of payment, does not impose any obligation on the purchaser to make any payment of that type.  Such a situation arises if the price of an item of goods is quoted on a basis that is inclusive of GST, or if the price of a motorcar is quoted on a basis inclusive of on-road costs.  In those situations, there is a recognition that the type of payment that the quoted price is “inclusive of” will need to be made by someone, but the purchaser will not be obliged to make a payment of that type in addition to the quoted price.  In the context of a sale of goods for a price quoted inclusive of GST, the relevant legislation places the obligation to make the payment of GST onto the vendor, not the purchaser.  In the case of a motor vehicle’s on-road costs (which include items like registration and insurance) the payments are capable of being made by either the purchaser or the vendor.  However in the context of a vendor financing, in the absence of evidence to show otherwise, the only loan on which interest could be payable is the loan made by the vendor to the purchaser.  In that situation there is no basis for concluding that the interest would be paid by anyone other than the purchaser. 

23. In my view the preferable construction of the interest obligation is that the interest at 8.5% per annum is to be paid by the Respondent, on the monthly balance outstanding from time to time.  So construed, the instalments of “$1,000 per month including interest at 8.5% per annum” fill a similar function to the usual way in which the monthly repayments of a home loan are quoted, where the borrower is told that his or her payments are so many dollars per month, and each month part of the amount is attributed to paying the interest for that month, and part to principal reduction. 

24. The instalments are payable monthly, but the interest is expressed as a rate per annum.  When the parties have said nothing more than this, it would be construed as a monthly rate of simple interest calculated on monthly rests.

25. If it were legitimate to look to the various documents identified in para 2 of the Amended Statement of Claim to construe the admissions made concerning paras 3(a)-(d) of the Amended Statement of Claim (and it is unnecessary to decide whether it is legitimate to use them in this way) no different conclusion is reached.  The Agreement for Sale of Business identifies the price as $115,000, the deposit as $10,000 and the balance as $105,000.  Clause 4 provides that the balance is to be paid on completion.  Those provisions are consistent with any amount that thereafter was outstanding being in the nature of vendor finance. 

26. The Bill of Sale contains a recital that the Appellants had agreed to lend the Respondent the amount of $105,000.  Clause 1 required that amount and all other monies secured by the Bill of Sale to be paid

    “by instalments of ($1,000.00) each on the 28^th day of each and every week/month/quarter the first of such instalments to be paid on the 28^th day of July next and by a final instalment of $1,000.00 on the _day of which the loan balance is paid down to NIL.”

27. It also provided:

    “2.That the Mortgagor will also pay to the Mortgagee:— bank rate of interest inclusive in $1000/month interest on the principal sum or on so much thereof as may be owing at the rate of 8.5% per centum [sic] per annum …”

    The italicised words were handwritten into blanks of a printed form.

28. There was a schedule to the Bill of Sale that said it identified the specific property that was said to be the subject of the Bill of Sale.  That schedule concluded “+ refer attachment ‘A’”.

29. There was a document entitled “Attachment ‘A’ (schedule – Bill of Sale)” dated 1 July 1999, which included the following provisions:

    “1.The $10,000 you have given us will be applied straight to the loan.

    2.Heny will need to inform the Koryzmas that she has purchased the business from us.

    3.The $200/week will remain until the loan outstanding amount has been reduced to $85000.

    4.When the loan amount is reduced to $85000 the new weekly payment will be $150.

    5.When the outstanding loan amount reaches $55000 the weekly payment will be reduced to $100.

    6.When the outstanding loan amount reaches $25000 the weekly payment will be reduced to $50.

    7.It is Heny’s responsibility to pay down the loan.  Each month she will provide Kathleen with a cheque/cash for $1000.  The cheque will be drawn on or before the last working day each month.  This will be paid on the loan each month (as opposed to the current situation where only the interest is being paid and thus the principal is not being reduced).  Heny is free to deposit in excess of $1000 per month in order to reduce the principal outstanding more quickly.  Kathleen and Brendan Bull will retain the debt in their name and provide Heny with copies of statements to indicate the progress of the loan.”

