Sacca v Starink
[2001] WASCA 215
•26 JULY 2001
SACCA -v- STARINK [2001] WASCA 215
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 215 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:132/2000 | 10 & 11 MAY 2001 | |
| Coram: | ANDERSON J OWEN J WHEELER J | 26/07/01 | |
| 13 | Judgment Part: | 1 of 1 | |
| Result: | Appeal dismissed | ||
| PDF Version |
| Parties: | JOSEPH SACCA JON STARINK |
Catchwords: | Appeal Evidence Witnesses Credibility No new point of principle |
Legislation: | Nil |
Case References: | Abalos v Australian Postal Commission (1990) 171 CLR 167 Devries v Australian National Railways Commission (1993) 177 CLR 472 Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 Benman v Austin Motor Co Ltd [1955] AC 370 Chandler Bros Ltd v Boswell [1936] 3 All ER 179 Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 174 ALR 585 Commonwealth v Verwayen (1990) 170 CLR 394 Connor v Stainton (1924) 27 WALR 72 David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353 Electronic Industries Ltd v David Jones Ltd (1954) 91 CLR 288 Festic v Atkinson, unreported; FCt SCt of WA; Library No 8484; 19 September 1990 Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32 H Dakin & Co Ltd v Less [1916] 1 KB 566 Hoenig v Isaacs [1952] 2 All ER 176 Holland v Wiltshire (1954) 90 CLR 409 Jackson v Rotax Motor & Cycle Co [1910] 2 KB 937 Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723 Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Purcell v Bacon (1914) 19 CLR 241 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588 Steele v Tardiani (1946) 72 CLR 386 TA Sundell & Sons Pty Ltd v Emm Yannoulatos (Overseas) Pty Ltd (1956) 56 SR (NSW) 323 Tallerman & Co Pty Ltd v Nathan's Merchandise (Vic) Pty Ltd (1957) 98 CLR 93 Taylor v Johnson (1983) 151 CLR 422 Williamson v Commonwealth (1907) 5 CLR 174 Williamson v Murdoch (1912) 14 WALR 54 Wing Luck Foods v Lay Choo Lim [1989] WAR 358 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : SACCA -v- STARINK [2001] WASCA 215 CORAM : ANDERSON J
- OWEN J
WHEELER J
- Appellant (Plaintiff)
AND
JON STARINK
Respondent (Defendant)
Catchwords:
Appeal - Evidence - Witnesses - Credibility
No new point of principle
Legislation:
Nil
Result:
Appeal dismissed
(Page 2)
Representation:
Counsel:
Appellant (Plaintiff) : Mr S Owen-Conway QC & Mr P Kakulus
Respondent (Defendant) : Mr M J McCusker QC & Mr R A Zilkens
Solicitors:
Appellant (Plaintiff) : Godfrey Virtue & Co
Respondent (Defendant) : Zilkens & Co
Case(s) referred to in judgment(s):
Abalos v Australian Postal Commission (1990) 171 CLR 167
Devries v Australian National Railways Commission (1993) 177 CLR 472
Case(s) also cited:
Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435
Benman v Austin Motor Co Ltd [1955] AC 370
Chandler Bros Ltd v Boswell [1936] 3 All ER 179
Coal & Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 174 ALR 585
Commonwealth v Verwayen (1990) 170 CLR 394
Connor v Stainton (1924) 27 WALR 72
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353
Electronic Industries Ltd v David Jones Ltd (1954) 91 CLR 288
Festic v Atkinson, unreported; FCt SCt of WA; Library No 8484; 19 September 1990
Fibrosa Spolka Akcyjna v Fairbairn Lawson Combe Barbour Ltd [1943] AC 32
H Dakin & Co Ltd v Less [1916] 1 KB 566
Hoenig v Isaacs [1952] 2 All ER 176
Holland v Wiltshire (1954) 90 CLR 409
Jackson v Rotax Motor & Cycle Co [1910] 2 KB 937
Musumeci v Winadell Pty Ltd (1994) 34 NSWLR 723
