Dielos v Barrie - [2015] SASC 31

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
DIELOS v BARRIE
[2015] SASC 31
Judgment of The Honourable Justice Blue
27 February 2015
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - NATURE OF APPEAL
CONTRACTS - PARTICULAR PARTIES - PRINCIPAL AND AGENT - IN GENERAL
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - PARTIES - GENERAL PRINCIPLES
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH
The plaintiff, Mr Dielos, appeals against the dismissal by a Magistrate of his claim to recover the deposit paid under a contract entered into in 2009 to purchase from the defendant, Mr Barrie, land for $1.25 million subject to, inter alia, a condition precedent that subdivisional development approval be granted by 29 September 2011.
The special condition was not satisfied and on 29 September 2011 Mr Dielos wrote to Mr Barrie's agent saying that the special conditions could not be satisfied and requesting that the deposit and accrued interest be returned immediately.
On 3 November 2011, the parties executed an addendum to contract providing for amendment of the contract deleting the special conditions, reducing the purchase price to $900,000 and extending the settlement date to 7 July 2012. Mr Dielos later gave evidence that, in executing the addendum, he was acting on behalf of another person and he disclosed this to Mr Barrie's agent.
Purchase of the land was not completed by the purchaser on 7 July 2012 and Mr Barrie purported to terminate the contract.
The Magistrate dismissed Mr Dielos' claim, holding that his letter of 29 September 2011 did not terminate the original contract, and he did not disclose to Mr Barrie that he was acting on behalf of another person in entering into the addendum to contract.
Held:
1. On its proper construction, Mr Dielos' letter of 29 September 2011 did terminate the original contract (at [58]-[64]).
2. The Magistrate’s finding that Mr Dielos did not disclose to Mr Barrie that he was acting for another person in entering into the addendum to contract was based upon her assessment of the credit of the witnesses and there is no basis to overturn the finding on appeal (at [88]-[90]).
3. There is no basis to conclude on appeal that entry into the addendum to contract was vitiated by Mr Dielos having been forced to do so (at [93]-[96]).
4. Appeal dismissed (at [98]).
Magistrates Court Act 1991 (SA), referred to.
Highfield Property Investments Pty Ltd v Commercial and Residential Developments (SA) Pty Ltd [2012] SASC 165; Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, discussed.
A & J Inglis v John Buttery & Co (1878) 3 App Cas 552; Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 139 CLR 337; Fox v Percy [2003] HCA 22; (2003) 214 CLR 118; Goss v Lord Nugent (1883) 5 B & Ad 58 and 64–65 (110 ER 713); Harry v Fidelity Nominees Pty Ltd (1985) 41 SASR 458; Inglis v John Buttery & Co (1878) 3 App Cas 552; Leggo v Brown & Dureau Ltd (1923) 32 CLR 95; Maynard v Goode (1926) 37 CLR 529; Railway Commissioner for NSW v Orton & Knight (1922) 30 CLR 422; Teheran-Europe Co Ltd v S T Belton (Tractors) Ltd [1968] 2 QB 545, considered.

DIELOS v BARRIE
[2015] SASC 31
Magistrates Appeal: Civil
BLUE J.

This is an appeal by the plaintiff, Dimitrios Dielos, against dismissal by a Magistrate of his claim against the defendant, Colin Barrie.
Mr Dielos sued Mr Barrie in the Magistrates Court for return of his $12,000 deposit paid under a contract entered into in July 2009 to purchase for $1,250,000 land at Golden Grove.[1] The contract was subject to the satisfaction of special conditions on or before 29 September 2011 relating to development approval for subdivision of the land and acquisition by the purchaser of a road reserve abutting the land. Settlement of the purchase was to take place on or before 29 October 2011.
[1] All figures in this judgment are exclusive of GST.
The special conditions were not satisfied. On 29 September 2011, Mr Dielos wrote to Mr Barrie’s real estate agent, Mr Howarth, saying that the special conditions could not be satisfied and requesting that the deposit and accrued interest be returned immediately.
On 3 November 2011, Mr Dielos and Mr Barrie executed an addendum to contract providing for amendment of the contract to delete the special conditions making the contract unconditional, reduce the purchase price to $900,000 and extend the settlement date to 7 July 2012.
Mr Dielos did not complete purchase of the land on the settlement date of 7 July 2012. On 27 July 2012, Mr Barrie sent to Mr Dielos a notice of termination.
In September 2012, Mr Dielos brought a claim against Mr Barrie in the Magistrates Court claiming return of the deposit because the special conditions were not satisfied and the original contract was not completed.
The trial proceeded before a Magistrate in December 2013 and January 2014. The principal issues at trial were whether Mr Dielos’ letter dated 29 September 2011 was effective to terminate the contract and, if so, whether Mr Dielos entered into a new contract by executing the addendum to contract on 3 November 2011 in his own right or on behalf of Mr Tsapaliaris.
On 14 February 2014, the Magistrate delivered reasons for judgment and dismissed Mr Dielos’ claim. The Magistrate held that Mr Dielos’ letter dated 29 September 2011 was not effective to terminate the contract and that Mr Dielos did not disclose to Mr Barrie or his agent, Mr Howarth, that he was acting as an agent for Mr Tsapaliaris in entering into the addendum to contract.
On 7 March 2014, Mr Dielos filed in the District Court an application to review the Magistrate’s decision. On 28 May 2014, a Judge of the District Court ruled that the application was incompetent because the action was not a minor civil action within the meaning of the Magistrates Court Act 1991 (SA) when the action was instituted in 2011 and an appeal lay to the Supreme Court rather than a review to the District Court. The Judge dismissed the application to review.
On 18 June 2014, Mr Dielos lodged for filing in this Court a notice of appeal against the Magistrate’s judgment. The Registrar was directed by a Judge that the notice of appeal should not be accepted for filing. Mr Dielos then sought pro bono legal advice on drafting the notice of appeal and on 28 August 2014 lodged a further notice of appeal which was accepted for filing by the Registrar.
The defendant applied for an extension of time in which to appeal and filed a supporting affidavit deposing to the above facts. At the hearing of the appeal, I granted the application for an extension of time.
