Holt v Bunney

Case [2020] SASCFC 89

Supreme Court of South Australia

(Full Court)

HOLT v BUNNEY

[2020] SASCFC 89

Judgment of The Full Court

(The Honourable Chief Justice Kourakis, The Honourable Justice Nicholson and The Honourable Justice Hughes)

10 September 2020

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES

CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - CONTRACT IMPLIED FROM CONDUCT OF PARTIES

APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - ADMISSION OF FRESH EVIDENCE

On 12 April 2013, the respondent transferred $100,000 into the bank account of the appellant. A further $4,999 was transferred on 15 April 2013. At trial, the respondent, then the plaintiff, claimed that the monies were paid to the appellant as a loan and deposit respectively and sought return of these amounts. The appellant, then the defendant, claimed that the monies were paid in part fulfilment of a contract to buy an Aston Martin ‘Virage’ motor vehicle. The respondent was successful at trial.  The Judge found that the parties had not entered into a contract for a loan or for the sale and purchase of the Virage. The $100,000 paid by the respondent was done so by mistake and the $4,999 was paid towards an ineffective transaction. The Judge ordered the repayment of the two sums and entered judgment for the plaintiff in the sum of $145,583.94 (inclusive of pre-judgment interest).

The appellant appealed on nine grounds with subgrounds. The appellant’s primary contention was that the trial Judge erred in the application of the objective theory of contract when deciding whether the parties had formed an intention to enter into the purported contract for the Virage motor vehicle. The appellant contended that properly analysed, the interactions between the parties between 4 April 2013 and 15 April 2013 supported a finding that the parties had entered into a contract for sale and purchase. The respondent maintained the position that there was no contract.  

Held per Nicholson J (Kourakis CJ and Hughes J agreeing):

1.      Appeal allowed.

2.      As a result of the parties’ dealings between 4 April 2013 and 15 April 2013 the parties entered into a binding contract for the sale and purchase of the Virage in its then condition for the sum of $105,000. 

3.      The appellant’s application to admit fresh evidence refused.

4.      The order of the trial Judge that the appellant pay the respondent the sum of $145,583.94 (inclusive of interest) and associated costs orders set aside.

5.      Parties to be heard on the costs of the trial and of the appeal.

Motor Vehicle Standards Act 1989 (Cth), referred to.
Taylor v Johnson (1983) 151 CLR 422; Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; Fox v Percy (2003) 214 CLR 118; Masters v Cameron (1954) 91 CLR 353; Sinclair, Scott & Co Ltd v Naughton (1929) 43 CLR 310; Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622; GR Securities Pty Ltd v Baulkham Hills…

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Holt v Bunney [2020] SASCFC 89
Case
[2020] SASCFC 89
Decision Date

CaseChat Overview and Summary

This appeal concerned a dispute between Mr Holt (appellant) and Mr Bunney (respondent) regarding alleged contractual agreements. The respondent, who suffered from bipolar disorder and was experiencing an episode of hypomania at the time of the relevant interactions, alleged that he and the appellant had entered into a loan agreement for $100,000 and had also agreed to a contract for the purchase of a Virage vehicle. The appellant denied the existence of these agreements. The matter came before the Supreme Court of South Australia on appeal from a decision of the District Court.

The primary legal issues before the Full Court were whether the trial judge had erred in his findings concerning the formation of contractual relations between the parties. Specifically, the court was required to determine whether a contract for the purchase of the Virage vehicle had been formed, and whether a loan agreement for $100,000 had been validly entered into. The court also considered whether the respondent lacked contractual capacity, and if so, whether he had successfully rescinded any such contract.

The Full Court upheld the trial judge's findings that no loan agreement was entered into between the parties, and that the respondent had not intended to purchase the Virage vehicle. The trial judge had concluded that while the respondent intended to enter into a loan transaction to assist the appellant, this intention was not communicated to the appellant. Furthermore, the trial judge found that objectively, the respondent did not intend to purchase the Virage. The court noted that the trial judge had found the respondent did not lack contractual capacity, but that even if he had, he had successfully avoided any contract to purchase.

The appeal was dismissed. The Full Court found no error in the trial judge's essential conclusions regarding the absence of a concluded contract for the purchase of the Virage and the lack of a loan agreement.

