Holt v Bunney
[2020] SASCFC 89
•10 September 2020
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 Private Hospital Pty Ltd (1986) 40 NSWLR 631; Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149; Kuehn & Kuehn v Masterton Homes (NSW) Pty Ltd [2020] NSWSC 1049; Raffles v Wichelhaus (1864) 159 ER 375; Seriven Bros & Co v Hindley & Co [1913] 3 KB 564; Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540; Barrier Wharfts Ltd v Scott Fell & Co Ltd (1908) 5 CLR 647; Film Bars Pty Ltd v Pacific Film Laboratories Pty Ltd (1979) 1 BPR 9251; King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251; Pitcher v Langford (1991) 23 NSWLR 142; Babsari Pty Ltd v Wong (2000) 2 Qd R 576, considered.
HOLT v BUNNEY
[2020] SASCFC 89Full Court: Kourakis CJ, Nicholson and Hughes JJ
KOURAKIS CJ: I would allow the appeal and join in the orders proposed by Nicholson J for the reasons he gives. I make the following additional observation.
I wish to emphasise my assent to the general proposition in [143] of the judgment of Nicholson J, that the conduct or statements of one party (secondary conduct), occurring after the statements or conduct constituting the primary arrangement made by the parties, in the absence of the other, will have little, if any, bearing on the question whether their objectively ascertained intention was to be legally bound by the primary arrangement. That is a necessary result of the objective perspective of the law of contract. When secondary conduct has been admitted, it has comprised exchanges between the parties or conduct of one of them of which the other was aware. Secondary conduct may be considered by the objective observer if the transactions in issue extend over a period of time which includes that secondary conduct. Whether or not it does so requires an assessment of the temporal and circumstantial connection between the primary arrangement and the secondary conduct. Viewing the primary arrangement in isolation, the objective observer might conclude that a legally binding agreement had been reached, but may conclude otherwise if the secondary conduct forms part of the transaction in issue.
However, the subsequent conduct on which Mr Bunney relies was not an exchange with Mr Holt, nor sufficiently connected to it to form part of the transaction from which Mr Holt’s and Mr Bunney’s respective intentions were to be objectively discerned.
NICHOLSON J.
Introduction
On 12 April 2013, Paul Roy Bunney (plaintiff at trial and respondent to the appeal) transferred $100,000 into the bank account of David Terrence[1] Holt (defendant at trial and appellant) sometimes referred to by the respondent as Terry or David. On 14 April 2013, he arranged the transfer of an additional $4,999 into that same account. Following a lengthy trial in the District Court, the respondent succeeded with his claim for the repayment of that money. The Judge ordered, inter alia,
Judgment for the plaintiff in the sum of $104,999 plus pre-judgment interest in the sum of $40,584.94 giving a total of $145,583.94 to [sic] the period ending 2 October 2019.
[1] The Court file records “Terrence” but in an email from Mr Holt containing his bank account details, exhibit P1, page 2, the name is spelt “Terence” and Mr Holt’s email address also uses “Terence”. However, in an affidavit sworn by Mr Holt (referred to later in these reasons) the name is spelt “Terrence”.
The issues canvassed at the trial included: whether the money had been advanced as a loan; whether the respondent and the appellant had entered into a binding contract for the respondent to purchase from the appellant a 1992 Aston Martin Virage motor vehicle (the Virage) for the price of $105,000; whether the money had been paid under mistake; and whether the respondent lacked capacity to enter into a contract.
The Judge found, and notwithstanding that the respondent suffered from bi-polar disorder type 1 that was florid during his dealings with the appellant, that the respondent did have capacity to contract during the relevant period. However, his Honour found that neither a loan transaction nor a contract to purchase had been entered into. Rather, the $100,000 had been paid under mistake and, there being no relevant defence, had to be repaid and the $4,999, having been paid in contemplation of what turned out to be an ineffective transaction, was also repayable.
In his second notice of appeal, the appellant has raised seven grounds with subgrounds asserting numerous errors of reasoning by the Judge. However, the appellant’s essential contention is that the Judge erred in not finding that the parties had entered into a binding contract for the sale and purchase of the Virage for the sum of $105,000, with the sum of $104,999 having been paid prior to completion, which is still to occur. None of the other conclusions by the Judge has been challenged on the appeal either by way of the notice of appeal or a notice of contention.
The appellant’s case on appeal is that the parties, as a result of their interactions during the period 4 April 2013 to 15 April 2013, upon application of the objective theory of contract formation,[2] did enter into such a contract. It was also agreed or, at least, an understanding that the appellant would retain possession of the Virage until delivery was called for and the final one dollar of the purchase price paid. As the matter presently stands, the appellant still has possession of the Virage and stands ready, willing and able to facilitate delivery when called upon and upon payment of the outstanding one dollar. Alternatively, the appellant might elect to waive payment of the outstanding one dollar but has not done so yet. On the appellant’s case, the respondent, by refusing to pay the one dollar and call for delivery, has repudiated the binding contract. That repudiation remains unaccepted by the appellant.
[2] Taylor v Johnson [1983] HCA 5; (1983) 151 CLR 422 and Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165.
The appellant concedes that if the Judge’s finding of no contract ultimately were to be upheld, there being no other challenge to his Honour’s conclusions, the appellant would be obliged to repay the $104,999 together with interest. The appellant has also appealed against the Judge’s orders for costs. The grounds are such that they still would need to be considered if the substantive appeal were to be dismissed.
For the reasons that follow, I would allow the appeal, set aside the Judge’s order that the appellant pay the respondent the sum of $145,583.94 inclusive of interest and set aside the Judge’s costs orders. I would hear the parties on the costs of the trial and of the appeal.
Nature of the appeal
An appeal to this Court from a decision of a District Court Judge, following a trial, is in the nature of a rehearing as explained in Fox v Percy.[3]
Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of “weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect”. In Warren v Coombes, the majority of this Court reiterated the rule that:
“[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.”
As this Court there said, that approach was “not only sound in law, but beneficial in . . . operation”.
(Footnotes omitted)
[3] [2003] HCA 22; (2003) 214 CLR 118 at [25] (Gleeson CJ, Gummow and Kirby JJ).
As the appeal progressed it became apparent that there was little challenge by the appellant to the Judge’s factual findings. Nevertheless, the appellant does challenge the Judge’s application of the law and whether certain inferences are properly available. Appeal grounds 1 to 3 and 5 to 7 essentially raise issues of law and challenge the Judge’s application of law to the facts. Appeal ground 4 challenges various findings relating to the respondent’s subjective intentions as being contrary to the objective evidence. However, appeal ground 4 only arises for consideration if appeal ground 3 fails. By appeal ground 3, the appellant asserts that the Judge erred by taking into account the respondent’s subjective intentions during his Honour’s formation of contract analysis, contrary to the objective theory of contract.
The parties’ interactions relied on by the appellant as bearing on the formation of a contract were largely documentary, although some potentially material oral exchanges occurred and aspects of the parties’ personal interactions may be of relevance when analysing the documentary interactions.
There is only the single issue on appeal; was, or rather is, there a contract? Consistent with the role of an appellate judge considering an appeal by way of rehearing, I propose to consider this issue for myself on the basis of the evidence before the Court and those of the Judge’s findings that are unchallenged. Before departing from any material findings, based on the oral evidence, I must bear in mind the need for appellant restraint. In Fox v Percy,[4] the plurality further observed as follows.
After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.
(Footnotes omitted)
[4] [2003] HCA 22; (2003) 214 CLR 118 at [26].
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.
During a visit at the appellant’s Summertown house in February/March 2013, the appellant showed the respondent an Aston Martin DBS V8 vehicle that he had been working on. This was the first time the respondent had seen such a car. The appellant explained that it was a handmade car, outlined some of its features and said that he was restoring it for sale. On the same occasion, the respondent also saw an Aston Martin Virage which the appellant said was not for sale. This visit was the beginning of the respondent’s short lived but extremely ardent infatuation with Aston Martin motor vehicles and one in particular.
The appellant and the respondent during this Summertown house visit also discussed the appellant’s plans for the house renovation, his lack of funds and difficulties he would have in raising funds. The appellant explained that he planned to finish the upstairs renovation first so that he could live there while leasing out a section of the bottom floor. The respondent asked the appellant how much he needed to do that and the appellant said that approximately $100,000 was required.
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].
The Judge found the respondent’s actions to be “consistent” with the third category of arrangement discussed by the High Court in Masters v Cameron[12] being the situation where the parties’ intention is not to make a concluded bargain at all, unless and until they execute a formal contract.
[12] [1954] HCA 72; (1954) 91 CLR 353 at [9], 360 (Dixon CJ, McTiernan and Kitto JJ).
I interpolate here that whilst I recognise that the Judge said only that the situation was “consistent” with this third category, the reference to Masters v Cameron may not be entirely apposite. In that case, the High Court was considering the phrase “subject to contract” when expressly used by parties during contractual negotiations. As discussed later in these reasons, there is insufficient evidence to enable a finding that the parties, at any time, employed such terminology.
In any event, where parties reach agreement on terms (including subject matter) but expressly describe that agreement as “subject to contract”, their intention always will be a question of construction. In the first Masters v Cameron category, the parties are bound whether or not a formal written contract comes about. In the second category, the parties have completely agreed on terms and intend no departure therefrom or addition thereto but have made performance of one or more terms conditional upon the execution of a formal document. In the third category, no binding agreement has been reached at all; either party can walk away up until the time when a formal contract is executed. A fourth category has been suggested in other cases.[13] It may be that the parties are content to be bound immediately and exclusively by the terms which they had agreed upon while expecting to make a further contract in substitution for the first contract, containing, by consent, additional terms.
[13] Sinclair, Scott & Co Ltd v Naughton [1929] HCA 34; (1929) 43 CLR 310 at 317, Baulkham Hills Private Hospital Pty Ltd v GR Securities Pty Ltd (1986) 40 NSWLR 622 at 628 and on appeal, sub nom, GR Securities Pty Ltd v Baulkham Hills Private Hospital Pty Ltd (1986) 40 NSWLR 631, Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 and Kuehn & Kuehn v Masterton Homes (NSW) Pty Ltd [2020] NSWSC 1049 at [28] (and cases there cited).
In this case, on the Judge’s findings, the respondent never intended to be legally bound to buy the Virage at any time but to be legally bound to lend the $100,000. Whereas, the appellant never intended to borrow the money, only to sell the Virage for $105,000.[14]
[I]t is clear to me that both parties were not ad idem [of one mind] as to the particular transaction that they were both contemplating, albeit simultaneously.[15]
The Judge dismissed any suggestion of gift and went on to conclude:[16]
My finding that the parties were not ad-idem but had different views as to the transaction that was being entered has the consequence that the payment of $100,000 to Mr Holt was made under a mistake of fact and/or law.
