Zoumis v Zoumis No. Scciv-03-700

ZOUMIS v ZOUMIS
[2003] SASC 433
Full Court: Doyle CJ, Prior and Vanstone JJ

DOYLE CJ: I would dismiss the appeal and the cross appeal. I agree with the reasons given by Vanstone J. In the end, the appeal and the cross appeal turn on the findings of fact made by the trial Judge. For the reasons that Vanstone J gives, I am not satisfied that those findings were wrong. There is nothing that I can usefully add to her reasons.
PRIOR J: I agree with the reasons proposed by Vanstone J. Both the appeal and the cross appeal should be dismissed.
VANSTONE J: This is an appeal and cross-appeal from a judgment in the District Court in relation to a claim and counter-claim made between two brothers.
The appellant, Nicholas Zoumis, who was the plaintiff in the District Court (and defendant on the counter-claim), originally claimed to be owed the sum of $30,800, being the balance of loans to his brother said to have been made from time to time since 1992, and interest thereon. The defendant, Theo Zoumis, admitted a debt, which the parties then agreed at $28,000, but counter-claimed for an unrelated sum of $62,068, being monies he asserted his brother had collected for him in the course of his work for the defendant but failed to pass on. At trial the debt to the plaintiff was acknowledged and the case proceeded on the counter-claim. The learned trial judge found for the defendant on the counter-claim, but only to the extent of $40,000, and that amount was set off against the debt to the plaintiff, so that judgment was given for the defendant in the sum of $12,000 together with interest.
The plaintiff, Nicholas Zoumis, appeals against that judgment, essentially arguing that the conclusion that he failed to account for his brother’s monies was not justified on the evidence. The defendant, Theo Zoumis, cross-appeals against the judge’s failure to find for him on the whole of the amount claimed. I shall refer to the parties by name.
From 1992 Theo Zoumis had a part share in a business called Photomatic Australia Pty Ltd which operated in several states. In August 1998 he bought the balance of the business and moved from his home in Adelaide to Sydney, for the purpose of running it from there. The business involved the operation of a number of automatic photograph booths, including some 17 booths in South Australia. The booths allowed customers to purchase instant portrait or passport photographs upon the insertion of coins into a machine. Three machines provided only black and white photographs, but the balance provided a colour service. Associated with the photographic machines were a series of meters which, in the case of the colour machines, recorded the quantity of coins received – this being referred to as a “credit meter” – as well as the quantity of film used and the numbers of passport and portrait photographs issued. The black and white photographic machines did not have a credit meter.
When Theo Zoumis moved to Sydney, he left the running of the Adelaide arm of the business to Mr William Chilton, Theo Zoumis’ son Evan, who did general maintenance work on the booths, and Nicholas Zoumis. Mr Chilton had been employed within the business as the electrical and mechanical technician for the previous 10 years. Nicholas Zoumis was entrusted with tasks in relation to the various photograph booths, including the weekly collection of monies that had accumulated in each of them, the noting of the various meter readings, the reporting to Mr Chilton as to the meter readings and cash amounts collected and the banking of that money. The trial judge found that during the relevant period Nicholas Zoumis was the only person with access to the cash boxes within the various machines and that he was the only person collecting those monies.
Theo Zoumis’ case on the counter-claim was that during the period February 1999 to November 2000 Nicholas Zoumis “skimmed” money from the coin boxes of the booths, accounting to Mr Chilton for, and banking, only part of the actual collections. Theo Zoumis became suspicious of his brother after being contacted by his bank and advised of falling returns from the business. In an effort to address the problem he issued orders that all the South Australian machines should be padlocked. The last collections were made by Nicholas Zoumis early in November and several days after the last collection he relinquished his keys. Soon after that Theo Zoumis travelled to Adelaide and undertook a collection in company with Nicholas Zoumis, Mr Chilton and Evan. A reconciliation of the coins collected as against the meters on the machines still showed a shortfall. However Theo Zoumis’ case was that all subsequent collections showed either no shortfall or at least not a significant one.
In support of his case, Theo Zoumis pointed to records of the readings of the various meters associated with the machines and their reconciliation with cash takings. It was on that basis that the quantum of Theo Zoumis’ counter-claim was fixed. Mr Chilton gave evidence before the learned trial judge about the workings of the meters associated with the machines. The judge was impressed with Mr Chilton’s evidence, finding him to be an honest witness and, to the extent of his recollection, a reliable one. Indeed the judge preferred Mr Chilton’s evidence to that of Nicholas Zoumis and Theo Zoumis. Mr Chilton expressed the view that only the credit meter on each colour machine provided a reliable means of recording how much money each machine received. He said that the meters worked mechanically and recorded four “clicks” for each dollar accepted. That ratio was fixed by the manufacturer and could not be altered. Unlike the other meters, the credit meters remained unaffected by any controls operated by the customer. If a machine were faulty and not accepting coins then it would simply eject them without registering any clicks. He said it was possible for the machine to accept coins without registering them. Therefore, theoretically, the only discrepancy would be an excess of coins over the metered number.
Over the relevant period it was Mr Chilton’s practice to forward the records compiled in consultation with Nicholas Zoumis to the office administrator employed by Theo Zoumis in Sydney, who would enter the data into a computer programme. That officer was called to prove the amount claimed. As I mentioned, Theo Zoumis asserted a shortfall in the collections to the extent of $62,068. Of that amount, $22,970 was attributable to black and white machines having no credit meters. The learned trial judge found for Theo Zoumis in respect of the shortfall associated with the colour machines, but was not prepared to extend that finding to the black and white machines where Theo Zoumis’ case was based only on the film and photograph meters. The judge did, however, in effect, “round up” the claim and found it proved to the extent of $40,000.