Orders

Orders of the court

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Background

Background to the litigation

In undertaking this exercise, the parties’ respective submissions and the various appeal grounds will be of assistance but whether or not particular errors by the Judge can be identified will not necessarily be determinative of the appeal either way.Background The respondent was 62 at the time of the trial and is a retired public servant. He suffers from bi-polar disorder type 1 and the Judge found that he was experiencing an episode of hypomania associated with that disorder at the time of his relevant interactions with the appellant. The appellant is also retired having previously worked in the oil importation business. The appellant is passionate about classic motor vehicles, in particular handmade Aston Martins, and is a long time member of the Aston Martin Owners Club (AMOC) based in the United Kingdom but with an Adelaide branch.I've been involved with the club for 35 years. I have made various alterations to the cars, products [scil: produced] years ago and sold them in the UK to the club members and some dealers over there, but it's sort of low volume but that's about the only involvement [with the motor car industry]. As far as the motor industry is concerned I'm only really interested in handmade cars or cars of quality and I'm not interested in the motor trade at all.At the time of trial, the appellant owned five Aston Martins together with a number of other classic and European manufactured vehicles. Both men gave evidence. The Judge made this finding.[5]Both Mr Bunney and Mr Holt gave evidence. In so far as they are concerned, I formed the view that both were genuinely attempting to tell the truth although both witnesses understandably approached their case from their own particular perspectives. In both cases I consider that by virtue of the passage of time both witnesses engaged in a certain degree of reconstruction or alternatively were simply mistaken about the events that occurred. In circumstances where I prefer the evidence of one over the other I make that clear in these reasons.The Judge did from time to time indicate that he preferred or accepted one party’s evidence on a particular topic rather than the other party’s. However, on a number of such occasions, his Honour confined himself to this bare finding without giving reasons why.[5] Bunney v Holt [2019] SADC 145 at [8]. The respondent met the appellant at a social function in late 2011 or early 2012. At this time, the appellant was renovating a house at Summertown in the Adelaide Hills. The respondent became interested because it had previously been owned by two of his friends. Over time the two started to associate socially and by late 2012 or early 2013, the respondent had become somewhat enchanted by the appellant – “he sort of all of a sudden became my best friend”. In early 2013, the appellant estimated that he would need to spend another approximately $150,000 on his renovations. He had run short of money having recently purchased two Aston Martins. He had cars to sell if he needed to.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

NICHOLSON J
Thereafter, the respondent became keen to find a way to assist the appellant. He began ruminating on various schemes by which the needed $100,000 might be raised. It was the respondent’s principal contention at trial that he and the appellant had entered into a loan agreement with respect to this $100,000. The respondent acknowledged being very interested in buying the Virage and considered that an “option”, available to him throughout his dealings with the appellant, was to purchase the Virage for $105,000 by later allocating the loan monies of $100,000 to that price. However, he had never ultimately agreed to do this. These issues were explored at some length in the evidence and in the Judge’s reasons. As earlier indicated, the Judge found that at no time did the respondent agree to lend or the appellant agree to borrow the first tranche of the money (the $100,000) soon to be transferred into the appellant’s bank account. No loan agreement was entered into[6] and neither party has challenged this finding on appeal.[6] Bunney v Holt [2019] SADC 145 at [57]-[59].The Judge’s essential conclusions Before proceeding further, I will briefly summarise the Judge’s essential conclusions. Other aspects of his Honour’s reasoning may need to be considered when expanding on some of the items in the chronology set out later in these reasons. As earlier indicated, the Judge found that at all relevant times, the respondent did not lack capacity to contract. However, his Honour went on to find that if he was wrong in this respect, the respondent had successfully avoided, (that is rescinded) any contract to purchase entered into, during a conversation with the appellant in September 2013.[7][7] Bunney v Holt [2019] SADC 145 at [152]-[195]. His Honour then considered whether a contract to purchase the Virage had been entered into and, if not, whether a contract to lend $100,000 to the appellant had been entered into.[8][8] Bunney v Holt [2019] SADC 145 at [196]-[239]. The Judge concluded that at no time did the respondent intend to enter into legal relations, by way of a contract to purchase the Virage.Looking at the issue objectively in relation to the intention to enter into contractual relations, I find that Mr Bunney did not intend to purchase the Virage on the evening of 10 April 2013 at the Stirling Hotel, or indeed at any time thereafter.[9]His Honour also concluded that whilst the respondent intended to enter into a loan transaction with respect to the $100,000 to assist the appellant with his renovations, he had not communicated that intention to the appellant as at 11 April 2013.[10]I find that at no time did Mr Holt intend to enter into a contract with Mr Bunney to borrow $100,000.[11][9] Bunney v Holt [2019] SADC 145 at [233].[10] Bunney v Holt [2019] SADC 145 at [234]. I infer that his Honour has picked this date as being the date the $100,000 was transferred. The actual day of transfer may have been 12 April 2013 but this would make no difference to his Honour’s conclusion.[11] Bunney v Holt [2019] SADC 145 at [235].

Ratio Decidendi

Legal Principle Established

Established by: NICHOLSON J

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