Todarello v Martin and Luscombe Pty Limited

Case

[2002] NSWSC 71

20 February 2002

No judgment structure available for this case.

CITATION: Todarello v Martin & Luscombe Pty Limited [2002] NSWSC 71
CURRENT JURISDICTION: Supreme Court of New South Wales
FILE NUMBER(S): SC 13509/2001
HEARING DATE(S): 11 February 2002
JUDGMENT DATE: 20 February 2002

PARTIES :


Mr. Anthony Todarello and Mrs. Maria Todarelllo
Martin & Luscombe Pty Limited
JUDGMENT OF: Sully J at 1
LOWER COURT
JURISDICTION :
Local Court
LOWER COURT
FILE NUMBER(S) :
969/2000
LOWER COURT
JUDICIAL OFFICER :
Magistrate S D K Hyde
COUNSEL : D. Charles - Plaintiffs
K. Smark - Defendant
SOLICITORS: William J. Player - Plaintiffs
McPhee Kelshaw - Defendant
LEGISLATION CITED: Local Courts (Civil Claims) Act 1970 (NSW)
Contracts Review Act 1980 (NSW)
Trade Practices Act 1974 (C'th)
CASES CITED: Re Spenborough Urban District Council's Agreement [1968] Ch. 139
DECISION: Judgment of Local Court affirmed; Summons dismissed with costs

      IN THE SUPREME COURT
      OF NEW SOUTH WALES
      COMMON LAW DIVISION

      SULLY J

      Wednesday 20 February 2002

      13509/01 - TODARELLO v MARTIN & LUSCOMBE PTY LIMITED

      JUDGMENT

1 SULLY J: By a summons filed on 13 November 2001 Mr. Anthony Todarello and his wife Mrs. Maria Todarello as Plaintiffs seek against Martin & Luscombe Pty Limited as Defendant an order setting aside a judgment and order of a Local Court Magistrate made on 17 October 2001 in certain proceedings in the Local Court at Penrith, in which proceedings Mr. and Mrs. Todarello were, also, plaintiffs, and Martin & Luscombe Pty Limited was, also, defendant. Such an appeal to this Court lies pursuant to section 69 of the Local Courts (Civil Claims) Act 1970 (NSW). That section provides, relevantly:

          “69.(1) Subject to sub-section (2), all judgments and orders of a court exercising jurisdiction under this Act shall be final and conclusive.
          (2) A party to proceedings under this Act who is dissatisfied with the judgment or order of the court as being erroneous in point of law, may appeal to the Supreme Court therefrom.
          (2A)…………. (not applicable)
          (3) The provisions of section 101 to section 115, both sections inclusive, of the Justices Act 1902 , apply, to the extent to which they are applicable, to appeals under sub-section (2) in the same way as they apply to appeals to the Supreme Court under those provisions.”

2 The proceedings in the Local Court were commenced by a Statement of Claim, the ultimate form of which, after amendment, claimed a sum of $19,000, pleading as follows the causes of action:

          “1. Moneys due and owing by the Defendant to the Plaintiff in respect of accountancy fees paid in advance under an agreement subsequently cancelled.
          IN THE ALTERNATIVE:
          2. Damages under section 51AC of the Trade Practices Act ;
          OR:
          3. Relief from an alleged contract between the parties dated on or about 19 June 1999 pursuant to the Contracts Review Act 1980 , to the extent that the amount claimed be repaid to the Plaintiffs.”

3 A lengthy and elaborate Defence was pleaded; but it is not necessary to say more about it than that it put in issue each and every one of the claims for relief pleaded in the Amended Statement of Claim.

4 In the Local Court, and again on the hearing of the appeal in this Court, certain matters of fact were not in dispute. The agreed facts can be summarised as follows:


      [1] The Defendant conducted at all material times an accountancy practice, and the directors of the Defendant were at all material times, and are, Chartered Accountants.

      [2] The Plaintiffs became clients of the Defendant in or about March 1992.

      [3] On or about 29 June 1993 the Plaintiffs entered into a retainer agreement with the Defendant involving, amongst other matters, the pre-payment of accounting fees for the 1993/1994 financial year.

