Koch v Carbone
[2016] SADC 103
•23 August 2016
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
KOCH v CARBONE
[2016] SADC 103
Judgment of Her Honour Judge Davison
23 August 2016
MAGISTRATES - APPEAL AND REVIEW - SOUTH AUSTRALIA
MINOR CIVIL REVIEW
Application to review a Magistrate's decision in a minor civil claim pursuant to s 38 of the Magistrates Court Act 1991.
Held: Application dismissed. Decision of the Magistrate affirmed. No order as to costs.
Magistrates Court Act 1991 ss 38(1), 38(4), 38(6) and 38(7), referred to.
Davies v Australian National Railways Commission (1993) 177 CLR 472; Fox v Percy (2003) 214 CLR 118; TNT Management Pty Ltd v Brooks (1979) 53 ALJR 267, considered.
KOCH v CARBONE
[2016] SADC 103Introduction
This is an application for review of a decision made by Magistrate Mr Gumpl on 19 May 2015. The claim was for repayment of the sum of $20,000 being the amount of money that the applicant asserts he paid to the respondent as a result of an oral contract entered into on or about 12 February 2013.
Mr Gumpl found that he was not satisfied on the balance of probabilities of the existence of the contract in the terms that had been pleaded or relied on by the applicant. Further, he found that even if such a contract had existed it was not enforceable as a result of illegality.
The Pleadings
The applicant’s claim dated 12 August 2014 was pleaded in the following terms:[1]
[1] Form 3 Minor Civil Action – Claim and Particulars of Claim annexed filed 12 August 2014.
1. In or about early February 2013, Mr Koch contracted with Mr Carbone to recover outstanding rent and damages due by tenants located at 25 Angas Avenue, Vale Park, and, thereafter, in the absence of the tenants vacating the premises in accordance with their lease contract, to affect the vacation of the premises.
Particulars
1.1The contract was oral.
1.2It was an express term of the contract that Mr Koch pay to Mr Carbone the sum of $20,000 (‘Payment’)to meet his reasonable fees and expenses.
1.3On 20 February 2013, Mr Koch paid to Mr Carbone the sum of $20,000 to perform the contract.
2. On or about February 20 2013, the tenants voluntarily vacated the premises, prior to Mr Carbone performing any aspect of the contract and on or about 15 July 2013, Mr Koch sought the return of Payment on the basis that the contract had by reason of the voluntary vacation and non-performance under the contract by Mr Carbone, been wholly frustrated.
3. Mr Carbone has failed to repay the Payment to Mr Koch.
AND the plaintiff claims return of the Payment in the sum of $20,000.00
AND the Plaintiff claims interest;
AND the Plaintiff claims costs.
The defence was a complete denial of the claim including the existence of the contract in any form.
The Minor Civil Trial
The conduct of a minor civil action is governed by s 38 of the Magistrates Court Act 1991 (the Act). Section 38(1) provides that:
38—Minor civil actions
(1) The following provisions are applicable to the trial of a minor civil action:
(a) the trial will take the form of an inquiry by the Court into the matters in dispute between the parties rather than an adversarial contest between the parties;
(b) the Court will itself elicit by inquiry from the parties and the witnesses, and by examination of evidentiary material produced to the Court, the issues in dispute and the facts necessary to decide those issues;
(c) the Court may itself call and examine witnesses;
(d) the parties are not bound by written pleadings;
(e) the Court is not bound by the rules of evidence;
(f) the Court must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
The learned Magistrate heard evidence from the applicant, Kyle Koch the applicant’s uncle, the respondent, Mr Carnemolla and Mr Weston the tenants, received a number of exhibits and heard submissions.
The Decision
The learned Magistrate summarised the evidence of the applicant:[2]
[2] Judgment of Magistrate GC Gumpl 19 May 2015 at [29]-[30].
29. Mr Koch gave the following evidence, when questioned by the Court:
·He is an insolvency practitioner.
·He was joint owner of the property with his wife. The property was purchased directly from his uncle in approximately 2012. He had previously owned investment properties.
·He initially met with Mr Carbone in the evening of 7 February, where they had a beer together.
·Mr McGrath was his solicitor at the time, and had been so for many years.
·He met Mr Carbone again on 12 February and [sic] Cafe Buongiorno in Norwood. The Tribunal orders had been made the day before. Mr Koch initiated that meeting. He told Mr Carbone that he needed to have a coffee with him to discuss his tenants.
·The purpose of seeking the eviction was because the tenants were not paying rent.
·He had genuine concerns about his safety in carrying out the Tribunal’s order and was concerned that the tenants might try to re-enter the property following eviction by the bailiff. He did not think that the police would ‘turn up’ or act on his concerns, based on his past experience. He needed protection and feared reprisals by the tenants for evicting them.
·He did not seek legal advice, but he read a Tribunal customer service counter brochure.
·He contracted with Mr Carbone to ‘talk to the tenants [and] convince them to leave’. Mr Carbone had many years of experience in dealing which such matters.