1. These clauses refer repeatedly to a “loan”.  When the document is an annexure to the Bill of Sale, the proper construction is that the “loan” being referred to is the loan of $105,000 referred to in the recital.  While the first of these clauses refers to a payment of $10,000, there is no suggestion in the evidence that this was anything other than the deposit. 

2. The terms of the Bill of Sale and its annexure lead to no different conclusion to that which I have arrived at by construing the admissions in the pleadings.

   The Respondent’s Submissions on Appeal

3. The written submissions of the Respondent advanced several arguments that cannot be accepted on topics other than construction of the agreement.  One was to the effect that the primary relief being sought by the Appellants in the court below was for $80,000 pursuant to the alleged settlement agreement, and that “the balance of the pleadings should have been struck out for not disclosing any other cause of action being sought”.

4. While there was a logical primacy to the claim for $80,000 under the alleged agreement to compromise (because if the agreement to compromise had indeed been made the Appellants would no longer have been able to sue on the Agreement for Sale of Business) the Amended Statement of Claim clearly made alternative claims for the amount due under the vendor financing component of the sale agreement.  Even though the Amended Statement of Claim did not state the amount that the Respondent had paid, there is a triable argument (to put it no higher than it need be for the purpose of considering whether the pleadings should have been struck out) that Young v Queensland Trustees Ltd (1956) 99 CLR 560 shows that, once the existence of a debt is established, the onus is on the debtor to prove payment. There was no basis for arguing that the pleading should have been struck out. In any event no such argument seems to have been put to the primary judge.

5. The submissions engaged in a lengthy exercise of construction of the pleadings, and asserted that the following issues arose:

   “a.What was the agreement or agreements reached as between the Appellants and Respondent, if any?

   b.When was it or when were they reached as a concluded agreement or agreements?

   c.            Was it wholly written or partly oral and partly written?

   d.In so far as it was written what were the documents that evidenced it and are there any construction issues that may affect its enforceability or any other matter that may affect its enforceability?

   e.            Are they in fact at law or equity enforceable?”

6. The first three of these issues arise on the pleadings.  However they do not detract from the fact that the Respondent has made the admissions set out in paras 1.1 and 1.2 of her Defence, has admitted paras 3(a)-(d) of the Amended Statement of Claim, has also admitted the matters alleged in paras 4 and 5 of the Amended Statement of Claim, and those are sufficient to conclude what her payment obligations were.

7. The final two issues that the Respondent’s written submissions identify appear nowhere in the Defence.  The only allegation of uncertainty and unenforceability is of the Bill of Sale, and even if the Bill of Sale were uncertain and unenforceable that would not detract from the strength of the admissions that the Respondent’s pleading made. 

8. The Respondent’s written submissions also sought to support the judge’s finding that the agreement was unenforceable, though counsel for the Respondent abandoned any such contention in oral argument on the appeal.

9. Submissions were made that the judge should not have found that the documents identified in paragraph 2 of the Amended Statement of Claim were the documents that the Respondent actually signed.  If they were not, it would mean that the support that is derived from those documents for the construction of the pleading that I have arrived at, would not legitimately be available.  However that would not affect the construction of the admissions of paras 3(a)-(d) considered independently of those documents.

10. There are also some submissions that, without clearly saying so, seem to allude to the payments having started at some time earlier than July 1999. 

11. In my view, there are clear findings by the judge in paras [28] and [29] of the judgment that the documents identified in para 2 of the Amended Statement of Claim were executed in July 1999.  The judge expressly found that the Respondent had entered into a Management Agreement with the Appellants before July 1999 (judgment para [2]), and it is clear from paras [23]-[27] of the judgment that the judge accepted that that management was on the terms of a Management Agreement that had been tendered in the proceedings as Exhibit B.  That Management Agreement obliged the Respondent to make payments to the Appellants.  Any payments that the Respondent made to the Appellants prior to 1 July 1999 could not have been in reduction of the purchase price payable under the agreement that the judge found was entered on 1 July 1999.

