New South Wales Court of Appeal CITATION : McIntosh v Araf Capital Funding Pty Limited [2004] NSWCA 280 HEARING DATE(S) : 17 August 2004 JUDGMENT DATE : 17 August 2004 JUDGMENT OF : Tobias JA at 1; Ipp JA at 16; Sheller JA at 15 DECISION : 1. Leave to Appeal refused; 2. Summons for Leave dismissed with costs CATCHWORDS : APPEAL - Alleged error of law in Local Court decision pursuant to s 69(2) Local Courts (Civil Claims) Act 1970 - on appeal firstly to Supreme Court Master - 1) whether a loan contract debt settlement agreement had been finalised between claimant (and claimant's son) and opponent or whether this finding was an error of law - 2) whether claimant's son had (actual or ostensible) authority to enter into settlement agreement on behalf of the claimant or whether this was an error of law - appeal dismissed by Supreme Court Master holding that the Magistrate below did not err in law as to either finding - appeal from Master's decision to Court of Appeal on authority issue - appeal dismissed with costs as inter alia claimant's son had actual and or ostensible authority including power of attorney at the relevant times - judgment debt was paid (with interest) therefore opponent has no further interest in the proceedings. LEGISLATION CITED : Local Courts (Civil Claims) Act 1970 CASES CITED : Masters v Cameron (1954) 91 CLR PARTIES : Rex McIntosh Araf Capital Funding Pty Limited (formerly Australian Rural & Agricultural Finance Pty Limited) FILE NUMBER(S) : CA 40900/03 COUNSEL : C: In person O: Mr David Pritchard C: Hopgood Ganim SOLICITORS : by their Sydney agent Kemp Strang, Sydney O: Garland Hawthorn Brahe LOWER COURT Supreme Court - Common Law Division JURISDICTION : LOWER COURT SC 10381/03 FILE NUMBER(S) : LOWER COURT Master Malpass JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40900/03 IPP JA TOBIAS JA SHELLER JA Tuesday 17 August 2004 REX McINTOSH v ARAF CAPITAL FUNDING PTY LIMITED (formerly Australian Rural & Agricultural Finance Pty Limited) Judgment 1 TOBIAS JA: The claimant seeks leave to appeal from the decision of Master Malpass of 12 September 2003 whereby he dismissed the claimant's summons in which he sought to set aside the judgment of Local Court Magistrate Emmett in favour of the opponent against the claimant and his son Tim McIntosh, (who, without any disrespect I shall refer to as Tim), in the sum of $10,000 together with interest and costs. 2 An appeal only lay from the Local Court to the Supreme Court pursuant to s 69(2) of the Local Courts (Civil Claims) Act 1970 where it is alleged that the decision appealed against is in error in point of law. 3 The learned Magistrate found, amongst other things, that on or about 16 August 2000, an agreement was entered into by Tim on behalf of himself and the claimant with Mr Ross on behalf of the opponent whereby the parties agreed to compromise a debt of $30,000 allegedly owed by the claimant and his son to the opponent and in respect of which the opponent had on 24 July 2000 entered default judgment in the Local Court. The terms of the agreement were that the opponent would accept the sum of $20,000 in full satisfaction of the indebtedness of the claimant and his son, such amount to be paid by one instalment of $10,000 payable immediately and the balance in equal instalments of $2,500 each every six months for a period of two years. I shall refer to this agreement as the settlement agreement. 4 On 17 August 2000, Tim paid the defendant the first instalment of $10,000. At the time of the hearing before the learned Magistrate, the balance had not been paid. 5 A number of issues were ventilated before the Magistrate. Of these only two are presently relevant. The first was whether a final and binding agreement had been entered into between the parties or whether no such agreement was concluded unless and until they executed a formal contract. The second was whether Tim had the authority of the claimant to enter into the settlement agreement. The Magistrate decided both issues in favour of the opponent. 6 The same two issues were litigated before the Master. The Master found that there was no error of law in the Magistrate's consideration of the first issue and that she had approached the issue correctly in concluding that it fell within the first class referred to in Masters v Cameron (1954) 91 CLR 353 at 360 as the opponent contended, rather than the third class as the claimant contended. The Master further found that the learned Magistrate had made no error in concluding that Tim had either actual or ostensible authority to enter into the settlement agreement on behalf of the claimant. Accordingly, the Master dismissed the summons with costs. 7 In this Court, only the second of the above issues was the subject of the application for leave to appeal. The ground of appeal set out in the amended draft notice of appeal was as follows: "The learned Master erred in law in concluding that there was an enforceable agreement whereby both the Claimant and Tim McIntosh were jointly and severally liable, as objectively viewed, Tim McIntosh did not act for nor purport to act for the Claimant." 