Cappuccio v Casuscelli

[2001] NSWSC 588

CITATION:	CAPPUCCIO & ANOR V CASUSCELLI [2001] NSWSC 588
FILE NUMBER(S):	SC 12397/00
HEARING DATE(S):	27 JUNE 2001
JUDGMENT DATE:	3 August 2001
PARTIES :	Emilio Cappuccio & Anor Peter Casuscelli t/as Casascelli & Associates
JUDGMENT OF:	Wood CJatCL at 1

LOWER COURT JURISDICTION :	Supreme Court
LOWER COURT FILE NUMBER(S) :
LOWER COURT JUDICIAL OFFICER :	W G Pierce LCM

COUNSEL :	Mr. A. Clout Mr. A. Radojev
SOLICITORS:	Allanson Benn (sols) Harpers (Sols)
CATCHWORDS:	CONTRACT- leave to appeal - formation of contract - terms of retainer – where terms of contract contained in contents of letters - whether mutual mistake – whether error of law – no error of law found
LEGISLATION CITED:	Supreme Court Rules 1970 Pt 51B r 5(5)
DECISION:	Leave to appeal refused. Application dismissed. Order applicants to pay the costs of the application.

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IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

WOOD CJ at CL

FRIDAY 3RD AUGUST 2001

CAPPUCCIO & Anor v CASUCELLI & ASSOCIATES

JUDGMENT

1   WOOD CJ at CL: The applicants seek two orders in these proceedings:

a) an order, pursuant to Part 51B r 5(5) of the Supreme Court Rules 1970, extending the time to file an appeal from a decision of Mr. W.G. Pierce, Local Court Magistrate, in proceedings in that Court, delivered on 21 March 2000.

b) an order pursuant to Part 51B r (5) SCR for leave to appeal from that decision.

2   The reference in the Summons to the decision having been delivered on 21 March 2000 is erroneous. In fact, the substantial issue was determined on 26 November 1999. The judgment of 21 March 2000 related to the costs of the proceedings.

3   No prejudice was suggested to exist in relation to the first of these applications. Mr. Radojev of Counsel, however, submitted that it should be refused by reason of the fact that a very small amount of money was involved, and no good reason had been shown for the delay. In view of the discretionary nature of the application, it is necessary, in order to determine whether the applicants suffered a risk of injustice sufficient to justify an order granting leave to appeal, to pay some attention to the merits of the case. For that reason, I consider it proper to grant the first part of the application. I will extend the time for filing the appeal to the date on which the summons was filed, namely 8 September 2000. However, having considered the matter in the light both of the submissions advanced, and of the record of the proceedings below, I am not persuaded that leave to appeal should be granted.

4   It is common ground between the parties that for the applicants to succeed on the appeal, they would need to point to an error of law on the part of the learned magistrate. The relevant error of law pressed is that the finding, as to the nature and terms of the agreement of the retainer sued upon by the respondent (the plaintiff in the Local Court), was not one that could be supported on the evidence.

5   My reasons for concluding that no such error of law has been demonstrated may briefly be stated:

6   The respondent, who carried on practice as a chartered accountant, was retained by the applicants in October 1997, to undertake some work for them in relation to a dispute with their bank, the Australian & New Zealand Banking Group. It is the terms of that retainer which were in issue in the Local Court.

7   In substance, it was the case of the respondent that he had been engaged to conduct an investigation of the applicants’ records from 1989 to 1995, in order to determine whether there had been any misappropriation of funds or bank errors concerning their dealings with it; and that he had been called in because the applicants were dissatisfied with earlier investigations into these matters.

8   It was the case of the applicants, however, that the work to be undertaken by the respondent was confined to searching for some documents which they believed to be missing, and which, if discovered, would assist in proving the mismanagement or irregular conduct by the bank, in respect of a loan transaction, which they believed had occurred, and which had occasioned them financial loss.

9   It was common ground that the respondent had been engaged by the applicants following unsuccessful attempts by other accountants, or solicitors, to unravel the dispute. It was also common ground that they had spoken to a private inquiry agent, Vince Placanica, of VP Securities, concerning the matter, and that the role he was to perform, if necessary, was to recover any documents that were missing.

10   There was also no issue other than that the respondent was engaged by the applicants at a meeting on 27 October 1997. Following this meeting, a letter was sent to them by the respondent, on 5 November 1997, in the following terms:

“We refer to our meetings of 28 October, 1997 and subsequent meetings in relation to your claims that there are discrepancies in your bank accounts. We note that you have instructed our office to conduct an investigation of your records to determine if there has been any misappropriation of funds or bank errors from 1989 to present.
…
Should you agree to the above, would you please sign the attached letter where indicated and return same to our office. A copy of this letter will be forwarded to you for your records.”

