Slattery Auctions Australia Pty Ltd trading as Slattery Auctions and Valuations (ABN 17 091 324 480) v James aka Roddom
[2016] NSWDC 240
•06 September 2016
District Court
New South Wales
Medium Neutral Citation: Slattery Auctions Australia Pty Ltd trading as Slattery Auctions and Valuations (ABN 17 091 324 480) v James aka Roddom [2016] NSWDC 240 Hearing dates: 6 September 2016 Date of orders: 06 September 2016 Decision date: 06 September 2016 Jurisdiction: Civil Before: Gibson DCJ Decision: (1) On the application of the plaintiff and with the consent of the defendant, grant leave to the plaintiff to file an Amended Statement of Claim adding the additional phrase “aka Daryll James Roddom” to the defendant’s name, and dispense with service.
(2) Judgment for the plaintiff against the defendant for $232,783.70.
(3) Defendant is to pay the plaintiff’s costs as agreed or assessed.
(4) Exhibits retained for 28 days.Catchwords: CONTRACT – breach of contract – plaintiff purchases items totalling $849,250 at auction and fails to pay by the due date in the Terms of Sale – whether defendant acting as agent for another – whether terms and conditions of the auction drawn to the defendant’s attention – defence of “honest and reasonable mistake” – breach of contract established – quantum
COSTS – no issue of principleCases Cited: Chelmsford Auctions v Poole (1973) 1 QB 543
Ex Parte Hartop (1806) 33 ER 132
HJ Lyons & Sando Limited v Houlson (1963) SASR 29
Lamond v. Duvall, 9 Q. B. 1030
Maclean v Dunn (1828) 4 Bing 722
Sau Yin Kwan v Eastern Insurance Co Limited (1994) 2 AC 199
Teheran-Europe Co Ltd v S T Belton Tractors Ltd [1968] 2 QB 545
Toll Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165Category: Principal judgment Parties: Plaintiff: Slattery Auctions Australia Pty Ltd trading as Slattery Auctions and Valuations (ABN 17 091 324 480)
Defendant: Daryll James aka Daryll James RoddomRepresentation: Counsel:
Solicitors:
Plaintiff: Mr D Neggo
Defendant: Mr D James (in person) with Mr W Ison (as McKenzie friend)
Plaintiff: Barraket Stanton Lawyers
Defendant: In person
File Number(s): 2015/328823 Publication restriction: None
Judgment
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HER HONOUR: The plaintiff by statement of claim filed on 9 November 2015 seeks payment of a liquidated sum which has been set out in the plaintiff's schedule of damages filed in court this morning as the sum of $209,625 together with interest of $23,158.70 making a total of $232,783.70 arising out of the circumstances in which the defendant bid at auction for four items but did not pay for them in circumstances where the amount quantified as the loss is the shortfall.
The auction and the conditions of sale
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The circumstances in which these events occurred are as follows. The plaintiff is an auctioneer of vehicles and heavy machinery and held an auction on 18 March 2015. The defendant attended that auction and in the course of so doing he had to register as a bidder. The process for registering as a bidder is set out in a series of photographs in exhibit A and consists of going to a computer terminal shown behind tab 3 of exhibit A and filling out a form following which a bidder's number is allocated.
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The defendant was allocated the number 518 which is set out at tab 7 of exhibit A. What this document says is as follows:
“I understand that the terms and conditions of this auction sale are displayed and I acknowledge that if I am a successful bidder I will be bound to purchase the items in accordance with the terms and conditions.
I understand that Slattery Auctions Australia Pty Limited are auctioneers acting as agents for the vendor and any dispute arising after Slattery Auctions Australia Pty Limited have paid the vendor will be between the vendor and the undersigned and I agree Slattery Auctions Australia Pty Limited will be excluded from any subsequent action.
I understand that and reference [sic] two a condition [sic] by Slattery Auctions Australia Pty Limited or their staff can only be interpreted as a matter of opinion and intending buyers must satisfy themselves in regard to the condition of the vehicle or object. I understand that Slattery Auctions Pty Limited may only be passing on information supplied to them by the vendor. I agree to pay Slattery Auctions Australia Pty Limited a premium as advertised on the date of sale.
Slattery Auctions may contact you from time to time to notify you of upcoming auctions and other information that we feel may be of interest to you. If you do not wish to be contacted, please tick this box.”
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There then appears a little square box for persons not wishing to be contacted (which was not ticked) and, more particularly, the following, in capital letters:
“Any item not paid for by the due date stated on the catalogue will attract a 1% late payment levy. Any item not collected within 30 days of sale will be deemed abandoned and will be discarded without notice or compensation.”
