New South Wales Supreme Court CITATION : Penhall-Jones v Stiftung Ausbildungsfonds Jung'She Psychologie [2004] NSWSC 789 HEARING DATE(S) : 23/08/04, 24/08/04 JUDGMENT DATE : 24 August 2004 JUDGMENT OF : Hoeben J at 1 DECISION : Plaintiff's summons dismissed. Local Courts (Civil Claims) Act 1970 LEGISLATION CITED : Contracts Review Act 1980 Industrial Arbitration Act (NSW) 1980 PARTIES : Margaret Penahll-Jones - Plaintiff Stiftung Ausbildungsfonds Jung'She Psychologie - Defendant FILE NUMBER(S) : SC 12223/03 COUNSEL : Plaintiff in person Mr B Burke - defendant SOLICITORS : Plaintiff in person Schweizer Kobras - defendant LOWER COURT Local Court JURISDICTION : LOWER COURT 10373/1999 FILE NUMBER(S) : LOWER COURT Lulham LCM JUDICIAL OFFICER : IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION HOEBEN J Tuesday, 24 August, 2004 12223/03 – Margaret PENHALL-JONES v STIFTUNG AUSBILDUNGSFONDS JUNG'SCHE PSYCHOLOGIE JUDGMENT – on summons seeking to set aside decision of Magistrate Lulham entered 4 August 2003; see p124. 1 HIS HONOUR: This is an appeal by the plaintiff from the decision of Mr Lulham, Local Court magistrate, hereafter called "the magistrate", brought under s 69 of the Local Courts (Civil Claims) Act 1970. 2 Section 69 restricts the appeal to point of law only and where there is an issue of mixed fact and law, that can only be dealt with on the appeal with leave. 3 Apart from the plaintiff's motion and affidavits in support, I have before me the exhibits tendered in the court below and a transcript of the proceedings of 28 and 29 May 2003 before the magistrate. With the advantage of that material it seems to me that the magistrate's summary of facts and the background to the dispute is accurate and appropriate and I incorporate into this judgment paragraphs 3 - 9 of the magistrate's judgment, except that the position of the plaintiff and the defendant in those proceedings has been reversed in the proceedings before me. 4 On 4 August 2003 the magistrate entered judgment in favour of the defendant in the sum of $14,284.24 plus interest, such interest to run from 14 September 1999. The magistrate reached this decision by the following stages of reasoning: i) Swiss law applied to the contract of loan and governed the proceedings before him; ii) In relation to the plaintiff's claim there was no difference between Swiss law and the law of New South Wales; iii) To the extent that the defendant wanted to rely upon the Contracts Review Act (CRA) and the Swiss Credit Code (SCC) in her defence, she carried the onus of proving as a fact the provisions of the Swiss Credit Code and that the Contracts Review Act had its equivalent under Swiss law; iv) The defendant had agreed with the plaintiff to repay loans from the end of June 1995 with the first payment to be made on 1 December 95; v) The defendant could not rely upon the Contracts Review Act or the provisions of the Swiss Credit Code because she had failed to prove as a question of fact that these provisions formed part of Swiss law; vi) Even if the Contracts Review Act could be relied upon by the defendant she had not brought herself within that act because it had not been established that the loan agreements were unfair - on the contrary, the magistrate thought that the terms were generous. In addition, the defendant had not established that when the loan contracts were entered into she had been affected by undue influence, unfair pressure or unfair tactics; vii) The defendant's cross-claim failed because the duty claimed did not exist and, even if it did, it was impossible of fulfilment. 5 In the proceedings before me the magistrate's judgment was challenged in the following respects: 6 (1) The magistrate erred in that, having said he would not rely upon the loan contracts he proceeded to do so. 7 The genesis of this point is at transcript day two, page 43 line 49 to page 45 line 40. In the course of argument the magistrate said that because the defendant required the plaintiff to sign a loan document in the German language he was not prepared to hold the plaintiff to that document unless the disputed terms in the agreement were otherwise proved. 8 The magistrate made the same point in his judgment at paras 10 and 21. 9 This challenge misunderstands what the magistrate said and what he did in the judgment. The magistrate was requiring the defendant to prove the disputed parts of the agreement by means other than by just tendering the agreement. He did not say that he would entirely disregard the agreement. 10 In any event, the magistrate was satisfied that the disputed parts of the agreement, ie the dates of payment, had been proved by other evidence (See judgment paras 25-26 and 29-34). This was a finding of fact open to the magistrate on the evidence and accordingly is not subject to appeal in these proceedings. 11 In addition, no error of law has been established in the magistrate's approach to this question. Accordingly, I reject this argument by the plaintiff. 12 (2) The second challenge related to the affidavit of Ms Grubel. The argument proceeded that the affidavit of Ms Grubel could not be relied upon by the magistrate, should not have been admitted by him and was misinterpreted by him. 13 This matter was dealt with at the hearing and the discussion in relation to it is set out in transcript day one, page 14, line 46 to page 17, line 15 and at page 23 line 1. 14 The affidavit of Ms Grubel was admitted in the end without objection (Transcript day one, page 23, line 1.) 15 The affidavit of Ms Grubel and its admission could only raise an issue of law if the magistrate had given to it a meaning which it could not possibly bear. 16 If the magistrate made any use of the affidavit of Ms Grubel it was limited. It would have enabled the magistrate to find that the Contracts Review Act was not the sort of provision where the presumption that Swiss law was the same as New South Wales law could apply. That, however, was a finding open to the magistrate even without the affidavit of Ms Grubel and it is not clear to me that the magistrate placed any weight upon the affidavit of Ms Grubel at all. (Judgment paras 15-19 and para 35.) 