Czernyszow v Abbott - [2019] WASCA 212

JURISDICTION     :   SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT :   THE COURT OF APPEAL (WA)
CITATION:   CZERNYSZOW -v- ABBOTT [2019] WASCA 212
CORAM:   QUINLAN CJ
MURPHY JA
VAUGHAN JA

HEARD:   23 DECEMBER 2019
DELIVERED          :   23 DECEMBER 2019
PUBLISHED           :   13 JANUARY 2020
FILE NO/S:   CACV 29 of 2019
BETWEEN:   TANYA CZERNYSZOW
Appellant
AND
ELIZABETH LUISA ABBOTT
Respondent

ON APPEAL FROM:
Jurisdiction              :   DISTRICT COURT OF WESTERN AUSTRALIA
Coram:   LONSDALE DCJ
File Number            :   APP 41 of 2018

Catchwords:

Australian Consumer Law - Appeal from District Court - Whether primary judge erred in upholding the magistrate's finding - Magistrate found agreement was not a lay-by agreement pursuant to s 96(3) of the Australian Consumer Law - Turns on own facts

Legislation:

Competition and Consumer Act 2010 (Cth), sch 2, Australian Consumer Law, sch 2 s 96, sch 2 s 96(3)

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant	:	C Silver
Respondent	:	R R Joseph

Solicitors:

Appellant	:	Chad Silver & Associates
Respondent	:	HHG Legal Group

Case(s) referred to in decision(s):

Australia and New Zealand Banking Group Ltd v Manasseh [2016] WASCA 41
Commissioner of Taxation of the Commonwealth of Australia v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520
Czernyszow v Abbott [2019] WADC 17
GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1
Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93

REASONS OF THE COURT:

Overview

The Australian Consumer Law[1] provides consumers with certain statutory rights when they enter into a 'lay-by agreement'. Importantly, by s 97(1) of the ACL, a consumer who is party to a lay-by agreement may terminate the agreement at any time before the goods to which the agreement relates are delivered to the consumer under the agreement. On termination the supplier must refund all amounts paid by the consumer under the agreement less any permitted termination charge.[2] Also, the supplier is not entitled to damages, or to enforce any other remedy, in relation to the termination except as provided for in s 99 of the ACL.[3]
[1] See Competition and Consumer Act 2010 (Cth), sch 2. Referred to below as the 'ACL'.
[2] ACL s 99(1). The 'termination charge' must be no more than the supplier's reasonable costs in relation to the agreement (s 97(3)). Moreover, the supplier must ensure that the agreement does not require payment of a termination charge unless (1) the agreement is terminated by the consumer; and (2) the supplier has not breached the agreement (s 97(2)).
[3] ACL s 99(3).
Section 96(3) of the ACL defines a lay-by agreement in these terms:
A lay-by agreement is an agreement between a supplier of goods and a consumer for the supply, in trade or commerce, of the goods on terms (whether express or implied) which provide that:
(a)the goods will not be delivered to the consumer until the total price of the goods has been paid; and
(b)the price of the goods is to be paid by:
(i)3 or more instalments; or
(ii)if the agreement specifies that it is a lay-by agreement--2 or more instalments.
For the purposes of s 96(3)(b), any deposit paid by the consumer for the goods is taken to be an instalment.[4]
[4] ACL s 96(4).
This appeal concerns an agreement by the appellant, Tanya Czernyszow, to purchase three horses from the respondent, Elizabeth Abbott. Ms Czernyszow purported to terminate the agreement and demanded a refund of all money paid to Ms Abbott. At trial in the Magistrates Court, and then on an appeal to the District Court, Ms Czernyszow claimed that the agreement to purchase the horses was a lay-by agreement within the meaning in s 96(3) of the ACL. That contention was rejected in both the Magistrates Court (by Magistrate Edwards) and the District Court (by Lonsdale DCJ).[5] On appeal to this court pursuant to s 42 of the Magistrates Court (Civil Proceedings) Act 2004 (WA) Ms Czernyszow continues to contend that the agreement was a lay-by agreement.
[5] Czernyszow v Abbott [2019] WADC 17 (primary reasons).
The parties' agreement was not a lay-by agreement. The agreement provided for payment of a deposit (10 per cent) with the balance payable as a lump sum. Later, when Ms Czernyszow failed to comply with the terms of the agreement, Ms Abbott allowed further time for payment of the balance and Ms Czernyszow made some partial payments. There was, however, no variation in the terms of the parties' agreement as to payment of the price of the goods.
After hearing from counsel for the appellant the court informed the parties that it was unanimously of the opinion that the appeal should be dismissed. We said that written reasons for the dismissal of the appeal would be provided at a later date. These are our reasons for dismissing the appeal.