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After this statement there appears a line for a signature. The copy of the document tendered shows a signature which it is not in dispute is the signature of the defendant, Mr James. I should note that the defendant has told the court that he wishes to be known as “Daryll James Roddom”, and accordingly he is referred to hereafter as either “the defendant” or “Mr Roddom”.
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The conditions which are referred to as being "displayed" are the conditions which photographs behind tabs 3 to 6 of Exhibit A show were, if not omnipresent in the auction room, certainly on display in many locations, including:
A framed version, which sits beside the computer screen used to register to bid at the auction.
Another framed version, which is affixed to the wall next to a series of other auction notices immediately under the screens showing the objects, the items which are being auctioned.
The terms and conditions are also set out at the front of the auction catalogue for the auction in question, which is behind tab 6 of Exhibit A. This is the auction catalogue for the goods in question, and it is apparent from the section containing this information that not only is the buyer's premium of 7.5% set out but that this premium is specifically stated to apply to this auction, for which (on p 2 of this catalogue) these Terms And Conditions Of Sale apply.
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It should be noted that those terms and conditions include a number of provisions which are relevant in the present case. In particular, since the defendant's case is one of what he called “honest mistake”, I note that paragraph 5 of the terms and conditions provides:
“The purchaser shall be deemed to be the Principle [sic] unless, prior to the sale, they had disclosed to the company that they would be bidding on behalf of a Principle [sic] whose name and address shall be disclosed to the auctioneer.”
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It is the case for the plaintiff that the name and address of Mr Howard, the person who the defendant says he was acting on behalf of was not disclosed to the auctioneer and there are no documents before me to confirm that this was in fact a step that the defendant took.
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The other relevant terms and conditions of sale are as follows.
Clause 7 provides that on the fall of the hammer each lot will pass to the purchaser and it will be at the purchaser's risk and shall be paid for in cash immediately on completion of this sale and prior to delivery.
Clause 10 provides that purchasers must be paid for and moved within two days at the completion of the sale and cl 7 sets out what happens if the purchaser fails to comply.
Clause 12 sets out the basis upon which losses and expenses may be claimed.
The defendant purchases the goods and is invoiced
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On the day in question the defendant attended the auction as I have already noted, registered, obtained a catalogue and bid for four lots, namely lots 112, 112A, 113 and 118 for a total cost of $849,250 including GST and buyer’s premium. At tab 9 of Exhibit A, the invoices from plaintiff set out the identity of the purchase and address as:
“Daryll James, 43 Wandewoi Avenue, San Remo, New South Wales, 2262”
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I infer from this that this was the address provided by the defendant on the registration form, since otherwise it would not have been appearing on these invoices. It is also not in dispute that this was in fact the defendant’s address, and that he received these invoices, and that the amounts set out in these invoices were not paid.
The plaintiff’s employees’ conversations with the defendant following his failure to pay
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As a result of the failure to pay, on a date about about two weeks after the auction, Mr Wilson, an employee of the plaintiff, telephoned the defendant and said:
“Daryll, we still haven't received the payment. What's going on? The bank has given us a deadline for payment at 5pm on 10 April 2015 otherwise they want us to proceed with legal action.”
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The defendant is recorded as saying:
“I'm buying them through John Howard but they're being financed by a third party. I've done this before without any issues. I don't want to be left to hold the baby.” (Exhibit C, paragraph 8)
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This conversation followed on from an earlier conversation, when Mr Wilson had telephoned the defendant to advise that the payment was due. The difference is that, this time, the defendant identified the person upon whose behalf he said he was buying the goods. On the first occasion when Mr Wilson had telephoned the defendant, he had also said that he was purchasing the items on behalf of another person but, when asked, “On behalf of whom?” had replied “I can't say.” (See exhibit C, paragraph 7). The plaintiff’s evidence is that this was the first they had heard of anyone, and specifically Mr Howard, being the purchaser upon whose behalf the defendant was asserted to be buying the goods.
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On 14 April 2015 Mr Slattery telephoned Mr Ison. Mr Ison is in court because he has sought leave to appear on behalf of the defendant as a McKenzie friend. According to Mr Slattery’s affidavit, this conversation was as follows:
“Mr Wilson: “Warwick, it's Johno Wilson from Slattery Auctions in Hexham. I'm calling in relation to the lots purchased by Mr Daryll James. We still haven't seen any funds from Daryll. Can you let me know what's going on?” Mr Ison replied, “I'm sorry. I've been leaving messages with my client and I've been unable to reach him.””