The appeal raises three issues:
1.Did the Magistrate err in law in concluding that Mr Dielos’ letter dated 29 September 2011 was not effective to terminate the original contract?
2.Did the Magistrate err in fact in finding that Mr Dielos did not disclose to Mr Barrie’s agent that he was acting as agent on behalf of Mr Tsapaliaris in entering into the addendum to contract?
3.Should the Magistrate have held that Mr Dielos’ entry into the addendum to contract was vitiated because he was forced to do so?
Background
All material times, Mr Barrie owned land situated at Golden Grove, South Australia (the Land). The Land was known as “the Doggy Lodge” and Mr Barrie carried on a boarding kennel business on the Land. Mr Barrie engaged Elders Real Estate – Modbury/Tea Tree Gully as his agent to sell the Land. Paul Howarth and Pauline Henson were the principals of Elders Real Estate – Modbury/Tea Tree Gully and Mr Howarth had the conduct of the sale of the Land. Christopher Colmer was the conveyancer engaged by Mr Barrie to act as the vendor’s conveyancer in the sale of the Land to Mr Dielos.
On 24 July 2009, Mr Barrie and Mr Dielos executed a contract (the Contract) for the sale of the land for $1,250,000[2] with settlement to take place on or before 29 October 2011. Clause 14 of the standard conditions to the Contract relevantly provided:
[2] The Contract provided that the purchase price was to be $1,200,000 if settlement occurred on or before 29 October 2010, but this did not in fact transpire.
14.1 This Agreement is subject to the satisfaction of the Special Conditions (if any).
14.2The party required to satisfy a Special Condition must use its best endeavours to do so on or before the specified date in that Special Condition…
14.3 If a party fails to satisfy a Special Condition then:
14.3.1 If the party required to satisfy the Special Condition complies with clause 14.2, and such other terms and conditions as specified in the Special Condition, then either party may terminate this Agreement upon written notice to the other party; or
14.3.2…
14.4 If this Agreement is terminated pursuant to clause 14.3.1, then any moneys paid by oron behalf of the relevant party under this Agreement shall be refunded to that party.
Clause 3 of the standard conditions to the Contract provided:
3.1All moneys payable by the Purchaser prior to settlement will be paid to the Agent to be held on trust until Settlement and will be applied to any amounts due to the Agent and then to the Purchase Price.
3.2The balance of the Purchase Price will be paid at Settlement, as directed by the Vendor.
The Special Conditions contained in annexure 4 to the Contract included the following:
A)This Contract is subject to the purchasor obtaining provisional Development Assessment Commission consent to divide the land substantially in accordance with the draft plan attached hereto on or before 29th day of September 2011. The purchasor must apply for the said consent on or before the 29th day of September 2009 and used the purchasor’s best endeavours to ensure that the said application is approved at the earliest possible time.… This condition will not be deemed to be satisfied unless the purchasor obtains approval for a minimum 26 allotments.…
B)This Contract is further subject to the purchasor obtaining all relevant approvals pursuant to the Roads (Opening and Closing) Act to purchase that portion of the road reserve abutting the land as may be required to complete the land division contemplated by the said plan. Such consents must be granted on or before 29 September 2011 …
Neither Special Condition A nor Special Condition B (the Special Conditions) was satisfied by 29 September 2011. Mr Barrie accepted at trial that Mr Dielos was not in breach of his best endeavours obligations under clause 14.2 in this respect. Accordingly, it was common ground at trial that Mr Dielos was entitled to terminate the Contract under clause 14.3.1 by giving written notice to Mr Barrie after 29 September 2011.
On 29 September 2011, Mr Dielos handwrote, dated and signed a letter addressed to Mr Howarth (the Letter). The body of the Letter was as follows:
Dear Sir
Re contract on 1669/1679 Golden Grove Rd Golden Grove SA 5125 between Collin William Barrie and Dielos Family Trust and or nominee.
This is to inform you that the contract – under the terms and special conditions of the contract cannot be satisfied for the Dielos Family Trust and/or Nominee and kindly request that the deposit of $12,000.00 and accrued interest be returned immediately.
Yours sincerely
Dimitrios Dielos
On 29 September 2011[3], Mr Dielos hand delivered the Letter to Mr Howarth’s office.
[3] There was a lack of clarity on the evidence of each of Mr Dielos and Mr Howarth whether the Letter was delivered on 29 or 30 September 2011. The Magistrate ultimately found, based on Mr Howarth's email to Mr Colmer dated 29 September 2011 extracted at [19] below, that the Letter was delivered on 29 September 2011. Neither party on appeal challenges that factual finding and I would in any event affirm that finding. Ultimately nothing turns on the precise date on which Mr Dielos delivered the Letter. Mr Barrie took no point at trial, and takes no point on appeal, that, if otherwise effective to terminate the Contract, the Letter was ineffective because it was delivered one day early.
On 29 September 2011, Mr Howarth sent an email to Mr Colmer, the conveyancer, in the following terms:
This morning the purchaser Mr Jim Dielos called into my office. He dropped off the letter attached. He however, did state his willingness to re negotiate but desperately needs his $12,000 deposit back ASAP.
On 29 or 30 September 2011, Mr Dielos and Mr Howarth had a discussion at Mr Howarth’s office (the Initial Discussion). There was a lack of clarity on the evidence whether the discussion occurred when the Letter was delivered or later that day or the next day. There was a substantive dispute between Mr Dielos and Mr Howarth on the evidence as to the substance of the discussion. The Magistrate made findings of fact on each of these matters.
Either during the Initial Discussion or in mid-October 2011, Mr Dielos and Mr Howarth had a discussion on the topic of Mr Dielos proceeding with the purchase of the Land on different terms. The different terms discussed included a reduction in the purchase price to $900,000 and an extension of the settlement date by six months. Mr Howarth’s evidence was that this discussion was initiated by Mr Dielos during the Initial Discussion. Mr Dielos’ evidence was that this discussion was initiated by Mr Howarth and the detail of different terms was not discussed until mid-October. At some point, there was also a discussion whether a purchase on different terms would be conditional or unconditional.