Background facts and procedural history

In relation to the subject matter of this appeal, there was no relevant challenge to the magistrate's factual findings before the primary judge. Before this court Ms Czernyszow accepted the factual findings of the magistrate.[6] Specifically, on appeal to this court Ms Czernyszow stated that she did not challenge any findings of fact. The appeal was said to be largely in reliance on the evidence of Ms Abbott.[7] In those circumstances it is convenient to describe the background facts by reference to the magistrate's findings and the documentary evidence.
[6] Appellant's submissions par 2 WAB 5; ts 6 (appeal hearing).
[7] Appellant's submissions par 2 WAB 5.
Ms Abbott is a self-employed farmer who breeds horses as a hobby. In August 2012 Ms Abbott received a telephone call from Ms Czernyszow in response to an advertisement. As a result Ms Czernyszow and Ms Abbott met on 11 August 2012 at Ms Abbott's Brunswick property. At that time Ms Czernyszow and her partner inspected a number of horses. Following the meeting Ms Czernyszow and Ms Abbott agreed that Ms Czernyszow would purchase three horses (two mares and a gelding) for $13,200 inclusive of GST. The purchase price included a $2,000 stud fee for Ms Abbott to arrange for one of the mares (Marais Al Saba also known as Maisi) to be artificially inseminated to a nominated stallion.
Ms Abbott prepared an invoice[8] detailing the agreed prices being:
1.Maisi - $5,500.
2.Zoya Lea (a mare) - $5,000.
3.The gelding, Ziegfreid Lea (also known as Ziggy) - $1,200.
4.The stud fee - $2,000.
(The difference between the sum of these amounts and the $13,200 total purchase price was not explained before the court.)
[8] GAB 35, 47.
The invoice nominated that a deposit of 10 per cent was payable on 16 August 2012. It went on to provide that the balance payable was due on 31 August 2012.
The magistrate referred to there being a contest in the evidence before her Honour as to the terms of the agreement.[9] Her Honour identified as an issue for determination the question of what was agreed between the parties as to the purchase and payment of the horses.[10] The magistrate concluded that Ms Abbott was generally the more reliable and credible witness. Where there was a conflict in the evidence of Ms Abbott and Ms Czernyszow the magistrate preferred the evidence of Ms Abbott - finding Ms Abbott to be 'honest and truthful' in her evidence.[11] The magistrate also noted that the documentary materials - various invoices and emails - supported Ms Abbott's evidence and did not support Ms Czernyszow's evidence.[12]
[9] ts 7 (22/03/18) BAB 79.
[10] ts 7 (22/03/18) BAB 79.
[11] ts 8 (22/03/18) BAB 80.
[12] ts 8 (22/03/18) BAB 80.
The finding of the magistrate (which was accepted at the hearing before the primary judge)[13] was that there had been an agreement for Ms Czernyszow to purchase the three horses (one to have been artificially inseminated) for $13,200 on terms that: (1) a 10 per cent deposit would be paid by 16 August 2012; and (2) the balance would be paid by 31 August 2012.[14]
[13] Primary reasons [11]. See also at [39].
[14] ts 8, 11 (22/03/18) BAB 80, 83.
The deposit was not paid by 16 August 2012. This resulted in Ms Abbott sending reminder emails on 17 August 2012[15] and 21 August 2012.[16] Ms Czernyszow paid the deposit on 21 August 2012. At around this time the parties agreed that Zoya Lea would be bred with a different stallion and a further stud fee would be paid. At the same time the parties agreed that Maisi would be bred with a different stallion (the change was to the sire of Ziggy who was the nominated stallion to breed with Zoya Lea). It is common ground that the original agreement was varied in these two respects. Thereafter there was a series of communications and further payments.
[15] GAB 48.
[16] GAB 49.
For the purpose of the appeal the material events comprised:
1.On 9 September 2012 (after the agreed time for payment of the balance) Ms Czernyszow paid a further $3,000.[17]
2.In a 27 September 2012 email Ms Abbott sought completion of payment by 4 October 2012.[18]
3.On 15 October 2012 the gelding, Ziggy, suffered an injury and had to be euthanised. Ms Abbott informed Ms Czernyszow what had happened to Ziggy.[19]
4.On 21 October 2012[20] and 22 October 2012[21] Ms Abbott sent emails to Ms Czernyszow about the outstanding balance. The first asked Ms Czernyszow when she intended to complete payment and foreshadowed that delay would result in Ms Czernyszow incurring agistment, transport and other costs. The second email was in similar terms to the first.
5.Ms Czernyszow made payments of $1,700 and $1,300 on 23 October 2012 and 5 November 2012 respectively.[22]
6.There were discussions between Ms Abbott and Ms Czernyszow in early December 2012. Ms Abbott offered to release Ms Czernyszow from the obligation of purchasing one of the mares provided that the outstanding amounts were paid immediately. An invoice was prepared on that basis.[23] However, the amount was not paid. Rather than just proceeding to purchase the single mare, Ms Czernyszow's evidence was that she asked Ms Abbott to cancel the whole contract.[24] However, Ms Czernyszow did not allege that there was any variation of the agreement in terms of these discussions. To the contrary, as formulated in her pleaded case, the relief sought by Ms Czernyszow included delivery up of the remaining two horses and damages to be assessed[25] claiming that she was the lawful proprietor of both horses under the 'original agreement'.[26] Accordingly, Ms Czernyszow relied on that agreement rather than any December 2012 variation.
7.Subsequently further invoices were prepared.[27] Ms Czernyszow only made one further payment - an amount of $1,700 on 25 January 2013. Thereafter, over many months, Ms Abbott tried to contact Ms Czernyszow without success. During that time Zoya Lea foaled and Ms Abbott arranged for the foal to be sold to an unrelated party.
8.In mid-December 2013 Ms Abbott received a text message from Ms Czernyszow. Ms Czernyszow demanded that Ms Abbott refund all amounts that Ms Czernyszow had paid towards the purchase price. Ms Abbott declined to do so.
[17] GAB 50.
[18] GAB 51.
[19] GAB 52.
[20] GAB 53.
[21] GAB 54.
[22] GAB 55.
[23] GAB 57.
[24] ts 10 (22/03/18) BAB 82.
[25] Appellant's statement of general procedure claim dated 27 September 2016 par 1 (relief claimed section) BAB 99.
[26] Appellant's statement of general procedure claim dated 27 September 2016 par 42 BAB 98.
[27] GAB 58 (4 January 2013); GAB 59 (3 June 2013).
In 2015 Ms Czernyszow commenced proceedings in the Magistrate's Court at Rockingham. Among other things Ms Czernyszow claimed that Ms Abbott had failed to comply with the provisions of the ACL in relation to lay-by agreements.[28] Ms Abbott denied that there was a lay-by agreement.[29] Ms Abbott counterclaimed contending that Ms Czernyszow had repudiated the contract; Ms Abbott sought damages in relation to agistment and other costs.[30]
[28] Appellant's statement of general procedure claim dated 27 September 2016 par 38 BAB 98.
[29] Respondent's amended statement of defence to general procedure claim dated 17 October 2016 par 53 BAB 103.
[30] Respondent's counterclaim dated 10 May 2016 BAB 89 - 92.
The magistrate concluded that:
1.The terms of the parties' agreement were as set out at [12] above, namely, Ms Czernyszow was to purchase the horses for $13,200 payable by a 10 per cent deposit with the balance to be paid by 31 August 2012.[31]
2.There was no discussion between Ms Czernyszow and Ms Abbott that the agreement would be a lay-by or instalment agreement.[32]
3.The mere fact that Ms Abbott continued to accept payments from Ms Czernyszow after 31 August 2012 did not create an instalment or lay-by agreement.[33]