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This conversation concluded with Mr Wilson reminding Mr Ison of deadlines for the payment of the money, failing which the goods would be reauctioned as foreshadowed.
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On 15 April Mr Wilson telephoned the defendant and said:
“Daryll, we still have not received payments for the lots you purchased. If we don't receive payment we have instructed our lawyers to write a letter to you stating they will be resold at auction and we will claim the shortfall from you.”
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Mr Wilson sets out in his affidavit that the defendant replied:
“Righto. Fuck this. I'm ringing John up now to see what's going on with the bloke who is supposed to be financing it. I've had a gutful.”
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On 16 April 2015 Mr Wilson again telephoned the defendant and said:
“Daryll, you need to make payment for the lots you've purchased immediately or we will be relisting them for auction on 28 April 2015. If we have to do this, we will take legal action against you for the difference.”
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Mr Roddom replied:
“Relist the lots and sell them. I know the payment will not be forthcoming and I know that I am liable as the registered buyer. John has told me that he will pay for my legal fees and will support me for any potential shortfall between the items. I have previously bought items for John Howard that have been financed by the same guy. I currently have two new Chinese 45-tonne excavators that are still in my name that I bought and paid for through another auction house. I might have to use this for leverage and you might see them in your yard if things continue to go down this path.”
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Subsequent to this there was an auction held on 22 April 2015. All attempts were made to conduct this auction with expedition and I note in conversations set out between Mr Wilson and Mr Slattery, who has also sworn an affidavit (exhibit B), in which the underbidders from the previous auction were contacted and I note that their names appear at paragraph 16 of Mr Wilson's affidavit.
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The items were relisted for auction on 22 April. Three of them sold but unfortunately one item did not sell and had to be relisted at an auction later that year when it finally sold. The quantum of the claim is not in dispute and I note that the sale price and premium as set out in the schedule for the loss on resale is $209,625 as previously mentioned.
The defendant’s evidence
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The defendant filed an affidavit setting out the following:
“1. I am the defendant.
2. I attended the Auction at Slatterys at 230 Old Maitland Road, Hexham NSW 2322 on 18 March 2015.
3. I completed the Bidder’s Card.
4. I purchased:
a. 2011 Drake 7 Rows of 8 Float Widener (Lot 1);
b. 2012 Drake 2 Rows of 8 Clip on Widener (Lot 2);
c. 2008 MTEA 2 Rows of 8 Dolly Widener (Lot 3); and
d. 2011 MTRA 2 Rows of 8 Tyre Widener Dolly (Lot 4)
5. John Howard had told me he was organizing the finance through his company Howard Heavy Haulage Pty Ltd and he would pay Slattery’s directly. Warwick Ison was the Chief Financial Officer for Howard Heavy Haulage Pty Ltd. The payment for the Lots purchased has not occurred as John was unable to arrange finance.
6. John Howard has since gone into Bankruptcy in August 2015. NSW/3569/15/0
7. John Howard’s company Howard Heavy Haulage Pty Ltd went into liquidation in June 2015. The liquidators are Rogers Reidy in Brisbane Queensland
8. I refer to the Affidavit of Jonathon Wilson and paragraph 12 of that statement and I would like to clarify a paragraph that I was quoted as saying.
I have purchased equipment on John Howard’s behalf before and John Howard paid for the equipment which was subsequently sold and forms part of John Howard’s Bankruptcy.
9. I am currently on anti depressants and suffer severe depression. See attached Doctors report.
10. I have no real assets or any other assets in my name and cannot afford legal representation nor repay any amounts claimed as outstanding.”
The defence to the claim
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This brings me to the issue of the defence to these claims. In his helpful written submissions Mr Neggo identifies three defences, namely:
That the defendant was acting as agent for another
That the terms and condition of the auction were not drawn to his attention; and/or
That there was no contract between himself and the plaintiff (this is apparently what is sought to be pleaded in paragraphs 6(d)(v) and 10 of the defence).
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I also note that there are issues raised in the defence in relation to mitigation; these have been unsupported by evidence. In fact, no evidence has been filed by the due date in June apart from those filed for the plaintiff (exhibit C).
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I also note Mr Ison's submissions on behalf of the defendant which were that this was an “honest and reasonable mistake”, in that when the defendant signed the bidder card number he was not given any instructions he had to sign as the agent and that nobody told him to do so and also that Mr Howard is now bankrupt. As already noted above, however, the terms and conditions expressly state the obligation to identify principals as otherwise any person who makes the purchase will be deemed to be the principal (C, cl 5 of the terms of agreement set out in exhibit A behind tabs 3 to 6).