Ogle v Comboyuro Investments Pty Ltd (1976) 136 CLR 444
Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221
(Page 3)
Purcell v Bacon (1914) 19 CLR 241
State Rail Authority of New South Wales v Earthline Constructions Pty Ltd (In Liq) (1999) 160 ALR 588
Steele v Tardiani (1946) 72 CLR 386
TA Sundell & Sons Pty Ltd v Emm Yannoulatos (Overseas) Pty Ltd (1956) 56 SR (NSW) 323
Tallerman & Co Pty Ltd v Nathan's Merchandise (Vic) Pty Ltd (1957) 98 CLR 93
Taylor v Johnson (1983) 151 CLR 422
Williamson v Commonwealth (1907) 5 CLR 174
Williamson v Murdoch (1912) 14 WALR 54
Wing Luck Foods v Lay Choo Lim [1989] WAR 358
(Page 4)
1 ANDERSON J: In this action, which was commenced in November 1997, the appellant as plaintiff sued on an oral agreement the terms of which were alleged to be that the appellant, Mr Sacca, would act as a consultant to the respondent, Mr Starink, in relation to the promotion and listing on the Australian Stock Exchange of a mining company. In consideration for doing this, Mr Starink would pay to Mr Sacca $400,000 as a success fee and arrange for 2,500,000 shares in the company to be allocated to Mr Sacca as "promoter's shares".
2 According to the statement of claim, the agreement was made in "numerous conversations between [Mr Sacca] and [Mr Starink] from about December 1995 to April 1996" and was "partly evidenced in writing … in facsimiles dated 3 and 25 April 1996 from [Mr Starink] to [Mr Sacca]".
3 It is pleaded that the consultancy services to be provided by Mr Sacca were to include particular services such as purchasing of a suitable public company to act as a vehicle for the float, arranging for the company to obtain capital, arranging for the company to acquire mining tenements and successfully floating the company.
4 By his defence, Mr Starink, in effect, admitted that he had entered into a consultancy arrangement with Mr Sacca for the provision of services substantially as set out in the statement of claim but pleaded that in consideration for all these services Mr Sacca would be paid a "promoter's success fee" of $400,000. Mr Starink denied that any final agreement was reached concerning the issue of promoter's shares and he pleaded that Mr Sacca failed to provide the services for which he was to be paid his success fee. Further, he pleaded that in any event Mr Sacca terminated the consultancy agreement by a letter of 16 September 1996.
5 By an amendment to his statement of claim, Mr Sacca acknowledged that the relationship between the parties changed in September 1996, but not by way of a termination of the consultancy agreement. Instead, it was his case that the agreement was simply varied at that time and that the variations related only to the nature of the services which he was to provide in order to earn his success fee and promoter's shares. He claimed to have fully performed the agreement as varied. By an amendment to his defence, Mr Starink denied the variation.
6 From this very brief description of the issues joined on the pleadings, it may be seen that this was essentially a fact case. The questions for determination by the trial Judge were whether the parties had concluded a
(Page 5)
- final and binding agreement for the issue of promoter's shares, and whether, if they had, the agreement was terminated or varied. As to the agreement for the payment of a success fee, the questions were whether that agreement had been terminated or whether it had been varied.