11   The authority attached to this letter was returned to the respondent, after having been signed by each applicant. It was in the following terms:

“5 November 1997
We Emilio & Carmen Cappuccio of 8 Sheoak Place, Bossley Park, authorise P. Casuscelli & Associates to conduct an investigation of our records.
We acknowledge that we will be billed for your services in relation to this matter irrespective of the outcome.
We confirm that your account will be paid within seven (7) days of issue.
Emilio Cappuccio Carmen Julie Cappuccio”

12   The applicants acknowledged, in cross examination, that they had signed this authority with an awareness both of its contents and of the contents of the letter under cover of which it had been sent to them. Notwithstanding that concession, Mrs. Cappuccio gave evidence to the effect that the letter did not accurately record what it was that they had retained the respondent to do. In essence, her evidence was to the effect that, as they had already received advice, from the accountants or solicitors who had previously examined the records, that there was nothing to show error on the part of the bank, they did not wish another accounting exercise to be carried out. Rather, they expected the respondent to use his skills or contacts to compel the bank to produce the “missing documents” or, in some other fashion, to find them. When pressed in this regard she acknowledged that she had left a large quantity of financial documents with the respondent, and further acknowledged that if the missing documents had been found, then an accounting exercise would need to be undertaken by the respondent to determine whether their suspicions were correct.

13   Mr. Cappuccio was somewhat less decisive in his evidence upon this topic, conceding in substance that he had given the respondent “the authority to investigate the paperwork” and that he had “instructed him to engage in an investigation into (his) dealings with the ANZ Bank.”

14   Although at one stage in the proceedings the possibility of the case turning upon the existence of a mutual mistake was ventilated (before Mr. Cappuccio gave evidence), this was not how the issue was left by Counsel for the applicants in his final submissions. It was there made clear (pages 23 to 26 of the transcript of 26 November 1999) that the issue was one that depended upon the credibility of the witnesses called by the applicants and by the respondent. Notwithstanding those submissions at trial, it is the matter of mutual mistake that the applicants seek to ventilate in this appeal.

15   It was by reference to the matter of credibility that the case was decided by his Worship in a fairly short judgment. That is clear from the reasons of 26 November 1999. If any doubt persisted in that regard, however, then it was placed beyond doubt by the reasons delivered in relation to the costs orders, in the course of which his Worship observed that the applicants’ defence was “doomed from the outset” and that there was “much about their case which was implausible”.

16   In the November reasons, attention was drawn to a number of matters potentially reflecting upon the credibility of the parties. Of central importance to his Worship’s acceptance of the respondent’s case was the existence of the letter of authority of 5 November 1997, previously mentioned.

17   An additional matter relied upon, in rejecting the evidence of the applicants, was the existence of a letter sent by them to the respondent, dated 16 December 1997, which commenced:

“We engaged your company to investigate our affairs, ensure the security of our records and professionally bring them into a very high order as discussed with us.”

This letter had a significance so far as there was an issue between Mrs. Cappuccio and Mrs. Davis, an employee of the respondent, as to whether the documents had arrived at his office in a mess, as the latter asserted or in a high state of order, as the former claimed.

18   Several other matters were identified by his Worship as reflecting adversely on the evidence of the applicants, including the fact that much of what they denied when giving evidence, had not been taken up in their statements. Additionally, there were the circumstances, found by his Worship firstly that, in order to determine whether there were any missing documents, an accounting exercise or analysis was needed, and secondly that, if the documents were found, then a similar exercise would have been needed to determine whether the applicants’ suspicions had any basis.

19   The respondent’s version was also corroborated by the evidence of Mr. Placanica, so far as he said that he had advised the respondents to engage the applicant because of the amount of paperwork that had to be sifted through, an exercise which required the skills of an accountant, if irregularities were to be found; and also by the volume of documents that had been handed over. They would not have been needed had the sole purpose of the respondent’s retainer been to use his good offices to pursue with the bank “the missing documents”.

20   His Worship did not overlook the matters that were identified as possibly impacting upon the credibility of the respondent, namely the fact that some of his time sheets, telephone memo sheets and working papers had not been kept or had been mislaid; his concession that he was aware, when handed the boxes of documents by the applicants, that if there were any missing documents they were to be discovered by him; and the fact that a private investigator had been previously engaged to look for missing documents, and that it was he who had suggested to the applicants that they also retain the respondent to assist in investigating their concerns.

21   These matters were clearly and properly taken into account by his Worship. So far as I can see, no other material aspect relevant to the respondent’s credibility was overlooked.

22   By reference to the evidence in the trial, which extended over five days, and the exhibits, including an additional letter (exhibit 9), which had been signed by the applicants, and sent to the accountant who had been attending to the matter before the respondent, there clearly was evidence upon which the findings of his Worship could properly have been made.

23   Having regard to those findings which, in essence, involved acceptance of the respondent’s account as to what had been discussed and agreed on 27 October, and rejection of the applicants’ version, no issue of mutual mistake can arise. That would have had a relevance had his Worship accepted the evidence of each party as to what had been said and intended respectively by them, with the consequence that they were not ad idem. However, that was not the conclusion reached, since his Worship rejected the account of the applicants. I am unable to see any error of law in relation to that conclusion. On the contrary, it appears to me to have been the only conclusion reasonably open, upon the whole of the evidence.

24   For these reasons I refuse leave to appeal, and dismiss the application.

25   I order the applicants to pay the costs of the application.

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Last Modified: 08/09/2001