BRAHAM v WRIGHT SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL PRIESTLEY, MEAGHER and HANDLEY JJA 23 March 1990, 23 March 1990 [1990] NSWCA 30 CONTRACT — EXISTENCE THEREOF — ORAL AGREEMENT — CREDIBILITY OF WITNESSES Priestley JA In this matter the appellant Wright as plaintiff sued the defendant, the current appellant Braham, on an oral agreement which he alleged took place in or about August 1985, whereby he was to sell to the defendant Braham options in Belcrest Corporation Ltd for the sum of $150,000. The number of options concerned was 300,000. His version is relatively simple. I think I perhaps should read it. He said that come some time which seems to be shortly before 5 August, 1985 Mr Braham said to him in the course of a telephone conversation: "'T am going to buy your options' and I said, 'How much?' and he said, '50-cents' and he said "You know the company has been suspended. It has been off the market." Mr Braham, accordingly to Mr Wright, rang and said: "'T spoke to Mr Lynch and you have 300,000 options for which you want 50-cents' and I said, "Yes', and he said 'Well, I am going to take them' and then he said, 'Will you go in and sign the transfer. It will be at Mr Lynch's office." That evidence from the plaintiffs, if it were accepted, would be ample evidence to justify the claim which the plaintiffs in fact made. I might add, that version on of the initial conversation was strongly denied by the defendant. One should take into account as background that the options in question had been suspended by the Stock Exchange before that date. At the time of the suspension they were priced at 16-cents. It was contemplated that the suspension would be lifted and when lifted the price of the options could go through the roof, perhaps to the figure of $1. The appellant wanted the options on what might be called a gambling basis. About that time - I do not think the evidence discloses when - he had acquired 100,000 options at 40-cents each from an innominate Chinese gentleman and he was not surprised that their price might go further. He thereafter caused the share transfer to be executed, which happened to be not in his name as transferee, but in the name of a company with which he was closely associated, that of the second respondent, Ashley and Martin (SA) Pty Ltd. It is also beyond dispute that that document, the share transfer, was in fact sent to Mr Lynch, the broker at Reynolds and Company, who is referred to in the telephone conversation which I have set out. The appellant, or some company associated with him, almost at the same time sent the sum of $1800 to the Stamp Duties Commissioner for stamping and shortly thereafter sent a cheque in the amount of $300,000 to Messrs. Reynolds and Company which they banked in their solicitor's trust account. They could not do it in their own trust account because of Stock Exchange rules which forbade a stock broker selling securities in a suspended listed company. 2 UNREPORTED JUDGMENTS In the draft letter which was prepared with the cheque for $300 000 the secretary of Leymar International Pty Ltd, another company associated with the appellant, said that they were to be held pending settlement, words which one would have thought were fairly unambiguous. In the event, in the upshot the present appellant denied tnat there had been any sale. He asked for, and surprisingly received, a refund of the $300,000, though he neither asked for nor received a refund of the Stamp Duties payment. Rogers CJ Comm D, who was posed with the problem of whether or not a contract of sale had occurred, having recited these facts said: "Although there are the difficulties I have mentioned in the stories given by Mr. Wright and Mr Lynch, on balance I prefer the evidence of the plaintiff and Mr. Lynch and I propose to enter a verdict for the plaintiff for the amount claimed." The amount claimed was the difference between the contract price, namely $150,000, and the price at which the options were eventually sold, namely some sum just short of $25,000. The oral evidence before his Elonour was not entirely satisfactory from anyone's point of view and his Honour's temptation to disbelieve everybody must have been nearly overwhelming. Nor does any single action of any of the parties offer any rational explanation, but the plain fact is that the plaintiff's case was at all times based on an oral agreement which took place on or shortly before 5 August. Evidence of such an oral agreement was led for the plaintiff. That was the only direct evidence suggestive of such an oral agreement which was led. His Honour's acceptance of "the evidence of the plaintiff' needs must imply an acceptance of the plaintiff's evidence about the existence of the oral contract. Such an acceptance necessarily involves an acceptance of the plaintiff's credibility and is therefore unexaminable by us. In challenging his Honour's judgement senior counsel for the appellant, Mr Downes, in a very able argument pointed to the various extraordinary features of the respondent's behaviour which would seem to be inconsistent with such a finding by his Honour. To some extent these features were commented on by his Honour and evidence about them was certainly before his Honour. To that extent, since they were in fact taken into account by his Honour in coming to his conclusion, there is no point in examining them further. The strongest point in my view of Mr Downe's submissions concerns a memorandum by Mr Bax who was in effect an associate of the appellant, who was present at the appellant's end of the telephone conversation between the appellant and the respondent in