7 In a comprehensive and detailed examination of the evidence in which the credibility of the various witnesses loomed large, the learned trial Judge reached conclusions which may be summarised as follows:
(a) There were negotiations concerning the issue of promoter's shares, but no final agreement was reached;
(b) there was an agreement for payment of a success fee of $400,000;
(c) on 16 September 1996 in an atmosphere of strained relations between Mr Sacca and Mr Starink involving accusations and counter-accusations of non-performance of respective obligations, Mr Sacca sent a letter to Mr Starink in which he, in effect, withdrew from the consultancy agreement. The letter included such statements as: "I therefore declare that I do not want a success fee in the company, all I want is the repayment of my out of pocket expenses … the money of which I have placed as seed capital, I will leave that as a loan … I do not want any shares in the company";
(d) this letter was sent by facsimile to Mr Starink's office, but before he read the facsimile, Mr Sacca spoke to him on his mobile telephone saying that he wanted to "pull out" and that "if you want a hand with the float, I'll give you a hand but I don't want any success fee", to which Mr Starink assented;
(e) there were further discussions, but by 2 October 1996 it was accepted on both sides that the original consultancy agreement had "come to an end";
(f) on 2 October 1996 the parties entered into a new arrangement, the substance of which was that for all Mr Sacca's services, including those rendered to that date, Mr Sacca's family company would receive an allocation of 400,000 shares and would be paid 5 per cent of all capital which he succeeded in raising for the new company;
(Page 6)
- (g) Mr Sacca's company, Quairading Holdings Pty Ltd, did receive an issue of 400,000 shares in the mining company, but Mr Sacca received no payment for raising capital.
8 On those findings, Mr Sacca's claims, which were in effect claims for enforcement of the agreement which had been terminated, could not succeed. There may be a question as to whether he is entitled to recover moneys from Mr Starink or from the new company under the arrangement whereby he was to be paid 5 per cent of any capital raised by him, but that is not a claim which falls to be determined in these proceedings.
9 I am not persuaded that the findings enumerated above were not open to the learned trial Judge.
10 As to the alleged agreement for the issue of promoter's shares, there is no written evidence of a final agreement. Mr Sacca's case depended not only on his evidence being accepted, but also on that evidence amounting in its terms to evidence of a concluded agreement. The trouble is that, at its highest, his evidence did not prove a final agreement. Mr Sacca's evidence is set out in the judgment of Wheeler J. Putting questions of credibility to one side, a conversation in the terms deposed to by Mr Sacca simply did not amount to a concluded agreement for the issue of 2,500,000 promoter's shares. As Wheeler J points out, the whole of the evidence on this subject establishes no more than that at one stage in negotiations Mr Starink accepted that if there was to be an issue of promoter's shares, the number of promoter's shares would be somewhere between 2,000,000 and 2,500,000. Negotiations went no further.
11 The appellant's grounds of appeal challenging the learned trial Judge's findings with respect to the termination of the agreement for payment of a success fee are prolix and repetitive and many of them are not grounds of appeal at all, but argumentation and recitation of evidence. Take, for example, ground 5 which is in the following terms:
"His Honour erred in law in finding that the matters set out in paragraph 65 of his reasons for decision were against the credit of the Plaintiff. His Honour should have found that these matters were against the credit of the Defendant and not against the credit of the Plaintiff."
12 That is, of course, mere argument and is not a proper ground of appeal. Order 63 r 2(2), provides that the notice of appeal must "state briefly, but specifically, the grounds relied upon in support of the appeal … ". On no view could the grounds of appeal in this case be regarded as
(Page 7)
- satisfying the requirement for brevity. The notice runs to 20 pages. It is true that O 63 5 2(3) provides that in an appeal in which it is alleged that a judgment is against the evidence or the weight of the evidence or that it is wrong in law, the notice must specify the particulars relied on, but that should not be taken as an invitation to turn the notice of appeal into a set of written submissions.
13 I entirely agree with what Wheeler J has said concerning the grounds of appeal relating to the dismissal of the claim for a success fee and with what her Honour has said concerning the merits of that appeal.
14 I would dismiss this appeal.
15 OWEN J: I have had the advantage of reading, in draft form, the reasons to be published by Wheeler J and the additional comments of Anderson J. I agree with what their Honours have said and with the conclusion that the appeal should be dismissed.
16 WHEELER J: Although the grounds of appeal in this matter allege that the learned trial Judge either "erred in law" or "erred in law and in fact", there are no issues of law arising in the appeal.
