Nair & 2 ors v Parker & 1 ors [2006] NSWSC 1375

New South Wales Supreme Court

CITATION : Nair & 2 ors v Parker & 1 ors [2006] NSWSC 1375

HEARING DATE(S) : 08/12/2006

JUDGMENT DATE : 15 December 2006

JUDGMENT OF : Associate Justice Malpass

DECISION : The appeal fails. The summons is dismissed. The plaintiff is to pay the costs of the proceedings.

CATCHWORDS : Sale of shares - contractual arrangement to pay rental - appeal from Local Court - alleged failure to distinguish between company and its shareholders - alleged lack of factual support for findings - questions of interest and costs.

Sudhir Ravidas Nair Rosa Bellissimo PARTIES : Byte Digital Pty Limited Brad Vincent Parker Elizabeth Parker

FILE NUMBER(S) : SC 12784/06

COUNSEL : Mr G Elliott (Pl) Mr M P Cleary (Def)

SOLICITORS : Hermann & Green Solicitors (Pl) Giles Payne & Co Solicitors & Public Notaries (Def)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 14323/04

LOWER COURT JUDICIAL OFFICER : Lulham LCM

LOWER COURT DATE OF DECISION : 12/05/2006

LOWER COURT MEDIUM NEUTRAL CITATION : Sudhir Ravidas Nair, Rosa Bellissimo & Byte Digital Pty Ltd v Brad Vincent Parker & Elizabeth Parker