[14] Bunney v Holt [2019] SADC 145 at [234]-[239].
[15] Bunney v Holt [2019] SADC 145 at [239].
[16] Bunney v Holt [2019] SADC 145 at [245].
His Honour further found that the payment under mistake (that the respondent believed he was making a loan) had been made in circumstances where the respondent was entitled to recover it.[17]
[17] Bunney v Holt [2019] SADC 145 at [243]-[261].
As far as the $4,999 was concerned, the Judge reasoned as follows.[18]
As to the sum of $4,999, on one view that sum falls into a different category. Arguably, the amount was not advanced by Mr Bunney under a mistake but in contemplation of a transaction exercisable by the payment of a further dollar to complete the purchase of the Virage either because Mr Bunney formed the view he was going to purchase the Virage per se or in exercising his rights over what he perceived to be security for the Loan. There is no mistake as to the payment of that amount however the transaction did not proceed and there being no terms of any potential transaction, there is no reason why the plaintiff should not recover that sum.
[18] Bunney v Holt [2019] SADC 145 at [262].
To my mind, there is an inherent difficulty with the Judge’s analysis of the parties’ interactions as a case of mutual mistake concerning the nature of the transaction agreed upon. Whilst such an analysis is theoretically possible it will be a rare case where it is found to apply. A case of mutual mistake occurs where each party proceeds under a fundamental but quite different mistake as to the nature of or terms of the transaction envisaged. The situation is to be distinguished from a case of common mistake where the parties labour under the same fundamental misapprehension and a case of unilateral mistake where one party labours under a fundamental misapprehension which has, somehow, been induced by the other party or of which the other party is aware.[19] There is no suggestion of common or unilateral mistake in the present case.
[19] Such a dispute usually will be resolved upon the application of the law concerning misrepresentation or unconscionable conduct.
It is not surprising that Australian law schools still teach a case decided in 1864, Raffles v Wichelhaus,[20] as the leading example of an operative mutual mistake.[21] It is one of only few, if any, true examples in the cases. Once the objective theory of contract formation is applied to the parties’ dealings, the scope for an operative mutual mistake, that is, that the parties are at cross purposes about a fundamental aspect of their agreement, will be very limited indeed.
[20] (1864) 2 H&C 906; (1864) 159 ER 375.
[21] See also Seriven Bros & Co v Hindley & Co [1913] 3 KB 564.
In Raffles v Wichelhaus,[22] a purchaser agreed to buy from a vendor cotton to arrive in London “ex ‘Peerless’ from Bombay”. There were two ships named “Peerless”; one set sail from Bombay in December carrying the vendor’s cotton and a second set sail in October. The buyer refused delivery on the basis that he had meant to buy cotton to be delivered on the October ship. The seller sued for damages for wrongful non-acceptance and failed. In Raffles, it was not possible on the available evidence to find that the proper, reasonable, interpretation to be placed on the contractual words used was that propounded by one party or the other.
[22] (1864) 2 H&C 906; (1864) 159 ER 375.
In Raffles, there was an intractable ambiguity. Usually, the evidence will permit an objective construction to be arrived at on the balance of probabilities favourable to one party and notwithstanding a subjective belief to the contrary held by the unsuccessful party.
Detailed chronology
Between 4 April and 15 April 2013, a number of interactions involving the parties occurred some of which are relied on by the appellant for his contractual claim. The following chronology of their interactions is lengthy and detailed. I will number each entry for ease of future reference.
Item 1
In February/March 2013, the Summertown house meeting (discussed earlier) took place.
Item 2
On 4 April 2013, the respondent went with the appellant to his storage shed at Carey Gully in the Adelaide Hills for an unrelated purpose. Once there, the respondent was shown the Virage which the appellant was restoring. According to the respondent, the appellant explained that it was number 400 and the last hand built Virage. The Judge made the following findings about this conversation which are unchallenged.[23]
(i)The respondent enquired whether the Virage was for sale and the appellant indicated it was not.
(ii)However, if the appellant were to sell, the price would be $105,000 “for the reasons he explained”.
(iii)The respondent indicated to the appellant that “because [the respondent] was a mechanical engineer he could work on the Virage under [the appellant’s] guidance”.
(iv)The appellant agreed that an arrangement such as in (iii) might work, at least in principle.
[23] Bunney v Holt [2019] SADC 145 at [60]-[63].
As I understand his Honour’s finding in (ii) above, the reference to the “reasons [the appellant] explained” is a reference to evidence given by the appellant as summarised by the Judge to the following effect.[24]
Mr Holt gave evidence that Mr Bunney asked what it would be worth once put together and on the road to which Mr Holt replied he did not know, probably $125,000. In answer to the question by Mr Bunney of how much would it be worth as it is, Mr Holt replied that it was probably worth $105,000.
Mr Holt said in evidence that the figure of $105,000 he gave to Mr Bunney came about by taking the ‘on the road’ figure of about $125,000, less $20,000 to get everything done to get it on the road, leaving $105,000. He said he did not take Mr Bunney’s interest in the Virage seriously.
[24] Bunney v Holt [2019] SADC 145 at [43]-[44].
Also, some context should be given with respect to the findings (i), (iii) and (iv). The Judge provided this summary of the appellant’s evidence bearing on these findings.[25]
Mr Holt said that Mr Bunney asked if it was a prototype to which Mr Holt said no. Mr Bunney asked if Mr Holt would sell this one and he replied no. Mr Holt explained to Mr Bunney he could sell it but it was a private import and he had to register it. Further, Mr Holt said it needed to be put together and painted and he was going to do that before he sold it, if he decided to sell it.
. . . .
According to Mr Holt, Mr Bunney then asked, ‘so you would sell it at $105,000?’ to which Mr Holt replied that he could not sell it because it is a personal import which means he has to register the vehicle and to do that he needed to finish restoring the car.
Mr Holt said in evidence that Mr Bunney told him he always wanted a high performance English sportscar and that Mr Bunney went to some length in explaining he was a mechanical engineer, however he did not take him seriously because Mr Holt was of the view that one did not just buy a car like the Virage without really understanding the complexity of it.
Mr Holt said Mr Bunney then said he (Mr Bunney) could put it together if Mr Holt helped, to which Mr Holt replied in words to the effect of ‘I suppose with my guidance you could do so but it is not the car for you’.
(Footnotes omitted)
[25] Bunney v Holt [2019] SADC 145 at [41], [45]-[47].
The respondent’s evidence had been to the effect that he did not indicate any interest in buying the Virage and that the discussion concerned his offer to lend $100,000 to the appellant and the possibility of converting the $100,000 that he had offered to lend into a part payment on the Virage if he were to purchase it. It was the appellant who had suggested the Virage could form some sort of security for a loan. This evidence was consistent with the respondent’s case at trial being that he had lent the money soon to be paid to the appellant. However, the Judge’s findings of no loan, and on this topic generally, indicate that this evidence was rejected.[26]
Although Mr Bunney says there were discussions in mid March in relation to him offering to raise $100,000 for Mr Holt to complete the renovations to the Summertown property, I do not accept that evidence. I accept that Mr Bunney is highly likely, in his philanthropic state of mind as part of his then manic state to which I make reference below, that he wanted to help Mr Holt by lending him the sum of $100,000 nonetheless no such offer was made.
I find that at no time did Mr Holt ask for Mr Bunney to advance him $100,000 for the purposes of renovating Mr Holt’s house at Summertown.
I find that to the extent that Mr Bunney began looking at various schemes in which he might be able to raise $100,000 for lending to Mr Holt (with which I also deal below), he did so as a consequence of his then manic state. That is consistent with there being a lack of any discussion between Mr Holt and Mr Bunney as to any terms or conditions as the basis for the loan including any repayment arrangement.
As to the meeting at Carey Gully on 4 April 2013, I find that Mr Bunney enquired as to whether the Virage was for sale and that Mr Holt indicated it was not but that if he was to sell it, the price was $105,000 for the reasons he explained.
To the extent that Mr Bunney said that he did not want to confuse the loan of $100,000 with a purchase of a car and therefore he would pay an additional $5,000, I reject that evidence. I accept Mr Holt’s version of how the figure of $105,000 was reached in, preference to Mr Bunney’s version of adding $5000 to a $100,000 sale price to differentiate between the loan transaction and the purchase of the Virage. As to the Virage being surety for the loan, I do not accept that evidence, although I accept that Mr Bunney was likely to have had the concept of the Virage being used as security in mind.
As to Mr Bunny’s evidence that he was exploring the possibility of converting the Loan that he had offered to Mr Holt into a part payment on the Virage, since I have found that Mr Bunney did not offer the loan to Mr Holt, I do not accept that evidence however again, I accept that such a scenario was in Mr Bunney’s contemplation.
I find that at the meeting at Carey Gully on 4 April 2013 Mr Bunney indicated to Mr Holt that because he was a mechanical engineer he could work on the Virage under Mr Holt’s guidance and that Mr Holt agreed, at least in principle, that such an arrangement might work.
[26] Bunney v Holt [2019] SADC 145 at [57]-[63].
By way of further context, the respondent agreed with the following during cross-examination, as summarised by the Judge.[27]
[27] Bunney v Holt [2019] SADC 145 at [33], [38].
Mr Bunney was cross-examined about the meeting at Carey Gully on 4 April 2013. He agreed that he had a discussion with Mr Holt at the Carey Gully storage shed about the work that needed to be done to bring the Virage up to a roadworthy condition. That work included:
•A rear child-restraint anchor point needed to be fitted;
•Various things had to be put back together for example, the rear seat was out and the passenger side door needed to be repainted;
•Bits and pieces needed to be done; and
•There was a problem with the radiator fan.
. . . .
Mr Bunney agreed that he told Mr Holt during this conversation that he (Mr Bunney) had mechanical engineering qualifications, that he could build a garage at his (Mr Bunney’s house) property to store the Virage and that if Mr Holt would sell the car as it was, he could restore the vehicle under Mr Holt’s supervision.
(Footnote omitted)
Item 3
On Friday 5 April 2013 at 9:50 am (the day after the Carey Gully storage shed meeting) the respondent emailed to the appellant a photograph of an Aston Martin Vanquish[28] with the subject line: “Don’t suppose you know where I could buy one of these?”.
[28] Exhibit P1, page 1. A “Vanquish” is another Aston Martin model.
Item 4
On Friday 5 April 2013 at 11:56, the respondent sent an email to the appellant[29] with the subject heading “My favourite colour! ‘Aston Green’ – Triumph [motorbike]”. The email contained a photograph of and information concerning an Aston Green Triumph motorbike with the observation “wouldn’t it be interesting if the two ‘Aston’ greens were the same?”. The respondent in the email was extoling the virtues of a particular motorbike he had purchased and by inference was referring to the fact that the appellant’s Virage discussed at the storage shed the day before, might also be “Aston” green.