      [4] Retainer agreements were concluded between the plaintiffs and/or Todarello Pty Limited of the one part and the defendant of the other part in respect of each of the financial years 1994/1995, 1995/1996, 1996/1997 and 1997/1998.

      [5] In respect of each of the years specified in paragraph [4] above, the Plaintiffs and/or Todarello Pty Limited pre-paid the accounting fees referred to in the retainer agreements, and claimed a tax deduction in respect of those payments.

      [6] On or about 25 June 1999, the plaintiff, Anthony Todarello, signed a document bearing that date.

      [7] The document referred to in paragraph 6 was a contract. The document dated 25 June 1999 was addressed to both plaintiffs, and it read, formal parts omitted, as follows:
      RETAINER FOR ACCOUNTING FEES
          As discussed, we are willing to enter a retainer arrangement with you regarding your accounting fees for the 1999/2000 financial years.
          The arrangement would be as follows:
          8. Our fee for the retainer would be $19,500.
          9. The fee would be payable by six equal instalments payable on first day of each month commencing on 1 July 1999 and ending on 1 December 1999.
          10. The fee may be pre-paid. Provided the whole fee is paid to us before 30 June 1999, you will be entitled to $500.00 settlement discount.
          11. The retainer will cover our services for the period from 1 July 1999 to 30 June 2000 and will include all of the normal services provided by our firm to you. Those services shall include the usual recurrent business, accounting and taxation advice that we have provided in the past. Additional Special Services are outside the terms of the retainer and will be charged separately (e.g. tax audits, special taxation advice, objections or appeals regarding your tax affairs, additional work due to increased number of business entities, business planning and development). Please note that advice regarding the introduction of the proposed goods and services tax is outside the terms of this retainer.
          12. Where the services provided to you and covered by the retainer exceed a cost of $22,000.00 calculated by reference to the time necessarily spent by our staff and the level of expertise required, we reserve the right to charge you the excess in addition to the retainer fee referred to above.
          13. Disbursement and other out-of-pocket expenses will be charged to you in addition to the retainer fee.
          14. This retainer covers services provided to or on behalf of the following persons or entities:
              Todarello Pty Limited (including quarterly accounts for bank)
              Mr. & Mrs. A. Todarello and Family
              Mr. & Mrs. G. Todarello
              A & M & G & A Todarello Partnership
              Amgade Pty Limited
              A.M.T. Trust Aust.
              If you accept the terms of this retainer, please sign the attached copy of this letter and return it to us before 30 June 1999.”


      [8] On or about 25 June 1999, the Plaintiffs and/or Todarello Pty Limited paid to the Defendant the sum of $19,000.00, being the pre-paid fees for accounting services to be provided by the Defendant to the Plaintiffs and other members of the Todarello Family and Todarello Group in the 1999/2000 year.

      [9] The Plaintiffs and/or Todarello Pty Limited claimed a tax deduction in respect of that pre-payment of accounting fees in their taxation return or returns lodged in relation to the financial year ended 30 June 1999.

      [10] On or about 22 September 1999, a conversation took place between Mr. Anthony Todarello on behalf of the Plaintiffs and Mr. Graham Martin on behalf of the Defendant.

      Mr. Martin gives, in an affidavit sworn by him on 13 July 2001, a version of this conversation. He says that Mr. Todarello told him that the Todarello family wanted him to take their accounting work elsewhere. Asked whether there was some dissatisfaction with the services being provided by the Defendant, Mr. Todarello allegedly said: “No, we are not unhappy with any of the work you have done for us. The family would like to change. The family would like to go with another accountant who has agreed to do the work for half the price.” After a further exchange of conversation, Mr. Todarello allegedly said: “I’ll talk to the family and see whether or not you can continue. If we do use another accountant we will need to talk about a refund” . Mr. Martin says that he responded: “Well, Tony, I’m not sure that you are entitled to a refund, but if you are we don’t have the funds available at present” ; to which Mr. Todarello allegedly responded: “That’s okay, we can sort something out” .