    Conclusion

12. The effect of the construction of the admissions about the agreement, and the judge’s findings about the payments made, is that when the payments ceased to be made at the end of November 2004 an amount of less than $20,000 remained unpaid.  I attach to this judgment a spreadsheet calculation that I have had made, that illustrates such a calculation.  It is appropriate, however, to give the parties the opportunity to consider the calculation, and to make any further submissions in writing that they may wish to make about the detail of how, consistently with the principles of construction stated in this judgment, the calculation should proceed, and what the end result of a calculation conducted in accordance with the principles of construction set out in this document should be.

    Costs

13. In the course of argument there was discussion about the costs orders that should be made in the event that the proper construction of the document, and the judge’s findings, resulted in a finding that the Respondent owed an amount of the order of $12,000 at the time she ceased making payments.  Mr Ash accepted that in that eventuality his client could not recover more for the costs in the court below than would have been appropriate had the proceedings been begun in the Local Court.  In that respect, it is relevant that the jurisdictional limit of the General Division of the Local Court is $60,000:  definition of “jurisdictional limit” in section 4 Local Courts Act 1982, conferral of jurisdiction in section 65 Local Courts Act. Pre-judgment interest claimed under section 100 Civil Procedure Act 2005 is disregarded for the purpose of determining whether a claim falls within the jurisdictional limits of the Local Court: section 65(4) Local Courts Act.  In my view this concession by Mr Ash was rightly made. 

14. On the assumption that the calculation attached to these reasons correctly carried through the principles stated in the reasons, I would deal with costs in the court below by ordering the Respondent to pay Appellants’ costs in the court below, assessed in an amount not to exceed the amount that would have been payable if the proceedings had been brought in the Local Court of NSW.

15. Concerning the costs of the appeal, for the reasons given by Young JA I would make no order as to costs.

16. The power to grant a certificate under the Suitors’ Fund Act 1951 arises if an appeal to this Court succeeds:  section 6(1).  That has happened.  Such a certificate can provide a partial indemnity for a respondent’s own costs of an appeal not ordered to be paid by another party:  section 6(2).  It is thus appropriate for the Respondent to have such a certificate even though she has not been ordered to pay the Appellants’ costs.

    Orders

17. I propose the following orders:

    (1)          Appeal allowed.

    (2)          Set aside orders made in the court below.

    (3)Direct the solicitors for the parties to confer and, if agreement is possible, provide to the Court within 14 days of the date of delivery of these reasons, Short Minutes of Order providing for a judgment in favour of the Appellants, as at a date approximating the date of submission of those Short Minutes of Order, in a sum calculated as the amount owing, in accordance with the principles set out in this judgment, as at 30 November 2004, together with interest under section 100 Civil Procedure Act 2005 on that amount from 1 December 2004 to the date as at which the calculation is made and (if the parties do not dispute the draft calculation attached to this judgment) costs orders as set out in paras [51]-[53] above.

    (4)Direct that, in the event that the parties are not able, within 14 days of the date of delivery of these reasons, to agree in the manner contemplated in the preceding order, they each provide written submissions, within 16 days of the date of delivery of these reasons, identifying their contentions about how the calculation of the amount owing as at 30 November 2004 should proceed, the amount of pre-trial interest that would be payable on that amount up to an identified date approximating the date of those submissions, and the costs orders that they submit should be made in the event that their calculations were accepted.

18. YOUNG JA:  I agree with the reasons of Campbell JA which I have read in draft.  However, I wish to make some additional comments principally as to costs.

19. Before dealing with costs, lest it be thought that this court was ignorant of the matter, I should state that the principal agreement, the subject of these proceedings should be tagged as a legal nonsense.

20. The parties, who did not avail themselves of legal assistance, purported to sell and buy a one-half share of a business which was being carried on in partnership with a third person.

21. What should have occurred was either the entering into a new partnership agreement with the third party or else an assignment of the profits of the vendors’ share of profits of the existing partnership with suitable collateral agreements.