[29] Exhibit D13.
Item 5
On Tuesday 9 April 2013 at 1:14,[30] the respondent sent an email to Andrew Forshaw, Aston Service Dorset, United Kingdom.[31] The email commenced “I am intending to purchase a 1992 V8 Vantage”. In the email, the respondent described the vehicle as “I believe that it was the last vehicle made in this series, and bears the No: 400”. He made a request of Mr Forshaw for additional information about this vehicle. He also requested the price for three technical books, by inference relating to Aston Martins.
[30] There is no reference on this particular email to “am” or “pm”. However, by reference to other emails sent and the use of “01”, I infer that a 24 hour clock was indicated and the time of sending was 1.14 am.
[31] Part exhibit P12.
The Judge included this email in his category of evidence which was against a contract having been formed (at all).[32] However, it has never been suggested by the appellant that a contract was in place as early as 9 April 2013. The assertion that as at that date the respondent was “intending to purchase” an Aston Martin is quite consistent with the appellant’s case.
[32] Bunney v Holt [2019] SADC 145 at [225(d)].
Item 6
On Wednesday 10 April 2013 at 12:42 am, Mr Forshaw sent an email to the respondent[33] seeking further information in order to be able to progress the respondent’s enquiry. There was no response from the respondent until his email to Mr Forshaw of 8 July 2013[34] in which he apologised for the delay and said, inter alia, “… its actually a 1992 Virage. The car still belongs to Terry Holt, who I believe you may know”.[35]
[33] Part exhibit P12.
[34] Part exhibit P12.
[35] See Item 28. The appellant relies on interactions between 4 and 15 April 2013 as giving rise to the contract relied on. Consideration will need to be given as to the relevance and probative force, if any, of this and other post 15 April 2013 conduct when considering whether a contract had been formed by then.
Item 7
On the evening of Wednesday 10 April 2013, the appellant and the respondent met at the Stirling Hotel for dinner and conversation. It is common ground that the respondent asked the appellant to send his bank account details to the respondent and that the appellant offered to take the respondent for a drive in the Virage.
This was an important meeting and I will spend a little time on it. According to the Judge, the parties gave conflicting accounts about what was said during the dinner. His Honour summarised the evidence from each party but did not make any express findings where their accounts were materially in conflict.[36]
[36] Bunney v Holt [2019] SADC 145 at [66]-[71].
The respondent gave this evidence in chief.
A.Earlier on that evening we'd had a meal at the Stirling Hotel, which I paid for. I don't remember the exact details of the conversation there but I'd told him that if he would forward his bank details I would arrange to transfer the $100,000. I paid for his meal, and he's thanked me for that.
Q.When you say transfer the $100,000 what $100,000 are you talking about.
A.It was for the loan, it was the loan that had already been discussed.
Q.Right. And you said that you had dinner with Mr Holt at the Stirling Hotel when this was discussed, giving rise to him sending these bank details. Are you now able to recall any other discussions on that evening at the Stirling Hotel.
A.No I'm not.
Q.Were there any discussions in relation to the car.
A.I think we would have discussed the car and the possibility of purchasing it. Because I was quite excited about that, that possibility.
Q.And did you agree terms on which you might possibly purchase the car.
A.No I didn't.
Q.Did you have any discussions about the detail of arrangements for the purchase of the car.
A.No I didn't.
There is of course an obvious difficulty with this evidence from the respondent’s perspective. He initially said quite categorically that he was “unable to recall any other discussions on that evening …”. However, he went on to also state that he did not “agree terms …” or have any discussions “about the detail of arrangements for the purchase of the car”.
During the cross-examination of the respondent on this topic, the respondent maintained his denial that he told the appellant he would buy the car. However, he gave this, somewhat equivocal, evidence.
Q.You also had a discussion at that dinner about the green Aston Martin that you had seen at Carey Gully, didn't you.
A.I don't recall.
Q.You said to Mr Holt, 'I'll buy the car'.
A.No, I didn't.
Q.You said that you would pay him $100,000 now and then you would pay $5,000 when you collected the car.
A.I did suggest that in an email,[37] but I don't recall the conversation at the hotel.
[37] The email to which the respondent referred is the email sent at 1.44 am the morning after the dinner, Item 9 in the chronology.
.. . .
Q.At the dinner, you said to Mr Holt 'I'll buy the car', didn't you.
A.No, I didn't.
Q.At the dinner, you said that you would pay $100,000 upfront and to pay a further $5,000 when you collected the car, didn't you.
A.I don't recall.
Q.At the dinner, you also asked Mr Holt for details of his bank account.
A.Yes.
(Emphasis added)
The appellant in his evidence in chief said that, at the dinner, they talked at length about the Virage. The respondent asked the appellant “would you sell it for $105,000” to which the appellant responded “I possibly would consider it” not thinking “in the slightest” that the appellant would come up with the money. The respondent then said “Well, you’ll have to send me your bank details” to which the appellant responded “Yeah, okay I’ll send you my bank details”. The appellant told the court that, at this time, he thought that it was “getting a bit silly” and that the Virage was not the sort of car the respondent ought to be buying. The appellant was not cross-examined on the Stirling Hotel meeting. The appellant had earlier given evidence as to why the Virage was not appropriate for the respondent and that he had told him so during the Carey Gully meeting.[38]
[38] See earlier at [42].
The only (somewhat limited) finding concerning what occurred at the Stirling Hotel meeting made by the Judge was the following.[39]
There seems little doubt that the Virage was the subject of considerable discussion between Mr Holt and Mr Bunney at dinner at the Stirling Hotel on 10 April 2014 and I find that Mr Bunney and Mr Holt discussed the potential purchase of the Virage at that time.
His Honour appears to have focussed on what took place before and after that dinner in order to determine whether a contract was formed that evening without actually determining what did occur at the dinner.[40]
[39] Bunney v Holt [2019] SADC 145 at [104].
[40] Bunney v Holt [2019] SADC 145 at [207]-[223].
Matters of potential importance about which no express findings were articulated are:
(i)Did the respondent, at the dinner, ask the appellant to sell him the Virage for $105,000?
(ii)If so, did the appellant respond that he would consider it?
(iii)Did the parties agree on the purpose behind the appellant providing his bank account details?
(iv)If so, what was that agreed purpose?[41]
I add here that during his cross-examination, the appellant said a number of times that, as far as he was concerned, the deal was done – a verbal agreement to sell, “pretty much at the Stirling Hotel when we went out to dinner and he transferred the funds”.
[41] Whilst the Judge made no express finding, it is to be inferred from his Honour’s ultimate conclusion that the parties were never ad idem that his Honour accepted that they had different (subjective) purposes.
Item 8
On Wednesday 10 April 2013 at 11:54 pm, that is, within hours of the Stirling Hotel dinner meeting, the appellant emailed his bank details to the respondent.[42] The complete email, omitting formal parts, was in these terms.
[42] Exhibit P1, page 2.
Subject: Bank details
Hi Paul, just finished the report, feeling like a good sleep!
My bank details are:-
David Terence Holt
ANZ Bank
BSB …
Account No …
I will get those small bits on the Virage & we can take it out for a spin. Thanks for dinner.
Regards Terry.
The Judge did not include this email in his Honour’s discussion of the evidence which was consistent with a contract for sale and purchase having been formed[43] nor in his Honour’s reasons for rejecting the formation of a contract.[44]
[43] Bunney v Holt [2019] SADC 145 at [207]-[223].
[44] Bunney v Holt [2019] SADC 145 at [227]-[233].
The respondent in his evidence in chief (set out above) explained that his purpose for obtaining the bank account details was to enable him to advance the $100,000 as a loan. The appellant (as set out above) said that the bank account details were provided in the context of the respondent’s request to buy the car. The Judge did not expressly resolve this issue. However, his Honour rejected the respondent’s evidence concerning there having been any discussion of a loan during the Summertown house meeting (Item 1) and the Carey Gully meeting (Item 2). And his Honour ultimately found that, as at 11 April 2013, the respondent had not communicated that he was minded to offer a loan and that at no time did the appellant ask for a loan.[45] Further, there was considerable discussion at the Stirling Hotel concerning the potential purchase of the Virage.
[45] Bunney v Holt [2019] SADC 145 at [234].
In these circumstances, it must be inferred that the appellant agreed to provide his bank details, and did so, with the sole understanding that the respondent wished to purchase the Virage for $105,000. Indeed, given the Judge’s findings summarised above, the notion that the respondent asked for the bank details other than in the context of the purchase of the Virage discussion, is not plausible. It is difficult to see how the Judge’s finding that the respondent nevertheless intended to provide a loan at this stage (but kept this to himself – a wholly subjective intention) can stand consistently with the evidence and the Judge’s other findings.
In my view, the email in Item 8 was a significant communication. It was a direct response to the respondent’s request or expressed desire, as perceived by the appellant, to purchase the Virage.
Item 9
On Thursday 11 April 2013 at 1:44 am, the respondent sent a responding email to the appellant with the subject heading “RE: Bank details”.[46] In the email, the respondent canvassed proposed financial arrangements with respect to the respondent’s brother, of no direct interest.[47] However, it included the following:
[46] Exhibit P1, page 3.
[47] At or about this time, whilst the respondent was thinking of ways to assist with the appellant’s need for finance, he was also exploring financial schemes in order to rearrange his brother’s finances.
Anyway I will, as discussed, do the following:
•Arrange for the transfer of $100,000 to your account tomorrow, to reach it by Friday. Sorry, I forgot that I can only transfer 5k online except by prior arrangement, which is a bit late now.
•Draft a document regarding the sale tonight (this morning) and forward it with some other unrelated matter. If you would peruse it and make any appropriate amendments before signing after all monies are received except for the final $5000 payment to complete the transfer (I.e. legal release of vehicle and responsibility for insurance.) I would however like to discuss whether the current cover, for a total loss, should be raised to reflect any value above the sale price, and improved or real value
. . . .
On a final note, my brother David seems to have heard a rumour about an “Aston – Martin” on which I made [sic]. If possible, I would like to try to keep this just between us for the time being, especially as it could only exacerbate other misconceptions associated with my mood/personality changes.
‘Til the next email/call/visit,
Regards
Item 9 is the respondent’s email in reply to the Item 8 bank account details email and sent about two hours later. It also is a significant communication and the Judge dealt with it at some length.[48]
[48] Bunney v Holt [2019] SADC 145 at [72]-[82].
His Honour found that the only sale “in contemplation” was the sale and purchase of the Virage. This is readily apparent from the second dot point in the email (quoted earlier).
His Honour found the penultimate paragraph – “On a final note …” – to be consistent with the respondent’s evidence that he wanted to keep “the purchase or potential purchase” a secret from others (particularly his family) because he had been diagnosed as hypomanic and was trying to disguise this from others. The respondent gave this evidence.