·The purpose of the meeting with Mr Carbone on 12 February was to tell him about the Tribunal’s order. He thought that if the tenants tried to re-enter the property, Mr Carbone could be ‘helpful’.
·After being questioned about why he was prepared to pay $20,000 on the spot, without first attempting to negotiate a fee decrease, Mr Koch said it was for his and his family’s protection.
·After being questioned about how Mr Koch thought he was going to enforce the oral contract with Mr Carbone, and why he kept no record of the meetings or proof of the oral contract, Mr Koch replied that he had dealt with Mr Carbone on many occasions in the past and had no reasons to mistrust him.
·After being questioned about whether he was a gambler, Mr Koch stated that it was well known that he owned thoroughbred horses.
·After Mr Koch explained that his meeting with Mr Carbone on 12 February was held in circumstances where time was of the essence, he was asked why he did not get his uncle to transfer the $20,000 directly to him electronically instead of using Mr Carbone as a courier. Mr Koch replied that his uncle ‘was not internet savvy’.
·In response to the Court expressing surprise that Mr Koch would feel intimidated by his former tenants, after hearing them give evidence, Mr Koch stated that ‘It only takes one HIV positive needle’. Mr Koch claimed that his former tenants lied when they were questioned about whether other people resided at the property.
·He denied ever asking Mr Carbone to do anything illegal.
30.Mr Koch gave the following evidence when he was cross-examined by Mr Carbone:
·On 11 May, on behalf of his employer (Anthony Matthews & Associates), Mr Koch instructed Mr Carbone in the matter of Instyle Hardware Pty Ltd. During the course of that Saturday morning telephone call, he did not mention the oral agreement which was a ‘personal matter’, and the outstanding $20,000.
·The reason Mr Koch did not mention the outstanding $20,000 while giving instructions to Mr Carbone on 11 May by telephone was because his employer, Mr Matthews, was keen to resurrect his business relationship with Mr Carbone. Mr Koch did not call Mr Matthews to verify that fact.
·Mr Koch admitted that after he instructed Mr Carbone over the telephone, he emailed Mr Carbone relevant supported documents that morning.
·When Mr Carbone tendered evidence that he was in Western Australia on 12 February (that he left Adelaide on 11 February and returned on 14 February), Mr Koch replied that ‘he believed’ he met with Mr Carbone the day after the Tribunal order was made (footnotes omitted).
·In response to the proposition the sale of the property was not urgent, and that settlement for 1 block did not occur until 24 January 2014, Mr Koch said time was of the essence in selling the property because the tenants were not paying rent.
The learned Magistrate found that he was an unimpressive witness who had exaggerated his evidence and whose behaviour was inconsistent with his claim.[3] He said:
33.Mr Koch’s evidence about the threat posed by his tenants towards him and his family appeared to be grossly exaggerated, particularly after hearing the evidence of the tenants, who stated that they could not recall or did not know where he lived, details about his children, where his children went to school and so on. Mr Koch’s concern about being infected by a HIV positive needle (‘it only takes one’) appeared to have only occurred to him on the day of the resumed hearing. Further, it is strange that three months after the alleged contract was frustrated, Mr Koch telephoned Mr Carbone to instruct him in another matter, without even mentioning $20,000.
[3] Ibid at [33].
The learned Magistrate summarised the evidence of Mr Carnemolla who was called by the respondent:[4]
[4] Ibid.
·Mr Carbone called Mr Carnemolla as a witness.
·He is a disability support pensioner.
·He knew Mr Koch as was his old landlord.
·He found the rental property through advertising.
· The person who co-signed the least [sic] with him was Phil Weston, who stopped paying rent.
· He left the property the day before he went to the Tribunal. He handed his keys in at the Tribunal.
· There was no animosity between himself and Mr Koch; they caught the lift down together after the Tribunal hearing and shook hands.
· When questioned about what state the property was in at the time he resided in it, Mr Carnemolla said that as far as he knew, a fly screen was damaged in his room because his dog had torn through it. However, he described the house as being ‘old’, ‘rundown’ and ‘pretty under the weather’. When Mr Carnemolla left the property, there were no broken windows.
· He explained that he was not at the property half of the time because he was ‘having problems with Phil’.
·He never heard Phil or his friends threaten Mr Koch.
· He mentioned to Mr Koch at the Tribunal that he found used needles underneath the sink.
· In cross-examination, he admitted that Phil borrowed $20 from Mr Koch on an occasion Mr Koch came to the property to mow the lawn.
· In cross-examination, he admitted that he has been treated for brain damage.
· In cross-examination, that he was not at the property on the weekends because ‘he didn’t like Phil’s drug habit’.
· In cross-examination, he admitted that he had a history of violence against police and that he had been charged at the property.
The learned Magistrate found Mr Carnemolla to be ‘on the whole, a relatively honest witness’.[5]
[5] Ibid at [34].
