Smith v Wikramanayake - [2007] NSWSC 136

CITATION: Smith v Wikramanayake [2007] NSWSC 136

HEARING DATE(S): 6th February - 9th February 2007

JUDGMENT DATE :
28 February 2007

JUDGMENT OF: Hammerschlag J

DECISION: The plaintiffs' claims are dismissed; judgment for the third cross-claimant against the third cross-defendant in the amounts of $626,833.16 and $72,126.22 ; the plaintiffs are to pay the defendants' costs of the proceedings including the cross-claims.

CATCHWORDS: CONTRACT - oral contract - spoken words in absence of reliable contemporaneous record or corroboration - standard of proof - reasonable satisfaction of court - reasonable satisfaction of court not established independently of considerations of seriousness or gravity of consequences flowing from alleged oral agreement.

CASES CITED: Briginshaw v Briginshaw (1938) 60 CLR 336
Helton v Allen (1940) 63 CLR 691
Rejfek v McElroy (1965) 112 CLR 517
Watson v Foxman (2000) 49 NSWLR 315
Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337

PARTIES: David Smith (First Plaintiff / First Cross Defendant)
John James (Second Plaintiff / Second Cross Defendant)
Plus 55 Village Management (Albury) Pty Limited (Third Plaintiff / Third Cross Defendant)
Margaret Anne Wikramanayake (First Defendant / First Cross Claimant)
Prenitha Srimath Wikramanayake (Second Defendant / Second Cross Claimant)
Wagga Road Properties Pty Limited (Third Defendant / Third Cross Claimant)

FILE NUMBER(S): SC 4414/2005

COUNSEL: R Weaver (Plaintiffs/ Cross Defendants)
A. S. Bell SC with P Bolster (Defendants / Cross Claimants)

SOLICITORS: The Law Company (Plaintiffs / Cross Defendants)
Verekers Solicitors (Defendants / Cross Claimants)

- 1 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

Hammerschlag J

28 February 2007

4414/05 David Smith & 2 Ors v Margaret Anne Wikramanayake & 2 Ors

JUDGMENT

1 This is a case about Lavender Lodge, an aged care facility (“the facility”) at 286 Warren Street Lavington near Albury in the State of New South Wales.

The parties and the claims

2 Mr David Smith, the first plaintiff, is an expert in the provision of aged care. He is a qualified accountant and chartered secretary. He has been associated with Mr John James, the second plaintiff, for some years. Plus 55 Village Management (Albury) Pty Ltd (“Plus 55”), the third plaintiff, is Mr Smith’s company.

3 The first and second defendants are Mrs Margaret and Mr Prenitha Wikramanayake (collectively “the Wikramanayakes”). Both the Wikramanayakes are chartered accountants.

4 Registered title to the land upon which the facility is built is in the name of the third defendant, Wagga Road Pty Ltd (“the Company”). The shares in the Company are held by the Wikramanayakes.

5 The principal controversy is whether in 2004 Messrs Smith and James and the Wikramanayakes entered into an oral agreement under which Messrs Smith and James would be granted equity in the facility in the form of a one-third share each through allocation of units in a unit trust to be formed to hold the facility and to be known as the Wagga Road Trust, and one-third each in the Company which was to be the trustee.

6…

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.

Continue reading Smith v Wikramanayake

Details

AGLC: Smith v Wikramanayake [2007] NSWSC 136
Case: [2007] NSWSC 136
Decision Date: 28 February 2007

CaseChat Overview and Summary

The case of Smith v Wikramanayake involved the plaintiffs, Smith, seeking to enforce an alleged oral contract against the defendant, Wikramanayake. The dispute centred around whether the plaintiffs could prove the existence of an oral agreement regarding a property transaction, in the absence of a reliable contemporaneous record or corroboration. The matter was heard in the Supreme Court of New South Wales.

The primary legal issue before the court was whether the plaintiffs could establish the existence of an oral contract with sufficient certainty to satisfy the standard of proof required by the court. The court needed to determine whether the reasonable satisfaction of the court could be established independently of the considerations of the seriousness or gravity of the consequences flowing from the alleged oral agreement.

The court held that in order for an oral contract to be enforceable, the party asserting its existence must prove it to the requisite standard of proof. This standard is reasonable satisfaction of the court, which must be established independently of the seriousness or gravity of the consequences flowing from the alleged oral agreement. The court found that the plaintiffs had not provided sufficient evidence to establish the existence of the oral contract to the required standard. Consequently, the plaintiffs' claim was dismissed.

The court did not make any further orders beyond dismissing the plaintiffs' claim. The dismissal effectively precluded the plaintiffs from enforcing the alleged oral contract against the defendant.

Orders