A.Well, I'd basically - my diagnosis by my doctor and my psychiatrist that I was hypomanic and I was concerned about that. So the - and I didn't believe that that was a bad thing at the time. I didn't appreciate the severity of my illness, so I was trying to disguise it from other people.
Q.Well this is an email to Mr Holt.
A.Yeah.
Q.Why were you telling him about that.
A.Well I just - I didn't want him telling people that I might be going to buy one of his Aston Martins.
Q.This is in the context of discussions that you've had with him at the Stirling Hotel.
A.Yes.
The respondent’s evidence concerning this email was to the effect that the first dot point (arranging a transfer of $100,000) was a reference to the parties’ agreement that he was to lend the appellant $100,000. Whereas, the second dot point was a reference only to the later possible purchase of the Virage for $105,000. The respondent said this during his evidence in chief.
A.I presume it was outlining the - I say 'presume' because it never happened, so I can't really - there's no proof of what the document was or would have been, so I can only assume that it would be something a little bit similar to what I did eventually forward to Mr Holt for his opinion,[49] it was outlining the arrangement if I decided to purchase the car instead of him repaying the loan.
Q.What did you understand that arrangement to be at that time.
A.I don't believe there was any arrangement. I was simply going to give him the $100,000 that was previously agreed; the cost of the car was agreed at $105,000, so it wasn't for the purchase of the car.
Q.It goes on to say 'If you would peruse it and make any appropriate amendments before signing after all moneys received except for the final 5,000 payment to complete transfer (I legal release)' etc. Can you explain to his Honour what you meant by that and if that was the subject of discussions on the evening of the meal at the pub.
A.I honestly can't explain this. It's not something I recall doing, it's not me writing something like that, but I can see that that does include the $5,000 payment to complete the transfer, but it's not consistent with what I understood.
[49] See the single page “draft contract” emailed by the respondent to the appellant at Item 22.
During his cross-examination on this topic, the respondent gave this evidence.
Q.Could you please turn to document 3 which is p.3 in Exhibit P1, just take a moment to read that to yourself.
A.I have read it.
Q.Go to the third paragraph 'Anyway I will as discussed do the following, first, arrange for transfer of $100,000 to your account tomorrow to reach it by Friday'.
A.Yes.
Q.Now do you stand by your evidence that there was no discussion at the Stirling Hotel about purchasing the car.
A.I thought I said I didn't recall.
Q.So if I've misremembered that's my fault. What I suggest is that when you wrote this email you understood that you were going to transfer $100,000 to Mr Holt as part payment for the green Aston Martin.
A.I can't deny that I wrote the email but I have no recollection of actually doing it.
Q.I think in your evidence yesterday you said that the $100,000 referred to the loan you say you were giving to Mr Holt, is your evidence now that you can't remember what you were thinking when you sent this email.
A.Yes. And I mean, I know we went through it yesterday but I don't remember. I don't remember what I was trying to say in that part.
Q.The next dot point with the introductory wording 'As discussed I will do the following draft a document regarding the sale', you were there referring to drafting a document for the sale of the green Aston Martin weren't you.
A.I presume so, yes.
Q.And you then say 'If you peruse and make any appropriate amendments before signing after all moneys are received except for the final $5,000 to complete the transfer, ie, legal release of vehicle and responsibility for insurance, you are there in your mind referring to the balance of 5,000 to complete the purchase for $105,000 weren't you.
A.Sorry, could you repeat that?
Q.In referring to making the final $5,000 payment to complete transfer you were there referring to payment of the balance of $5,000 to complete the purchase for $105,000.
A.That would be correct, yes.
.. . .
Q.The following sentence - sorry, the words in brackets where you refer to the 'responsibility for insurance', I suggest when you drafted that part of your email you had in mind a discussion you'd had with Mr Holt at the hotel about insurance for the green Aston Martin.
A.Can I just say that this was written while I was in a manic state and it's not the way I write normally. I don't really know that I'd given - I don't what I was thinking at the time but. I mean, I don't know what 'legal release' means really but.
HIS HONOUR
Q.Well the question was the next sentence, that is, the words in brackets in which 'responsibility for insurance' is mentioned -
A.Yes.
Q.- but reflects your discussion with Mr Holt at the hotel, is that right or not or don't you recall.
A.I don't recall.
XXN
.. . .
Q.You also understood when you wrote this email that when the works had been done to finish the car, the painting, electrical work and to get to condition where it could be registered and roadworthy, you understood by reference to your conversation with Mr Holt that the value of the car at that point would be $120,000 or more.
A.That's what he said.
Q.And that was your understanding at the time.
A.No, I had no knowledge - I knew nothing about Aston Martins.
Q.You didn't have any reason to doubt what Mr Holt had told you about the value of the car, did you.
A.I trusted him.
The appellant was asked some questions concerning the Item 9 email during examination in chief. He said that the email “pretty much sums up what we discussed and agreed to”.
The Judge made these further observations concerning this Item 9 email during his Honour’s discussion of the evidence consistent with a contract.[50]
Second, there is the email from Mr Bunney to Mr Holt sent 11 April 2013 at 1.44 am. There are two dot points in that email. The first dot point concerns the transfer of $100,000 to Mr Holt’s account. That is also consistent with Mr Bunney, in his manic and philanthropic state, transferring $100,000 to Mr Holt as a loan notwithstanding Mr Holt not asking for it.
The second dot point in the email states an intention on the part of Mr Bunney to draft a document ‘…regarding the sale tonight (this morning) and forward it with some other unrelated matter. If you would peruse it and make any appropriate amendments before signing after all monies are received except for the final $5,000 payment to complete [scil: the] transfer (i.e. legal lease [release[51]] of vehicle and responsibility for insurance.)’.
The statement in the second dot point of that email is consistent with a number of scenarios.
(a)It is consistent with the parties having agreed orally that Mr Bunney would purchase the Virage from Mr Holt; and
(b)It is consistent with the first and third categories in Masters v Cameron.[52]
(Footnotes omitted)
I interpolate here that the second dot point, which speaks of a contract to purchase the Virage, and refers to “after all monies are received except for the final $5,000”, gives context to the first dot point. Furthermore, the Judge found that a loan of $100,000 had not been discussed. The appellant can only have understood the first dot point to also be referring to a purchase of the Virage.
[50] Bunney v Holt [2019] SADC 145 at [209]-[211].
[51] The judgment where it refers to “lease” contains a typographical error; the email uses “release” (this footnote supplied).
[52] As discussed earlier, under the first category the parties are bound whether or not a written document comes into existence and under the third category, the parties are not bound until the anticipated written document comes into existence (this footnote supplied).
His Honour included this email in his category of evidence “which is against a contract being formed”.[53]
(a)The email from Mr Bunney to Mr Holt sent 11 April 2013 at 1.44 am where Mr Bunney indicates that he would draft a document regarding the sale; is contrary to an intention to be bound immediately;
(Footnote omitted)
Further, under the Judge’s heading “Consideration” towards the end of the judgment, his Honour made this finding.[54]
I have noted that in the email to Mr Holt sent on 11 April 2013 at 1.44 am, Mr Bunney refers to a final $5,000 payment “to complete transfer (i.e. legal release of vehicle and responsibility for insurance)”. This also indicates to me, on an objective basis, that Mr Bunney understood that a further payment was required to complete the purchase of the Virage.
I interpolate here that the issue is not what did the respondent understand by the email he had authored but what would a reasonable person in the position of the appellant, including in the context of the Stirling Hotel dinner, have understood from the email.[55] In any event, the notion of “completion” is quite different from the notion of formation of contract and the two should not be conflated.
[53] Bunney v Holt [2019] SADC 145 at [225(a)].
[54] Bunney v Holt [2019] SADC 145 at [231].
[55] Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR 540 at 549-550 (Gleeson CJ, with whom Hope and Mahoney JJ agreed).
Item 10
On Thursday 11 April 2013 at 12:17 pm, Carolyn Cunneen (the respondent’s relationship manager at his credit union) emailed to the respondent a “transfer form” for him to sign and return to her.[56] The transfer form signed by the respondent and dated 11 April 2013, purported to authorise the credit union to transfer, from an account in the respondent’s name, $100,000 to an ANZ account in the name of the appellant and with the account details as supplied by the appellant. The form contains the typed (by the credit union) description “one off external transfer”. No reason for or purpose underlying the transfer is referred to. Consistently with the email to the appellant earlier that day, the respondent had contacted Ms Cunneen to set this process in motion.
[56] Exhibit P1, pages 7-8.
Item 11
On Thursday 11 April 2013 at 3:54 pm, the respondent sent an email to Ms Cunneen to which was attached the signed transfer form.[57] The subject heading is “One off External Transfer”. The email was copied (cc) to: the respondent’s brothers David Bunney and Andrew Bunney, his mother Judy Bunney, a land conveyancer (Paul) and the appellant. The opening words are:
Dear Colleen,[58]
Thank you very much for your time and patience this morning. Sorry it has taken so long to reply, but this turned out to be a non-trivial task!
Completed form is attached for loan to David Terrance Holt. His bank details are attached.
(Emphasis supplied)
[57] Exhibit P1, page 5.
[58] The respondent used an incorrect given name for Ms Cunneen. The email should have been addressed “Dear Carolyn”.
Thereafter, the email traverses an elaborate (but not clearly articulated) financial scheme, apparently involving a sale and mortgaging of real property. This aspect of the email appears on its face to have nothing to do with the appellant or with any financial arrangement between the respondent and the appellant, other than as identifying a possible series of transactions to be engaged in by the respondent involving his brother, David, designed to enable the respondent to obtain the $100,000 he would need to reimburse his mother for the money he was proposing to transfer to the appellant. According to the respondent’s evidence, he used $100,000 from money on term deposit with the same credit union that he was “looking after” for his mother in order to fund his transfer to the appellant.[59]
[59] According to the respondent, he later repaid this unauthorised borrowing from his mother out of his own funds.
Attached to the exhibit copy of this email is a screenshot of the header to and opening words of the email. This screenshot came to the appellant’s attention at the time he received his copy of the email. The screenshot contains the words “DTH Loan against BR50400 …”. According to the respondent, DTH was a reference to David Terrence Holt and BR50400 was a reference to what the respondent thought was the chassis number of the Virage. The respondent described the screenshot as “a copy of an authorisation to withdraw $100,000 from my bank account and transfer it into [the appellant’s] bank account”.
It also is to be noted that the attached transfer authority[60] which also was received by the appellant when copied into the email contains the handwritten (by the respondent) reference number “BR 50400(338)” a description which both parties accepted was intended as a reference to the Virage.
[60] Exhibit P1, page 8.
