New South Wales Supreme Court CITATION : Koutoulas v Venuto & Ors [2004] NSWSC 922 HEARING DATE(S) : 6 October 2004 JUDGMENT DATE : 12 October 2004 JURISDICTION: Common Law Division JUDGMENT OF : Master Malpass at 1 DECISION : The summons is dismissed; the plaintiff is to pay the costs of the summons; the exhibits may be returned. CATCHWORDS : Appeal - special defences not expressly rejected - rejected by implication - no error in point of law justifying a disturbing of the decision of the Local Court. LEGISLATION CITED : Contracts Review Act 1980 CASES CITED : McConville v Australian Telecommunications Commission & Ors (1991) NSW ConvR 55-602 Konstantinos Koutoulas (Plaintiff) PARTIES : Domenci Venuto (First Defendant) George Samaras (Second Defendant) Salvatore Crino (Third Defendant) FILE NUMBER(S) : SC 10643 of 2004 COUNSEL : Mr D Bernie (Plaintiff) Mr P Barham (Defendants) SOLICITORS : JP Capsanis & Co (Plaintiff) D La Rosa, Izzo & Co (Defendants) LOWER COURT Local Court JURISDICTION : LOWER COURT 10188/02 FILE NUMBER(S) : LOWER COURT Madgwick LCM JUDICIAL OFFICER : - 6 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION Master Malpass 12 October 2004 10643 of 2004 Konstantinos Koutoulas v Domenci Venuto & Ors JUDGMENT 1 Master: On 3 November 2001, the plaintiff attended an auction. At the auction, a property owned by the defendants was offered for sale. The plaintiff was the highest bidder. His bid was accepted by the auctioneer. 2 A written contract for the sale of the property was signed by the plaintiff. He gave the auctioneer a cheque for the deposit ($49,800). 3 The cheque was drawn on a joint account had by the plaintiff with his wife. 4 It was suggested that she be added as an additional purchaser. How this came about is a matter of some dispute. Her name was added as a purchaser in the written document. Arrangements were made for the wife to later sign the document. 5 She refused to sign the contract. The plaintiff instructed his bank to stop payment of the cheque. 6 The defendants terminated the contract. There was a resale of the property with a deficiency. 7 The defendants brought proceedings in the Local Court, claiming alternatively the amount of the deposit or the deficiency on resale plus expenses. There was a waiver of any jurisdictional excess. 8 The proceedings were defended by the plaintiff. He retained Phillips Fox to prepare the notice of grounds of defence filed by him. It is a lengthy and detailed document. It pleaded inter alia a number of special defences. 9 The hearing came before Madgwick LCM. The defendants were represented by counsel. The plaintiff appeared in person (partially assisted by his son who had legal qualifications). It is said that the son was involved in the preparation of written submissions which were relied on by the plaintiff. 10 The learned magistrate delivered judgment on 6 February 2004. She found in favour of the defendants. The plaintiff was ordered to pay the sum of $29,000 (being a deficiency on the resale in the sum of $28,000 plus the $1,000 expenses). 11 The plaintiff brings an appeal to this court against the decision of the learned magistrate. The plaintiff contends that there has been error in point of law. He bears the onus of demonstrating error in point of law that justifies the disturbing of the decision of the Local Court. 12 It may be that the appeal was brought one day out of time. If there be a need to do so, the defendants do not oppose any extension of time. 13 The plaintiff does not seek to disturb any of the findings of fact made by the learned magistrate. Her judgment contains inter alia the following:- The defendant has a hearing problem which was apparent to the Court which he acknowledged, and said he did not hear everything that the auctioneer said. The defendant agreed he did not read the contract prior to signing it. He said that it was only after he signed and nominated his wife as a party to the contract was he advised that the block of land had been divided. It was also agreed that the defendant made no enquiries regarding the property prior to attending the auction. In fact it appears to have been a spur of the moment decision. [Tr 6.2.04 p2] … … … Having heard the evidence of the witnesses for the plaintiff and the defendant I am of the view that the following occurred. The defendant saw the advertisement in the paper on the morning of 3 November 2001 and decided to attend the auction. He took his cheque book and without advising his wife or son drove to 69 Marsden Road where the property was and where the auction was to be held. The auction had started by the time he arrived. He made no enquiries but proceeded to bid. He did not ask for a copy of the contract prior to bidding. He was a successful bidder and it was only after he had signed the contract that he became aware of the true extent of the property he had just purchased. He did not at that time say he would not proceed with the contract but he arranged for the estate agent to attend his home that afternoon for the purpose of having his wife sign the document. When he arrived home he spoke to his wife and son and his fears were confirmed regarding the property. His wife was furious with him for his actions and when the estate agent arrived with the contract for the wife to sign, the wife refused to sign. The defendant advised he was not going ahead with the contract and subsequently cancelled the cheque. I accept the evidence of Mr Venuto that the auctioneer explained the extent of the property prior to the auction commencing. I accept that the property was marked so that prospective purchasers could see where the boundaries were and that the contract adequately described the property for sale. [Tr 6.2.04 p4] … … … Unfortunately, in this case the defendant made no attempt (a) to see the contract before the bidding, bid without making any enquiries at all … [Tr 6.2.04 p5] 14 I should add that it is not suggested that the defendants (or their agents) had any awareness of any disability had by the plaintiff. 