The learned Magistrate summarised the evidence of Mr Weston who was also called by the respondent:[6]
[6] Ibid.
· Mr Carbone called Mr Weston as a witness.
· Mr Weston denied that he was an uncooperative tenant. He said that he was admitted to the Royal Adelaide Hospital for four weeks for an emotional breakdown. However, he kept in touch with Mr Koch and said that he would pay his rent after he was discharged.
· He said that when he was ready to go home, he was served with an eviction notice. Mr Koch told him it was too late.
· He described the drug allegations as ‘totally untrue’. He denied being a recreational drug user.
· He denied threatening Mr Koch: ‘No way, we weren’t aggressive towards him.’
· He admitted to co-signing a lease for the property with Mr Carnemolla.
· When asked whether anyone other than himself and Mr Carnemolla lived at the property, he said that they only had a friend stay for a few nights.
· He admitted that he did not return his set of keys or remote control to the property.
· He denied returning to the property after being discharged from hospital.
· He admitted to borrowing $25 from Mr Koch ‘to get into town, for a bus fare and food’.
· He denied not keeping Mr Koch informed of his whereabouts.
The learned Magistrate found that Mr Weston ‘was not an impressive or convincing witness’.[7]
[7] Ibid at [35].
The learned Magistrate summarised the evidence of the respondent.[8]
[8] Ibid.
· When he received the letter from Mr Koch’s solicitor dated 29 April 2014 (Final notice of claim before action), Exhibit D4, this was the first time the allegations were put to him.
· Mr Koch explained that the letter drafted in response by his solicitor, dated 20 May 2014, raised the ‘courier’ issue from the beginning i.e. that he accepted $20,000 from Mr Koch’s uncle in Sydney and couriered it to Mr Koch in Adelaide. In denying that he received the money in his pleading, he was responding to the text of Mr Koch’s claim that Mr Koch paid Mr Carbone (directly).
· He admitted that he didn’t ask for a receipt or count the money; he was simply ‘doing someone a favour.’
· He explained that as a licenced process server, he cannot ‘go outside the rules’.
· When collecting $20,000 from Mr Koch’s uncle in Sydney, Mr Koch said words to Mr Carbone along the lines of: ‘Tarquin [Mr Koch] is in a jam. Is he gambling again?’
· On 21 February 2013, he went into Mr Koch’s office and gave him the money. Mr Koch said, ‘Thanks mate’. Mr Carbone then went in to see Mr Matthews.
· In Mr Carbone’s diary for 2013, Exhibit D7, the name ‘Tony Matthews’ appears next to a circled 5pm in blue pen on Thursday, 21 February 2013.
· Mr Carbone conceded that his business relationship with Mr Koch’s employer, Anthony Mathews [sic], had soured after all of the proceeds of a particular liquidation (‘the Seabay matter’) had been consumed in liquidators’ fees, leaving Mr Carbone and creditors out of pocket.
· He always charged at the rate of 30% of the amount sought.
The learned Magistrate found that the respondent ‘was a marginally more impressive witness than Mr Koch, [the applicant] although a somewhat belligerent and intemperate one’.[9]
[9] Ibid at [36].
The learned Magistrate concluded:[10]
37 The outstanding amount of rent Mr Koch sought was $1282. The tribunal had already ordered tenant Mr Carnemolla to pay that amount at the rate of $20 per week, with the first payment due on 22 February 2013.
38 Mr Carbone gave evidence that if he had accepted the assignment to extract the rent from the tenant(s), which he refutes, he would have charged Mr Koch his usual fee, namely 30% of the amount sought. In this case, had Mr Carbone agreed to provide the service of obtaining unpaid rent, he would have charged $384 or thereabouts. Yet Mr Koch would have the Court believe he was prepared to pay Mr Carbone $20,000 for such a service without advice or debate. Whilst the Court has been presented with clear evidence that Mr Koch’s uncle paid $20,000 to Mr Carbone, this falls far short of proof that such a payment was in furtherance of the contract that Mr Koch asserts arose.
39 Mr Koch gave evidence that, although he instructed Mr Carbone on another matter months after the so-called frustrated contract, he failed to raise it at all. His reason for not doing so was that he was instructed by his employer, Mr Matthews, to proceed diplomatically with Mr Carbone for business reasons. Yet Mr Koch failed to call Mr Matthews to corroborate this part of his story.
40 Further, Mr Carbone gave evidence that at the date of receiving instructions from Mr Koch in May, the relationship between Mr Carbone and Mr Matthews was normal and cordial and it was only after that date that differences emerged between them. In other words, Mr Koch has failed to give any reasonable account of why he did not raise the issue of the $20,000 with Mr Carbone when he had every opportunity to do so. This suggests that other issues were at play and seriously detracts from Mr Koch’s assertions that a contract existed.