8 In my opinion leave to appeal should be refused for the following reasons. Firstly, the amount in issue is only $10,000 together with interest and costs. Although that may not be a determinative factor, nonetheless it is of significance as the amount in issue is quite small and, clearly, out of proportion to the nature to the controversy and the resources of the parties that would be regarded as appropriate to spend in resolving the dispute. 9 Secondly, the claimant had and took the opportunity to appeal the Magistrate's decision when he appealed to the Master. 10 Thirdly, it is apparent that since the Master's decision the opponent and Tim have entered into a further agreement whereby the latter has agreed to pay the entire $10,000 judgment debt together with interest and that that amount has now been fully paid as the opponent acknowledges. Accordingly, subject to the payment of its costs as ordered by the Magistrate and the Master, the opponent has no further interest in the proceedings, its judgment debt having been paid in full. The only further interest the claimant would appear to have is if Tim seeks contribution from him in respect of that debt and the costs of the proceedings. There is no suggestion that he will do so. 11 Fourthly, it is important to note that at all material times Tim held an enduring power of attorney from the claimant and there was no suggestion that it had been revoked prior to 16 August 2000. Subject to one matter, it is clear that Tim had authority pursuant to that power of attorney to enter into the settlement agreement with the opponent on behalf of the claimant. That one matter relates to the conversation between Tim and Mr Ross on 16 August 2000, when the settlement agreement was entered into. It might be said that Mr Ross was concerned that Tim should ensure that his father, the claimant, agreed to the settlement. Tim informed Mr Ross that he would contact him as he had his mobile number. The following day, as I have said, Tim paid $10,000 to the opponent being the first instalment payable under the Agreement. 12 More importantly, there was no doubt that Tim had authority pursuant to the power of attorney to enter into the agreement of 10 April 2000 on behalf of his father which gave rise to the default judgment in the sum of $30,000. In these circumstances it was open to the learned Magistrate to find that Tim had the authority of the claimant to enter into the agreement to settle the debt the subject of the default judgment for an amount which was only two thirds of that debt and which was confirmed by the payment of the first instalment of $10,000. This was the view of the Master and, in my opinion it was open to him to come to that view. Further, it was open to the learned Magistrate to find that Tim had the actual or ostensible authority of the claimant to enter into the settlement agreement. 13 Finally, I should record that the claimant alleged before this Court that he was the victim of fraud, false pretences and unfair trading practices on the part of the opponent. However, the issues raised by those allegations are irrelevant to the sole basis upon which the claimant relies to found his application for leave to appeal. 14 In the foregoing circumstances, in my opinion leave to appeal should be refused and the summons for leave should be dismissed with costs. 15 SHELLER JA: I agree. 16 IPP JA: I agree. I would add this. In the written submissions filed on behalf of the claimant the principal complaint is made that the evidence before the Magistrate did not address the critical element. This was said to be whether Mr Tim McIntosh in fact, and objectively viewed, acted or purported to act for Mr Rex McIntosh, the claimant. It is contended that the terms of the conversation make it plain that Tim McIntosh was not acting on behalf of his father. I do not agree with that proposition. 17 The whole point of the conversation was to attempt to settle the debt owed by Mr Rex McIntosh, the claimant, as well as that owed by Tim. That was plainly known to both parties. Whatever was said during that conversation was implicitly being said on behalf of Mr Rex McIntosh. 18 The later statement by Mr Ross to the effect that Tim McIntosh would speak to his father and make sure that the settlement was acceptable to his father does not detract from this. 19 Further, the fact that $10,000 was paid the very next day objectively speaking is confirmation that Tim McIntosh was authorised to act on behalf of the claimant. 20 I would add that in my view no question of law is raised whatever. 21 For the reasons expressed by Justice Tobias and the reasons I have reached, I agree with the order proposed, namely that the application for leave to appeal be dismissed with costs. 22 SHELLER JA: The order of the Court is leave to appeal is refused and the summons for leave is dismissed with costs. ********** Last Modified: 08/24/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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