On 19 October 2011, a meeting took place between Mr Howarth, Mr Barrie and Mr Colmer. Mr Barrie instructed Mr Howarth to agree that the Land be sold to Mr Dielos for $900,000, with settlement to take place on 7 July 2012, the sale be unconditional, the $12,000 deposit to be retained and otherwise on the conditions set out in the Contract.
At some point between 19 October and 3 November 2011, Mr Howarth and Mr Dielos had a further discussion during which Mr Dielos agreed to those conditions. It was further agreed that an addendum to contract reflecting this agreement and amending the terms of the Contract be prepared and executed.
At some point in October 2011, Mr Dielos introduced Mr Tsapaliaris to Mr Howarth at Mr Howarth’s office. They had a discussion that lasted between one and two hours. There was a dispute on the evidence between Mr Dielos and Mr Howarth as to the capacity in which Mr Tsapaliaris was introduced to Mr Howarth. Mr Dielos gave evidence that he introduced and described Mr Tsapaliaris as the purchaser. Mr Howarth gave evidence that Mr Dielos introduced and described Mr Tsapaliaris as Mr Dielos’ financial backer. The Magistrate resolved this conflict by preferring the evidence of Mr Howarth.
On 3 November 2011, Mr Dielos and Mr Barrie separately executed an addendum to contract (the Addendum to Contract). The Addendum to Contract was as follows:
ADDENDUM TO CONTRACT
An Addendum to the Contract dated the 24th day of July 2009
BETWEEN:        Colin William Barrie (The Vendor/s)
AND:                Dimetrios Dielos as Trustee of the Dielos of Family Trust and/or Nominee (The Purchaser/s)
For sale and purchase of the property situated at: “The Doggy Lodge” 1669–1674, Golden Grove Road, Golden Grove 5125.
Described in Certificate of Title Volume: 5836 Folio: 455
IT IS HEREBY AGREED BETWEEN THE VENDORS AND THE PURCHASER THAT:
The Contract be amended to read:
1.   Delete all and any conditions making the Contract “Unconditional”.
2.   Page 3 of 15
Item 8 – Settlement Date.
To read “7th of July 2012”
3.   Page 2 of 15
Item 6 – Purchase Price.
To read “$900,000” (Nine Hundred Thousand Dollars).
In all other respects, the parties confirm the terms of the Contract
In June 2012, Mr Dielos informed Mr Howarth that Mr Tsapaliaris had reneged. On 12 June 2012, Mr Dielos sent an email to the City of Tea Tree Gully saying that he had been let down by Mr Tsapaliaris, who had reneged on their agreement. He said he was in discussion with two other parties to resurrect the situation to do the development and inquired if more time would be allowed to rectify the situation if he could not settle by 7 July 2012.
Mr Dielos did not settle on 7 July 2012. On 17 July 2012, Mr Colmer sent to Mr Dielos a Notice to Complete, nominating 27 July 2012. Mr Dielos did not settle on 27 July 2012. On 27 July 2012, Mr Colmer sent to Mr Dielos a notice of termination of contract.
Between June and September 2012, Mr Dielos had several discussions with Mr Howarth concerning revised terms of purchase of the Land by Mr Dielos. Mr Dielos made several verbal offers to Mr Howarth to purchase the Land subject to various conditions for prices ranging from $950,000 down to $650,000. Those offers were rejected by Mr Barrie.
On 27 September 2012, Mr Dielos brought the claim against Mr Barrie in the Magistrates Court to recover the deposit money.
On 2 October 2012, Mr Barrie entered into a contract to sell the Land to Mr Skinner and others for $650,000.
On 9 October 2012, Mr Dielos filed an application for an interlocutory injunction restraining Mr Barrie from selling the Land on the basis that he was not given the opportunity to make a counter offer for $650,000 or better in accordance with discussions with Mr Howarth. On 12 October 2012, a Magistrate heard Mr Dielos’ interlocutory application. He declined to grant the injunction, but continued an earlier injunction that Mr Howarth retain the deposit pending determination of the action.
On 30 November 2012, settlement of the sale of the Land to Mr Skinner and others took place.
The trial
Mr Dielos was self-represented at trial. He gave evidence on his own behalf. Mr Dielos referred to an affidavit that he had sworn on 19 November 2013 in response to an affidavit sworn by Mr Howarth which also exhibited certain documents. Mr Dielos then gave evidence-in-chief. At the conclusion of his evidence-in-chief, the question was raised whether Mr Dielos’ affidavit had been or should be received. The Magistrate said that she had thought it preferable that Mr Dielos cover the matters addressed in the affidavit in oral evidence instead, which he had done.
Mr Dielos gave evidence that on 22 September 2011 he told Ms Edson, who was partner of Mr Howarth at Elders Modbury, that he wanted his money back, the Contract couldn’t be fulfilled and he needed the money to open a chicken shop on Anzac Highway. Ms Edson responded that Elders did not give money back.
Mr Dielos gave evidence that on 30 September 2011 he had a discussion with Mr Howarth concerning the Letter to get the deposit back. Mr Dielos said that Mr Howarth twice asked him if he wanted to terminate the Contract and he replied that he did. The general effect of Mr Dielos’ evidence was that the discussion with Mr Howarth occurred when he handed the Letter to Mr Howarth and that this occurred on 30 September 2011, but there was some vagueness on his evidence whether he delivered the Letter on 29 or 30 September 2011 and whether the discussion about his wanting to terminate the Contract occurred on 29 or 30 September 2011.
Mr Dielos gave evidence that, during a subsequent discussion in October 2011, Mr Howarth said words to the effect: you know other people, you can find somebody else to fulfil this contract and that he had been instructed by Mr Barrie not to return the deposit.
Mr Dielos gave evidence that in October 2011 he spoke to Mr Tsapaliaris who was interested in purchasing the Land for a lower price. Mr Dielos said that in mid-October 2011 he introduced Mr Tsapaliaris to Mr Howarth at Mr Howarth’s office. He said that he introduced Mr Tsapaliaris as the proposed purchaser of the Land.

Mr Dielos called Ms Edson as a witness. Ms Edson denied the conversation on 22 September put to her by Mr Dielos.