41 The tribunal had already made orders in the matter. There was no convincing reason to hire Mr Carbone, let alone to agree to pay him $20,000 on the spot, without seeking any counsel or advice. Mr Koch made no note of the meeting and was wrong about the date the meeting took place. The real reason why Mr Carbone was paid $20,000 may never be known by anyone other than the protagonists. However, the onus of proof remains with Mr Koch.
42 At first blush, Mr Carbone’s explanation that he was merely a courier doing Mr Koch a favour appeared dubious, but after considering the whole of the evidence, I prefer that explanation to Mr Koch’s unsubstantiated claim that the parties entered into a contract that was subsequently frustrated.
43 The existence of the oral contract and its terms as pleaded by Mr Koch has not been proved on the balance of probabilities. Even if the oral contract did exist, it appears to be an attempt to circumvent the clear legislative scheme for evicting tenants prescribed by the Residential Tenancies Act, and is not a bargain the court should enforce.
[10] Ibid at [37] – [43].
The learned Magistrate dismissed the applicant’s claim.
Application for Review
The applicant, Tarquin Koch, has applied for a review of the learned Magistrate’s decision pursuant to s 38(6) of the Act.[11] The grounds of review were set out as follows:
[11] FDN 14.
1. The judgment of the Magistrate was against the weight of the evidence.
2. The Magistrate’s decision that the appellant had not discharged the onus of proof of showing that the appellant had entered into a contract with the respondent on the terms alleged by the appellant was:
2.1Against the weight of the evidence including the admissions made by the respondent;
2.2Against the evidence, or glaringly improbable, in the light of the finding of the Magistrate that the respondent had been paid the sum of $20,000.00.
2.3 Based on findings as to the respective credibility as witnesses of the appellant and the respondent which such findings were erroneous in the light of the evidence as a whole and which were also erroneous as having been formed by the Magistrate in circumstances where procedural fairness was not afforded to the appellant including in that:
(a) The Magistrate had expressed views to the appellant at the end of the first day of trial which indicated to the appellant that the appellant need not call the further witnesses which the appellant otherwise proposed to call;
(b) The Magistrate then drew adverse inferences as to the appellant’s credibility by not calling further witnesses including Mr Tony Matthews;
(c) The Magistrate did not permit the appellant to give further evidence upon the adjourned hearing of the trial of the action.
3. The Magistrate erred in failing to find that the respondent was liable to repay the sum of $20,000.00 as moneys had and received by the respondent to the use of the appellant, or by reason of being under a restitutionary obligation to the appellant, even if the Magistrate was not satisfied that the appellant had established the contract alleged by the appellant in the action.
4. The Magistrate erred in law in regarding the contract alleged by the appellant was not being one which the Court should enforce.
5. The Magistrate did not determine the action in accordance with equity, good conscience and the substantial merits of the case and did not afford procedural fairness to the appellant.
Hearing of the review
The matter came before me on 18 April 2016. The applicant made application that he be permitted to be legally represented pursuant to s 38(4)(a)(iii) and s 38(7) of the Act. This was opposed by the respondent. The applicant is a professional man who has had the assistance of legal practitioners in preparing his case, as had the respondent. I was not satisfied that the applicant would be unfairly disadvantaged if not represented by a legal practitioner and declined the application. The applicant then said he was not in a position to proceed with the matter on the day of hearing as he was not prepared.
I then set a timetable for the filing of Outlines and other material and adjourned the matter to a hearing date on 4 July 2016.
Nature of the Review
Section 38 of the Act sets out the power of this Court on an application for review. In particular the Court may inform itself as it thinks fit and is not bound by the rules of evidence. On the hearing of an application for review the Court must act in accordance with equity, good conscience and the substantial merits of the case, without regard to technicalities and legal forms.
I am obliged to accept the advantage enjoyed by the learned Magistrate in a situation where the decision is based upon his impression as to the credibility of witnesses. In particular a finding of fact made by the learned Magistrate based on the credibility of a witness, may only be set aside on appeal where the decision is either manifestly wrong by reason of error indicated by incontrovertible facts, or uncontested testimony, or is glaringly improbable or is contrary to compelling inferences in the case.[12]
[12] See, for example, Devries v Australian National Railways Commission (1993) 177 CLR 472 at 479.
However, as was observed in Fox v Percy:[13]
… 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.
[13] (2003) 214 CLR 118 at 127.
Any inference drawn or relied upon must reasonably arise from proven acts or circumstances.[14]
[14] See TNT Management Pty Ltd v Brooks (1979) 53 ALJR 267 at 349.
Upon the hearing of the review, Mr Koch appeared as did Mr Carbone.
As observed earlier, and as can be seen from the terms of s 38 of the Act, the trial of a minor civil action is essentially inquisitorial in nature and the Court is entitled to elicit information from the parties, the witnesses and by examining the evidentiary material. The parties are not bound by written pleadings and the Court is not bound by the rules of evidence. The Court, as I have said, is required to act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms. Having regard to that wide remit, much of the criticism of the learned Magistrate's approach outlined by the applicant in the grounds for review falls away.