15 At the commencement of the hearing of the appeal, the thrust of the plaintiff's case was that the learned magistrate had failed to address the special defences (including a defence under the Contracts Review Act 1980, a defence of misrepresentation and a defence of mistake). It was further said, that she had erroneously addressed an issue that had not been pleaded by the plaintiff. It was also said that the decision should be set aside because there was in fact no contract and no evidence in writing of a contract. 16 It is convenient to deal with the latter matter first. Whilst it may have been open on the pleadings to propound such an argument, it is conceded that no such defence was propounded during the hearing before the learned magistrate. 17 In my view, that matter suffices to dispose of the argument. If it had been raised in the court below, the hearing may have taken a different course (inter alia the defendants may have led other evidence and there may have been cross-examination of the plaintiff and his witnesses). 18 Be that as it may, it seems to me that the argument is doomed to failure. A contract came into being upon acceptance of the plaintiff's highest bid. He then signed the standard written contract. Although there was a proposal to add the wife as an additional purchaser, this did not eventuate, because she refused to sign the contract. In my view, the contract which came into being at the auction remained binding on the plaintiff. The abortive proposal did not discharge him from the obligations under that contract. 19 The court was referred to McConville v Australian Telecommunications Commission & Ors (1991) NSW ConvR 55-602. In my view, that case was distinguishable on its facts. 20 I now turn to the other matters argued on the appeal. 21 Any reliance on the matters of misrepresentation and mistake could be said to have been largely abandoned. In my view, the submissions made on these matters were doomed to failure (inter alia they were unarguable by reason of the findings of fact made by the learned magistrate). 22 There remains the matter of the claim for relief under the Contracts Review Act 1980 (the Act) which is an act under which the Local Court has limited jurisdiction. It seems to be the case that in her judgment, the learned magistrate did not expressly reject inter alia whatever case was propounded for relief under the Act. 23 She clearly addressed the contents of the notice of grounds of defence and the written submissions (Tr 6.2.04 p3). There is express reference to matters that could be regarded as relevant to a consideration of an exercise of jurisdiction under the Act. 24 In her judgment, after reference to her acceptance of the evidence of Mr Venuto, it was observed that:- It appears that what the defendant is pleading is really non est factum – it is not my deed. [Tr 6.2.04 p4] 25 Clearly, the learned magistrate was confronted with the difficulty of discerning the real nature of the case being propounded by an unrepresented person who had hearing and language difficulties. In doing her best to identify the substance of the defence the plaintiff wished to litigate, she perhaps erroneously came to the conclusion that it was really a case of non est factum. In so doing, it seems to me that she impliedly rejected any question of entitlement to relief under the special defences (including under the Act). 26 Before proceeding further, for completeness, I should add that the plaintiff does not seek to advance any argument founded on non est factum in this appeal. 27 I have patiently listened to the arguments advanced in support of entitlement to relief under the Act (or generally in relation to matters of unconscionability or unconscientious conduct). In my view, what is put is manifestly hopeless. 28 This was a case where the plaintiff was the maker of whatever problems befell him as a result of his attendance at the auction. In my view, he has failed to demonstrate any basis for the making of the jurisdictional findings that would enable an order to be made in his favour under the Act. Relief can only be granted when the plaintiff satisfies the threshold requirements of s7. If that is done, the court may then exercise its discretionary powers (if it chooses to do so). 29 In conclusion, I should mention one other matter raised by the defendants. A count founded on the dishonouring of the cheque had been pleaded in the second amended statement of liquidated claim. No defence was pleaded to that count. As things stood, the defendants were entitled to judgment on the pleadings in relation to that cause of action. Although the learned magistrate appears to have decided that the defendants were not entitled to the full amount of the deposit, it seems that she may not have otherwise dealt with this matter. 30 The onus borne by the plaintiff has not been discharged. Accordingly, the appeal fails. 31 The summons is dismissed. The plaintiff is to pay the costs of the summons. The exhibits may be returned. Last Modified: 10/13/2004 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.