Cincotta v Russo - [2019] NSWSC 272

Supreme Court

New South Wales

Medium Neutral Citation: Cincotta v Russo [2019] NSWSC 272
Hearing dates: 4 March 2019; further submissions 4 and 6 March 2019
Decision date: 15 March 2019
Jurisdiction: Equity - Technology and Construction List
Before: Stevenson J
Decision:
Judgment for the plaintiff against the first defendant for damages to be assessed.
First defendant to pay the plaintiff’s costs.

Catchwords: CONTRACTS – particular parties – principal and agent – undisclosed principal – building contract – where licensed supervisor contracted as agent for builder – identity of contracting parties – agent personally liable in circumstances where reasonable person in position of the parties would conclude agent was contracting party
Legislation Cited: Corporations Act 2001 (Cth)
Home Building Act 1989 (NSW)
Cases Cited: Basma v Weekes [1950] AC 441
Cooke v Wilson (1856) 1 CBNS 153; (1856) 140 ER 65
Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154
Hyundai Merchant Marine Co Ltd v Dartbrook Coal (Sales) Pty Ltd [2006] FCA 1324; (2006) 236 ALR 115
Marginson v Ian Potter & Co (1976) 136 CLR 161; [1976] HCA 35
Stanley Yeung Kai Yung v Hong Kong and Shanghai Banking Corporation [1981] AC 787
Taheri v Vitek (2014) 87 NSWLR 403; [2014] NSWCA 209
Tudor Marine Ltd v Tradax Export SA [1976] 2 Lloyd’s Rep 135
Universal Steam Navigation Co v James McKelvie & Co [1923] AC 492
Texts Cited: G E Dal Pont, Law of Agency (3rd ed, 2014, LexisNexis Butterworths)
G Treitel, The Law of Contract (11th ed, 2003, Sweet and Maxwell)
Category: Principal judgment
Parties: John Cincotta (First Plaintiff)
Rosa Cincotta (Second Plaintiff)
Saverio Russo (First Defendant)
Bespeak 3 Pty Ltd (Second Defendant)
Representation:
Counsel:
W Calokerinos (Plaintiffs)
Solicitors:
Madison Marcus (Plaintiffs)

File Number(s): SC 2017/255557

Judgment

The plaintiffs, Mr John and Mrs Rosa Cincotta, are the registered proprietors of a property in Concord West (“the Property”). Without intending any disrespect or over familiarity, I will refer to Mr and Mrs Cincotta as “the Cincottas”.
At all relevant times:

The second defendant, Bespeak 3 Pty Ltd was a licensed builder under the Home Building Act1989 (NSW) (“HBA”) and held Contractor Licence no. 266447C;

The first defendant, Mr Saverio Russo held a qualified Supervisor Certificate no. 47904S which stipulated that he could not contract directly with consumers; and

Mr Russo was employed by Bespeak as a building supervisor and was the nominated supervisor on Bespeak’s Contractor Licence;

Mr Russo is an equal shareholder in Bespeak. His wife is the other shareholder. Mrs Russo is the sole director.
On 2 January 2014 the Cincottas entered into a contract (“the Contract”) with Mr Russo to do residential building work at the Property for a contract price of $610,000. They claim that the work was not done in accordance with the Contract, nor in accordance with the warranties implied by the HBA, and that they have suffered damage as a result.
The Cincottas contend that:

Mr Russo entered the Contract as agent for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Cincotta v Russo

Details

AGLC: Cincotta v Russo [2019] NSWSC 272
Case: [2019] NSWSC 272
Decision Date: 15 March 2019

CaseChat Overview and Summary

Cincotta v Russo involved a dispute between the parties regarding a building contract. Cincotta entered into a contract with Russo, who purported to act as an agent for an undisclosed principal. The dispute centred on the enforceability of the contract and the identity of the contracting parties. The case was heard by the Supreme Court of New South Wales.

The key legal issues were whether Russo was acting as an agent for an undisclosed principal and, if so, whether Russo was personally liable under the contract. The Court had to determine whether Russo's conduct led a reasonable person in Cincotta's position to believe that Russo was the contracting party or merely an agent for someone else. The Court also had to consider whether Russo could be held personally liable if it was found that he was acting as an agent for an undisclosed principal.

The Court found that Russo was acting as an agent for an undisclosed principal. The Court reasoned that Russo's conduct, including his representation that he was authorised to enter into the contract on behalf of the principal, led a reasonable person in Cincotta's position to believe that Russo was the contracting party. As a result, Russo was personally liable under the contract. The Court held that where an agent purports to contract on behalf of an undisclosed principal, the agent is personally liable if a reasonable person in the position of the other party would conclude that the agent was the contracting party. This decision highlights the importance of clear disclosure of agency relationships in contractual dealings.

The Court ordered Russo to pay Cincotta the outstanding balance of the contract price, along with interest and costs. The Court also noted that the undisclosed principal remained liable for any amounts owed under the contract, but the judgment was entered against Russo as the agent who was personally liable.

Orders