There is a power to rehear evidence taken before the learned Magistrate. The applicant sought permission to adduce further evidence both oral and written. I have received further affidavit material but not reheard the evidence given in the Magistrates Court as I do not consider it was necessary or desirable to do so.
The affidavit evidence includes a very lengthy affidavit of the applicant with annexures, an affidavit of process server Phillip Scicluna, and an affidavit of the respondent. I have had regard to each affidavit and the written and oral submissions of the parties.
It is plain that this matter has degenerated into an acrimonious and emotive dispute between the parties. The applicant’s affidavit sets out a history in respect of the relationship between himself, the respondent and Anthony Matthews and Associates (AMA). The applicant is an employee of AMA. Much of this history is irrelevant.
The question for the learned Magistrate was – whether he was satisfied on the balance of probabilities that the sum of $20,000 was paid to the respondent for the task of evicting the tenants from the applicant’s property – if so, was it retained thereafter without proper justification and has the applicant made out his claim for the repayment of this sum. Even if not satisfied that the applicant has made good his claim that there was an oral contract, on the facts of this case it was necessary for the learned Magistrate to consider whether there was a sum of $20,000 paid to the respondent to which he was not entitled. I will consider each aspect separately.
The matter commenced on 18 February 2015. The learned Magistrate heard evidence from both parties and their witnesses. It was unfortunate that at a stage when the facts were not clearly understood by the learned Magistrate he gave voice to his views on the matter. The learned Magistrate intimated that he was going to infer that the applicant’s version was preferable to that of the respondent:[15]
His Honour: Now, there is a certain inevitability about this if the plaintiff can prove that there was a tenancy and so, you know, particularly in view of all of the material that’s been present. I will keep my powder dry and wait to see what transpires on the next occasion, but I’ll remind you Mr Carbone yet again that your defence is so stark that the only thing really, based on the pleadings, that the only thing that the plaintiff needs to do is to persuade the court on balance that this agreement took place and that, because we know money was paid to you okay, and if that’s the case and I’m satisfied that the contract was frustrated, then the inevitable result will be that you repay the plaintiff the $20,000. Now, I’ll just leave it at that, but be warned that that is a clear outcome if I go with the plaintiff, that’s the clear outcome, okay?
[15] T 41.36-42.13.
This occurred at the end of the hearing on the first day. When the matter resumed on 7 April 2015 further evidence was called by both parties and exhibits produced. The tide then turned in relation to the view that the learned Magistrate took of this matter. This was in no small part as a result of the evidence given by the applicant. His evidence was as set out in the summary in the reasons for Judgment. However I have felt it necessary to set out the evidence in greater detail:[16]
[16] T 51.6-58.31.
HIS HONOUR: Well, just tell me what was it that you expected Mr Carbone could do that the police couldn’t do?
MR KOCH:Well, first of all I expected he would go and talk to the tenants before there was a need for the bailiff. He may well have been able to convince the tenants just to leave pursuant to the order.
HIS HONOUR: Well, why would it be the case that Mr Carbone has some special ability that the bailiff wouldn’t have?
MR KOCH: He’s dealt with these sort of people over 30-odd years.
HIS HONOUR: But why is it that the court would presume that somehow Mr Carbone would be preferential to the proper processes set out in the legislation?
MR KOCH:That’s only in relation to the eviction your Honour. Mr Carbone also obviously was going to collect rent and or damages to the property, so the bailiff only, as I was told by the RTT on the 11th, is used to do physical eviction. So, things like chattels and all of that I’d have to have dealt with, or obviously chattels left at the property. The tribunal bailiff has no power to deal with chattels. It’s between the landlord and tenant. So, I would have been stuck in a position where I would have had to deal with these people to remove the balance of their chattels.
HIS HONOUR: So, these are all predictions of yours, which then meant that you felt obliged to involve Mr Carbone?
MR KOCH: For protection your Honour, that’s correct.
HIS HONOUR: Protection, you keep mentioning this, but do I take it that somehow Mr Carbone was going to give you personal protection?
MR KOCH:Well, I took it that Mr Carbone would ensure that these people wouldn’t seek reprisals against me.
HIS HONOUR: Why would they seek reprisals against you?
MR KOCH:Because they would have been extremely upset to have been evicted. They weren’t rational people your Honour.
HIS HONOUR: What makes you say that?
MR KOCH:Well, they’re clearly drug users. Mr Carnemolla had said various things at the Residential Tenancies Tribunal during the hearing itself and outside the hearing about Mr Weston and the sorts of people that he associated with. I became aware in January of ‘13 that Mr Carnemolla was charged with offences. I have evidence of that here your Honour.
HIS HONOUR: What did you think Mr Carbone was going to do?
MR KOCH:Well, if the tribunal bailiff had left and I didn’t know how many people were in the property your Honour. I’ve said that on numerous occasions. It wasn’t just the two tenants. There were others living in the property. I could have been left in the scenario where I was literally standing out the front of the property with numerous angry ejected occupants of the property, with all of their chattels locked inside, by myself. I didn’t want to be in that position.
