McIntosh & Anor v ARAF Capital Funding [2003] NSWSC 843

New South Wales Supreme Court

CITATION : McIntosh & Anor v ARAF Capital Funding [2003] NSWSC 843 HEARING DATE(S) : 9 September 2003 JUDGMENT DATE : 12 September 2003 JURISDICTION: Common Law Division JUDGMENT OF : Master Malpass DECISION : The Summons is dismissed. The plaintiffs are to pay the costs of the Summons. The Exhibits may be returned.

CATCHWORDS : Appeal - intention to create immediate binding agreement - authority - no error of law. LEGISLATION CITED : N/A CASES CITED : Masters v Cameron (1954) 91 CLR 353. Rex Bernard McIntosh (First Plaintiff) PARTIES : Timothy William McIntosh (Second Plaintiff) v ARAF Capital Funding Pty Ltd (formerly Australian Rural and Agricultural Finance Pty Ltd) (Defendant) FILE NUMBER(S) : SC 10381 of 2003 COUNSEL : Ms D Hogan-Doran (Plaintiffs) Mr D Pritchard (Defendant) SOLICITORS : Kemp Strang (Plaintiffs) Garland Hawthorn Brahe (Defendant)

LOWER COURT Local Court JURISDICTION : LOWER COURT 923 of 2002 Local Court Downing Centre Sydney FILE NUMBER(S) : LOWER COURT S Emmett (LCM) JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Master Malpass

Friday 12 September 2003

10381 of 2003 Rex Bernard McIntosh & Anor v ARAF Capital Funding Pty Ltd (formerly Australian Rural and Agricultural Finance Pty Ltd)

JUDGMENT 1 MASTER: In 1978, Mr Rex McIntosh (Rex) purchased a property in Queensland ("Lurline"). In 1995, his son, Mr Timothy McIntosh (Tim) commenced to manage "Lurline". 2 On 16 November 1999, a written Power of Attorney was executed. Pursuant to that document, Rex appointed Tim to be his attorney (inter alia to do on my behalf anything that I may lawfully authorise an attorney to do). 3 Upon dispute arising with his bankers, Rex took steps to either refinance the existing bank debt or sell "Lurline". He approached Mr Mettam (a finance broker). His intervention brought about contact with the defendant. 4 On 18 March 2000, Rex paid the sum of $6,000 to Mr Mettam. On 10 April 2000, Tim signed a document which is headed "Mandate To Act" (the Mandate) as attorney for Rex. The defendant has been described as a mortgage broker and financial adviser. The Mandate authorised the defendant to arrange for refinancing for a prescribed brokerage fee. The defendant was given a copy of the Power of Attorney. 5 Refinancing arrangements were made. Rex decided to put the property up for auction. It was then sold. 6 The defendant claimed an entitlement to brokerage fees in the sum of $30,000. Proceedings were commenced in the Local Court and default judgment obtained against both Rex and Tim for the sum of $30,000. 7 It was in this context, that discussions were had to finally resolve the dispute. 8 The plaintiff advised of an intention to apply to have the default judgment set aside. On 16 August 2000, a conference was had between Mr Mettam and Tim. It was followed by telephone conversations between Mr Ross (who is described as a principal of the defendant) and Tim (who was in the presence of Mr Mettam). It is said by the defendant that during this conversation an agreement was reached to resolve the dispute by payment of the sum of $20,000 (being $10,000 now and $2,500 by way of four instalments over two years). The agreement contemplated the subsequent execution of a written contract. 9 On 17 August 2000, Tim paid a sum of $10,000 to the defendant. There was a subsequent confirmatory telephone conversation. Tim informed Mr Mettam that the dispute had been resolved. Steps were taken towards the execution of a deed. In September 2000, Rex advised the defendant that it was his intention to have the judgment set aside, sue for damages and get back the $10,000. On 21 November 2000, the default judgment was set aside by consent. 10 The parties went to a hearing on the defendant's claim. It was heard by Emmett LCM. The trial took about 3½ days. The defendant's case was put in the alternative (there were three alternatives). The learned Magistrate found in favour of the defendant. She made a determination on one only of the defendant's alternative claims (founded on an alleged oral agreement). She did not determine either of the other two alternative claims. She entered judgment in favour of the defendant in the sum of $10,000 plus interest and costs. 11 On 19 February 2003, the plaintiffs filed a Summons in this Court. It propounds an appeal from the decision of the learned Magistrate. On 19 February 2003, the plaintiffs also filed a Statement of Grounds in Support of Summons. It identifies 10 grounds of appeal. 12 The appeal was heard on 9 September 2003. Only grounds 1, 2 and 3 as set forth in the Statement of Grounds were argued (these were said to be related and concerned the findings as to the alleged oral agreement). The other grounds were abandoned. 13 It is common ground that an appeal only lies where there has been error in point of law. The plaintiff bears the onus of satisfying the court that there is such error which justifies the disturbing of the decision of the learned Magistrate. 14 The learned Magistrate found that a binding oral agreement had been made between the defendant and the plaintiffs on 16 August 2000. It is common ground, that if this decision be disturbed, the matter should be remitted to the Local Court for rehearing according to law. 15 She had before her evidence given inter alia by the plaintiffs and Mr Ross. There was no conflict between Tim and Mr Ross. There was some conflict between Tim and Rex. The learned Magistrate found that Tim was a reliable and truthful witness and preferred his evidence to that of Rex. 16 Mr Ross gave evidence of inter alia what passed between him and Tim on 16 August 2000. The evidence was as follows:- " I then spoke with Tim McIntosh Tim said to me; 'I'd like to see if we could settle this matter'. I said to Tim, 'Tim, I'd like to reach agreement with you. The debt is $30,000-00'. Tim said to me: 'Can we negotiate on that?' I said, 'Yes, what do you have in mind?' Tim said ' Would you accept $12,000-00 now and the balance over time?' I said to Tim, ' Tim, what about $10,000-00 now and the balance over the next two years, say $2,5000-00 (sic) each six months. Can you handle that?'