Bearing in mind that the objective theory of contract formation applies, Item 11 is of potential relevance because it was copied to the appellant. The email itself refers to a “loan” to the appellant, the screenshot attached refers to “DTH Loan against BR50400 …” and the attached transfer authority also contained a reference to the Virage – “BR 50400(338)”. The Judge made these findings.[61]
Mr Bunney said in evidence that the description of the attachment ‘DTH loan against BR 50400.pdf’ was consistent with Mr Holt offering the Virage as security for the $100,000 loan for the renovations to Mr Holt’s house at Summertown in the event that he did not buy the Virage. I do not accept that evidence. I have found that Mr Holt did not request a loan from Mr Bunney and Mr Bunney did not raise the topic of him providing a loan to Mr Holt. On that basis, there is no reason for Mr Holt to offer the Virage as security. Rather, I find that it is consistent with Mr Bunney’s intention to keep secret from his family the potential purchase of the Virage and Mr Bunney put that description on the email not only for that purpose but also because Mr Bunney considered he was lending $100,000 to Mr Holt and the Virage was available as security against the loan albeit without any suggestion to that effect from Mr Holt.
. . . .
I find that by describing the advance of the money as a “loan” in the email to Ms Cuneen [sic] sent on 11 April 2013, Mr Bunney was acting in accordance with his perception that he was advancing money as a loan to Mr Holt but also using it as a disguise for his contemplation that he might purchase the Virage for the sum of $105,000.
[61] Bunney v Holt [2019] SADC 145 at [85], [236].
The Judge made no finding concerning what the appellant or what a reasonable person in the position of the appellant was led to understand upon receiving a copy of the Item 11 email. The appellant in his evidence in chief said that he read the email at or shortly after it was sent, “briefly”. The appellant was not asked in chief what, if anything, he understood by the references to “loan” in the email and the attachment.
However, in cross-examination the appellant gave this evidence.
Q.Do you see, in the second line of the body of the email, it says: 'Completed form is attached ... David Terrance Holt.'
A.Yes.
Q.His details are attached. Now, you received that email, didn't you.
A.Yep and I assumed it was the same story that he was telling his family, that it was a loan and this goes through everybody that he was dealing with and he'd said to me 'Don't tell anybody I've bought an Aston Martin from you, my brother has already heard rumours'.
Q.I put it to you that the reason why he's referred to a loan to you is that, in fact, you had discussed him providing you with a loan for your renovations.
A.It's not true at all. I wouldn't have gone to Mr Bunney for a loan.
Q.In fact, but what he's referring to there is his provision to you of $100,000 on 11 April as a loan for those renovations.
A.A loan document would be good if it was going to be a loan.
Q.I'll put my question again. He was referring there to the loan between you and he of $100,000 for renovations to your property.
A.There was never a loan from Mr Bunney. He bought a vehicle from me.
.. . .
Q.You accept, don't you Mr Holt, that written statements regarding the basis upon which money is provided by a bank are important.
A.Yes.
Q.A reference in an email to a banker or a bank describing the provision of monies to you as a loan, if that was incorrect it would be important to correct it, wouldn't it.
A.It would be, yes.
Q.And you didn't correct that, did you.
A.No, because if you look at the top of this email, it's copied in to his brother, Judy, myself and David. Those are the people he did not want to know that he'd bought a car. He was still keeping this pretence up that it was a loan.
Q.But you would accept, wouldn't you, that there was some considerable danger for you in all of those people being given an understanding that you had a loan from Mr Bunney.
A.No, because Mr Bunney had bought the car and he'd told me that he was telling his family it was a loan. He told his mother, his sister and he didn't want to put anything in here that would refer to a purchase. He told me - it was - and that's why it says 'loan'. Everything to do with outside his family, anything to do with his close circle of friends, it was a loan but anybody outside that, it was a purchase. So I had no concern about it whatsoever. The only time I heard it was a loan was when I came back and Mr Bunney said to me, in my driveway, 'I didn't really buy the car, it was a loan'. That was the first time he told me it was a loan and that was in September '13.
Whilst self-serving, this evidence was responsive to the cross-examiner’s questions. Furthermore, it is entirely consistent with the Judge’s finding that at no material time did the respondent offer a loan to the appellant or the appellant ask for one.[62] The appellant’s evidence here is of potential importance to an assessment of the appellant’s state of mind.
[62] Bunney v Holt [2019] SADC 145 at [85].
Item 12
On Thursday 11 April 2013, the sum of $100,000 was transferred into the respondent’s credit union account.[63]
[63] Exhibit P1, page 17.
Item 13
On Thursday 11 April 2013 at 7:06 pm, the respondent emailed the appellant and provided an internet link to a site that provided information about personalised numberplates.[64] The respondent advised that “AM•5400” was available. It is common ground that AM•5400 was an attempt at referring to the chassis number of the Virage owned by the appellant.
[64] Exhibit P1, page 9.
Item 14
On Friday 12 April 2013, the sum of $100,000 was transferred from the respondent’s credit union account into the appellant’s ANZ bank account.[65]
[65] Exhibit P1, page 17.
The respondent’s evidence as to why he made this transfer has been canvassed already. It was rejected by the Judge. The appellant gave this evidence during examination in chief as to his reaction when the $100,000 arrived in his bank account.
Q.Did you then receive any money in your bank account from Mr Bunney.
A.I think in the next day or two I did and I was, quite frankly, astonished.
Q.How much did you receive.
A.A figure of $100,000 came into my account.
Q.What did you understand the $100,000 to be in relation to.
A.Well, the reference Mr Bunney used on the transfer was the chassis number of the Virage that he'd been looking at in the warehouse.
HIS HONOUR
Q.That wasn't the question though.
A.Sorry.
XN
Q.What did you understand the $100,000 to relate to.
A.Well, the $100,000 was obviously a significant payment towards buying the Virage, and having its chassis number on the document tended to confirm that.
Q.You refer to it being a payment towards the Virage. Why are you saying 'Payment towards the Virage'.
A.Well, the following day when I - this money had arrived in my account, I had a phone conversation with Mr Bunney and he said 'I've transferred $100,000 to your account for the Virage and I will pay you $500 balance when I want you to deliver the car to my premises'.
HIS HONOUR: Just to clear that up, Mr Thomas.
HIS HONOUR
Q.The answer was 500. I think it should be $5,000.
A.5,000.
Q.There's no dispute about that though, is there.
A.5,000, sorry.
.. . .
HIS HONOUR
Q.You were asked about any conversations with Mr Bunney, I think, after this email of 11 April.
A.Mm-hmm.
Q.And you indicated that there was a conversation where Mr Bunney said he'd pay $5,000 later when he was ready to take delivery, and he was also building a garage at the time to put a couple of cars in it.
A.He had two cars in the carport at the front of his house and he wanted to build a garage - his driveway goes in and then underneath the carport and to the right of it he was building a garage.
Q.But when did this conversation about the $5,000 and the garage occur.
A.The conversation about the $5,000 happened after I'd received the 100,000.
Q.What about the garage.
A.That was an ongoing discussion about building a garage. It wasn't a substantial garage so I didn't really pay a lot of attention to it. He was building a garage suitable for at least one car, perhaps two.
The Judge referred to this evidence[66] but made no express finding as to whether or not he accepted it, that is, whether such a conversation occurred in the next day or so and, if so, as to its contents. However, his Honour did make this important finding.[67]
I accept that upon receiving this money, Mr Holt formed the view that Mr Bunney intended to purchase the Virage.
I add here that I would find it extraordinary and implausible if, when $100,000 arrived in the appellant’s account within a day or two of the Stirling Hotel dinner, he did not, very soon after, acknowledge this to the respondent and have a conversation about it. They were after all, at this time, very good friends. There would seem to be no reason not to accept this evidence. It is consistent with the respondent’s conduct including the fact that he had told the appellant at the Carey Gully meeting that he could build a garage on his property in which to store the Virage if purchased.
[66] Bunney v Holt [2019] SADC 145 at [90]-[91].
[67] Bunney v Holt [2019] SADC 145 at [106].
Item 15
On Saturday 13 April 2013, the appellant and the respondent went for a drive in the Adelaide Hills in the Virage. The Judge made a number of findings.[68] His Honour found that the appellant put fuel in the car for which the respondent paid but rejected the appellant’s evidence that the respondent said “it’s my car I’ll fill it up”. His Honour noted that this proposition had not been put to the respondent. His Honour found that, whilst the appellant offered to let the respondent drive, the respondent declined and said, to the effect, that he would not drive it until he decided to buy it. The appellant’s evidence in this respect differed; the respondent had indicated only that he did not want to drive. The only reason given by the Judge for preferring the respondent’s evidence here was that it was “supported” by the respondent’s statement in an email to Mr Forshaw on 9 July 2013 (Item 30) – “I declined to drive until I take possession”.
[68] Bunney v Holt [2019] SADC 145 at [93]-[96].
The respondent’s exact words in evidence were:
I wasn’t making much sense at the time but I think I said words to the effect that I wouldn’t drive it until I decided to buy it, but with the benefit of hindsight I think I should have driven it before I decided to buy it.
(Emphasis added)
It is highly likely that the respondent did offer a reason rather than just baldly decline to drive. However, when deciding what actual words were used by the respondent, the contest is between what, during his evidence in late 2018, he could recall having said five years earlier in April 2013 and what he told Mr Forshaw only two months later in July 2013. The words used when writing to Mr Forshaw are more likely to represent an accurate recollection. For this reason, the Judge’s reason for accepting the respondent’s evidence cannot be sustained.
Furthermore, the notions of buying and taking possession are quite different. The statement to Mr Forshaw does not lend support to a finding that the respondent said to the appellant that which the Judge found. The statement to Mr Forshaw, on balance, supports an inference that the respondent believed, at the time of the drive in the Hills, that he was entitled to or would become entitled to take possession pursuant to an arrangement in place.
The respondent was asked in chief to explain this apparent inconsistency. He gave this evidence.
Q.Again, on 9 July email, I'm returning back to the beginning of the bundle you are looking at to p.1, you will see in the fourth paragraph you say 'I decline to drive until I take possession, but we had a quick trip through some roads in the Adelaide Hills a while ago' is that referring to the journey you described to his Honour earlier on today, on 13 April.
A.Yes, it is.
Q.Did you ever go on any other trips in the vehicle.
A.No, I haven't seen it since.
Q.And what did you mean when you said to Mr Forshaw 'I decline to drive until I take possession'.
A.Well, it's precisely what I - well, it was meant to - it was meant to reflect words to the effect that 'I decline to take it for a drive until I have decided to buy', it's different wording.
The Judge did not express a view about this last answer but in my view it is suggestive of an invention to explain away the obvious inconsistency between buying and taking possession.
Item 16
On either Sunday evening 14 April 2013 or Monday 15 April 2013, the respondent transferred $4,999 from his credit union account into the appellant’s ANZ bank account.[69]
[69] Exhibit P1, page 18.