17 The appellant seeks to challenge findings of fact made by the learned trial Judge, on the basis that his Honour either gave no weight or gave insufficient weight to various items of evidence, and as a result erred in his assessment of the credibility of the principal witnesses in the trial, so as to reach erroneous conclusions of fact. There was a quantity of documentary evidence in the trial, some of which is open to a variety of interpretations. There was also significant and conflicting oral evidence concerning whether or not certain conversations and events occurred, or in what manner they occurred. It is plain that his Honour's view of the credibility of witnesses must have been based at least in part upon the demeanour of the witnesses and his Honour's assessment of the way in which they gave their evidence and responded to cross examination. The difficulty which the appellant faces is obvious. The relevant principles have been enunciated in many cases, including Devries v Australian National Railways Commission (1993) 177 CLR 472 and Abalos v Australian Postal Commission (1990) 171 CLR 167.
18 The relevant facts are set out in paragraphs 1 through to 45 of his Honour's reasons for decision. We were advised that the appellant does not challenge that summary. I do not propose to set out all of those
(Page 8)
- matters in these reasons, which should be read together with paragraphs 1 to 45 of his Honour's reasons for judgment.
19 There is some overlap between the grounds of appeal, and some of them contain material which is really in the nature of submission. They are too long to reproduce, containing some 15 grounds and numerous sub-grounds, and running to 19 pages in all. However, they really fall into two categories. The first category deals with the claim that there was an agreement reached during the course of a three-way telephone discussion between the appellant, the respondent and a Mr Luff, in which it was alleged that the respondent had agreed to issue 2.5 million "promoter shares" to the appellant upon the successful listing of the company, Adelong. The second related to the question of whether there was also payable by the respondent to the appellant a "success fee"; the respondent asserted, and the learned trial Judge found, that there was an agreement made on 2 October, which amounted to an accord and satisfaction in respect of that fee. I deal with those two issues below.
The Promoter Shares Claim
20 His Honour did not accept the evidence of the appellant and Mr Luff in relation to this conversation, and complaints are made about that finding of credibility based on a number of propositions. It appears to me that the issues were not all one way and that it was clearly open to his Honour to reject that evidence and to find, as he did, that there were negotiations concerning a proposed promoter's fee and that the true position was that the respondent had not finally indicated whether he would or would not be prepared to issue promoter's shares and, if so, how many of them.
21 However, as was pointed out to the appellant during the course of the appeal, even if his Honour had been in error in that respect and the evidence of the appellant and Mr Luff had been accepted, it would still have been insufficient to establish the agreement pleaded. The relevant evidence was as follows. The appellant said:
"… We did have discussion with Starink and at that particular time with Geoff Luff was present when I discussed it with him and I told him that Geoff Luff wanted to make it three million and
Make what three million?---Three million promoter shares.
(Page 9)
- Yes?---And Starink said 'That's a bit too much'. I said, 'Yeah, I know, I agree. I reckon it should be somewhere between two and two and a half' and he agreed."
22 Whether the "agreement" was with the quantity of shares (on the assumption that promoter shares should issue) or also agreement with the proposition that there should be promoter shares is by no means clear. In any event, the number of shares to be issued is uncertain.
23 In evidence-in-chief, Mr Luff's evidence was somewhat clearer as to the quantity of shares. His evidence was, "Joe [Sacca] said Luff wants me to issue three million promoter shares and Joe said it should be two and a half million. Starink agreed with Joe." Again, the crucial portion of the evidence is by way of characterisation of what was said as agreement, rather than any attempt to give the words, or gist of the words, spoken. It also leaves open the question of whether the agreement was agreement to the issue of promoter shares in the numbers specified or agreement that if promoter shares were issued there should be two and a half million of them. Mr Luff also said the following:
"But what I'm asking you is do you now today have an independent recollection of the discussion that you witnessed, as I understand your evidence?---I was involved in the discussion.
What did you say during this discussion?---I listened to most of the discussion but I also thought - I assured Joe [Sacca] that the promoter shares were essential in order to make a success of the float and I assured the same thing to Starink.