      Mr. Todarello, in an affidavit sworn on 4 July 2001, gives a somewhat different version of this conversation. He says that he relied entirely on the Defendant for taxation and accountancy advice and that “……………….. at no time was I informed that if no work was carried out, or work to a lesser value than the amount paid was carried out, that I would not be entitled to a refund of the amount paid, or a proportion thereof. Accordingly I assumed that I could cancel the agreement for services and receive a refund”.

      Mr. Todarello goes on to say in his affidavit that “Due to dissatisfaction with the services and advice of the Defendant being given to me and my companies, I cancelled the services of the Defendant verbally on or about 1 September 1999, without any work having been carried out by the Defendant in respect of the financial year 1 July 1999 to 30 June 2000; and I sought a refund of the $19,000.00 paid to the Defendant in June 1999” .

      [11] The notion that Mr. Todarello cancelled verbally on or about 1 September 1999 the retainer previously entered into with the Defendant, does not sit altogether comfortably with the fact, as agreed for the purposes of the Local Court hearing and of the appellate hearing in this Court, that a conversation took place on 22 September 1999 in connection with the proposed withdrawal by the Plaintiffs and their associated family members and entities from the retainer arrangement with the Defendant. I think, however, that nothing of significance turns for present purposes upon this discrepancy.

      [12] On 23 September 1999 a firm of Registered Tax Agents and public Accountants wrote a letter of that date to the Defendant. The letter was in the following terms, formal parts omitted:
          “We have been approached by the above stated to attend to their taxation and financial requirements.
          Please advise if there is any professional objection that may preclude us from accepting this appointment.
          Should there be no objection, please provide all income tax returns, corporate files and registers, financial accounts and files, and other appropriate items. These will be collected from your office by the undersigned in due course.”

      The Defendant replied promptly and in the following terms:
          “We have perused our files and are able to advise that we can see no professional or other reason why you should not accept this appointment.
          All information requested will be picked up from our office by Mr. Tony Todarello.”
      [13] On 1 November 1999 Mr. Todarello wrote to the Defendant a letter of that date. The letter was received by the Defendant on or about 9 November 1999. The letter read, formal parts omitted:
          “As noted, we have pre-paid you the above amount at the end of June 1999 for the proposed accounting and taxation work etc. to 30th June 2000.
          We note that certain works were carried out to 30th September 1999. Therefore, we respectfully require a detailed statement of account for these works carried out, together with a refund for the balance therewith.”

      [14] On or about 3 December 1999 the Defendant replied to Mr. Todarello. The reply is headed “without prejudice”. Notwithstanding this marking, the letter was, by consent, made available to this Court in connection with the hearing of the present appeal. The letter reads, formal parts omitted, as follows:
          “In June 1999 you entered into an agreement with our firm whereby Martin & Luscombe Pty Limited agreed to provide accounting, financial and taxation services during the year ended 30 June 1999. [sic, but it was agreed at the hearing that this was a misprint and that the correct year was 2000]. It was agreed that the fee for these services would be $19,500 with a discount of $500 for payment in advance. On 29 June 1999 you paid to our firm $19,000.
          In September 1999, you chose to seek further accounting services from another accountant. It is clear from your words at the time that the change of accountant was not based upon any dissatisfaction with the services provided to you over a number of years. The withdrawal of your authority to continue acting on your behalf has resulted in our inability to provide further services to you at this time.
          Accordingly, you chose to break the agreement between you and Mrs. Todarello and our firm, without any valid reason being stated. Our firm has always had every intention of fulfilling our obligations under the agreement. Even now, we are willing to complete these obligations until 30 June 2000.
          In these circumstances, it is our belief that our firm has no legal obligation to refund any of the amount paid in respect of the agreement.
          That belief is confirmed by advice from our legal advisers.
          If you hold a different view, please advise so in writing, stating your reasons for that view”.

      [15] On 10 December 1999 Mr. Todarello responded in a letter bearing that date. The letter stated, relevantly:
          “We wish to advise that we have liaised with the Institute of Chartered Accountants (ICA) whom have advised us that you must comply and respond to our initial request. If you fail to do so, we must report this matter to the ICA and accordingly proceed with legal action.”