HIS HONOUR: Now, the purpose of you evicting these people was what exactly?
MR KOCH: To gain possession of the property your Honour.
HIS HONOUR: And what was the reason for that?
MR KOCH: They weren’t paying the rent your Honour.
HIS HONOUR: So they weren’t paying rent, you’d gone to the tribunal. You’d had an original order, termination order. Clearly the legislation gives you a pro forma as to what steps you take in order to successfully evict the tenant.
MR KOCH: Yes, your Honour.
HIS HONOUR: But you circumvented that process. Is that correct?
MR KOCH:I don’t believe so your Honour. I’m not sure why you think I circumvented it. I didn’t –
HIS HONOUR: Well, you didn’t use it.
MR KOCH:I didn’t have to engage the tribunal bailiff as a result of the tenants voluntarily leaving.
HIS HONOUR: Well, you didn’t engage them. What you, on your evidence, what you’re saying is that you approached Mr Carbone to presumably effect this without reference to the legislation or the processes.
MR KOCH: That’s not correct your Honour.
HIS HONOUR: Well, you tell me what part of that’s incorrect?
MR KOCH:Well, I didn’t engage Mr Carbone to evict the tenants. If the tenants were –
HIS HONOUR: Well, what was the purpose of engaging Mr Carbone?
MR KOCH:I fully expected, if I needed the tribunal bailiff, that the tenants would have been violent towards me at the property. They would have sought re-entry to the property because all the chattels were in the property and if they re-entered the property I have a right to remove them from the property using whatever means necessary, unrelated to the Residential Tenancies Act your Honour. Up to the point where the tribunal bailiff has physically removed any occupants from the premises, and effectively I’ve been given back, for want of a better word, control of the property, I don’t have any further recourse through the Residential Tenancies Act. It’s up to –
HIS HONOUR: But you just mentioned that you think that you could use whatever means necessary to evict these people over and above the legislation. That’s what you’ve just said.
MR KOCH: I said if they re-entered the property after the bailiff had removed them.
HIS HONOUR: But you haven’t even attempted to go down the correct path of the Act. The RTA. You’ve got a termination order. If you’d bothered to read the Act, you’d see that there are processes and procedures. You’re a member of the business community and you know the importance of abiding by the legislation and you’ve just said that you would take whatever means necessary in order to get the protection and or the eviction that you wanted. That’s what you’ve just said. In one way or another that’s what I understand the tenor of your evidence is.
MR KOCH:If the tenants re-entered the property after they had been evicted by the tribunal bailiff –
HIS HONOUR: But you didn’t know that and you just surmised that. You just predicted that.
MR KOCH:I had a very good, well I thought that’s what would happen your Honour.
HIS HONOUR: Sure.
MR KOCH: Yes.
HIS HONOUR: So, in any event you organised this meeting between yourself and Mr Carbone. Do I take it that once you pointed out to Mr, well perhaps I can ask you, what did you say to Mr Carbone? What was the purpose of the meeting?
MR KOCH:I told him what had transpired in the Residential Tenancies Tribunal the day before and that I fully believed these guys would not leave the property. They were just trouble. You know, Mr Carbone told me he’d dealt with these sort of people over, you know, many years and done many evictions and probably fuelled my fire a bit about the sort of people we were dealing with.
HIS HONOUR: And what did you think Mr Carbone would eventually do?
MR KOCH:Well, if the tribunal bailiff evicted the tenants, he would have been there. So, I initially thought he would go to the property and speak to them about leaving, pursuant to the order.
HIS HONOUR: Now, apart from that, what else would he do?
MR KOCH:He would have collected the outstanding rent pursuant to the order. He would have gone through the property and looked at the damages and agreed with the tenants what the damages to the property were and we would have agreed what was fair compensation for the damages.
HIS HONOUR: And did any of these tenants ever threaten you personally?
MR KOCH: They did on one occasion your Honour.
HIS HONOUR: Did you ever report that to the police?
MR KOCH:Been to the police a couple of times your Honour. They told me the property was well known to them. Because no actual crime had been committed, no charges could be laid.
HIS HONOUR: So there’s some log in some police file that indicates that you’ve made a complaint about threats?
MR KOCH:I regularly attend the Norwood Police Station your Honour on multiple –
HIS HONOUR: You know, in theory, regardless of your view about the insouciance of the police, in theory if someone threatens you and they’re able to physically carry that out, then that’s an assault. So, do I take it that the police just brushed that aside?
MR KOCH: They did. They said there was no grounds to take any further action. They said again the property was very well known to them. They knew there was problems there.
HIS HONOUR: Well that’s all hearsay. Did you go to your solicitor and say ‘Look I’m worried about these people and I’ve made a complaint to the police and they’re not taking it any further’, did you think about doing that?