In his evidence in chief on this topic, the respondent explained his position in these terms.
A.… I think I was quite excited after a ride in the car and I decided to for some obscure reason tease myself by transferring part of the $5,000, so that it left an almost insignificant amount outstanding. I can't explain the logic behind it.
Q.Well what do you mean by 'tease yourself'.
A.Well I've been fantasising about what it would be like to have a very expensive sports car which is quite out of character, considering that I was driving around in a $400 Toyota Corona station wagon and I had two wrecks of cars in my driveway plus a 1985 Honda Accord and a 1985 Toyota ute, really this was quite - it was absurd to even contemplate that having a car like that notwithstanding the fact that there was no room for it.
In addition, the respondent made these admissions.
(i)He had not discussed with the appellant formal terms in relation to an arrangement like the one just explained above.
(ii)He had not discussed with the appellant terms in relation to making a deposit against the car.
(iii)He had not reached an agreement with the appellant in relation to putting down $4,999 with purchase to be confirmed only on the payment of $1.
(iv)He had not discussed with the appellant the $4,999.
(v)He could not explain why he used the term “deposit” in the transfer form – “I couldn’t think of anything else to put in there”.
The appellant’s version of the conversation following receipt of $4,999 was in these terms.
A.[Y]es, we had a telephone conversation about this.
Q.When.
A.After I received the email and he had said that he had a great idea, 'Why don't I give you the balance of the purchase price of the car, but I'll just hold back a dollar instead of $5,000'. I said, 'That's a bit unusual', he said, 'The [sic] I virtually own the car apart from $1'.
Q.What did you say.
A.I said that's a bit of an unusual arrangement, he said, 'Yeah, but it's fun, isn't it, I've got $1 to pay and then it's mine, I can take delivery'. I said, 'Okay, whatever you like', so another $4,999 went into my account for the purchase of the Virage, so for all intents and purposes it was bought and paid for.
.. . .
Q.You never communicated to Mr Bunney that you considered the $4,999 deposit was non-refundable did you.
A.The $4,999 that was meant to be a $5,000 final payment just came through out of the blue, it wasn't expected. He told me on the telephone that he thought, why not give me that money now and just keep a dollar back and then [scil: when] I delivered the car, he would pay me the dollar and that would be better and he thought it was quite amusing that he could finish - conclude the purchase with a dollar. So the $4,999 wasn't expected, it just arrived in my bank account. It's Mr Bunney who should answer why that came in, I have no idea because I was expecting to pay 5,000.
Q.I'll put my question again because that was a long answer but it didn't answer my question. When you received this document, you didn't reply to him or send him an email saying the 4,999 deposit is non- refundable.
A.No, I didn't.
Q.You didn't reply to him saying that you didn't agree to a $1 conversion arrangement.
A.No I didn't because the deposit was read as far as I was concerned as a deposit into my bank account, it wasn't a deposit as a deposit on the car because I'd already received $100,000.
Q.But that was your understanding -
A.Yes.
Q.- you didn't set that out in an email to him, did you.
A.No I didn't.
The Judge summarised the evidence given in chief by both parties concerning the transfer of $4,999 by the respondent and its receipt by the appellant.[70] His Honour made these findings concerning that evidence.[71]
The conversation in relation to the $4,999 was not put in those terms to Mr Bunney. That apart, I find there was a conversation about the dollar because it is a natural and logical matter to discuss given its peculiarity. I also find Mr Bunney said words to the effect that he ‘virtually owned the car apart from a dollar’. Such a statement is consistent with Mr Bunney’s view of whether he had purchased the Virage and his view that the Virage constituted security for the loan.
Later in his Honour’s reasons when giving final consideration to the question of contract formation, the Judge made these further findings concerning the payment of the $4,999.[72]
As to the sum of $4,999, I find Mr Bunney transferred that sum in anticipation of the possibility that he might purchase the Virage. However, I find that Mr Bunney intended to loan $100,000 to Mr Holt and although in his manic state and with grandiose plans he clearly contemplated the purchase of the Virage, nevertheless he specifically held back the extra dollar.
I note that these latter findings concern matters subjective to the respondent. They were not conveyed to the appellant.
[70] Bunney v Holt [2019] SADC 145 at [97]-[101].
[71] Bunney v Holt [2019] SADC 145 at [102].
[72] Bunney v Holt [2019] SADC 145 at [232].
Item 17
In propounding my analysis, I have not overlooked the appellant’s evidence that he said at the hotel “I possibly would consider it” and, when asked to provide his bank account details, “Yeah okay I’ll send you my bank details” but thought it was “getting a bit silly”. At best for the respondent, a reasonable person in the respondent’s position might consider that, as at the end of the dinner, the appellant was in two minds about being willing to sell the car. At worst for the respondent, they had reached agreement when the appellant said “okay” to sending the bank details. In any event, the appellant took time to think about the matter and then went ahead with sending his bank details so as to accept the respondent’s offer.
There are alternative “offer and acceptance” analyses such as, for example, the sending of the bank details was the offer to sell on the terms discussed at the dinner which was accepted by the respondent transferring the first tranche of $100,000, the understanding being that the balance of $5,000 would be held back until the respondent wished to take delivery. Yet a further alternative is that the respondent made an offer on the terms discussed at the dinner by transferring the whole price (less one dollar) which the appellant accepted by retaining the money and on the joint understanding that the balance of one dollar would be paid and full performance complied with when the respondent decided to call for delivery.
I have a clear preference for my first offer and acceptance analysis. However, the fact that more than one such analysis may be available is not, of itself, indicative that no final agreement was reached. I am satisfied that by no later than the time that the appellant received and retained the second tranche of the price ($4,999), an enforceable contract had been entered into.[116]
[116] Cf; King Tide Company Pty Ltd v Arawak Holdings Pty Ltd [2017] QCA 251 at [17]-[21].
The next important communication was the respondent’s email to the appellant in the early morning of 11 April 2013 at Item 9. I have previously set out the respondent’s evidence concerning this email and discussed the Judge’s findings at some length. The questioning of the respondent tended to focus on what he could recall as to his intention underlying some of the things said in the email. I repeat what I earlier said, the issue of present relevance is what would a reasonable person in the position of the appellant have understood upon receipt of the email.
A reasonable person in the position of the appellant, and in the context of the discussions at Carey Gully and the Stirling Hotel, would have understood the two dot points to be referring to the sale of the Virage as discussed at the Stirling Hotel.
The acknowledgement in the first dot point that the respondent would transfer $100,000 to the appellant’s bank account to reach it by Friday,[117] “as discussed” is entirely consistent with an agreement to purchase already having been concluded. The notion that a person would pay in advance of a binding contract, the sum of $100,000 for something priced at $105,000 is implausible. Of course, the respondent in a state of hypomania may well do the implausible. And, according to the respondent’s evidence, the $100,000 was by way of loan not purchase. However, the material question is what would a reasonable person in the position of the appellant have understood. The appellant knew nothing of any proposed loan. A reasonable person in the circumstances would have understood the foreshadowed payment of $100,000 to be by way of part payment of the purchase price.
[117] The Item 9 email was sent on Thursday morning at 1:44 am and the respondent presumably had been intending to transfer later that same day.
The language used in the second dot point does cloud the issue a little. The reference to the respondent intending to “draft a document regarding the sale …” is the first time this notion of a “document”, by inference either some form of sale contract or record of sale, arose in the evidence. Neither party in their evidence concerning the Stirling Hotel dinner said anything about a “document” featuring in their dinner discussion. Of course, any evidence by the respondent of a discussion at the hotel concerning the preparation of a document relating to a sale would have been quite inconsistent with the evidence the respondent did give. As it has transpired, the respondent said that he was unable to give any explanation for the second dot point in the email.
Leaving aside the reference to a document for the moment, the balance of the second dot point would be understood by a reasonable person in the position of the appellant as consistent with an agreement to purchase being in place. It speaks of the “final $5,000 payment to complete the transfer”. Whilst in simple purchase transactions it often will be the case that an agreement to be bound, payment of the price, and transfer of title will take place simultaneously[118] this was not the situation here, where a distinction between an executory agreement and its completion or execution, is manifest. In addition, the second dot point refers to insurance arrangements. The respondent, in effect, expressed a concern that the current level of cover might not be adequate. This would be perceived as, at least, being consistent with the respondent regarding himself as on risk with respect to the Virage.
[118] A purchase over the counter at a shop is a typical example.
I return to the reference to a document. There is no evidence sufficient to permit a finding as to what the respondent intended by this other than it was to be “regarding the sale”. More importantly, there is no evidence sufficient to permit a finding as to what a reasonable person in the position of the appellant would have understood it to refer. There is a possible inference, from the use of the phrase “as discussed” that reference to a “document” may have been made at the Stirling Hotel dinner. However, if so, there is nothing to assist as to by whom it was raised, if there was any agreement as to the need for a document, and as to what it would contain. The respondent’s email in Item 9 does not assist in any of these respects.
I make these further observations.
(i)The written context of the respondent’s reference to drafting and providing a document is such as to indicate that there was nothing further to be negotiated from the respondent’s perspective. He asked the appellant to peruse the document when it arrives, to make any appropriate amendments and then after receiving the $100,000 to sign it. The appellant is given a free hand in terms of appropriate amendments. This is understandable; the sale is a relatively simple one and the appellant is the vendor whose primary or perhaps only interest would be to receive the $105,000 before parting with possession of the Virage. It is difficult to imagine any amendment that would cause the respondent a concern particularly as it would have to be consistent with the parties’ discussions at the hotel in order to be binding.
(ii)As events transpired, the respondent did not provide such a document either before transferring the $100,000 or before transferring the second tranche of $4,999. The respondent was prepared to, all but, complete the transaction but for taking possession of the Virage in the absence of any such document.
(iii)As events transpired, the respondent did provide the appellant with a document headed “Contract for sale” a little less than four weeks later being the single page document sent by email to the appellant on 6 May 2013 (Item 22). Included in the respondent’s evidence in chief concerning Item 9, earlier set out, was the following.
I presume it was outlining the - I say 'presume' because it never happened, so I can't really - there's no proof of what the document was or would have been, so I can only assume that it would be something a little bit similar to what I did eventually forward to Mr Holt for his opinion, it was outlining the arrangement if I decided to purchase the car instead of him repaying the loan.
A reasonable person in the circumstances of the appellant is likely to have understood the document received on 6 May 2013 (Item 22) as being the document referred to by the respondent in the second dot point of his 11 April 2013 email (Item 9). In any event, as earlier noted, the Item 22 document does no more than record the basic terms – the parties, a proper description of the vehicle, the fact (being common ground) that it was not registered and the price.