Mr Barrie’s affidavit was tendered and he gave oral evidence. He also called Mr Howarth and Mr Colmer as witnesses. Their affidavits were tendered and they gave oral evidence.
Mr Dielos and Mr Barrie both gave evidence that there were no direct communications between them from 29 September to 3 November 2011. Mr Barrie gave evidence that he was not told by Mr Howarth that Mr Dielos had terminated the Contract. Mr Barrie gave evidence that he was told by Mr Howarth that Mr Tsapaliaris was Mr Dielos’ financial backer and he was not told that Mr Tsapaliaris was now the purchaser.
Mr Howarth gave evidence that he received the Letter on 29 or 30 September 2011. Initially he thought that he received the letter on 30 September, but he accepted that his email to Mr Colmer on 29 September indicated that he received it on the morning of 29 September. Mr Howarth gave evidence that he had a discussion with Mr Dielos which he believed occurred on 30 September 2011. Mr Howarth said that Mr Dielos told him that he could not meet the Special Conditions. Mr Dielos said that he had spent money on attempting to satisfy the Special Conditions and he wanted his deposit back for working capital. Mr Dielos said that the asking price of $1.2 million was too high according to his financiers. Mr Dielos said that he did not want to lose the block, having spent money on it, and was looking to renegotiate the price and an extension of time. Mr Dielos suggested that $900,000 was more appropriate for and he could make it work on that basis. Mr Howarth denied that Mr Dielos used the word “terminate” in the conversation.
Mr Howarth gave evidence that subsequently in October 2011 he was introduced by Mr Dielos to Mr Tsapaliaris on the basis that Mr Tsapaliaris was Mr Dielos’ financial backer rather than the purchaser. Mr Howarth’s evidence was that at no point up to and including September 2012 did Mr Dielos inform him that Mr Tsapaliaris was the purchaser as opposed to his financial backer.
The Magistrate’s reasons
The Magistrate summarised the facts not in dispute and the evidence of the witnesses. The Magistrate made an adverse credit finding in relation to Mr Dielos’ evidence and a positive credit finding in relation to Mr Howarth’s and Ms Edson’s evidence. The Magistrate made factual findings preferring the evidence of Mr Howarth and Ms Edson over the evidence of Mr Dielos where they conflicted.
First Issue
The Magistrate identified the first principal issue for determination as whether the Letter had the effect of terminating the Contract. The Magistrate identified the relevant test by quoting from and applying a passage from my judgment in Highfield Property Investments Pty Ltd v Commercial and Residential Developments (SA) Pty Ltd[4] as follows:
In general terms, termination of a contract (whether for breach or failure of a condition precedent to performance) is not effected automatically upon the occurrence of the breach or the non-fulfilment of the condition precedent to performance. Except in those rare cases where the contract on its proper construction provides for automatic termination, the contract will only be terminated by an act of a party entitled to exercise a right to terminate.
The act must unequivocally manifest an intention to elect to treat the contract as not subsisting (I use this neutral term given the dispute addressed below as to what is required to amount to the election). The reference to “intention” is, as in other areas involving contract, to objective manifestation of intention as opposed to subjective intention.
The election to terminate must be communicated to the other party. The manifestation and communication of the election might be by words or conduct, expressed or implied.[5]
[4] [2012] SASC 165.
[5] Ibid at [277]-[279] (Footnotes omitted).
The Magistrate construed the Letter in the following terms:
The plaintiff’s letter makes no reference to clause 14 of the Contract, nor does it make any reference to the words ‘terminate’ or ‘termination’ or to the fact that the contract is at an end. It merely refers to the fact that the Special Conditions have not been satisfied and seeks the return of the deposit. As I have already stated, the fact that the Special Conditions have not been satisfied does not, of itself, terminate the Contract and entitle the plaintiff to have his deposit returned. It merely gives rise to a right to terminate, provided that party has used his best endeavours to satisfy the Special Conditions.
I agree with the submission of counsel for the defendant that the plaintiff’s letter dated 29 September 2011, did not amount to an unequivocal act evidencing an intention to terminate the Contract.
The Magistrate said that her conclusion was supported when the subsequent conduct of the parties was considered.
The Magistrate made factual findings concerning the communications between Mr Dielos and Mr Howarth between 29 September and 3 November 2011. She found that Mr Dielos delivered the Letter to Mr Howarth on 29 September rather than 30 September 2011. She found (implicitly by preferring Mr Howarth’s evidence as she summarised it) that there was no substantive discussion between Mr Dielos and Mr Howarth until 30 September 2011, being the day after the Letter was delivered. She rejected Mr Dielos’ evidence that he informed Mr Howarth when delivering the Letter that he wished to terminate the Contract. She found that, in his conversations with Mr Howarth, Mr Dielos made no mention of his wish to terminate the Contract. She found that Mr Dielos informed Mr Howarth that he sought the return of his deposit to provide him with working capital. She found that Mr Dielos informed Mr Howarth that he wished to renegotiate certain provisions of the Contract, including the purchase price and an extension of the settlement date. She found that Mr Howarth met with Mr Dielos and spoke with him on the telephone on numerous occasions between 29 September and 3 November 2011 to negotiate changes to the terms of the Contract, including the purchase price and the settlement date.
The Magistrate said that her factual findings, as summarised in the previous paragraph, supported her conclusion that the Letter did not amount to an unequivocal act evidencing an intention by Mr Dielos to terminate the Contract. She held that the Contract was not terminated by the Letter and remained on foot after 29 September 2011.
Second issue
The Magistrate identified the second principal issue for determination as being the status of the Addendum to Contract, including the identity of the parties. The Magistrate identified Mr Dielos’ contentions on this issue in the following terms:
The plaintiff contends that he was not a contracting party to the Addendum and that, at all times, the purchaser was Mr Spero Tsapaliaris. He further contends that both the defendant and Mr Howarth were aware of this fact and, in fact, met with Mr Tsapaliaris in the course of negotiations.
The Magistrate said that she assumed that, in advancing those contentions, Mr Dielos was relying on the words “and/or nominee” in the description of the purchaser as entitling him to transfer his rights under the Addendum to Mr Tsapaliaris. The Magistrate held that, in accordance with the decision of the Full Court in Harry v Fidelity Nominees Pty Ltd,[6] the inclusion of those words do not entitle a purchaser unilaterally to nominate another person in his or her stead as the party to contract.