- 6 - IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

ASSOCIATE JUSTICE MALPASS

15 December 2006

12784/06 Sudhir Ravidas NAIR & 2ors v Brad Vincent PARKER & 1ors

JUDGMENT 1 HIS HONOUR: Mr Nair was an employee of a computer repair business conducted by Byte Digital Pty Limited (the company). Mr and Mrs Parker were the shareholders in the company. An arrangement was reached whereby Mr Nair was to purchase their shareholding and take over the company. 2 The sale was carried out without legal assistance. The initial legal documentation came into being on 11 August 2004. There was subsequent written communication and discussion. 3 At the time of the transaction, the company conducted the business from rented premises. The lease did not expire until 2005. Mr Parker was a guarantor of the rental payments. 4 It had been Mr Nair's intention to conduct the company business elsewhere. Mr Parker had said words to the effect that he would endeavour to get a release from the lease. This did not come to pass. Mr Nair came to accept that the lease would be part of the transaction. 5 Mr Nair took over the business in September 2004. Disputes came to arise between the parties. The disputes saw the commencement of proceedings in the Local Court. 6 There were three plaintiffs (Mr Nair, Rosa Bellissimo and the company). Mr and Mrs Parker were the defendants. Mr and Mrs Parker brought a cross-claim against Mr Nair. 7 The proceedings came to a hearing. They were heard by Lulham LCM. At the time of the hearing, the company was the only one of the three plaintiffs pressing relief in the principal proceedings. It was seeking the recovery of monies that had been received by the Parkers and which were said to be company monies. In the cross-claim, the Parkers were seeking the recovery of unpaid purchase price and rental payments for the months of October, November and December 2004. 8 The evidence before the Magistrate included affidavits and documentary material. There was oral evidence from, inter alia, Mr Nair and Mr Parker. Messrs Nair and Parker gave some conflicting evidence. The Magistrate delivered his judgment on 7 March 2006. 9 He summarised the proceedings as follows [T 7/3/06, 1.45-2.4]:- "In the statement of claim the plaintiffs, Mr Nair, Bellissimo and Byte Digital Pty Limited, sought to recover an amount of $11,479.77. They relied on a written agreement dated 11 August 2004 and on oral agreements. The claim which they made was that after 11 August 2004 the defendants had received payments on account of Byte International for which they did not account to the plaintiffs in accordance with the agreement. The defendants denied that they had not accounted as alleged and in a cross-claim alleged that Mr Nair had either agreed to assume responsibility for the rent on the premises from which the business was conducted or had guaranteed payment of that amount. In addition, the defendants in the cross-claim sought the outstanding instalments in respect of the purchase price for Byte International then in the original statement of claim, being an amount of $1250." 10 In the judgment, he referred to the documentation dated 11 August 2004. He referred to other written communication and discussion (including a written communication dated 20 August 2004 and evidence given by Mr Parker concerning it). This latter evidence was disputed by Mr Nair. 11 The communication contained, inter alia, the following: "The office lease is in the name of Byte Pty Limited and is your responsibility as the new owner". 12 The Magistrate decided that he preferred the evidence given by Mr Parker. He came to the view that the lease was included in the sale. 13 He allowed the company the sum of $1943.66 in the principal proceedings. He allowed the Parkers the sum of $8652 in the cross-claim. He also made an award of $1256.55 by way of interest in the cross-claim. He ordered Mr Nair to pay the Parker's costs. 14 The plaintiff has brought an appeal in this Court. An Amended Summons was filed on 18 July 2006. The appeal came on for hearing on 8 December 2006. On that day, further amendment was made to the Amended Summons. 15 The effect of the last amendment was to narrow the ambit of the appeal to a challenge as to part of the amount allowed in the cross-claim and to the costs order. 16 The sum of $8652 had two components; one component was in the sum of $5000. It was allowed in respect of unpaid purchase money. Such component is no longer the subject of appeal. The second component was in the sum of $3652. This sum represented rent which Mr Parker had paid as guarantor for the months October, November and December 2004. There was also a challenge to part of the amount allowed for interest. The Court was told that this was in the order of a couple of hundred dollars. 17 The appeal was argued at disproportionate length. The parties have relied on written submissions (those prepared for Mr Nair extended to 22 pages). There was supplementary oral argument. The hearing lasted three hours. 18 The basis for the appeal was elusive in nature. Initially, it was put in terms of error by the Magistrate in failing to distinguish between the company and its shareholders. It later seemed to gain momentum and to trespass into other areas (one of them being a lack of evidence to support the findings that were made). 19 Before proceeding further, I should mention one matter that was the subject of emphasis by counsel for Mr Nair. At an early stage in the proceedings before the Magistrate, counsel then acting for Mr Nair made application to the Magistrate for the striking out of that part of the cross-claim which was said to be "in relation to the lease". One of the bases of the application seemed to be that any such claim should have been directed to the company and not Mr Nair. The Magistrate appears to have taken the approach of deferring the application so that it could be dealt with in his ultimate judgment. Mr Nair complains that what in fact happened was that the Magistrate failed to address this application. I do not accept that submission. Whilst it was not expressly dealt with, the application was inconsistent with the judgment entered by the Magistrate on the cross-claim. By implication, it was rejected. 20 The Court has been taken to passages in the transcript and in the judgment which are said to evidence misconception (in respect of the alleged failure to distinguish) on the part of the Magistrate. It may be that some of that material might be considered to throw up a perception of misconception. However, it does not seem to me to have any impact on the decision reached in respect of the rental payments. 21 Mr Nair has the onus of demonstrating that the Magistrate has made material error which justifies the disturbing of his decision. In my view, he has failed to discharge that onus. 22 It may be that what was litigated saw some departure from the pleadings. However, there seemed to be no misunderstanding between the parties as to what the real issues were. The case conducted by the Parkers on the cross-claim was that that payment of the rental claimed by Mr Nair to the Parkers was a part of the contractual arrangement entered into between the parties. The Magistrate found that this was the case. 23 The Magistrate had evidence before him that supported his findings. Not only did he have the communication of 20 August 2004 and the evidence of the discussion concerning it, he also had what was set forth in paragraph 75 of an affidavit sworn by Mr Parker. 24 I now turn to the challenge concerning the question of interest. It relates to a sum of money that could be described as trivial. Whilst it has not been abandoned, it has been the subject of minimal argument. When the matter was before the Magistrate, the legal representatives for Mr Nair chose to make no submissions whatsoever on the question. The Magistrate was left to do his best without assistance. In my view, Mr Nair should not be now allowed to agitate this question in the appeal. 25 There remains the challenge to the question of costs. It is a question that can only be agitated when there has been a grant of leave. In my view, this is not an appropriate case in which leave should be granted. 26 It remains unclear as to whether this challenge was still pressed in the event that Mr Nair failed in the other challenges. Whatever be the case, leaving aside the absence of manifest error, there is no question of legal importance or public interest. 27 Accordingly, I am not satisfied that the plaintiff has demonstrated any manifest error that justifies the disturbing of what was done by the Magistrate. 28 The appeal fails. The summons is dismissed. The plaintiff is to pay the costs of the proceedings. The exhibits may be returned.