4.Ms Abbott effectively gave Ms Czernyszow an extension of time in which to pay the deposit and then to pay the balance.[34]
5.There was no agreement between the parties creating a lay-by or instalment agreement.[35]
6.Ms Czernyszow repudiated the agreement by demanding the return of all money paid to Ms Abbott.[36] That constituted a breach of the agreement.[37] The magistrate quantified Ms Abbott's claim to damages resulting from the breach in an amount totalling $5,333.40.[38] Judgment was entered for Ms Abbott, against Ms Czernyszow, in that amount together with interest and costs.
[31] ts 8, 11 (22/03/18) BAB 80, 83.
[32] ts 10 (22/03/18) BAB 82.
[33] ts 10 (22/03/18) BAB 82.
[34] ts 11 (22/03/18) BAB 83.
[35] ts 10, 11 (22/03/18) BAB 82. See also ts 9 BAB 81.
[36] ts 10 - 11 (22/03/18) BAB 82 -83.
[37] ts 11 (22/03/18) BAB 83.
[38] ts 11 - 14 (22/03/18) BAB 83 - 86.
Ms Czernyszow lodged an appeal in the District Court. There were 10 grounds of appeal.[39] Two grounds relied on an application for leave to adduce additional evidence. The primary judge refused that application.[40] More generally the primary judge gave comprehensive reasons for refusing all of Ms Czernyszow's grounds of appeal. As, on appeal to this court, only two of the grounds before the primary judge have been reagitated, it suffices to record how the primary judge dealt with those grounds.
[39] Primary reasons [19].
[40] Primary reasons [79] - [84].
The primary judge characterised grounds 1 and 2 before her as raising whether the magistrate was in error in not finding that the parties' agreement was a lay-by agreement.[41] Her Honour noted Ms Czernyszow's concession, by senior counsel, that when first made the agreement could not have been a lay-by agreement.[42] That concession was correctly made. The agreement, while in writing so far as recorded in the invoice, was not specified to be a lay-by agreement. Thus the agreement could only have been a lay-by agreement within s 96(3) of the ACL if it provided for payment by three or more instalments. By the time of the appeal in the District Court it was common ground (given the acceptance of the magistrate's factual findings) that as at the time of formation on 11 August 2012 the original agreement only provided for two instalments.
[41] Primary reasons [96].
[42] Primary reasons [97].
Nevertheless, senior counsel for Ms Czernyszow submitted that the agreement became a lay-by agreement by progressive events.[43] The contention was that the contract was varied by Ms Abbott permitting Ms Czernyszow further time to pay; it was said that this evinced an intention on the part of Ms Abbott to permit Ms Czernyszow to pay by instalments. Senior counsel for Ms Czernyszow also submitted that it was relevant that Ms Czernyszow went on to make a number of part payments which Ms Abbott accepted without terminating the agreement.[44]
[43] Primary reasons [97].
[44] Primary reasons [98].
The primary judge held as follows:
There was no evidence to support [Ms Czernyszow's] contention that the parties had agreed to a variation of the original agreement: any discussion about [Ms Czernyszow] being granted further time to pay came after [Ms Czernyszow] had breached the agreement by failing to pay both the deposit and the balance by the due date. In these circumstances [Ms Abbott's] decision to grant [Ms Czernyszow] further time to pay must be seen in that light.
Clearly [Ms Abbott] hoped to receive the benefit of the agreement (to which she was entitled) by granting [Ms Czernyszow] further time to pay. Merely granting [Ms Czernyszow] time within which to pay could not have amounted to a variation of the original agreement in the absence of her [ie Ms Abbott] having expressly stated that that was what was intended.
[Ms Czernyszow] has not demonstrated that the learned magistrate erred in fact or law by failing to characterise the agreement as a lay-by agreement.[45]
[45] Primary reasons [99] - [101].