[6] (1985) 41 SASR 458.
The Magistrate made the following factual findings and reached the following conclusion:
I accept the evidence of both the defendant and Mr Howarth that, whilst they met Mr Tsapaliaris, they understood his involvement to be as a financial backer of the plaintiff and he was, in fact, introduced as such.
…
I therefore reject the assertion by the plaintiff that the intended purchaser of the Property in the Addendum was in fact, Mr Spero Tsapaliaris.
Third issue
The Magistrate identified the third principal issue for determination as being the entitlement of Mr Dielos to return of his deposit. The Magistrate observed that it was not in dispute that Mr Dielos failed to settle on 7 July 2012 and again on 27 July 2012 after he was served with a Notice to Complete. The Magistrate held that Mr Barrie was entitled to retain the deposit in accordance with clause 15.10 of the Contract.
Termination of the Contract
It is common ground on appeal that the test whether Mr Dielos gave notice of termination of the Contract in accordance with clause 14.3.1 of the Contract is an objective one and the subjective intentions and beliefs of the parties are irrelevant. This is in accordance with the general approach of the law of contract.[7] In this context, the objective question can be framed as whether a reasonable person in the position of Mr Barrie, knowing what his agent Mr Howarth knew, would have understood that Mr Dielos was giving notice of termination of the Contract through the Letter because of non-satisfaction of the Special Conditions.
[7] Highfield Property Investments Pty Ltd v Commercial and Residential Developments (SA) Pty Ltd [2012] SASC 165 at [277]-[279].
In Pacific Carriers Ltd v BNP Paribas,[8] Gleeson CJ, Gummow, Hayne, Callinan, and Heydon JJ said (in the context of determining the terms of a contract):
The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction.[9]
[8] [2004] HCA 35; (2004) 218 CLR 451 at [22].
[9] Ibid.
It is also common ground on appeal that, in construing the Letter, it is impermissible to have regard to the subsequent conduct of the parties. This also is in accordance with the general approach of the law of contract to the construction of terms.[10]
[10] A & JInglis v John Buttery & Co (1878) 3 App Cas 552 at 572, per Lord O’Hagan; Maynard v Goode (1926) 37 CLR 529 at 538 per Issacs J.
Construction of the Letter
In approaching the construction of the Letter, it is important to have regard to the terms of the Contract and the context in which the Letter was delivered.
Under the terms of the Contract, Mr Dielos was entitled, and only entitled, to refund of the deposit if he gave effective notice under clause 14.3.1 terminating the Contract: see clause 14.4. If the contract remained on foot, Mr Barrie was entitled to retain the deposit and either apply it towards the purchase price at settlement (clause 3) or retain it as forfeited if Mr Dielos defaulted at settlement (clause 15.10).
Under the terms of the Contract, Mr Dielos had a right, upon non-fulfilment of the Special Conditions by 29 September 2011, to terminate or affirm the Contract.[11] If Mr Dielos affirmed the Contract, he would have been bound unconditionally to complete the purchase by 29 October 2011 notwithstanding that he had not obtained the necessary approvals for the proposed subdivision into 26 allotments or the acquisition of the abutting road reserve necessary to complete the subdivision. These rights to terminate the Contract or in effect to “waive” compliance with the Special Conditions were mutually inconsistent and Mr Dielos was required to elect between them.
[11] Legally Mr Barrie also had a right to terminate the Contract but, having no incentive to do so, in practical terms this can be disregarded.
While the Contract did not stipulate a time by which Mr Dielos was required to elect and he was not required to do so by say 30 September 2011, nevertheless if he elected to proceed with the Contract he had only one month in which to settle and was obliged to pay a purchase price of $1.25 million notwithstanding that he might not be able to proceed with the subdivision and had failed to obtain the requisite approvals over the course of more than two years. In these circumstances, in a practical and commercial sense, from the perspective of a reasonable person in the position of Mr Barrie, it could be seen that it was essential that Mr Dielos elect forthwith upon non-fulfilment of the Special Conditions on 29 September 2011 whether to terminate the Contract or proceed to settle on an unconditional basis.
Turning to the language of the Letter itself, I reproduce here the operative paragraph:
This is to inform you that the contract – under the terms and special conditions of the contract cannot be satisfied for the Dielos Family Trust and/or Nominee and kindly request that the deposit of $12,000.00 and accrued interest be returned immediately.
If Mr Dielos were electing to affirm the Contract or had not yet made an election either way, there was no evident utility or purpose in his informing the vendor that the Special Conditions had not been satisfied. While drafted by a layperson, this paragraph is expressed in relatively formal terms. The timing of the Letter, being on the very day on which – after the expiration of two years – satisfaction of the Special Conditions was required and on which Mr Dielos acquired a right to terminate the contract, coupled with its formality of expression and lack of any other apparent purpose, objectively suggests that the purpose of notifying Mr Barrie that the Special Conditions had not been satisfied was to give notice of an election under clause 14.3.1.
The Letter goes on to request that the deposit be returned immediately. Mr Dielos had no entitlement to return of the deposit unless he was giving written notice of termination of the Contract. Return of the deposit was inconsistent with an election to affirm the Contract because in that event the deposit was to be retained by the agent and ultimately paid to the vendor at settlement or on default at settlement by the purchaser. Return of the deposit was inconsistent with Mr Dielos deferring making an election because in that event the deposit was to be retained to be held by the agent on trust under clause 3. The request that the deposit be returned immediately emphasises that Mr Dielos was not deferring making an election. The request that accrued interest on the deposit be paid to Mr Dielos emphasises that the deposit was no longer to be treated as having been held on trust for either the vendor or purchaser depending on whether and why settlement proceeded or did not, and is inconsistent with the Contract remaining on foot.