August. He made a note at or about the time of the telephone conversation and that note is in the following form: "Check PAB Shares in name of A and M SA P/L Ken Wright 059-985325 / Melbourne Clyde Options - 50-55cents" If what Mr Downes said is to be accepted, that is prima facie evidence of a very strong kind against his Honour's conclusion because at least on one reading of it I note that Mr Wright was not making firm sale at 50-cents per option but making an offer of such options at a sum undetermined between 50-cents and 55-cents. There are, however, I think, two answers to that proposition. One is that on the very form of the document concerned it is not exactly consistent with a reproduction either of that part of the telephone conversation which Mr Bax may URJ BRAHAM v WRIGHT (Meagher JA) 3 have heard or with an exact summary of what the defendant, the present appellant, would have said to Mr Bax after the conversation took place. Rather it is equally consistent, and perhaps more consistent, with a notation of observations which Mr Bax took down from the appellant before the appellant rang Mr Wright. In any event, Mr Emmett, senior counsel for the respondent Mr Wright, has pointed out to us, and I think accurately, that Mr Bax's evidence as to the non-existence of a contract was sufficiently challenged. After all, Mr Bax had the unenviable difficulty of explaining why he said the $300,000 was sent Pending settlement if there were no contract to be settled. For those reasons, without going into further detail, I am of the opinion that the appeal should be dismissed with costs. Meagher JA I agree. There is only one matter I wish to mention in addition to those that have been dealt with by Meagher JA. The starting point of the appellant's submissions was that the trial Judge's conclusion that he should prefer the case of the plaintiff and therefore enter judgement in the plaintiff's favour, was not based on specific findings dealing with the credibility of the various witnesses and reasons for his views on their credibility, but rather a deductive process. I do not agree with what is involved in that starting point. The trial Judge was presented with an issue which could be stated very simply: Did a conversation take place between Mr Wright and Mr Braham substantially as Mr Wright said when giving his evidence before the trial Judge? That simple issue became complicated by the differing recollections of the various witnesses, no two of whom seem to have agreed with any precision on all of the main points and indeed appear to have had somewhat differing recollections on almost all of the main points. Nevertheless Mr Wright's evidence was there for his Honour to consider and his Honour did so, obviously getting whatever assistance he could from such of the material before him as could reasonably be relied on as either accurate or indicating with some accuracy what lay behind in particular the written material. There is nothing in the evidence that was gone through carefully by counsel for Mr Braham which contradicts or makes unreasonable the trial Judge's findings. When I say "nothing in the evidence" I am referring to that part of the evidence which I mentioned a moment ago, upon which reasonable reliance could be placed. Although the trial Judge expressed his findings at the end of his reasons in what is in my view an appropriately restrained way, nevertheless his conclusion that he preferred the evidence of Mr Wright and Mr Lynch inevitably involved fact finding on his part, which meant that he was not satisfied that he should accept the evidence of Mr Braham and Mr Bax, and he W that he should accept the substance of Mr Wright's recollection of what was said to be the contractual conversation. Those findings of fact which, as I say, were in my opinion necessarily involved in his Honour's conclusion, were reached in circumstances where, according to the authorities to which we are referred again and again, all of which state the rule first clearly stated by the Court of Appeal in England in Coghlan v Cumberland (1898) 1 Ch 704, gave the trial Judge a position of advantage which this Court does not have. 4 UNREPORTED JUDGMENTS In the absence of some compelling piece of evidence which would lead this Court to think the trial Judge must have made a mistake in concluding that he should find for Mr Wright, the rule upon which this Court operates in deciding appeals by way of rehearing where the trial Court has had to decide conflicts of evidence leads to the result in this case, given the analysis of the facts made by Meagher JA, that the appeal must be dismissed. I agree with the orders proposed by Meagher JA. Handley JA Likewise I have not been persuaded that the appellant has made goodhis challenge to the findings of fact of the trial Judge in this case. In addition to the matters referred to in the reasons for Judgment of the other members of the Court, I would draw attention to the fact that such documentary and surrounding circumstance evidence as exists in this case tended to support the oral evidence of the plaintiff and to corroborate his version of the conversations, namely that an oral agreement for the sale of these options had come into existence some time on or about 5 August 1985. I therefore agree in the orders proposed. The Court therefore orders that the appeal be dismissed with costs. Counsel for the Appellant: GK Downes QC and RA campbell Solicitor for the Apellant: Gould and Shaw Counsel for the Respondent: A Emmett QC and J Simpkins Solicitors for the First Respondent: Phillips Fox Solicitor for the Second Respondent: Henry Davis York