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Dealing with the relevant legal principles the law in relation to the conduct of auctions is of some antiquity and has remained largely unchanged. The nature of the relationship between the auctioneer, the vendor and the purchaser is helpfully set out by Lord Denning MR in Chelmsford Auctions v Poole (1973) 1 QB 543 at 548 where his Honour sets out the three different contracts entered into by the auctioneer with each of the vendor and purchaser as well as the contract between the vendor and the purchaser. I do not need to do more than note that it is settled law that if the purchaser who has bid the highest afterwards fails to pay and refuses to take delivery the auctioneer can sue him and that essentially the quantum of that claim is, as is noted in Lamond v. Duvall, 9 Q. B. 1030, that the defaulter is liable for the difference on resale and expenses (see also Maclean v Dunn (1828) 4 Bing 722).
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The liability of an agent where there is an undisclosed principal is similarly an area of the law which has been settled for many years and I note a general statement of the law as it has been for a very long period of time and remains by the Privy Council in Sau Yin Kwan v Eastern Insurance Co Limited (1994) 2 AC 199 at 207.
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As has been stated in many other cases (see for example, Teheran-Europe Co Ltd v S T Belton Tractors Ltd [1968] 2 QB 545) the liability of the agent for the undisclosed principal rests on practical common sense bases of the need for there to be business efficacy in contracts and the principles in relation to this area of the law are justified on the grounds of what is noted at p 207 of Sau v Eastern Insurance Company Limited as “grounds of commercial convenience.” Similar sentiments are expressed by Chamberlain J in HJ Lyons & Sando Limited v Houlson (1963) SASR 29 at 31.
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It is not sufficient to merely disclose the identity of the principal. What must be made clear is that the agent is “contracting on the principal's behalf and not on his own” (at p 31). Chamberlain J goes on to refer to the statement by Erskine LC in Ex Parte Hartop (1806) 33 ER 132 at 133 that:
“No rule of law is better ascertained, or stands upon a stronger foundation, than this; that, where an agent names its principal, the principal is responsible, not the agent, but for the application of that rule, the agent must name his principal as the person responsible.”
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Taking all of the above into account and noting the execution by the defendant of the bidder's card in circumstances where the contents of that bidder's card directly drew his attention to the terms and conditions, he was in the position of a person who signs the document which was known to him to contain contractual terms and effect his legal representations and he is accordingly bound for the reasons expressed by the High Court of Australia in Toll Pty Limited v Alphapharm Pty Limited (2004) 219 CLR 165 at 54 and 57.
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It is immaterial that the defendant says he did not read the document and it was not necessary for anyone to “tell” him when the very terms of the document drew it to his attention and where it was in multiple copies around the auction room as well as in the catalogue.
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The statements by the defendant in his affidavit add little or nothing to the factual balance beyond a repetition of the fact that he purchased items in circumstances where a gentleman called John Howard, who is now bankrupt, told him he was organising the finance.
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This is a clear case of breach of contract. It has been the cause of action identified in the statement of claim by setting out the terms and conditions of that contract and the particulars of the defendant's breach, all of which I am satisfied has been established.
Quantum and costs
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I have already noted that the question of quantum is not in issue in these proceedings. Exhibit D sets out the lot 1 to 4 sale price and buyer's premium and total and goes on to calculate the interest. I am satisfied that the principal and interest have been set out accurately and accordingly.
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I propose to enter judgment for the liquidated sum sought, namely, $232,783.70. I will hear from the parties on costs. What cost order do you seek?
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NEGGO: Your Honour, I seek an order that the defendant pay the plaintiff's costs on the ordinary basis as agreed—
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HER HONOUR: All right. Is there any reason why he shouldn't pay those costs on that basis?
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ISON: No, your Honour.
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HER HONOUR: In that case the defendant is to pay the plaintiff's costs as agreed or assessed. Exhibits are retained for 28 days.
Orders
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On the application of the plaintiff and with the consent of the defendant, grant leave to the plaintiff to file an Amended Statement of Claim adding the additional phrase “aka Daryll James Roddom” to the defendant’s name, and dispense with service.
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Judgment for the plaintiff against the defendant for $232,783.70.
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Defendant is to pay the plaintiff’s costs as agreed or assessed.
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Exhibits retained for 28 days.
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Decision last updated: 13 October 2016
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