You have a clear recollection of this discussion?---Yes.
Today?---Yes.
Can you recall what Mr Starink said?---Mr Starink agreed with both Joe and myself that there should be promoter shares.
(Mr Keen) It's not what he agreed; it's what he said.
(Mr Owen-Conway) Yes can you recall what he said?---No"
24 During cross-examination he agreed with the following propositions (T 584):
(Page 10)
- "And you have told us in evidence that during the course of this telephone discussion you can't recall precisely what Mr Starink said but the substance of what he said was that he agreed the people had to be paid for their services?---Correct.
That was the extent of his discussion was it?---Correct.
No more than that. That's what he said?---Yes."
25 In my view, it is not possible to construct from this evidence an oral agreement both that there should be promoter shares and that there should be 2.5 million of them. Even if it were theoretically possible to do so, the vagueness of the evidence and the fact that there was obviously a substantial element of negotiation during the course of the conversation provide significant support for his Honour's finding that there were ongoing negotiations concerning the question of promoter's shares but no concluded agreement.
The Success Fee - Accord and Satisfaction
26 The grounds in relation to this matter fall into a number of categories. Some are inconsistent with each other. For example, ground 2.1 alleges that his Honour erred in accepting the respondent's version of certain events in the light of a draft deed proffered by the respondent to the appellant purporting to settle his indebtedness to the appellant for consulting services. It is asserted in this ground that the offer was not made in the light of any threat by the appellant to sue the respondent for the outstanding success fee. However, ground 3.5.4, in listing of matters said to be against the respondent's credibility, asserts "He falsely claimed that the [appellant] had threatened to sue him over outstanding fees". In fact, his Honour recorded that the respondent gave evidence that he thought the appellant was to commence action but that there was no evidence (presumably no independent evidence) to suggest that this was the position. His Honour did not find it necessary to make a finding one way or the other as to whether there had been such a threat. Grounds of this kind appear to be no more than a re-run of submissions which no doubt were made to his Honour and which his Honour either rejected, or found did not carry such weight as to require a finding that the respondent's evidence was not credible.
27 The grounds refer to a number of matters telling against the respondent's credit, such as an alleged backdating of an agreement in order to avoid taxation, and an attempt to sell the tenements in question to
(Page 11)
- third parties in breach of an implied term of his contract with the appellant. His Honour referred to the significant matters relating to the respondent's credit, but nevertheless found him a credible witness.
28 The matters going to credit alleged by the appellant do not appear to me, either singly or in combination, to be such as to require that his Honour reject the evidence of the respondent. This is particularly so, since there were some matters which were consistent with the account given by the respondent. For example, telephone records produced by the respondent were inconsistent with the appellant's evidence as to a telephone conversation on 16 September 1996. The appellant attempts to use those telephone records for his purposes by suggesting that since the respondent produced only mobile telephone records, it was possible (and perhaps probable) that a telephone conversation on the relevant day had taken place on a land line. However, the telephone records produced show very many telephone calls made during the course of the day on the respondent's mobile telephone, some of them very lengthy, They are certainly consistent with an inference that had the disputed call taken place, the respondent would have used his mobile telephone and the call would have appeared on the records.
29 Some of the grounds simply are not supported by the evidence at all; indeed, they are contradicted by the evidence. For example, in ground 8 it is complained that his Honour erred in finding that a meeting which included a Mr Arnott-Smith took place in August when, the ground asserts "both the plaintiff and Mr Arnott-Smith gave clear evidence that the meeting took place in late September 1996". It was indeed Mr Arnott-Smith's evidence that the meeting took place in late September, but when he was asked, in relation to the question of whether the meeting was in August or September, "Could it be that your memory is somewhat erroneous on that?" He replied, "It's quite possible", and described his evidence as to the date as being a "guess on my part".