17 Once that finding was made an evidentiary onus moved to the plaintiff to prove the relevant Swiss law (Judgment para 35). That onus was not discharged. 18 Even if the onus had been discharged by the plaintiff and she had been able to rely upon the Contracts Review Act or a Swiss equivalent, the plaintiff in this appeal has made no answer to the magistrate's finding of fact that the agreements were not unfair and that no duress or unfair influence had been used to obtain them (Judgment para 38.) I can find no error of law on the part of the magistrate in his treatment of the affidavit of Ms Grubel and in his finding that the plaintiff could not rely upon the Contracts Review Act unless she could establish that it was part of Swiss law. 19 (3) The next argument was that the magistrate erred in not making a presumption that Swiss law was the same as New South Wales law in respect of the Contracts Review Act. That argument is substantially related to argument 2 which I have just referred to. 20 It seems to me that the magistrate was clearly correct in characterising the Contracts Review Act as a special provision peculiar to New South Wales. This is so given its origins in s 88F of the Industrial Arbitration Act (NSW) (1980). Even if the magistrate was wrong the plaintiff would still have failed because of the magistrate's findings of fact (Judgment para 38) that the tests for the application of the Contracts Review Act had not been made out. 21 (4) The next challenge related to procedural fairness. The argument was that the plaintiff had prepared her case on an understanding that she could rely upon the Contracts Review Act and she had been taken by surprise when the magistrate found that Swiss law applied and required her to prove that the Contracts Review Act had an equivalent under Swiss law. 22 There are a number of answers to this proposition. Firstly, as early as April 2001 the magistrate had made it clear that the relevant law was Swiss law. That should not have come as a surprise to the plaintiff in May 2003. Secondly, the magistrate's decision as to the applicable law was an issue of fact and accordingly is immune to appeal in these proceedings. Finally, even if the Contracts Review Act had applied, the magistrate found that the factual basis for its application had not been made out (Judgment para 38). 23 (5) The next challenge related to the plaintiff's cross-claim. The argument was that the magistrate had changed the claim from contributory negligence to negligence without the plaintiff's consent and that this had imposed on her a higher standard of proof. The terms of the cross-claim are set out at judgment para 41. 24 The first problem with the cross-claim was that there was no evidence that the law of Switzerland in relation to negligence and contributory negligence was the same as that in New South Wales on those topics, nevertheless the magistrate was prepared to assume in the plaintiff's favour that such was the case (Judgment para 42). 25 As articulated by the plaintiff before the magistrate and before me, her argument on the cross-claim was not one based on a failure of the lending institution to exercise reasonable care in the lending of its money, but related to a failure to observe certain specified duties which it owed to students of which the plaintiff was one. I agree with the magistrate that the sort of duties suggested by the plaintiff is unknown to the law of Australia and the cross-claim was correctly rejected by the magistrate. This leaves aside the question of whether there was evidence to substantiate the allegations on which the cross-claim was based. 26 I find no unfairness or error of law on the part of the magistrate in the way the cross-claim was dealt with and I reject this argument. 27 (6) This argument related to an allegation of denial of natural justice. The basis for the argument was that the magistrate had made it clear to the plaintiff that he wished to conclude the matter by 4 pm on the second day of the hearing. The argument proceeded that this deprived the plaintiff of the opportunity to fully present her case. Allied to this submission was the argument that the magistrate was biased and interfered in the conduct of the proceedings so as to assist the defendant and break the plaintiff's train of thought. 28 I have read the references in the transcript to which I was referred by both sides. I can find no indication of bias on the part of the magistrate. The magistrate, it seems to me, was more than fair in the way he treated the plaintiff. What he tried to do, as I have tried to do in these proceedings, is guide the plaintiff towards matters which were relevant and to try to make allowances for the fact that she was unrepresented. 29 Nowhere in the transcript is there any complaint by the plaintiff that she needed more time or that she could not adequately put her case. The subjects to which I was referred by the plaintiff such as the affidavit of Dr Breuleux were covered by the plaintiff in her submissions to the magistrate. 30 I find no denial of natural justice or other error of law in the way in which the magistrate treated the plaintiff or conducted himself in relation to the hearing of the matter before him. 31 (7) The final complaint was that the magistrate did not deal with the plaintiff's submission as to duress. 32 This submission is not made out. The magistrate specifically referred to that issue at judgment para 38. This was a finding of fact open to the magistrate and accordingly is not subject to challenge in this appeal. I reject this argument. 33 In conclusion I find that the plaintiff's challenge to the decision of the magistrate as recorded in his orders of 4 August 2003 fails. I dismiss the plaintiff's summons in relation to that matter. ********** Last Modified: 09/07/2004 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.