Li v Chu

[2010] SASC 238

SUPREME COURT OF SOUTH AUSTRALIA

(Magistrates Appeals: Civil)

LI v CHU

[2010] SASC 238

Judgment of The Honourable Justice David

6 August 2010

PARTNERSHIP - ACTIONS BY AND AGAINST PARTNERS - ACTIONS AND PROCEEDINGS AGAINST FIRMS AND INDIVIDUAL PARTNERS - OTHER MATTERS

MAGISTRATES - APPEALS AND REVIEW - SOUTH AUSTRALIA - APPEAL TO SUPREME COURT - PRINCIPLES ON WHICH COURT ACTS - OTHER MATTERS

Appeal against dismissal of appellant’s claim in contract after trial in the Magistrates Court – appellant and respondent operated café as a partnership – appellant claimed respondent agreed to buy out his share in the partnership for $40,000 – respondent denied ever making such an agreement – whether magistrate erred in dismissing the appellant’s claim.

Held:  Appeal dismissed – magistrate properly directed himself as to the onus and standard of proof required to be met by the appellant – magistrate properly considered the state of the evidence to find that the onus was not discharged.

LI v CHU
[2010] SASC 238

Magistrates Appeal

DAVID J.

Introduction

1. This is an appeal against a decision of a magistrate to dismiss the appellant’s claim in contract. The appellant’s claim was for $40,000, which he says was owed by virtue of an oral contract between he and the respondent. The respondent (defendant at trial) denied that such an oral contract existed. The magistrate, having directed himself appropriately as to the onus of proof, came to the conclusion that he could not find it proved that an oral contract existed, and therefore, dismissed the claim.

   Background facts

2. In about June 2006, the respondent approached the appellant and another person, Tong Li, about purchasing the Montpellier Café, a café at 56 Jetty Road, Glenelg. The respondent suggested that each contribute $40,000, allowing $100,000 for the purchase price and $20,000 for working capital. On 4 July 2006, the three parties commenced running the business and the appellant and Tong Li contributed $10,000 each to the respondent. About a week later, Tong Li decided not to proceed in the business, and the appellant paid him $10,000 in satisfaction of the amount he had already paid. On 19 July 2006, the appellant paid the respondent a further $20,000, and from that point the two parties ran the Montpellier Café business, both working there at different times.

3. After the appellant travelled to Hong Kong between 13 and 27 September 2007, the appellant and respondent agreed to dissolve their partnership.

4. The appellant claimed that the respondent agreed to buy his share of the partnership for $40,000, and they agreed to meet at Ciconni Restaurant on 4 October 2006, whereby he would give the respondent all invoices, receipts and the partnership cheque book, and she would give him a cheque for $40,000. The appellant claimed they met at the restaurant and he gave the respondent the requested documents, however, he was told that he would be paid the $40,000 later by another person, Mr Liang.

5. The respondent admitted that she met the appellant at the restaurant on 4 October 2006, however, she categorically denied ever offering the appellant $40,000. She said they merely discussed whether the appellant should purchase the business from her, whether they should sell the business jointly, or convince Mr Liang to take over the business.

   The magistrate’s reasons

6. The magistrate dismissed the claim. He said the following:

   Mr Li bears the onus of proving his claim on the balance of probabilities. An agreement to pay someone $40,000 is a matter of some importance. Ms Chu, at least on the evidence presented to me, also lost her investment in Montpellier. I am not able to make an order requiring her to pay $40,000 to Mr Li in the absence of proper proof. Apart from Mr Li’s oral evidence, there is no evidentiary support at all for the agreement Mr Li alleges. In light of Ms Chu’s denial of the agreement, I am not able to be satisfied that the alleged agreement ever existed. On all the evidence, Mr Li has been unable to discharge the onus he bears. Mr Li’s claim must be dismissed.

   Appeal

7. The appellant now argues that, in effect, the magistrate has misdirected himself in that he seems to have said that before he could find for the appellant, there had to be some sort of support or corroboration. He also argues that there has been an inadequate analysis of the evidence, and he has not clearly set out why he does not accept the evidence of the appellant on the salient matters.

8. There is a further argument put by the respondent, both to the magistrate and on appeal, to the effect that if it was proved that the arrangement existed, on the appellant’s case, it was an arrangement to dispose of a lease, and was therefore, legally unenforceable. The magistrate dismissed that argument, and in the light of my conclusions, it is unnecessary to deal with it.

9. The reasons of the magistrate leave much to be desired in many ways. I am of the view that a more in-depth analysis of the evidence of both parties was required. However, having looked at the evidence as a whole, one can sympathise with the task confronting the magistrate, as there was a lack of clarity about what happened on the day in question, confusion in many of the background facts and many unanswered questions, which the magistrate deals with in his judgment and which are unnecessary to repeat. However, I am of the view that it was clear from his reasons that he considered that the onus of proof lay upon the appellant (plaintiff at trial) to prove a contract, that that onus was on the balance of probabilities, and that the state of the evidence was such that that onus was not discharged. I can see no reason to differ from that view of the evidence as it was presented, and indeed it would seem to be almost impossible to come to any other conclusion.

   Conclusion

10. I dismiss the appeal.