      [16] To this letter the Defendant responded by a letter bearing date 13 December 1999. That letter read, omitting irrelevant material, as follows:
          “Would you please advise the name of the person at the Institute of Chartered Accountants with whom you liaised. We would welcome the advice of that person in relation to any actions we must take in accordance with our obligations as Chartered Accountants.
          Alternatively (and in response to our previous letter), you may wish to provide the basis upon which you claim to be entitled to a refund following your actions to terminate the agreement between you and our firm.”

      [17] No part of the $19,000 paid to the Defendant has been refunded to the Plaintiffs.

5 The learned Local Court Magistrate dealt fairly briefly with all three bases for the relief claimed in the Amended Statement of Claim. As to the first of the three propounded claims, his Worship said:

          “The evidence is clear. The Plaintiff breached the retainer agreement. The Defendant was willing to carry out his duties under the agreement. I agree with the Defendant’s submissions on this point. I am satisfied the terms of the agreement did not allow for unilateral termination.
          Failure of consideration: again, I agree with the Defendant’s submissions on this point. The Plaintiff had the opportunity to continue with the agreed agreement and have the Defendant continue to supply the services with the benefits of some discounting and a tax benefit. The Plaintiff terminated because he could get a cheaper service from discussions he had with persons in the trade.
          I agree with the Defendant’s submission that the suggestion that the Plaintiff can cancel the agreement at will – and I emphasis ‘at will’ – flies in the face of any certainty in relation to the agreement and undermines any business efficacy pertaining to the agreement. In my opinion, the question of the right of any refund of the $19,000 depends on the Trade Practices Act argument and the Contracts Review Act 1980 argument.”

6 His Worship then turned to consider the two alternative ways in which the Plaintiffs had pleaded their claim. His Worship said:

          “I examined the Plaintiffs’ submissions on s 51AC of the Trade Practices Act and the references to the fact that the Defendant has acted unconscionably in refusing to return its windfall gain. I note s 51AC(3) of that Act. I reject the Plaintiffs’ submission that the Plaintiffs had entered into the contract without the benefit of independent legal advice.
          The facts in this case indicate that this is a situation where any independent legal advice would not have altered the Plaintiffs’ intention. The agreement was a simple agreement for the supply of services and had been renewed each year from 1993, albeit with an increase in fees. The Plaintiff was not under any misapprehension as to where he stood under the terms. The Defendant submits the Plaintiffs’ pleading is flawed in that the Plaintiffs should have sought an order pursuant to s 87. ………………………… [His Worship then referred briefly to the decisions in West v AGC Advances Limited ; and Zoneff v Elcom Credit Union Limited (1990) 94 ALR at 441; and continued]……………. . The facts in this case are the Plaintiffs terminated the agreement. The Defendant still offered to carry out the services. I cannot see this as being unconscionable and that submission fails.”

7 His Worship turned, finally, to the second of the alternative bases upon which the Plaintiffs had propounded their claim, that is to say the alternative based upon the Contracts Review Act 1980 (NSW). His Worship reiterated his finding of fact concerning the circumstances of the Plaintiffs’ entering into the agreement allegedly without independent legal advice. His Worship noted that he had already determined, adversely to the Plaintiffs, that question of fact; and proceeded:

          “As to the forfeiture of the $19,000 going beyond what was reasonably necessary to protect the interests of the Defendant. The Plaintiffs made reference to West v AGC and submitted the purpose of the contract was to allow pre-payment of fees for work to be performed over a 12-month period. It was not to guarantee a minimum payment to the Defendant for the 12-month period. I am against the Plaintiffs' submission on this point. The simple facts are the fees increased annually. The Plaintiff signed the agreement as he had done for some years. There was no animosity between the parties. The Plaintiff became aware of the cheaper firm. The Defendant still held out the offer to complete.
          The Defendant submits on this claim in the alternative as follows and says ‘The Plaintiffs cannot plead a contravention pursuant to the Contracts Review Act 1980 in relation to these proceedings’ and relies on s 6(2) of that Act. I agree with that submission.”