(iv)If a document, in fact, was referred to during the Stirling Hotel dinner meeting, the spectre of Masters v Cameron is conjured up. It is not possible to make a concluded finding as to the effect of any discussion that may have occurred at the Stirling Hotel concerning a “document” and it is not suggested by the appellant that a concluded oral agreement was reached at that dinner so as to bring any reference to a document within the situation dealt with by Masters v Cameron.
As events transpired, any suggestion of the need for or expressed desire for a document at the dinner was overtaken and implicitly abandoned by later events. On the evidence that is available as to the manner in which the parties conducted themselves during April and May 2013, in particular: the evidence of the conversation that took place at the Stirling Hotel; the terms of the Item 9 email; the payment by the respondent of $104,999, the terms of the “document” ultimately produced by the respondent (Item 22); and the admissions made by the respondent to Messrs Dyson-Harvey and Williams and Ms Kitson (referred to earlier and again later in these reasons) the only realistic role of any such document would be the so called fourth (not referred to in Masters v Cameron) category, that is, the parties agreed to be bound in the manner I earlier described but expected to make or were open to making a further written contract in substitution which might contain, but only by consent, additional terms. At no time did the parties agree to additional terms.
As a consequence, when all the circumstances are considered, I, with respect, disagree with the Judge’s observation that the reference to a document is consistent with the third Masters v Cameron category (parties not bound unless and until a written contract comes into existence) and that the email was evidence which tended against a contract being formed.
The final matter concerning the Item 9 email concerns the last paragraph. I agree with the Judge’s finding that this was consistent with the respondent’s evidence that he wanted to keep “the purchase or potential purchase” of the Virage a secret from his family. There is evidence to the effect that this concern had been raised by the respondent in conversation with the appellant as early as the Carey Gully meeting. In any event, the appellant was on notice of this concern by no later than the email on Thursday 11 April 2013 at 1:44 am (Item 9). This is an important matter of context when consideration is given to later references by the respondent to a “loan” to the appellant.
To summarise to this point – my preferred view is that an agreement to buy and sell the Virage in its then state was entered into prior to the respondent’s Item 9 email. The agreement was partly written and partly by conduct (the provision of the bank account details). The Item 9 email is not inconsistent with this analysis and is largely supportive. The fact that over the next few days the respondent paid the whole of the price less one dollar, from an objective perspective (that of the reasonable recipient) is confirmatory. Human experience is such that it would be unusual for a person to pay the full price of a motor vehicle (particularly such a large amount as here) without believing that they have an enforceable contract. Ordinarily, a person who received the full price of a motor vehicle and retains it, in the absence of dishonesty (and this has not been suggested) ordinarily does so on the understanding that they have a legal entitlement to the money.
The respondent retaining one dollar of the agreed price was very strange indeed. However, whatever the respondent thought he was achieving by “teasing” himself in this way he was not conveying anything to the reasonable person in the position of the appellant other than odd behaviour. In my view, the respondent’s behaviour here may simply have been a product of confused thinking in conflating the notion of formation of contract with performance of contract.
The reasonable person in the position of the appellant would have understood the withholding of the final dollar to represent incomplete performance on the respondent’s part. As explained by the respondent to the appellant, this was because, at the time he paid the $4,999 tranche, whilst he “virtually” owned the car he did not want to complete the purchase then. A reasonable person, in all the circumstances, would have been led to believe, as did the appellant, that the respondent did not want to take possession of the Virage at the time he paid the $4,999 – and this was so. The appellant gave evidence that the respondent wanted and needed to build a garage in which to store the Virage. The respondent agreed in cross-examination that during the discussion at Carey Gully, he told the appellant that he could build a garage on his property in which to store it.
Whether or not at some time after the payment of the $4,999, the respondent changed his mind and decided that he did not wish to acquire the Virage at all and convinced himself that he was not bound until he had decided to pay the outstanding one dollar, is of no moment and does not undermine the analysis.
This is sufficient to decide the appeal in favour of the appellant. However, I will (more briefly) consider the remaining items in the chronology with a view to determining whether the parties by their conduct vis a vis each other, occurring after the putative time of contract formation, have behaved inconsistently with my conclusion.
Items 3, 4, 5, 6, 10, 12, 13, 20, 23, 24, 25, 27, 28, 29, 31, 32 and 33 are of no assistance. Some are simply irrelevant to the question of contract formation and whilst others might be suggestive of a subjective view of the respondent, such was not communicated to the appellant or otherwise shared by the appellant.
Item 11 is the email to Ms Cunneen later on Thursday 11 April 2013 by which the respondent organised the $100,000 transfer. It was copied to the appellant and makes reference to a “loan” to the appellant. I have previously discussed this email at length. The Judge found that the respondent was using this terminology to disguise from his family his thoughts of purchasing the Virage. The appellant said he read the email in this way – “I assumed it was the same story he was telling his family, that it was a loan …”. I am satisfied that a reasonable person in the circumstances of the appellant, as earlier discussed (including the Judge’s finding that a loan had never been discussed with the appellant) would have understood this email in the same way.
Item 14 is the transfer of the first tranche of $100,000 on Friday 12 April 2013. This, together with the evidence concerning it, has already been canvassed at length. The Judge made this important finding with which I agree.
I accept that upon receiving this money, Mr Holt formed the view that the respondent intended to purchase the Virage.
The payment of this money is quite consistent with a pre-existing contractual arrangement or in the alternative with the formation of a contract to sell and purchase with the transfer of the $100,000 (on the understanding that a further $5,000 is to come) being an acceptance by conduct, if the appellant’s provision of bank details were to be characterised as an offer to sell on the terms discussed at the Stirling Hotel rather than as an acceptance.
Item 15 is the drive in the Hills on Saturday 13 April 2013, that is, after the first tranche of $100,000 had been transferred but before the second tranche of $4,999 was to be transferred. For the reasons earlier given, I find it more likely that the reason given by the appellant for not driving the Virage was that he wanted to wait until he took possession. The evidence of this event overall carries little weight but, if anything, it lends support to the existence at this time of an unexecuted or not fully executed contract.
Item 16 is the transfer of the second tranche of $4,999 on the evening of Sunday 14 April 2013 and morning of Monday 15 April 2013 together with the parties’ evidence concerning this issue. Item 16 and the respondent’s evidence concerning it is suggestive of the respondent’s confused and incorrect subjective view of what he thought he was achieving. None of this was conveyed to the appellant as the respondent acknowledged. The fact of the payment of the second tranche and of its receipt and retention by the appellant supports the existence of a contract for reasons earlier discussed.
Item 17 is the “flexible contract for sale” email sent by the respondent to the appellant on Monday 15 April 2013 at 11:48 am, that is, after transferring the second tranche of $4,999. It states that the conveyancing documents attached “probably could be applied to any sale, including cars”. It is a nonsensical statement and adds nothing to the picture in place after the Item 9 email. The appellant regarded the email and attachments as irrelevant to him as most reasonable people would.
Item 18 is the three conversations with Messrs Dyson-Harvey and Williams and Ms Kitson, the terms of which have been set out earlier. The appellant seeks to rely on these statements by the respondent as admissions against interest to the effect that he had bought the Virage. I deal further with this issue later in these reasons.
Item 19 is the respondent’s conduct in gluing a two dollar coin to his kitchen counter and the discussion he had about this with the appellant. I have earlier considered the relevance of this. It is not inconsistent with the contract analysis. If anything it is consistent with, indeed supports, the position that the respondent’s subjective belief or understanding was a conflation of formation of an executory contract with its performance or execution.
Item 21 is the email sent on Monday 29 April by the respondent to various persons including the appellant soon after his release from hospital. The discussion by the respondent of his “fantasy” is consistent with and reflects his conflation of formation and performance. Again, with respect, I disagree with the Judge’s finding that this email containing the respondent’s subjective and ambiguous views concerning his “fantasy” is evidence tending against the earlier formation of a contract.
Item 22 is the single page draft contract sent to the respondent on 6 May 2013. I have already dealt with its relevance. I have concerns about the Judge’s finding that the appellant did not sign and return the document, for the reasons earlier given. However, whether he did or did not does not affect my analysis of the formation of the contract. Furthermore, the presentation of this document by the respondent to the appellant demonstrates that at least as at 6 May 2013, and notwithstanding whatever else may have passed between the parties prior thereto, the respondent still was content with the simple terms discussed at the Stirling Hotel – parties, description and price.
Item 26 is the email from the respondent to the appellant sent on 10 June 2013 in which he states that if the appellant would email the chassis and engine numbers he will update his AMOC application and “prise the $2 coin off the counter”.
As my reasons to this point would indicate, I disagree with the Judge’s view or, at least, the relevance thereof, that this email represented “a continuation of [the respondent’s] ongoing consideration of purchasing the Virage”. In the circumstances leading up to 10 June 2013, as I have described and analysed them, a reasonable person in the position of the appellant would have understood the email as disclosing an intention to delay the final act of performance on the respondent’s side of the transaction, of paying the outstanding one dollar.
I add here that the reference to updating the AMOC application as at 10 June 2013 is consistent with the AMOC coming into possession of such an application sometime in June 2013 so as to explain the provenance of the note in its records of the respondent having “acquired” the Virage in June 2013 (Item 34).
Item 30 is the respondent’s email to Mr Forshaw on 9 July 2013 in which he stated “I declined to drive until I take possession”. I have dealt with the issue earlier.
Item 34 is the affidavit evidence sought to be adduced on appeal by the appellant as fresh evidence. I have canvassed the potential value to the appellant’s case earlier. Before considering further whether or not this evidence should be admitted on the appeal, I need to determine whether or not or the extent to which admissions by the respondent, which are of mixed fact and law, and relied on by the appellant are admissible on the question of whether a contract to buy and sell was formed.
The respondent’s putative admissions
Under this heading, I consider the admissibility of:
(i)the statements made to Messrs Dyson-Harvey and Williams and Ms Kitson (Item 18);
(ii)the statement made to AMOC in June 2013 (to be implied) that the respondent acquired the Virage in June 2013 (Item 34); and
(iii)the assertion of an existing contract to be implied from the statement in the email of 9 July 2013 to Mr Forshaw “I declined a drive until I take possession” (Item 30).
Whether or not an enforceable contract exists involves a mixed question of fact and law; a conclusion based on the formation of an opinion as to the effect of relevant law applied to the facts believed to have been established. Most lay people do not have much of an understanding of the technical elements making up a binding contract and are not really equipped to form (or, at least adequately justify) such an opinion. However, the notions that “I own” or “I have bought”, particularly in the context of negotiations for the sale and purchase of a motor vehicle, are relatively straightforward concepts understood by most people. The respondent was experienced in buying motor vehicles. The authorities, on balance, are to the effect that a statement by a person to the effect that there is or is not a concluded contract can be admissible.[119]
[119] See for example, Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149 at [106] (set out earlier) and Pitcher v Langford (1991) 23 NSWLR 142 at 160 (Handley JA), 146 (Kirby P).