Grounds of appeal

Ms Czernyszow relied on two Grounds of appeal:
1.The learned Judge erred in law in the construction he [sic] placed on Australian Consumer Law section 96(3) in determining that the buyer and seller did not enter into, or arrive at, a layby agreement.
2.The learned Judge erred in law in concluding that the intention of the parties, expressed or otherwise, and, in particular, the intention of the Respondent, expressed or otherwise, was determinative of whether or not the agreement reached between the parties was a lay by agreement.
Those two Grounds are substantially the same as the initial two grounds of appeal before the primary judge.[46]
[46] Appellant's outline of preliminary submissions dated 30 July 2018 in app 41 of 2018 pars 14 - 15 BAB 35 ‑ 36.
Three things should be mentioned about the Grounds. First, the Grounds purported to identify where the alleged error on the part of the primary judge occurred. However, in neither case did the Grounds direct attention to the reasons for decision of the primary judge. Rather, the Grounds referred to the transcript of the magistrate's oral reasons for decision. Accordingly, the Grounds are not proper grounds of appeal.[47]
[47] See Supreme Court (Court of Appeal) Rules 2005 (WA), pt 5 r 32(4).
Second, Ground 1 alleged that the primary judge misconstrued s 96(3) of the ACL. There was no identification of where her Honour did so. In oral submissions, although asked to do so, counsel for Ms Czernyszow did not identify where in the primary reasons the primary judge misconstrued the ACL. In truth the primary judge made a finding as to the terms of the parties' agreement that was conformable with the magistrate's factual finding.[48] In effect the primary judge found that no error had been established in that finding.[49] On the proper construction of s 96(3) of the ACL a finding that an agreement in the terms as found was not a lay-by agreement was plainly correct. Indeed, as the primary judge recorded, before her Honour senior counsel appearing for Ms Czernyszow had conceded the point. There was no misconstruction of s 96(3) of the ACL on the part of the primary judge.
[48] Primary reasons [60].
[49] Primary reasons [101].
The final issue concerns Ground 2. The suggestion appears to be that the magistrate concluded that the intention of the parties - and Ms Abbott in particular - was determinative of whether the agreement was a lay-by agreement. Ms Czernyszow's appellant's case suggested that this error occurred at page 10 of the transcript of the magistrate's oral reasons.[50] But there was no such finding. The most that was said was as follows:
I accept the evidence from Ms Abbott that there was no discussion between them that the agreement would be a lay-by or instalment agreement. The mere fact that Ms Abbott continued to accept payments from Ms Czernyszow after the last date for payment, being 31 August, does not, in my view, create a payment by instalment or a lay-by agreement. The continuing request by Ms Abbott for payment of the balance owing, in my view, is strong evidence that there was no such instalment or lay-by agreement.[51]
[50] Appellant's grounds of appeal fn 2 WAB 4.
[51] ts 9 (22/03/18) BAB 82.

Accordingly, the magistrate accepted Ms Abbott's evidence. Her Honour also found that the fact that there were continuing requests for the payment of the balance was strong evidence that there was no instalment or lay-by agreement. But at no time did the magistrate make a finding in terms of that attacked by Ground 2.
The primary judge understood the two Grounds to raise whether the magistrate erred in law in not finding that the agreement between the parties was a lay-by agreement within the meaning of s 96(3) of the Australian Consumer Law.[52] Before this court counsel for Ms Czernyszow confirmed that this was the gravamen of Grounds 1 and 2. In essence - while there was no error on the part of the primary judge as alleged in Ground 1 as there was no misconstruction or misapplication of s 96(3) of the ACL - the contention was that on the facts as found by the magistrate there was a lay-by agreement within the meaning of s 96(3) of the ACL. [53]
[52] Primary reasons [96].
[53] ts 6 (appeal hearing).
Despite the deficiencies in the Grounds we considered the appeal on the basis as advanced in the oral submissions of counsel for Ms Czernyszow.