8 The summons which brings the appeal before this Court has appended to it, as required by SCR Part 51B a statement of grounds of appeal. The statement runs to twelve paragraphs. It was submitted for the Defendant that the grounds of appeal, read and construed reasonably, did not raise points of law satisfying the very strict requirements in that behalf of section 69 of the Local Courts (Civil Claims) Act 1970. As to some of the twelve paragraphs, for example the paragraphs (i), (ii) and (iii), I think that this submission is well founded. Others of the twelve paragraphs are not, I think, free from doubt as to whether, upon a fair construction, they raise questions of law rather than questions of fact. It seems to me, however, that on the given facts of the present case it is better not to become embroiled in extended technical legal disputation on that point. It is, I think, preferable to test the published reasons of the learned Magistrate, they being both clear and succinct, by reference to the following criteria:


      [1] In so far as his Worship has made a finding of fact, was that finding reasonably open to him on the whole of the evidence then in hand?

      [2] In so far as his Worship has stated a proposition of law, is the proposition as stated correct in law?

      [3] In so far as his Worship has applied law correctly stated to facts reasonably found, has he reached a conclusion reasonably open to him?

9 Approaching the substance of the present appeal in that way, I have come to the following conclusions:


      [1] It is in my opinion clear beyond question that the document of 25 June 1999, executed by Mr. Todarello on behalf of the Plaintiffs and by the Defendant, constituted a contract for the provision by the Defendant to the Plaintiffs of accounting services as stipulated in the letter. It seems to me to be clear beyond question that both parties, at the time they negotiated and then executed that contract, contemplated that it would subsist for the whole of the 1999/2000 financial year.

      [2] The Plaintiffs submit that there ought to be implied in the contract as constituted by the letter a term empowering either party to the agreement to cancel it upon reasonable notice to the other.

      The relevant law in that connection is correctly stated, in my respectful opinion, by Buckley J in Re Spenborough Urban District Council’s Agreement [1968] Ch. 139 as follows:
          “Authority establishes that, where an agreement does not in terms confer on the parties or one of them a power to determine the agreement, whether such a power should be inferred is a question of construction of the agreement to be determined in accordance with the ordinary principles applicable to such a question……………………… . An agreement which is silent about determination will not be determinable unless the facts of the case, such as the subject matter of the agreement, the nature of the contract or the circumstances in which the agreement was made, support a finding that the parties intended it to be determinable, but there is in my judgment, no presumption one way or the other.”

      The above quotation forms part of the discussion of the particular point in Lewison: The Interpretation of Contracts: Second Edition at 5.15 on pp 147-148. That discussion continues as follows:
          “Where the contract is not for an unlimited time, but is for a fixed term, there is likely to be no room for implying further terms as to the termination of the agreement. In Kirklees Metropolitan Borough Council v Yorkshire Woollen District Transport Co Ltd , an agreement between a company and two local authorities provided that during a period of 99 years neither of the local authorities should operate public transport services. In return the company was to pay the authorities a percentage of its profits. A successor to the company sought to imply a term that the agreement should determine if the company became unable lawfully to operate public transport services. Walton J held that ‘by no stretch of the imagination’ could such a term be implied.”


      In my opinion, the fair application of these principles to the given facts of the present case does not permit of the implication into the written contract of a term empowering either party to the contract to bring it to an end upon reasonable notice to the other party. I reject the submission to the contrary.

      [3] That being so, it seems to me to follow ineluctably that the action of the Plaintiffs in withdrawing the instructions of the Defendant and in transferring those instructions and all of their relevant materials to another firm of accountants, amounted to a unilateral repudiation of the contract evidenced by the letter of 25 June 1999. I do not think that it could be sensibly disputed that what the Plaintiffs did evinced in the clearest terms an intention not to adhere to their part of the bargain evidenced by the letter of 25 June 1999; and an intention, also, that such unilateral repudiation by them should become, so far as the Defendant was concerned, a fait accompli , so that the Defendant had, in reality, no option other than to accept the repudiation. I think that a fair view of the response of the Defendant to the unilateral repudiation by the Plaintiffs is that the Defendant was willing at all times to reinstate the agreement evidenced by the letter of 25 June 1999; but accepted that, if such a course was not acceptable to the Plaintiffs, then the Defendant itself would have de facto no practical alternative to accepting the repudiation.