From the perspective of a reasonable person in Mr Barrie’s position, objectively it was practically and commercially imperative for Mr Dielos to elect one way or the other to terminate or affirm the Contract almost immediately upon non-satisfaction of the Special Conditions by 29 September 2011 for the reasons identified at paragraphs [58] and [59] above. It is manifest that, by the Letter, Mr Dielos was not affirming the Contract, nor is there anything in the Letter that suggests that he was deferring making an election. The Letter is inconsistent with Mr Dielos affirming the Contract or deferring making an election.
Construed objectively, the Letter unequivocally manifested an intention by Mr Dielos to elect to terminate the Contract. The mere fact that Mr Dielos in the Letter did not use the word “terminate” or cite clause 14.3.1 of the Contract does not detract from this conclusion.
Oral communications
The Magistrate made a finding of fact that the discussion between Mr Dielos and Mr Howarth concerning the Letter occurred after the delivery of the letter by Mr Dielos to the agent. Neither party on appeal challenges that finding of fact. In particular, Mr Barrie makes no submission on appeal that the Magistrate erred in making that finding of fact and she ought to have held that the discussion occurred contemporaneously with delivery of the Letter.
As observed above, it is common ground on appeal that, in construing the Letter, it is impermissible to have regard to subsequent communications between the parties. In particular, Mr Barrie concedes on appeal that regard cannot be had to subsequent communications between or the conduct of the parties.
In the circumstances, it is impermissible to have regard to the discussion between Mr Dielos and Mr Barrie on 30 September 2011 concerning the Letter.
Even if it were appropriate to proceed on the basis that the oral discussion was contemporaneous with delivery of the Letter, clause 14.3.1 of the Contract required notice of termination to be written and the Letter was in writing. It may be that the parol evidence rule[12] or an extension by analogy of it would preclude reliance by either party upon the oral discussion. However, given my findings it is unnecessary to consider that question.
[12] Goss v Lord Nugent (1833) 5 B & Ad 58 at 64–65 (110 ER 713) at 716; and Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 347 per Mason J.
In any event, on the evidence, the discussion that occurred on that occasion does not assist Mr Barrie on the construction of the Letter. The Magistrate preferred the evidence of Mr Howarth over that of Mr Dielos about the content of that discussion. While Mr Dielos complains on appeal about that finding, it was based upon the Magistrate’s assessment of the credibility of the witnesses, having heard and seen them give evidence, and no basis has been established by Mr Dielos for me to interfere with that finding. In particular, Mr Dielos has not established that the Magistrate made a finding in this regard that was contrary to “incontrovertible facts or uncontested testimony”, “glaringly improbable” or “contrary to compelling inferences”.[13]
[13] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28] and [29] per Gleeson CJ, Gummow and Kirby JJ (see also McHugh J at [65]–[66]).
Proceeding on the basis that the Magistrate accepted Mr Howarth’s account of the content of the discussion, I set out below Mr Howarth’s evidence under cross-examination by Mr Dielos in which he set out his most complete account of that discussion:
You said “Paul, I can’t meet the conditions” … you indicated to me that you didn’t want to lose the block, the opportunity, ‘don’t want to lose the land; I’ve spent money on it to get it thus far, I don’t want to lose it and I amwilling and looking to renegotiate the price and an extension’ because you’d run out of time to fulfil the conditions. I then asked you as to what you were thinking of. You told me $900,000 was more appropriate and that you could make it work on that basis.
The fact that Mr Dielos expressed a wish to renegotiate the price and timing of settlement is not inconsistent with the Contract having been terminated, nor is it suggestive that the Contract remained on foot. It is entirely consistent with the Contract having come to an end, but Mr Dielos expressing an interest in purchasing the Land on different terms. The very fact that Mr Dielos suggested radically different terms, including a reduction in the purchase price by $350,000 and a substantial extension of time of six months suggests that Mr Dielos was no longer constrained by the terms of the Contract and was free to bargain on fundamental matters of price and timing.
Addendum to Contract: identity of the purchaser party
Mr Barrie’s case at trial was that, if the Contract was terminated at the end of September 2011, by executing the Addendum to Contract the parties entered into a new contract for Mr Dielos to purchase the Land for $900,000 with settlement to occur on 7 July 2012 on an unconditional basis and otherwise on the terms and conditions set out in the original contract.[14] Mr Dielos did not dispute at trial, and does not dispute on appeal, that a new contract came into existence upon execution of the Addendum to Contract on 3 November 2012.[15]
[14] Mr Barrie conceded that, if the original contract had been terminated, it could not merely be amended because it had ceased to exist but there was no reason why the parties could not enter into a new contract adopting some of the terms and conditions of the original contract.
[15] In any event, the terms of the Addendum to Contract unequivocally manifested an intention by the parties to contract for the sale and purchase of the Land on the terms set out in the Addendum to Contract and otherwise on the terms set out in the original contract.

Mr Dielos’ case at trial was that he was not the contracting party to the Addendum to Contract, but rather it was Mr Tsapaliaris. Mr Dielos’ case was that Mr Tsapaliaris agreed with him to purchase the Land and that in October 2011 he told Mr Howarth that Mr Tsapaliaris was to be the purchaser. Mr Dielos did not articulate the legal principle upon which Mr Tsapaliaris became the party to the Addendum to Contract rather than himself.
Was Mr Tsapaliaris the disclosed principal of Mr Dielos?
Under the doctrine of the disclosed principal, if Mr Dielos entered into the Addendum to Contract as agent for Mr Tsapaliaris and disclosed that fact to Mr Barrie via Mr Barrie’s agent, Mr Howarth, Mr Tsapaliaris would have been the purchasing party to the contract and Mr Dielos would not have been a party to the Contract.[16] Under the doctrine of the undisclosed principal, if Mr Dielos entered into the Addendum to Contract as agent for Mr Tsapaliaris but did not disclose that fact to Mr Barrie via Mr Barrie’s agent Mr Howarth, Mr Dielos[17] would have been the purchaser party to the Contract.[18] Under agency and contract doctrines, if Mr Dielos purported to enter into the Addendum to Contract as agent for Mr Tsapaliaris but did not in fact have authority from Mr Tsapaliaris to do so, Mr Dielos would have been liable to Mr Barrie for damages under an implied warranty of authority.[19]
[16] Railway Commissioner for NSW v Orton & Knight (1922) 30 CLR 422 at 425-426 per Knox CJ, Gavan Duffy and Starke JJ.