In the present case, the statements in (i) to (iii) above are really to the effect that the respondent is aware of facts that caused him to believe that he had purchased the Virage. However, I would give each of them (particularly that in (iii)) limited weight in the circumstances of this matter because of the other evidence, earlier referred to, concerning the respondent’s subjective and confused understanding.
In any event, I would reach the same conclusion that on my analysis of the parties’ interactions they entered into a binding contract no later than 15 April 2013, even in the absence of each of the admissions relied on by the appellant. As such, the affidavit of the appellant sought to be admitted as fresh evidence on appeal is not sufficiently probative and would not have sufficient influence on the outcome of the appeal to warrant its admission. I would refuse the appellant’s application that the Court receive this evidence.
Terms
There is one further matter that needs to be considered. The respondent maintained on appeal that important terms had not been agreed by the parties. Whilst the matter was explored, to a limited extent, in evidence during the trial, it did not feature in his Honour’s judgment.
The Virage was unregistered and not in registrable condition. Registration is not a prerequisite to the formation of a contract to sell a motor vehicle. According to the evidence, the Virage could have been brought into registrable condition and would need to have been if it were to be driven on the public roads. Plainly, the respondent wished to have the Virage registered and to be able to drive it on public roads. However, he was aware that the restoration of the Virage still needed to be completed before it could be registered and that the price was reduced accordingly.
During the negotiations, he discussed with the appellant what needed to be done in order to put the Virage in registrable condition and he appeared content (indeed enthusiastically confident) that he could do this work albeit under the supervision of the appellant, to the extent necessary. The respondent wanted and offered to buy the Virage in its “as is” condition.
I have considered whether at any time during their negotiations the parties intended that the contract was to include a term to the effect that the appellant would supervise or otherwise assist in the restoration process and that no agreement was reached absent such a term. In my view, there is no evidence to support this. The evidence rises no higher than that the question of such supervision was possible and, as I have earlier observed, the respondent anticipated that his then good friend would assist him if necessary.
Also, in this context, the respondent raised on appeal the statutory framework applicable to a “private import” or “personal import” as the appellant described the Virage.[120] The respondent did not go so far as to submit that any contract for sale of the Virage as a “private” import in an unregistered state would be tainted by illegality. The submission, as I understand it, was to the effect that this statutory framework and the restrictions and other requirements imposed on the appellant as a consequence of the Virage being a private import were such as, objectively, to render it unlikely that the parties, particularly, the appellant, reached agreement to sell the Virage whilst in that state.
[120] The Motor Vehicle Standards Act 1989 (Cth) and regulations thereunder.
In the absence of a plea of illegality, it is unnecessary to delve into the details of the statutory framework. Both parties were on notice that the Virage was a private import which may impose restrictions on how the Virage might be dealt with. The appellant in his evidence concerning the Carey Gully meeting said that he explained the issue to the respondent in these terms. That evidence was not challenged.
He said 'Well, you have two of these'. I said 'That's right, I have'. He said 'Well, you could sell one'. I said 'Well, I could sell one but this car is a private import. I've imported; I have to register it and it needs to be put together and painted so I'll need to do that before I sell it if I decide to sell it'.
. . . .
Well, he said 'So you would sell it at 105,000?' I said 'Well, I've explained that I can't really sell it because the car is a personal import which means I have to register the vehicle because it's come in under a licence for me, as the personal importer and because of that I need to finish the car and register it'.
Each was free to make their own further enquiries. There is nothing in the evidence to suggest that either party was so concerned about this as to not proceed with the sale and purchase. There was no mention of the matter at the Stirling Hotel meeting, according to the evidence, nor in any of the subsequent communications.
Conclusion
Both parties’ oral and written submissions were extensive and detailed. I have not identified each of the respondent’s contentions and dealt with them seriatim. However, I have had regard to them when undertaking the analysis set out in these reasons. In the respondent’s overview in his written submissions, the following primary contentions are summarised.
It is contended that the appellant’s submissions failed to have regard to the relevance of the effect of and implications from the respondent’s serious mental health condition in informing an objective understanding of the facts, “particularly where both parties were aware [of] and acting in the context of that condition”. However, the evidence of the extent to which the appellant was aware of this condition or appreciated its seriousness, prior to 15 April 2013, is limited. It was after this date that the respondent was hospitalised to the appellant’s knowledge and his conduct became more erratic and the language used in his emails less temperate. There is no evidence that the appellant was aware that the respondent was suffering from a diagnosed serious mental illness before then. In any event, the Judge found that, at all material times, the respondent had contractual capacity. Whilst the respondent’s personality, behaviour and language are matters to be considered when determining what a reasonable person in the position of the appellant would understand from the various communications, they were not such as, in the circumstances here, to undermine the analysis I have favoured.
A second primary contention is that the appellant, in pressing for an objective construction resulting in a contract for sale, has ignored the following objective evidence and findings.
(i)it was ‘common ground that no agreement to purchase the Virage was reached at the meeting in Carey Gully on 4 April 2013’,
(ii) Mr Holt’s evidence was that he was ‘astonished to receive the $100,000 deposit on 11 August 2013’,
(iii)Mr Bunney’s email of 11 April 2013 to his bank, copied to Mr Holt, in which he attaches the transfer form describing the transfer of the $100,000 as ‘for loan to David Terance Holt’,
(iv) the Trial Judge’s finding that when Mr Holt took Mr Bunney for a drive in the Virage on 13 April 2013, Mr Bunney said ‘he would not drive the car until he decided to buy it’ and that at no time did Mr Bunney ever drive the Virage,
(v) Mr Holt’s visit of Mr Bunney in the RAH C3 Mental Health Ward and Mr Bunney’s email, sent to Mr Holt on 29 April 2013, in which he confirms his hospitalisation under a compulsory mental health order and his hypomania,
(vi) The same 29 April 2013 email confirming Mr Bunney has ordered ‘2 car covers from the U.S.A for Terry, as a present, to protect his 2 Virages’ (and confirming one of the two is the Virage the subject of these proceedings),
(vii) Mr Holt’s evidence that he understood from the 29 April 2013 email that Mr Bunney was still unsure whether Mr Holt would go through with a sale of the Virage and the fact that Mr Holt never replied to the email confirming there was a settled agreement,
(viii)provision by Mr Bunney of draft contracts on 6 May 2013 ‘for Mr Holt’s perusal’, never objectively acknowledged or receipt of confirmed by Mr Holt and found by the Trial Judge not to have been signed or sent back by Mr Holt,
(ix) Mr Holt’s evidence that he thought an agreement was confirmed with Mr Bunney on 6 May 2013, by him signing and returning the draft contracts to Mr Bunney, which the Trial Judge found never occurred [R149],
(x)Mr Bunney’s email of 26 May 2013, copied to Mr Holt, in which he confirms Mr Holt owns 7 Aston Martins, including the Virage the subject of these proceedings,
(xi)Mr Bunney’s email of 9 April 2013 to Anthony Forshaw of Aston Service, UK, in which he states he is ‘intending to purchase’ a Virage and the follow up email on 8 July 2013 in which he confirms ‘The car still belongs to Terry Holt’
(xii)There is no email, correspondence, written document or objective contemporaneous evidence of Mr Holt ever offering terms of sale for the Virage, or accepting or confirming that the parties had reached agreement or entered into an agreement or agreed terms for sale of the Virage,
(xiii)Mr Holt’s evidence the car was a personal import, on which no duty or taxes had been paid, which, as a matter of law (Statute) could not legally be sold by him without his first obtaining SA State Govt. approval to register (Regency Park certification).
(xiv)The legal requirement that as a personal import, the car could only be registered in Australia by Mr Holt, in his name, as the private importer and in relation to which Mr Holt gave evidence the work required to bring it to registerable standard would require his oversight and involvement.
(Footnotes omitted)
I have already canvassed the matters in (i) to (iv); they form part of the overall circumstances which I considered, but do not undermine the analysis. The matter in (v) is too late to be of significance. The matters in (vi) to (ix) carry little weight for the reasons I have given. The matter in (x) is equivocal and too late. The matter in (xi) expresses a subjective view only, as earlier discussed. The matters in (xii) to (xiv) have been dealt with earlier.
Thereafter, the respondent in his written submissions directly addresses the appellant’s various submissions in support of his seven grounds of appeal. Appeal ground 1 is as follows.
The primary judge erred in mixed fact and law in failing to find, in all the circumstances, objectively viewed, that the Appellant and Respondent had entered into a binding contract for the sale and purchase of the Appellant’s 1992 Aston Martin Virage (the Virage) for a price of $105,000.
I have found this ground to have been established. As such, and whilst, as part of my reasoning, I have considered the submissions raised by the parties respectively in support of and in opposition to appeal grounds 2 to 7, it is not necessary that I make findings concerning the specific errors of reasoning by the Judge asserted by the appellant, nor that I specifically address each of the parties’ respective submissions concerning grounds 2 to 7.
As a result of their dealings with one another between 4 April 2013 (Carey Gully) and 15 April 2013 (payment of the second tranche), 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. That contract has been partly preformed but remains on foot. The parties’ subsequent communications and conduct were potentially available in order to:[121]
(i)demonstrate that the parties had no intention to be bound until other matters had been agreed;
(ii)demonstrate that the parties had no intention to be bound unless and until a formal contract was drawn up and agreed;
(iii)demonstrate that the parties were still engaging in contractual negotiations, negativing the existence of an existing concluded contract; or
(iv)shed light on the proper interpretation of the earlier communications alleged to constitute the contract.
None of the parties’ subsequent communications and conduct, in any of these ways or otherwise, tells against my primary conclusion. I have decided this matter following a consideration of the parties’ relevant interactions objectively assessed. However, I am by no means satisfied that the conclusion I have reached was not, in fact, congruent with the respondent’s subjective intentions at the time. In any event, even if the Judge’s finding that the respondent only ever intended to lend the $100,000 is correct, there is no suggestion in the evidence that the appellant had any awareness of this.[122]
[121] Sagacious Procurement Pty Ltd v Symbion Health Ltd [2008] NSWCA 149.
[122] For a discussion of the limited role that subjective intentions may still have in the formation of a contract, see Babsari Pty Ltd v Wong [1999] QSC 326; [2000] 2 Qd R 576 at 585-589, [35]-[47].
I would allow the appeal and set aside the Judge’s order that the appellant pay the respondent $145,583.94 inclusive of interest.
In these circumstances, the appeal against the Judge’s costs orders in favour of the respondent is rendered otiose. I would set aside the Judge’s costs orders. I would hear the parties on the costs of the trial and of the appeal.
HUGHES J: I would allow the appeal for the reasons given by Nicholson J. I join the orders he proposes.
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