      [4] The principal claim pleaded in the Amended Statement of Claim is in form, essentially, a common money count for money had and received by the Defendant to the use of the Plaintiffs. Of such a count, the learned authors of Bullen and Leake say in their Third Edition at p 44:
          “This is the most comprehensive of all the common counts. It is applicable whenever the Defendant has received money which in justice and equity belongs to the Plaintiff, under circumstances which render the receipt of it a receipt by the Defendant to the use of the Plaintiff.”


      In the present case, the payment of $19,000 by the Plaintiffs to the Defendant was not, so far as I can see from the given facts, ever intended by the Plaintiffs to be held, as it were, by the Defendant as trust funds of the Plaintiff. The payment was a pre-payment of a lump sum fee as consideration for a particular contract. The Plaintiffs were not compelled in any way to make a pre-payment. It suited them to do so for the obvious reasons that they obtained: first , a discount of $500 on what would otherwise have been the consideration for the contract and: secondly , because they received an immediate, and not insignificant, taxation advantage by reason of their having so pre-paid the agreed consideration.

      There is a great deal of law, some of it not altogether easy to understand, concerning restitutionary claims in the wake of the wrongful termination of a contract by one of the parties to it. The position, put simply and relevantly to the facts of the present case, is summarised as follows in Carter: Breach of Contract: Second Edition at paragraph [1212]:
          “Where a party to a contract seeks to pursue a restitutionary claim in relation to a benefit conferred under the contract, it is necessary for the performance of the contract to be terminated and termination for breach or repudiation is sufficient, provided the party pursuing the claim is otherwise entitled to claim restitution.”


      The present case differs somewhat from the ordinary kind of case that arises in that context. What makes the difference in the present case is the fact of pre-payment. The pre-payment meant, and means, that the Defendant does not have to bring an action for loss or damage resulting from the Plaintiffs’ unilateral repudiation of the agreement. The Defendant already has in hand the full amount of the agreed contract price. One consequence of that is that the Plaintiff must now discharge the burden of proving its asserted entitlement to recover that pre-payment. The Plaintiffs cannot do that unless the contract is first cleared out of the way by proof that it has been brought to an end. The only way in which the Plaintiffs can prove that fact is by relying upon their own wrongful repudiation of the contract, coupled with their de facto deprivation of the Defendant of the latter’s ordinary right of election to accept or to reject the unilateral repudiation.

      The learned Magistrate found, and in my opinion it was reasonably open to him so to find, that the Defendant was without fault in the matter of the termination of the contract. The learned Magistrate found, and in my opinion it was reasonably open to him so to find, that everything having to do with the termination of the contract derived from the wrongful and unilateral repudiation by the Plaintiffs of their obligations under the contract. In those circumstances, I do not think that the Plaintiffs have demonstrated that they are “otherwise entitled to claim restitution” .

      It follows, therefore, that in my opinion the learned Magistrate was correct in his conclusion that the first of the three bases upon which the Plaintiffs asserted a right to repayment of the $19,000 had not been established by them.

      [5] As to the alternative claim based upon section 51AC of the Trade Practices Act 1974 (C’th) , the decision of the learned Magistrate turned, as has been previously noted, upon the simple proposition that his Worship was not persuaded to a finding of fact that anything done by the Defendant had been “unconscionable” in the sense contemplated by section 51AC of that Act. In my opinion, it was open to the Magistrate to come to that finding of fact upon the basis of the evidence placed before him.

      What the Plaintiffs undertook, in connection with this head of their original claim, was proof on the probabilities that the Defendant, in connection with the supply, or possible supply, of accounting services to them, had engaged in conduct that was, in all the circumstances, unconscionable: section 51AC(1).