22. It must be said that, in practice, the agreement worked itself out with few hitches.  The third party accepted the respondent as her partner and in due course the whole business was sold and the respondent and the third party each took half the net proceeds.  Moreover, the respondent for a period of over five years paid instalments of the so-called purchase price to the vendors.

23. However, when the present appellants came to sue on the documents, both the parties and the court faced considerable problems.

24. The primary judge was forced to decide the case, doubtless well aware of the legal nonsense the parties had created in order to bring their dispute to an end, justly and cheaply.

25. This Court must do the same. Unfortunately this is not the first time where this Court has been asked to adjudicate on a matter where the court below has been induced to deal with a case on a false basis. When that happens, section 56 of the Civil Procedure Act 2005 means that we just do the best we can.

26. In doing so, this court has had to pretend that the agreement to sell one half of a business operated to do just that and direct our minds to the real dispute.

27. The real dispute is whether the respondent owes the appellants anything and if so how much.

28. In the court below, the appellants took the view that the respondent owed them at least $80,000 and they strongly maintained that view in this court.

29. The respondent in the court below seemed to take the position that she may owe something, but that she was unsure how much.

30. Unfortunately, though understandably, the primary judge found no contract, which I agree was not a course open to him.

31. No meaningful account was ever produced by the appellants to guide the respondent.  Indeed, apart from the work that Campbell JA has done without assistance, even today, there is no proper account.

32. The general exercise of the court’s discretion as to costs is that a person who succeeds even as to a small amount on an appeal is entitled to costs.

33. The court, of course, retains its discretion to make a just order for costs in all the circumstances of the case.

34. In my view where (i) the court is given little assistance on the real issues;  (ii) the court itself has to mould a just result;  (iii) the judge’s findings of fact for the respondent are all upheld;  (iv) the respondent at the trial appeared willing to pay whatever was truly owing;  and (v) the appellants made a large demand and succeeded for perhaps only 20% of their claim, the result is that there should be no order for costs on the appeal.