Disposition

On Ms Czernyszow's further appeal from the District Court to this court she substantially repeated the submissions made before the primary judge. In substance Ms Czernyszow contended that the terms of the agreement changed over time and became a lay-by agreement.[54]
[54] Appellant's submissions pars 4 (the terms … changed), 26 (elected to receive a third instalment), 31, 34, 58 (amended the terms), 61 (the seller agreed to change the terms) WAB 5, 7, 8, 10, 11. See also pars 20 (alleged amendment to terms to allow for later payment of deposit), 21 (alleged amendment to change contract to provide for different breeding stallion) WAB 7; ts 7, 11, 14, 16, 18 - 19, 20 (appeal hearing).
Counsel for Ms Czernyszow accepted that the original agreement was not a lay-by agreement within the meaning of s 96(3) of the ACL.[55] The argument was that, by implication, Ms Abbott's acceptance of the part-payments and invitation to make further payments created a lay-by agreement.[56] Counsel for Ms Czernyszow accepted that there was nothing specified by way of agreement as to when, how and in what amount payments were to be made.[57] (To that it might be added that there was no identification of when the varied or replacement agreement was entered into, whether it was written or oral, and the terms of the new agreement.) Counsel contended it was enough that there was an agreement for payment by instalments.[58] As to the basis for there being such an agreement counsel for Ms Czernyszow contended that there was an implied agreement.[59] Counsel relied on Ms Abbott's conduct in accepting the further part-payments and inviting further instalments.[60] The terms of Ms Abbott's emails of 21 and 22 October 2012[61] were said to provide 'quite compelling' evidence.[62]
[55] ts 7, 11, 15 (appeal hearing).
[56] ts 13, 15, 17, 20 (appeal hearing).
[57] ts 17 (appeal hearing). See also ts 8 - 9 (appeal hearing).
[58] ts 17 (appeal hearing).
[59] ts 13, 15, 17, 20 (appeal hearing).
[60] ts 17 (appeal hearing).
[61] GAB 53 - 54.
[62] ts 4 (appeal hearing).
Given the concession that the agreement was not, at formation, a lay-by agreement, success on the appeal required Ms Czernyszow to make good the proposition that either:
1.The agreement was varied such that, in terms of s 96(3) of the ACL, the price of the horses was to be paid by three or more instalments.
2.The agreement was replaced by a new agreement pursuant to which, in terms of s 96(3) of the ACL, the price of the horses was to be paid by three or more instalments.
It is not enough that Ms Abbott was prepared to accept three or more instalments of the purchase price for the horses. Assuming all other elements of the definition to be satisfied, s 96(3)(b)(i) defines the concept of a 'lay-by agreement' in terms of there being an agreement that the price of the goods is to be paid by three or more instalments. Accordingly, attention must be directed to ascertaining the terms of the relevant agreement.
A contract which brings an end to an earlier one and replaces it, and a variation to a contract, are both in law new contracts.[63] Sometimes it may be necessary to determine whether the effect of the second contract is to bring an end to the first contract and replace it with the second, or whether the effect is to leave the first contract standing subject to the alteration.[64] Whether this is the case is a matter of intention objectively ascertained.[65] The distinction does not matter for present purposes. Accepting that s 96(3)(b)(ii) is inapplicable, once there is an agreement that the price of the goods is to be paid by three or more instalments the relevant statutory integer will be satisfied.
[63] Australia and New Zealand Banking Group Ltd v Manasseh [2016] WASCA 41 [220].
[64] Commissioner of Taxation of the Commonwealth of Australia v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520 [22].
[65] Tallerman & Co Pty Ltd v Nathan's Merchandise (Victoria) Pty Ltd [1957] HCA 10; (1957) 98 CLR 93, 144.
In the present case, however, it was incumbent on Ms Czernyszow to establish that the agreement was so varied or replaced.