[17] Mr Barrie would have had the right to elect to treat Mr Tsapaliaris as the purchaser party to the contract in lieu of Mr Dielos: Wolton & Anor v Cummins (1924) 20 Tas LR 52 at 55 per Nicholls CJ. However, there was no suggestion at trial that this occurred and it was contrary to Mr Barrie's conduct and evidence. Mr Tsapaliaris, as undisclosed principal, might have sued Mr Barrie on the contract: Teheran-Europe Co Ltd v S T Belton (Tractors) Ltd [1968] 2 QB 545 at 552 per Lord Denning MR. However, again, there was no suggestion at trial that this occurred and it was contrary to Mr Dielos’ conduct and evidence.
[18] Teheran-Europe Co Ltd v ST Belton (Tractors) Ltd [1968] 2 QB 545 at 552 per Lord Denning MR.
[19] Leggo v Brown & Dureau Ltd at 106 per Issacs J.
At trial, Mr Dielos did not articulate that he was relying upon the doctrine of the disclosed principal. However, Mr Dielos being self-represented, on appeal, I articulated the doctrine as the apparent legal basis of Mr Dielos’ case that it was Mr Tsapaliaris and not himself who was the party to the Addendum to Contract. The parties on appeal made submissions on the Magistrate’s factual findings relevant to this doctrine.
The doctrine of the disclosed principal gives rise to two factual issues:
1.Did Mr Dielos enter into the Addendum to Contract as agent for Mr Tsapaliaris?
2.If yes, did Mr Dielos disclose that fact to Mr Barrie via Mr Barrie’s agent Mr Howarth?
Existence of agency
Mr Dielos’ evidence at trial about his communications with Mr Tsapaliaris before he entered into the Addendum to Contract on 3 November 2011 was vague. Mr Dielos did not suggest that he had any written agreement with Mr Tsapaliaris before 3 November 2011 that Mr Tsapaliaris would purchase the Land or Mr Dielos would agree to purchase the Land on behalf of Mr Tsapaliaris. Nor did Mr Dielos suggest that he had any written authority from Mr Tsapaliaris before 3 November 2011 to act as agent for Mr Tsapaliaris for the purpose of agreeing to purchase the Land. Mr Dielos did not give evidence of a specific conversation with Mr Tsapaliaris before 3 November 2011 during which Mr Tsapaliaris agreed to purchase the Land or authorised Mr Dielos to act on his behalf to agree to purchase the Land from Mr Barrie.
The most specific evidence given by Mr Dielos concerning his communications with Mr Tsapaliaris was in examination in chief as follows:
I managed to find Spero Tsapaliaris… and Spero had a look at it, some figures he threw up, he said $900,000 I would look at and he’d try for a 30 June or 7 July settlement, with approvals.
It is not evident from that passage that Mr Tsapaliaris actually agreed to purchase the Land for $900,000 as opposed to looking at it, nor that Mr Tsapaliaris agreed to purchase on an unconditional basis, ie without being subject to development approval.
I assume, without deciding, that Mr Dielos sufficiently proved at trial that Mr Tsapaliaris authorised him to agree on his behalf to purchase the Land on the terms and conditions set out in the Addendum to Contract. The real issue then becomes whether Mr Dielos proved that he told Mr Howarth that, in making the verbal offer to purchase the Land for $900,000 and entering into the Addendum to Contract, he was acting on behalf of Mr Tsapaliaris.
I interpolate that Mr Dielos complains on appeal that the Magistrate did not receive two exhibits to his affidavit sworn on 19 November 2013 which included the first page of an undated consultancy agreement between Greenwith Views Pty Ltd and Mr Dielos (the Undated Consultancy Agreement) and a letter dated 28 February 2012 (February letter) from Finlaysons to Mr Tsapaliaris and Mr Dielos referring to the Greenwith Project, discussions with Mr Barrie and future steps.
The reason why the Magistrate did not receive Mr Dielos’ affidavit was that she considered it preferable that Mr Dielos give oral evidence instead. In so doing, it appears that the exhibits to Mr Dielos’ affidavit were overlooked. Mr Barrie did not express an objection to receipt of the affidavit or its exhibits, but the point was not reached at which he was given an opportunity to do so.
On appeal, Mr Dielos produces the entirety of the Undated Consultancy Agreement, which shows that it was not executed, and the covering email which shows that it was sent to Mr Tsapaliaris and Mr Dielos on 12 January 2012. Mr Dielos contends that the documents exhibited to his affidavit, together with the entirety of the Undated Consultancy Agreement, prove that he was acting as Mr Tsapaliaris’ agent in entering into the Addendum to Contract. In addition, Mr Dielos seeks to tender as fresh evidence on appeal two additional documents, namely a draft (unsigned) Addendum to Contract between Mr Barrie and Mr Dielos dated 24 July 2009 and invoice from a surveyor to Mr Dielos for $5,652.80 dated 29 September 2011 bearing a handwritten notation that he was paid by Mr Tsapaliaris in January 2012.
I assume, without deciding, that the Magistrate erred in not admitting the three documents exhibited to Mr Dielos’ affidavit and that the additional documents should be received on appeal. Considered separately or together, these documents do not prove that Mr Dielos was acting as agent for Mr Tsapaliaris in entering into the Addendum to Contract on 3 November 2011. The Undated Consultancy Agreement is equivocal as to whether Mr Tsapaliaris had agreed with Mr Dielos as at January 2012 to become the purchaser of the Land. While recital B states that Greenwith Views “is or is entitled to be the owner of the Land and intends to undertake the Project”, clause 2(d) provides that “the Project may be commenced, say by the acquisition of the Land but the Company may then elect to not progress the Project at all or only at some time in the future…” and in any event the document was not executed. The payment of the surveyor’s invoice in January 2012 and the February letter are also equivocal as to the position in November 2011. All of the documents post-date November 2011 and do not prove the existence of an agency relationship as at November 2011, whatever might have been the position in 2012.