Nicholas Zoumis’ attack on the judge’s findings focussed on the evidence as to the reliability of the credit meters. It was argued that there was no expert evidence as to the accuracy of those credit meters and that there was no evidence that the credit meters were tested for accuracy during the relevant period. In fact Mr Chilton’s evidence was in the nature of that of an expert. Although he held no formal qualifications he had been an electronics technician for 40 years and while in Theo Zoumis’ photo booth business he had regularly serviced and repaired the machines. Those repairs extended to mechanical, electrical and electronic components of the machines. He gave evidence that the “Mars” coin mechanism was a good unit used in many different vending machines and was known to be reliable. He said that although no regular checks of the correlation of the coins with the credit meter were made, occasionally he would put coins in to verify that the machine was correctly registering receipts.
However, even though there were no systematic checks of the machines, there were several matters of evidence, amounting to informal tests, which suggested that the credit meters were indeed reliable. Mr Chilton’s evidence was that before departing to live in Sydney, Theo Zoumis made his own collections and in those circumstances no effort was made to check credit meter readings. For a short period after his original departure Theo Zoumis’ wife and “an Asian gentleman” made the collections. There was no suggested shortfall in that period. It would seem that in this period Mr Chilton instituted a system whereby the takings and the meter readings were recorded. Mr Chilton designed a form to record that information. It was after Nicholas Zoumis took over the collections that Mr Chilton first noticed a lack of conformity between meter readings and takings. He said he was not particularly concerned. However, he did notice that once a year, when some of the machines were put into the Royal Show, there was a remarkable accuracy in the takings as against meter readings. Furthermore, and importantly, after the time when Nicholas Zoumis had no further access to the coin boxes in the machines there were no shortfalls of any significance. It is noteworthy, too, that what was in issue throughout was not a single machine but a number of machines. The trial judge was entitled to have regard to the coincidence that once Nicholas Zoumis’ access to the machines was at an end, all shortfalls seemed to disappear.
In my view Mr Chilton’s evidence could properly be seen to be that of an expert. In any event his evidence was amply supported by the items of circumstantial evidence bearing on the accuracy of the credit meters, as outlined.
Counsel for Nicholas Zoumis on appeal pointed to the fact that subsequent to Nicholas Zoumis’ employment terminating, records produced at trial still revealed a level of error as between collections and meter readings. However, in most instances such errors turned out to be in relation to black and white machines with no credit meter and on other occasions the discrepancies were of single figure dollar amounts, explicable on the basis of Mr Chilton’s evidence by reference to a short term malfunction.
Counsel also complained that Theo Zoumis failed to produce at trial all the primary records relating to the machines. It is apparent from the trial transcript that when the office administrator, Ms Lazaris, gave evidence she had with her records which ultimately did not go into evidence. Nonetheless they were plainly available in the courtroom and could have been tendered. It seems to me that it is now too late to raise such a complaint.
Further it was argued that contrary to Theo Zoumis’ case, correction of the shortfalls did not occur immediately upon the padlocks being placed on the machines, but occurred, at best, after the next collection. The trial judge found, on the basis of the evidence, that after Nicholas Zoumis made his last collection there were several days prior to the positioning of the padlocks when Nicholas Zoumis continued to have access to the cash boxes. It was from the time of the next collection and henceforward that the records consistently reconciled.
Counsel further complained that the finding against his client failed to take into account an incident which was said to have occurred in March 1999 in which Theo Zoumis had acknowledged to his brother that the meter readings were inaccurate. Mr Chilton was said to have been present on that occasion, although he disclaimed any memory of it. Whether Theo Zoumis did make such a concession to his brother is not at all clear from the transcript. Passages in the transcript of Theo Zoumis’ evidence are not plainly referable to March 1999 as against November 2000. In any event, in my view, even had that concession then been made, it is explicable on the basis that investigations at that time caused Theo Zoumis to withdraw any accusation made against his brother even if those investigations did not wholly assuage his suspicions. There is no reason to think the trial judge overlooked Nicholas Zoumis’ position as to that alleged event.
It has not been demonstrated that the learned trial judge mistook any matter of fact or fell into any other error. Moreover the conclusions he reached on the evidence were clearly available to him, and, on my reading of the evidence, quite compelling. The appeal of Nicholas Zoumis must fail.
For similar reasons the cross-appeal of Theo Zoumis must also fail. It was plainly open to the trial judge to discriminate as between discrepancies demonstrated by the credit meters of the colour machines, as against the admittedly inaccurate film and photograph meters of the black and white machines. True it is that if Nicholas Zoumis were minded to “skim” coins from the colour machines, it is hardly likely that he would draw the line at pocketing some proceeds from the black and white machines. But short of approximating a ratio of monies passed on to monies retained by Nicholas Zoumis in respect of the colour machines and then applying that ratio to the proceeds of the black and white machines, there was no basis for a specific finding in relation to the latter. It was suggested to us by counsel for Theo Zoumis that we could make some sort of “judicial estimate” of the amount of the shortfall. However, the learned trial judge was not asked to do so and nor do I think it appropriate that it now be done.
In my view both the appeal and the cross-appeal should be dismissed.

[2003] SASC 433

24 December 2003