Ms Czernyszow's contention that the terms of the agreement changed is not established by the mere acceptance of payments by Ms Abbott outside the contractually stipulated time. Before this court no submissions were made on the question of whether there was good consideration for the posited agreement. Accordingly, it is unnecessary to consider that question. But counsel for Ms Abbott submitted,[66] correctly, that any variation of the original agreement was subject to the ordinary rules governing contract formation.[67] That is all the more so where the contention is that a new contract replaces an earlier contract in its entirety.
[66] Respondent's submissions pars 13 - 14 WAB 18 - 19.
[67] GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2003] FCA 50; (2003) 128 FCR 1 [226].
The initial difficulty with Ms Czernyszow's appeal was that the argument for variation or replacement as mounted had no foothold in either Ms Czernyszow's pleaded case or the evidence.
Ms Czernyszow pleaded the terms of the agreement conformably with the findings of the magistrate.[68] Specifically, by par 6(i) of her pleaded case, Ms Czernyszow stated that:
It was a term of the contract that [Ms Czernyszow] was to pay a 10% deposit and pay the remainder by 31 August 2012.
[68] Appellant's statement of general procedure claim dated 27 September 2016 pars 5 - 6 BAB 96.
Thereafter Ms Czernyszow pleaded that Ms Abbott provided an extension of time for the payment of the balance due and that Ms Czernyszow 'accepted the offer of additional time'.[69] Ms Czernyszow also pleaded that she made more than three payments to Ms Abbott.[70] But there was no plea that the contract, as initially pleaded, was varied to provide for payment by three or more instalments; or that a new contract in those terms was entered into in substitution of the initial contract. The highest that the pleading took matters was to assert that Ms Abbott attempted to unilaterally amend the contract.[71] However, this was an allegation directed to various costs that Ms Abbott sought to recover rather than the terms on which the price of the horses was to be paid, and was plainly not a pleading of an agreement.
[69] Appellant's statement of general procedure claim dated 27 September 2016 par 7 BAB 96.
[70] Appellant's statement of general procedure claim dated 27 September 2016 par 8 BAB 96.
[71] Appellant's statement of general procedure claim dated 27 September 2016 par 26 BAB 97.
Ms Czernyszow gave her evidence-in-chief by adoption of a witness statement. The statement departed from Ms Czernyszow's pleaded case by asserting that the agreement was that the balance after the deposit would be payable by instalments with unspecified terms.[72] The magistrate rejected that evidence in concluding that her Honour preferred the evidence of Ms Abbott where there was a conflict on the oral evidence. Otherwise Ms Czernyszow's evidence was no higher than that Ms Abbott stated on occasions that she, Ms Abbott, was happy to accept the balance payment in instalments.[73]
[72] Amended statement of intended evidence of Tanya Czernyszow dated 30 October 2017 par 15.3 GAB 32.
[73] Amended statement of intended evidence of Tanya Czernyszow dated 30 October 2017 pars 18, 26 GAB 32.
Ms Czernyszow was cross-examined on the instalments and whether there was any variation to the agreement. Ms Czernyszow's evidence was:
Had you discussed these instalments at any point with Ms Abbott; are you saying that was part of any agreement?---Well, we were in contact over the phone and she was quite happy to keep having money come in. If she didn’t want to have the money coming in in instalments, she could have just cancelled the contract and refunded my money.
You hadn’t negotiated a variation to the contract, had you? You hadn’t said, “I want the terms changed.”?---Well, no, but she still continued to accept the money.
Specifically, you haven’t said that you want the last date for payment, the date when you had agreed the entire $13,200 would be paid, to be extended or - - -?---No.[74] (emphasis added)
[74] ts 18 (31/10/17).
Later this exchange occurred:
And you didn’t renegotiate the contract?---No.[75]
[75] ts 20 (31/10/17).