Disclosure of agency
Mr Barrie on appeal concedes that, if (as I have concluded) the original Contract had been terminated at the end of September 2011, and if Mr Dielos disclosed to Mr Howarth that Mr Dielos was acting as agent for Mr Tsapaliaris in making the verbal offer to purchase the Land for $900,000 and entering into the Addendum to Contract, Mr Dielos would not have been a party to the Addendum to Contract and would not have been liable for failure by the purchaser to settle under it.[20]
[20] Mr Barrie contends that, in that event, the deposit of $12,000 originally paid by Mr Dielos would no longer have been recoverable by him, but only by Mr Tsapaliaris if settlement did not occur under the new contract without the fault of Mr Tsapaliaris. For reasons which will appear, it is unnecessary to determine this question.
Mr Dielos gave evidence that he told Mr Howarth that he was making the offer on behalf of Mr Tsapaliaris. In his evidence immediately after the passage extracted at [78] above, Mr Dielos said:
Then I went back to Mr Howarth and I said that’s what this gentleman wants, its not what I wanted…
Q.Did that happen after you informed him [Mr Howarth] about Spero’s conversation with you, you went back to Mr Howarth.
A.Yes. Yes, I went and I said there’s a gentleman here that will take this on at that price and that he would require settlement to be on 7 July next year.
Mr Howarth denied that Mr Dielos told him before 3 November 2011, or at any time, that Mr Tsapaliaris was to be the purchaser. His evidence-in-chief included the following:
Q.Did Mr Dielos ever mention during this period that he was entering into the addendum for someone else.
A.No. I had at some stage met his financial backer but to my knowledge Mr Dielos was the person – was my purchaser. And, I don’t know, I didn’t care to be frank with you who the financial backer may have been.
Q. Who was the financial backer.
A.The one that I was introduced to.… Jim brought the purchaser. His name was… Spero was part of his name….
Q Was it ever mentioned during that meeting that Mr Tsapaliaris, or Spero, as you have referred to him, was the purchaser.
A. No, the financial backer.
and he maintained the same position during cross examination.
As observed above, the Magistrate made credit findings in favour of Mr Howarth and against Mr Dielos and preferred Mr Howarth’s evidence over Mr Dielos’ evidence where it conflicted. In particular, the Magistrate accepted Mr Howarth’s evidence that Mr Tsapaliaris was only described by Mr Dielos as his financial backer and not as the purchaser. The Magistrate gave reasons for her credit findings.
The Magistrate’s findings in this regard are not contrary to “incontrovertible facts or uncontested testimony”, “glaringly improbable” or “contrary to compelling inferences”.[21] On the contrary, the question how Mr Dielos described the role of Mr Tsapaliaris to Mr Howarth depended upon the Magistrate’s assessment of who was telling the truth in that regard.
[21] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28] and [29] per Gleeson CJ, Gummow and Kirby JJ (see also McHugh J at [65]–[66]).
Based on the Magistrate’s factual finding, Mr Dielos did not disclose to Mr Barrie via Mr Howarth that he was acting as agent for Mr Tsapaliaris. It follows that Mr Dielos was liable as principal under the new contract entered into on 3 November 2011.
Nomination
At trial, Mr Dielos did not articulate a case that he nominated Mr Tsapaliaris as the purchaser pursuant to the description of the purchaser in the Schedule to the Contract or that Mr Tsapaliaris became at law the purchaser for the purposes of the Addendum to Contract in lieu of Mr Dielos by reason thereof. Counsel for Mr Barrie articulated this as a possible legal basis for Mr Dielos’ case that he was not the purchaser for the purposes of the Addendum to Contract and then made submissions why it could not justify Mr Dielos’ case.
The decision of the Full Court in Harry v Fidelity Nominees Pty Ltd[22] is, as the Magistrate held, clear and binding authority that Mr Dielos could not unilaterally nominate Mr Tsapaliaris to become the purchaser party under the Addendum to Contract by virtue of the description of the purchaser as “Mr Dielos as trustee of the Dielos Family Trust and/or nominee”.
[22] (1985) 41 SASR 458.
Was Mr Dielos forced into the Addendum to Contract?
In his evidence, Mr Dielos said that, during a discussion with Mr Howarth in mid-October 2011, Mr Howarth said that Mr Dielos knew other people and could find somebody to fulfil the contract and that he had definite instructions from Mr Barrie not to give him his deposit back. Mr Dielos said that he was forced into signing the Addendum to Contract as a result.
At trial, Mr Dielos did not contend that the Addendum to Contract was not binding because he was forced into it or articulate any legal basis upon which that was so. On appeal, Mr Dielos suggests that Mr Howarth’s conduct was misleading.
The Magistrate rejected Mr Dielos’ account of his discussions with Mr Howarth. Mr Howarth gave evidence that it was Mr Dielos’ suggestion, and not his own, that Mr Dielos might proceed with the purchase of the Land at a lower price and at a later time and further that this suggestion was made during a discussion on 30 September 2011. Mr Howarth gave evidence that he said to Mr Dielos that, if Mr Dielos was going to proceed with the purchase of the Land, the deposit would be retained by Mr Howarth for that purpose. On Mr Howarth’s account of the discussions, Mr Dielos was not forced into entering into the Addendum to Contract and was not induced to do so by any misleading conduct by Mr Howarth concerning return of his deposit.
Another legal basis upon which Mr Dielos might have contended that the Addendum to Contract was not binding would have been if he was forced into it under the doctrines relating to duress. However, Mr Dielos did not suggest any physical or other duress capable of amounting to duress at common law. Given the Magistrate’s factual findings accepting the evidence of Mr Howarth as to his discussions with Mr Dielos, there was no conduct by Mr Howarth capable of amounting to duress or unconscionable conduct in equity in any event.
Conclusion
Mr Dielos has not established any basis to challenge the Magistrate’s credit and factual findings that Mr Dielos did not tell Mr Howarth that Mr Tsapaliaris was to be the purchaser under the Addendum to Contract. Accordingly, Mr Dielos has not established any basis to challenge the Magistrate’s conclusion that he defaulted in not settling on the purchase of the Land in July 2012 under the Addendum to Contract and that he was not entitled to return of the deposit.
I dismiss the appeal. I will hear the parties as to costs.