30 It would be, in my view, unnecessary tediously to go through the grounds of appeal dealing with the success fee seriatim, in order to point out the competing inferences available, the other evidence bearing on the issue, and the ambiguities or deficiencies in the evidence upon which the appellant wishes to rely. It is in my view both permissible and appropriate to deal with the issue globally in the following way.
31 The respondent asserts that the accord and satisfaction began with a facsimile message from the appellant to him dated 16 September, saying that the appellant did not want a success fee any more but that he would
(Page 12)
- continue to assist with the float because he was a man of his word. That facsimile existed and was produced in evidence. The respondent said that he was skiing on 16 September and did not receive the facsimile, but received a message to ring the appellant and had a short conversation in which the appellant said he wanted to "pull out" but would still assist with the float without a success fee. The respondent agreed. The account given by the respondent of the appellant's side of the conversation is consistent with the terms of the facsimile.
32 The appellant claimed that when the respondent received that facsimile he rang the appellant and begged him to stay in the float, as a result of which they agreed that they would each pretend that the facsimile had never been received. There is no evidence of such a conversation, apart from the evidence of the appellant, which his Honour could have accepted but did not. The respondent's account of these events received some support from the telephone records to which I have referred.
33 Following that telephone conversation while the respondent was skiing, which his Honour accepted occurred, it followed that it was no longer necessary for the respondent to pay the appellant pursuant to the original agreement. The respondent asserted that it was then necessary for him to make new arrangements with the appellant and the arrangement which he did make was that the company would transfer 400,000 shares to the appellant forthwith on account of work done to date and would pay 5 per cent of the capital raised.
34 Four hundred thousand shares were in fact transferred to the appellant's family company. There is a dispute as to the reason for doing so, the appellant saying that in part it was to enable shares to be transferred from his company to Mr Higginson for reasons which are not material and in part it was in payment for secretarial services rendered by the appellant's daughter. As his Honour noted, no invoice had been submitted for those expenses and no attempt was made to show that they had been incurred, so that there was reason for his Honour to reject this explanation, as he did.The respondent gave evidence that he was aware of some agreement between the appellant and Mr Higginson about 200,000 shares but that it was no concern of his what happened to the shares once they had been paid to the appellant.
35 One of the things which was consistent with the respondent's account was the fact that the appellant did not in fact send any account for a success fee to the respondent. His explanation was that he did not do so because the appellant had promised that he would "fix it up". Again, it
(Page 13)
- would of course have been open to his Honour to have accepted this evidence, but he did not.
36 Finally, the appellant relied heavily upon the draft deed produced by the appellant and proffered to the respondent purporting to settle an indebtedness for "consulting services in the sum of $20,000". The appellant submits that this draft deed gave rise to a "compelling inference" that the appellant's entitlement to be paid a success fee did not terminate with the 400,000 shares in Adelong being issued to his family company.
37 His Honour specifically referred to this matter and noted that he did find it difficult to determine why the defendant had made the offer. Although he did not specifically determine the matter, it appears that his inclination would have been to reject the respondent's explanation that he thought that the appellant was to commence an action against him. However, his Honour also noted, in my view correctly, that there was nothing in the terms of the deed which could be read as a reference to the success fee as claimed by the appellant. Moreover, as his Honour noted, the deed referred to an amount of only $20,000, which appears to be a "token" payment only in the context of the fee claimed by the appellant.
38 In those circumstances, the deed does not necessarily give rise to an inference that any success fee was due; still less does it give rise to a "compelling" inference that the fee as alleged by the appellant was due.
39 In my view, there is nothing in any of the grounds of appeal, either singly or together, which suggests that his Honour overlooked a material fact, failed to appreciate the significance of any evidence, or otherwise "palpably misused" the advantage which he had as a trial Judge in observing all of the witnesses, including having regard to their demeanour, and absorbing their evidence in the context of the trial as a whole and in the context of the emphasis placed by the parties during the course of the trial upon particular aspects of their evidence.
40 I would dismiss the appeal, and it is therefore unnecessary to turn to consider the respondent's notice of contention.
0
20
1