      The first thing that was entailed by that sort of claim was a precise articulation of the nature of the alleged unconscionable conduct. The Amended Statement of Claim does not itself give any such particulars. The affidavit sworn by Mr. Todarello on 4 July 2001, also, does not seem to me to give any clear delineation to the notion of relevant unconscionable conduct on the part of the Defendant. It is clear from his Worship’s reasons that a submission was put to him to the effect that, at least in part, the alleged unconscionable behaviour on the part of the Defendant had to do with the fact that the Plaintiffs had not had independent legal advice before entering into the relevant contract. I am not at all clear, as at present advised, where there is to be found any evidence capable of supporting such a submission. Even assuming that in fact the Plaintiffs did not obtain independent legal advice, that could not entail, without more, any unconscionable conduct on the part of the Defendant.
          The learned Magistrate, in my respectful opinion, was entirely correct in his approach to the definition of unconscionability in connection with section 51AC. In so far as his Worship came to the conclusion that the evidence before him, such as it was, did not show, on the part of the Defendant, unconscionable conduct in the statutory sense, I am of the opinion that the conclusion was amply open to his Worship on a fair view of the whole of the evidence that was placed before him.


      In my opinion the learned Magistrate was correct in rejecting the second of the three bases upon which the claim of the Plaintiffs was originally pleaded.

      [6] There remains for consideration the claim based upon the Contracts Review Act 1980 (NSW) .

      The learned Magistrate, as has previously herein been noted, upheld a submission of law to the effect that the claim of the Plaintiffs could not be entertained by reason of the limitation imposed by section 6(2) of the Act. That provision is, relevantly:
          “(2) A person may not be granted relief under this Act in relation to a contract so far as the contract was entered into in the course of or for the purpose of a trade, ……………. [or] …………………… business ……………….. carried on by the person ………………….. other than a farming undertaking (including, but not limited to, an agricultural, pastoral, horticultural, orcharding or viticultural undertaking) carried on by the person ……………… wholly or principally in New South Wales.”


      Mr. Todarello, in his affidavit of 4 July 2001, gave his occupation as “Greengrocer” . It is clear that he, his wife, some of their children, and various associated corporate entities, were in business as, essentially, greengrocers, in a very substantial way. I think that the learned Magistrate was clearly correct in upholding the Defendant’s submission of law based upon section 6(2) of the Act.

      Even had the Plaintiffs’ claim been capable of being entertained pursuant to the Act, it would have been necessary for the learned Magistrate to have considered, among other things, the matters defined in sub-sections (4) and (5) of section 9 of the Act. Those provisions are:
          “(4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made.
          (5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made.”

      It is clear that the learned Magistrate did not accept the evidence of Mr. Todarello that he and his wife and family had been dissatisfied with the services rendered by the Defendant; and that it was such dissatisfaction that led to the unilateral repudiation of the contract. In my respectful opinion it was entirely a matter of fact for the learned Magistrate whether or not he accepted that version of events. It was, in my respectful opinion, entirely open to the learned Magistrate to reject the version, as his Worship plainly did. That left the Plaintiffs, as previously herein explained, in a position where they had themselves wrongfully and unilaterally repudiated their contract with the Defendant, cementing that repudiation by rendering it impossible for the Defendant to do anything other than accept a fait accompli .
          It is not either necessary or possible to pursue these considerations any further, because the course of events in the Local Court does not seem to have raised those issues in a real way supported by precise evidence. I point out the requirements of sub-sections (4) and (5) of section 9 in order to underscore my own view that, the section 6(2) question apart, the conduct of the Plaintiffs themselves must have made it, to say the least, difficult to survive the tests established by those two sub-sections.

      In my opinion, the conclusion to which the learned Magistrate came in connection with the Contracts Review Act portion of the Plaintiffs’ claim was both correct in law and sustainable in fact.

10 For the whole of the foregoing reasons, I have come to the conclusion that the decision of the Local Court should not be disturbed.

11 The judgment of the Local Court is, accordingly, affirmed. The summons is dismissed with costs.

      **********
Last Modified: 02/26/2002
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