MR KOCH: I didn’t think about having that discussion with –
HIS HONOUR: So, in other words, you weren’t enamoured by the process available to you through legislation. You weren’t impressed by the police’s lack of action and so you thought that Mr Carbone could fix all of this.
MR KOCH:I thought if the tenants re-entered the property after going through the proper process that Mr Carbone could help me your Honour.
HIS HONOUR: But you hadn’t tried the bailiff. You hadn’t even tried that process.
MR KOCH:As a result of the tenants leaving voluntarily your Honour I didn’t need to use the bailiff.
HIS HONOUR: Yes, but take it a step back. Before they leave, you haven’t actually attempted to use the processes available to you as a landlord to evict these people. Regardless of how difficult they are. I mean that’s the whole point of the process is it not? The whole point of the tribunal is to deal with difficult cases. So, you didn’t utilise that process and you didn’t intend to utilise that process. Is that fair?
MR KOCH: No, it’s not your Honour. I did intend to utilise that process –
HIS HONOUR: Well, okay, but you had a –
MR KOCH:If we look at the timing of events, and I don’t have that in front of me, but I believe they were given ‘til the 18th to move out.
HIS HONOUR: What was the problem with that?
MR KOCH:The earliest possible I could have got the bailiff in was probably the afternoon of the 18th or obviously on the 19th.
HIS HONOUR: Well, I mean so what? That’s just the process. That’s a few days. What difference would that make? It wouldn’t make any difference at all would it?
MR KOCH:Well, Mr Carbone would have been there your Honour. He wasn’t going to be there without being paid. He would have been there at that eviction if it had been necessary.
HIS HONOUR: Yes, I know, alright. So, in any event you had this meeting at the café and who raised the $20,000 issue?
MR KOCH:I just asked Mr Carbone outright, what would he charge me for doing this and he said he wanted $20,000 up front.
HIS HONOUR: $20,000. Did you think that was a lot of money?
MR KOCH:I thought it was a lot of money, but I also thought it was not a lot of money considering what the outcome might have been had I done it myself.
HIS HONOUR: And when did you decide that you would accept that offer?
MR KOCH:There and then, subject to being able to raise the funds from a third party.
HIS HONOUR: So, do I take it that there and then means that you weren’t interested in thinking about it. You weren’t interested in discussing it with anyone?
MR KOCH: Not necessarily your Honour, that’s correct.
HIS HONOUR: Did you discuss it with your wife prior to going there?
MR KOCH: No.
HIS HONOUR: So, your wife wasn’t a confidante, you didn’t discuss it with your lawyer. So, you went to this meeting fully prepared to pay $20,000 on the spot, without giving it any thought at all. Is that what you’re telling me?
MR KOCH:I certainly thought about it your Honour. The major thing in my mind your Honour was mine and my family’s protection. I truly believed that these folks –
HIS HONOUR: Well, you believe but people believe all sorts of crazy things. Believed is one thing. The proof is another. I mean where is the proof that your family was under threat in any way? Where is the proof of that?
MR KOCH: Well, just the evidence I’ve given your Honour.
HIS HONOUR: So, you go to this meeting and you agree to pay Mr Carbone $20,000, simply to be there when the bailiff evicts these people. Is that the case?
MR KOCH:Well, I thought he would attend the property before I got the bailiff involved to ask them to leave, pursuant to the order. Not evict them but talk to them at the front door.
HIS HONOUR: So, you’re prepared to pay $20,000 for Mr Carbone to have a chat with these people and that would somehow assuage your concerns about any possible threat or assault etc, is that what you’re telling me?
MR KOCH: It would certainly mitigate the fears that I had your Honour, yes.
HIS HONOUR: And so you were prepared to pay $20,000 and for that you’d receive $1200 in unpaid rent. Is that what you’re telling me?
MR KOCH:And compensation that I’m entitled to for the damages to the property your Honour.
HIS HONOUR: Well, have you received compensation for that?
MR KOCH: No, your Honour.
HIS HONOUR: Well, have you pursued that?
MR KOCH: No, your Honour.
HIS HONOUR: Why not?
MR KOCH:I just haven’t your Honour. I don’t see realistically how I can do so now.
HIS HONOUR: Well, in any event, you agreed to pay $20,000. I take it you didn’t negotiate. You didn’t seek time to think about it and you didn’t seek any independent advice about this. Is that what your evidence is?
MR KOCH: That is correct.
The learned Magistrate was, in my view, quite right to reject the evidence given by the applicant in relation to the existence of the contract as he had alleged.
In addition there was evidence that although the money had been paid on 20 February 2013 and the tenants moved out without incident either that same night or the following morning, the applicant did not make any effort to recover the money from the respondent for five months. It seems that there was no communication to the effect that there was no need for the respondent to do the ‘job’. During the intervening period he had continued to engage with the respondent on other matters.[17] When the applicant did raise the issue with the respondent it was in an email in these terms:[18]
Hi Frank,
It is disappointing our agreement has not been performed. The opportunity is lost.
