Dascom Pty Ltd v Lee - [2002] QDC 342

DISTRICT COURT OF QUEENSLAND

CITATION: Dascom Pty Ltd v Lee [2002] QDC 342
PARTIES: DASCOM PTY LTD

Plaintiff

and
KENNETH JOHN LEE

Defendant

FILE NO/S: 770/2000
DIVISION: District Court of Queensland
PROCEEDING: Claim
ORIGINATING
COURT: Southport
DELIVERED ON: 18 December 2002
DELIVERED AT: Southport
HEARING DATE: 14, 15, and 16 October; and, 7 and 8 November 2002
JUDGE: Alan Wilson SC DCJ
ORDER: Judgment for the plaintiff, on the claim and counterclaim
CATCHWORDS: CONTRACT – CAPACITY TO CONTRACT – MENTAL ILLNESS – whether defendant lacked capacity to contract by reason of mental illness – whether plaintiff knew or ought to have known of mental illness – whether contract void at law– general matters – whether contract voidable in equity
Cases considered:
Begbie v State Bank of New South Wales Ltd (1994) ATPR
41-288
Doull (1881) 7 VLR (IPA&M) 70
Gibbons v Wright 91 CLR 423
Imperial Loan Co v Stone (1892) 1 QB 599 (CA)
NAB v Freeman [2001] QCA 473

COUNSEL: Mr K C Kelso for the plaintiff
Defendant in person
SOLICITORS: Bennett & Philp for the plaintiff
Defendant self represented

On 12 August 1999 an auction took place at Beattie Road, Coomera. The plaintiff claims that, at the auction, it sold a tugboat to the defendant for $94,500 and that, although the defendant later paid a deposit of $10,000 towards the purchase price on 20 October 1999, he has never completed the contract. The tugboat was then, the plaintiff says, maintained for another year and resold at a further auction, but at a substantially lower price; and, the plaintiff’s claim is comprised of maintenance and other costs incurred between the two auctions, and the difference in the sale prices. The defendant counterclaims for the return of his deposit of $10,000.00.
Mr Lee’s defence, and his counterclaim, are based on his assertion that at the time of the auction he lacked the mental capacity necessary to create a binding contract because he was suffering a serious mental illness and, by reason of his behaviour at the auction (and in the days before it, when he had some contact with the auctioneer, and one of the plaintiff’s directors) the plaintiff and its agents knew or ought to have known that. As a consequence, he says, the contract is void.
Mr Lee conducted his own defence. He elected to give evidence on oath and in the course of it said, and I accept, that in the months leading up to the auction he had been receiving treatment for depression and, not long after it, was committed to a mental institution for four months and diagnosed as having, and was treated for, bi- polar disorder. He also said he continues to receive psychiatric treatment, and take medication for that condition.
[4] That evidence, and other matters, gave rise to a concern that he lacked the capacity to represent himself, or that it might be unfair to proceed with the trial by reason of his mental state. One ground for concern arose from…

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 Dascom Pty Ltd v Lee

Details

AGLC: Dascom Pty Ltd v Lee [2002] QDC 342
Case: [2002] QDC 342
Decision Date: 18/12/2002

CaseChat Overview and Summary

Dascom Pty Ltd v Lee is a decision of the District Court of Queensland, where the plaintiff, Dascom Pty Ltd, claimed that it sold a tugboat to the defendant, Kenneth John Lee, for $94,500 at an auction on 12 August 1999. The plaintiff claimed that, although the defendant later paid a deposit of $10,000 towards the purchase price on 20 October 1999, he has never completed the contract. The tugboat was then, the plaintiff says, maintained for another year and resold at a further auction, but at a substantially lower price; and, the plaintiff’s claim is comprised of maintenance and other costs incurred between the two auctions, and the difference in the sale prices. The defendant counterclaims for the return of his deposit of $10,000. Mr Lee’s defence, and his counterclaim, are based on his assertion that at the time of the auction he lacked the mental capacity necessary to create a binding contract because he was suffering a serious mental illness and, by reason of his behaviour at the auction (and in the days before it, when he had some contact with the auctioneer, and one of the plaintiff’s directors) the plaintiff and its agents knew or ought to have known that. As a consequence, he says, the contract is void. The court considered the issues of whether Mr Lee was unable, due to mental impairment, to understand the contract at the time of formation, and whether or not the plaintiff and/or its agents either knew or ought to have known of his impairment. The court found that the defendant was suffering from a mental incapacity at the time of the auction, but not one which deprived him of the means of knowing or understanding the nature of the auction process, or the ultimate effect of his bids, and the general nature of the legal obligations to which a successful bid would give rise. The court also found that there was no evidence that any person on the plaintiff’s side actually possessed knowledge of the defendant’s mental impairment, or that they ought to have known of an impairment or, according to the test in equity, have been aware of a possibility that a situation of special disadvantage might exist. Therefore, the court gave judgment for the plaintiff, on the claim and counterclaim.

Orders