Indeed, as the magistrate noted in her Honour's reasons,[76] Ms Czernyszow's evidence in cross-examination was that she did not really recall the conversation with Ms Abbott about when she would pay by instalments.[77] And as to the $3,000 payment on 9 September 2012 Ms Czernyszow had said in oral examination-in-chief that there were no discussions about the payment.[78]
[76] ts 9 (22/03/18) BAB 81.
[77] See eg ts 18, 21, 23 (31/10/17).
[78] ts 9 (31/10/17).
Ms Abbott was cross-examined on whether she willingly accepted the part payments and did not terminate the agreement.[79] There was, however, no direct cross-examination on whether - in accepting the part payments - there was any discussion on changing or renegotiating the terms of the agreement.
[79] See eg ts 41 - 42, 46 (31/10/17).
Finally, before leaving the evidence, Ms Czernyszow's reliance on the emails of 21 and 22 October 2012 was misplaced. The emails were no more than enquiries on the part of Ms Abbott as to when Ms Czernyszow would make payment (the balance being well overdue by then). There was nothing promissory or contractual in the contents of the emails. The suggestion that the emails provide compelling evidence by which to imply or infer a variation or replacement agreement was without substance.
The further difficulty with Ms Czernyszow's argument for variation or replacement was its lack of coherence with the magistrate's factual findings - an insurmountable hurdle given that on this appeal Ms Czernyszow accepted the factual findings of the magistrate. There were two findings that were incompatible with Ms Czernyszow's argument on appeal.
First, the magistrate found that the terms of the parties' agreement were that Ms Czernyszow would purchase the horses paying a 10 per cent deposit with the balance being payable by 31 August 2012. That finding does not admit of any relevant alteration in the terms of the original agreement. Second, the magistrate found that Ms Abbott gave Ms Czernyszow an extension of time to pay the deposit and balance in circumstances not giving rise to a variation to or replacement of the original agreement. The payment terms of the original agreement continued; however, despite Ms Czernyszow's non-compliance, Ms Abbott did not terminate and instead accepted part payments as they were provided. On the magistrate's finding there was no basis to imply a change in the parties' agreement creating a lay-by agreement.
Moreover, on appeal - both before the primary judge and this court - Ms Czernyszow did not contend that there was any error in failing to consider and determine that there was such a variation to or replacement of the original agreement. Nor was there a challenge to the primary judge's finding that there was no evidence to support the contention that the parties had agreed to a variation of the original agreement. The appeal could not succeed in the absence of such a challenge.
Ms Czernyszow's contention that there was a lay-by agreement focussed on the circumstance that more than three instalments were paid towards the total purchase price for the horses. That is not the relevant criterion. If mere number of payments was determinative a purchaser could bring about characterisation of a contract as a lay-by agreement by making multiple additional payments. The definition in s 96(3)(b)(i) of the ACL instead requires that the agreement itself be one for supply on terms which provide for the price to be paid by three or more instalments. The terms of the agreement are determinative.
On the factual findings of the magistrate - which are not challenged on Ms Czernyszow's appeal - there was no lay-by agreement within the meaning of s 96(3) of the ACL. The price was to be paid by two instalments: the initial deposit and the balance as a further lump sum. An agreement to purchase goods at a fixed price, consisting of a deposit and the balance, does not become an agreement to pay by three or more instalments simply because the buyer defaults in its obligations and the seller allows more time to pay. There was no substance in Grounds 1 and 2. It followed that the appeal must be dismissed.

Conclusion and orders

For these reasons we made orders that:
1.The appeal is dismissed.
2.The appellant pay the respondent's costs of the appeal, to be taxed if not agreed.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DT
Associate to the Honourable Justice Vaughan
13 JANUARY 2020