I understand you have had a “falling out” with my employer, Tony Matthews in relation to his actions on [ ]. I have had nothing to do with this.
I have always treated you with respect and where possible referred work to you, in particular [ ] which was a very good job for you. When [ ] threatened your fees, I went to “bat” for you to make sure you got all of your money.
Please contact me to make arrangements to return my money at your earliest convenience.
Regards
Tarquin Koch
[17] T 84-86.
[18] Exhibit P1 document 5, email dated 15 July 2013 from Tarquin Koch to Frank Carbone.
It is not clear what the ‘lost opportunity’ is referring to. Nor is it clear why [It] ‘was disappointing that our agreement has not been performed’. The tenants had moved out. The damage had never been quantified. The premise was destined for demolition. No harm had come to the applicant or his family. No one was able to throw light on this.
Equally, the respondent’s response is equivocal:[19]
Tarquin
I have no idea what you are talking about we had no agreement let me make that very clear.
…
[19] Exhibit P1 document 4, email dated 15 July 2015 from Frank Carbone to Tarquin Koch.
I have reconsidered this matter taking into account whether it has been demonstrated that there was an error by the learned Magistrate. I do not think that there was.
The fundamental problem that I have in this matter is that I simply do not accept the claims made by the applicant that he paid the respondent $20,000, that he borrowed from his uncle, as a matter of urgency, for the purpose of evicting tenants who owed just a little over $1200 in rent or gaining vacant possession. I find his claim to be plainly absurd. There seems to have been no immediate need for vacant possession. The applicant had an order from the Residential Tenancies Tribunal (RTT) that could be enforced. The usual rate for obtaining unpaid rent of this amount was about $384. An order had also been made that the rent be paid by the tenant in the sum of $20 per week. I am in complete agreement with the Magistrate in relation to these issues. It seems that the applicant considered that the respondent had skills and powers beyond that commonly available. That may have been so. However to engage any person and pay them in advance this sum of money to do a job that was only ever speculative is so foolhardy that I cannot accept that a person in the applicant’s position would have done this.
I do accept that the applicant contacted his uncle in Sydney to arrange to borrow $20,000. The terms of the repayment (if any) are not clear. I accept that the applicant wanted cash. It was said that his uncle was unfamiliar with electronic banking and for that reason cash was obtained. There does appear to have been an electronic transfer between the accounts of the uncle to facilitate the cash then being available.[20] I accept that the uncle was never told the actual reason for the urgent need the applicant had for $20,000 cash. I accept that the uncle had his own theories in relation to why this was so.
[20] T 25.
I accept that the applicant made arrangements for the respondent to meet his uncle and collect the cash. At the time the uncle gave the money to the respondent he thought the respondent was ‘the messenger’.[21] I accept that the respondent met the uncle and received the cash. I accept that this transfer occurred on 19 February 2013. On the morning of 21 February 2013 the applicant found out the premises had been vacated. The order of the RTT that the applicant had a copy of was in these terms:
The tenant must move out of the premises by 11.00am on Monday 18 February 2013 but if the tenant does not move out this order may only be enforced by the Tribunal bailiff.[22]
…
[21] T 28.
[22] Exhibit P2.
The order could not have been any plainer.
The respondent has asserted that on the morning of 20 February 2013 he attend at the offices of AMA and gave the money to the applicant. The applicant strenuously denied this. The respondent claims to have a diary entry in relation to this. I am not prepared to place any weight on this. It was not discovered in the usual way. It could be fraudulent and self-serving. Neither the applicant nor the respondent were convincing witnesses. The applicant did not produce any evidence that satisfies me that his version should not just be preferred over the version of the respondent but satisfies me on the balance of probabilities of his claim that there was an oral contract that was frustrated and as a result the respondent has retained $20,000 to which he was not entitled.
As I have said I do accept that the respondent received the sum of $20,000 from the applicant’s uncle that the uncle thought was intended for the applicant. However I am not satisfied that this money was not either given to the applicant by the respondent or was retained by him for some other lawful purpose. The onus is on the applicant to satisfy me that the respondent was under a restitutionary obligation to repay this sum. I am left in this position. I regard the respective cases of both parties as unsatisfactory. I regard the conduct of the case by the respondent as being opportunistic and unsatisfactory. I regard the applicant as being inconsistent, equivocal and evasive. I do not know why he presented this case to the court on the basis that he did but do not accept him as a truthful witness. I feel no confidence that the money received by the respondent was not given to the applicant at some stage or that there was some entirely different agreement in place between the parties. In short I do not think either of the parties have been truthful with this court or in the Magistrates Court.
I decline to make any order for restitution. As I have said, I am not satisfied that the applicant has proven an unjust enrichment to the requisite standard. I am not satisfied that the monies received by the respondent were not either paid to the applicant or received for some entirely different purpose to that asserted by the applicant.
I therefore affirm the decision made by the learned Magistrate on 19 May 2015.
I make no order as to costs.
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