Rashid Raashed v Mosharrof Hussein - [2013] HCASL 7

RASHID RAASHED
v
MOSHARROF HUSSEIN & ANOR
[2013] HCASL 7
S265/2012

The applicant commenced proceedings against the respondents seeking to enforce a written contract for the sale of a business to the respondents. The respondents relied on s 7(1)(a) of the Contracts Review Act 1980 (NSW) ("the Act").
On 29 October 2010, the Local Court found that the contract was unjust within the meaning of s 7(1)(a). It ordered that the requirement that the respondents pay a contract balance of $50,063 not be enforced. The Magistrate found, inter alia, that there was a material inequality in bargaining power (s 9(2)(a)); that at the time the contract was made, the respondents were not able to negotiate the contract conditions (s 9(2)(b)); that the respondents were denied an opportunity to obtain legal advice (s 9(2)(h)); and that the respondents were the victims of undue influence (s 9(2)(j)(i)).
The applicant appealed to the Supreme Court of New South Wales (Harrison AsJ). The applicant did not attack the conclusion that the contract was unjust. Rather, the principal complaint was that the Magistrate had erred in declining to enforce the relevant contractual term to pay the balance in circumstances where it was not possible, in the absence of evidence of valuation, to determine if and to what extent the respondents suffered any financial loss. The appeal was dismissed.
On 24 August 2012, the Court of Appeal of the Supreme Court of New South Wales (Macfarlan JA and Sackville AJA) refused the applicant leave to appeal. The Court considered that the Magistrate had not erred by failing to take into account a relevant consideration, ie the extent of the benefits obtained by the respondents under the contract. It held that even if the respondents did receive benefits under the contract of greater value, the amount in issue on any appeal would be limited. It held that it was not clear that an injustice had occurred, that no question of general principle was at stake, and that the amount in issue on appeal – approximately $29,000 – was far below the threshold of $100,000 to be crossed before an appeal lay as of right. The Court noted that the costs expended by the parties were disproportionate to the amount in issue.
Several parts of the Applicant's Written Case in this Court stray beyond the only ground in the Draft Notice of Appeal, which is:
"That relief under the [Act] by way of non-enforcement of a contract in respect of which property had passed to the Respondents and in respect of which the Respondents had placed themselves in a position of being unable to provide 'restitutio in integrum' should not be granted as against the Appellant unless the extent of the non-enforcement was limited to the amount of any loss established by the evidence to have been occasioned to the Respondents as a result of their entry into an unjust contract."
The points made by the Court of Appeal in relation to this issue are, with…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] HCASL 7
Decision Date

CaseChat Overview and Summary

The case before the High Court involved Rashid Raashed, the applicant, who sought to enforce a written contract for the sale of a business to the respondents, Mosharrof Hussein and another. The respondents claimed relief under the Contracts Review Act 1980 (NSW), arguing the contract was unjust. The initial decision by the Local Court found the contract was indeed unjust and refused to enforce the payment of the contract balance of $50,063. This decision was upheld by the Supreme Court of New South Wales and subsequently by the Court of Appeal of the Supreme Court of New South Wales, which refused the applicant leave to appeal. The applicant then sought special leave to appeal to the High Court.

The central legal issue was whether the contract, found to be unjust under the Act, should still be enforced to the extent of the balance payment, despite the absence of evidence to establish the extent of financial loss suffered by the respondents. The applicant argued that the contract should be enforced in part to the extent of any loss suffered by the respondents. The respondents maintained that the decision of the lower courts should stand, as it was not clearly erroneous and the amount in dispute was below the monetary threshold for an automatic right of appeal.

The High Court found that the appeal did not have sufficient prospects of success. It noted that the Court of Appeal had correctly identified that the lower court did not err in its consideration of the benefits received by the respondents and that the amount in issue on appeal was significantly below the monetary threshold for an automatic right of appeal. Furthermore, the Court highlighted that the costs incurred by the parties were disproportionate to the amount in issue. The Court also observed that several points raised by the applicant in the High Court strayed beyond the grounds of appeal specified in the Notice of Appeal, which concerned the non-enforcement of the contract where property had already transferred to the respondents and they could not restore the original state (restitutio in integrum).

Accordingly, the High Court dismissed the application for special leave to appeal. It directed the Registrar to prepare, sign, and seal an order dismissing the application. The reasoning and outcome of the case underscore the importance of adhering to the grounds of appeal and the proportionality of the costs incurred in relation to the amount in dispute, particularly in cases involving the enforcement of contracts found to be unjust.

Orders