    **********

INTEREST IN A MONTH on a MONTH-OPENING PRINCIPAL
Month End	Previous Month's Closing Balance	Interest	Principal plus Interest	Monthly Repayment	Month End Balance
Jul-1999	$105,000.00	$743.75	$105,743.75	$1,800.00	$103,943.75
Aug-1999	103,943.75	736.27	104,680.02	1,800.00	102,880.02
Sep-1999	102,880.02	728.73	103,608.75	1,800.00	101,808.75
Oct-1999	101,808.75	721.15	102,529.90	1,800.00	100,729.90
Nov-1999	100,729.90	713.50	101,443.40	1,800.00	99,643.40
Dec-1999	99,643.40	705.81	100,349.21	1,800.00	98,549.21
Jan-2000	98,549.21	698.06	99,247.26	1,800.00	97,447.26
Feb-2000	97,447.26	690.25	98,137.52	1,800.00	96,337.52
Mar-2000	96,337.52	682.39	97,019.91	1,800.00	95,219.91
Apr-2000	95,219.91	674.47	95,894.38	1,800.00	94,094.38
May-2000	94,094.38	666.50	94,760.88	1,800.00	92,960.88
Jun-2000	92,960.88	658.47	93,619.36	1,800.00	91,819.36
Jul-2000	91,819.36	650.39	92,469.74	1,800.00	90,669.74
Aug-2000	90,669.74	642.24	91,311.99	1,800.00	89,511.99
Sep-2000	89,511.99	634.04	90,146.03	1,800.00	88,346.03
Oct-2000	88,346.03	625.78	88,971.81	1,800.00	87,171.81
Nov-2000	87,171.81	617.47	87,789.28	1,800.00	85,989.28
Dec-2000	85,989.28	609.09	86,598.37	1,800.00	84,798.37
Jan-2001	84,798.37	600.66	85,399.03	1,800.00	83,599.03
Feb-2001	83,599.03	592.16	84,191.19	1,800.00	82,391.19
Mar-2001	82,391.19	583.60	82,974.79	1,800.00	81,174.79
Apr-2001	81,174.79	574.99	81,749.78	1,800.00	79,949.78
May-2001	79,949.78	566.31	80,516.09	1,800.00	78,716.09
Jun-2001	78,716.09	557.57	79,273.66	1,800.00	77,473.66
Jul-2001	77,473.66	548.77	78,022.43	1,800.00	76,222.43
Aug-2001	76,222.43	539.91	76,762.34	1,800.00	74,962.34
Sep-2001	74,962.34	530.98	75,493.33	1,800.00	73,693.33
Oct-2001	73,693.33	521.99	74,215.32	1,800.00	72,415.32
Nov-2001	72,415.32	512.94	72,928.26	1,800.00	71,128.26
Dec-2001	71,128.26	503.83	71,632.09	1,800.00	69,832.09
Jan-2002	69,832.09	494.64	70,326.73	1,800.00	68,526.73
Feb-2002	68,526.73	485.40	69,012.13	1,800.00	67,212.13
Mar-2002	67,212.13	476.09	67,688.22	1,800.00	65,888.22
Apr-2002	65,888.22	466.71	66,354.92	1,800.00	64,554.92
May-2002	64,554.92	457.26	65,012.19	1,800.00	63,212.19
Jun-2002	63,212.19	447.75	63,659.94	1,800.00	61,859.94
Jul-2002	61,859.94	438.17	62,298.12	1,800.00	60,498.12
Aug-2002	60,498.12	428.53	60,926.64	1,800.00	59,126.64
Sep-2002	59,126.64	418.81	59,545.46	1,800.00	57,745.46
Oct-2002	57,745.46	409.03	58,154.49	1,800.00	56,354.49
Nov-2002	56,354.49	399.18	56,753.67	1,800.00	54,953.67
Dec-2002	54,953.67	389.26	55,342.92	1,800.00	53,542.92
Jan-2003	53,542.92	379.26	53,922.18	1,800.00	52,122.18
Feb-2003	52,122.18	369.20	52,491.38	1,800.00	50,691.38
Mar-2003	50,691.38	359.06	51,050.45	1,800.00	49,250.45
Apr-2003	49,250.45	348.86	49,599.30	1,800.00	47,799.30
May-2003	47,799.30	338.58	48,137.88	1,800.00	46,337.88
Jun-2003	46,337.88	328.23	46,666.11	1,800.00	44,866.11
Jul-2003	44,866.11	317.80	45,183.91	1,800.00	43,383.91
Aug-2003	43,383.91	307.30	43,691.21	1,800.00	41,891.21
Sep-2003	41,891.21	296.73	42,187.94	1,800.00	40,387.94
Oct-2003	40,387.94	286.08	40,674.02	1,800.00	38,874.02
Nov-2003	38,874.02	275.36	39,149.38	1,800.00	37,349.38
Dec-2003	37,349.38	264.56	37,613.94	1,800.00	35,813.94
Jan-2004	35,813.94	253.68	36,067.62	1,800.00	34,267.62
Feb-2004	34,267.62	242.73	34,510.35	1,800.00	32,710.35
Mar-2004	32,710.35	231.70	32,942.05	1,800.00	31,142.05
Apr-2004	31,142.05	220.59	31,362.64	1,800.00	29,562.64
May-2004	29,562.64	209.40	29,772.04	1,800.00	27,972.04
Jun-2004	27,972.04	198.14	28,170.18	1,800.00	26,370.18
Jul-2004	26,370.18	186.79	26,556.96	1,800.00	24,756.96
Aug-2004	24,756.96	175.36	24,932.33	1,800.00	23,132.33
Sep-2004	23,132.33	163.85	23,296.18	1,800.00	21,496.18
Oct-2004	21,496.18	152.26	21,648.44	1,800.00	19,848.44
Nov-2004	$19,848.44	$140.59	$19,989.04	$1,800.00	$18,189.04

AMENDMENTS:

17/08/2009 - Reference to District Court in penultimate sentence, amended to Local Court. - Paragraph(s) 50

LAST UPDATED:
17 August 2009