Pachos v Davison [2009] NSWSC 228

New South Wales Supreme Court

CITATION : Pachos v Davison [2009] NSWSC 228 This decision has been amended. Please see the end of the judgment for a list of the amendments.

HEARING DATE(S) : 30 March 2009

JUDGMENT DATE : 30 March 2009

JUDGMENT OF : Mathews AJ

EX TEMPORE JUDGMENT DATE : 30 March 2009

DECISION : (i) appeal dismissed (ii) by consent, plaintiff to pay the defendant's costs assessed and agreed at $11,000 inclusive of GST and to be paid within 28 days of today.

CATCHWORDS : CONTRACT - appeal from Local Court - whether purported agent had ostensible authority - no agency established

LEGISLATION CITED : Uniform Civil Procedure Rules 2005

CATEGORY : Principal judgment

CASES CITED : Pacific Carriers Limited v BNP Paribas [2004] HCA 35; 133 CLR 72 Smith v Hubbard Pty Limited [2006] NSWCA 109

John Pachos (Plaintiff) PARTIES : Charles Davison (First Defendant) Candice Weeden (Second Defendant)

COUNSEL : J Keys (Plaintiff) AS Monzo (1st Defendant)

SOLICITORS : Plaintiff in person Houston Dearn O'Connor (First Defendant)

LOWER COURT JURISDICTION : Local Court

LOWER COURT FILE NUMBER(S) : 650/07

LOWER COURT JUDICIAL OFFICER : Pierce LCM

LOWER COURT DATE OF DECISION : 6 May 2008

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

Mathews AJ

Monday 30 March 2009

12631/08 John Pachos v Charles Davison & Anor

JUDGMENT 1 HER HONOUR: This is appeal from the decision of a Local Court Magistrate at Burwood delivered on 6 May 2008. His Honour dismissed the plaintiff's claim against the first defendant and ordered the plaintiff to pay the first defendant's costs including costs on an indemnity basis from 17 December 2007. 2 The background of the matter is as follows. On 11 June 2007, the plaintiff, who is the owner of a business called High Tech Motor Sport, was approached by the second defendant, Candice Weeden, who identified herself as the first defendant's, "Motor Sport Media Manager" and said she was authorised to negotiate on the first defendant's behalf. She proceeded to negotiate with the plaintiff for one of his V8 utes to be leased out for the first defendant to drive at a forthcoming round of races at Hidden Valley, Darwin on 24 June 2007. 3 The plaintiff told the second defendant that the cost would be $15,000 plus GST, making a total of $16,500. She accepted these terms. The plaintiff asked for the first defendant's height and weight so that he could adjust the driving seat and for his licence details. These were, in due course, provided by the second defendant. 4 I should say by way of aside that the second defendant obtained the details of the first defendant's height and weight from the internet. She obtained the details from the defendant himself as a necessary precondition for his driving in the race. 5 The plaintiff accordingly arranged for one of his racing utes to be sent to Darwin before the event on 24 June. He himself also travelled to Darwin on 20 June. The plaintiff met the first defendant in Darwin on Friday 22 June. They had not previously had any direct contact with each other. The first defendant then proceeded to drive the plaintiff's vehicle at practice trials on 22 and 23 June and during the races on 24 June. During the practice on 22 June, some damage was occasioned to the vehicle which the plaintiff said cost $2,000, leading to his ultimately claiming an amount of $18,500 from the first defendant. 6 As to the payment for the lease of the vehicle, at some time during the day of 22 June, a cheque drawn by Candice Weeden was paid into the plaintiff's bank account for the agreed amount of the lease, namely, $16,500. However, the following Tuesday, the plaintiff was told by his bank that the cheque had been dishonoured. His attempts to obtain a replacement cheque were fruitless. Accordingly, he contacted the first defendant seeking payment and in due course commenced the Local Court proceedings against both defendants. 7 Later again, it must have become apparent that nothing could be achieved by pursuing the proceedings against the second defendant, so the plaintiff's case was directed at obtaining damages from the first defendant. 8 Both parties gave evidence in the Local Court proceedings and the first defendant also called evidence in support of his case. 9 The first defendant, who is a young man in his twenties, comes from a racing car family. His first contact with the second defendant was in April 2007 through Myspace where she entered him as a friend. She represented herself as being Manager of Public Relations at Holden, and held herself out to have degrees and qualifications relevant to the racing industry world. 10 A correspondence developed between the two of them. They first met in person in May 2007. On this occasion, the second defendant paid for their meals and made offers to the first defendant, including an offer to provide him with a Holden company car, with a fuel card, and to arrange for him to drive in the Australian V8 Ute Championships, these being the championships with which we are concerned in these proceedings. 11 When asked by the first defendant why the second defendant was assisting him in these ways, she said: "I want to help young upcoming drivers to achieve their goals because the motorsport industry is so cut-throat and expensive." 12 The first defendant accepted this explanation. He also accepted that the second defendant was, as she professed, employed by Holden. They next met during the June Queen's Birthday weekend 2007 at a racing event at Eastern Creek. This must be the same event at which the plaintiff also met the second defendant. The first defendant said that the second defendant was not wearing her Holden uniform on this occasion, as she had done previously, but she was acting like a "PR girl". She also invited him to the media centre at the races to which she clearly had access. It was during the course of this weekend that she said to the first defendant: "It has been confirmed by John Pachos that you will drive with the team at the next round which is to be held in Darwin, June 22nd to June 24th." 13 The first defendant said that at that time he had no interest in competing in these championships as his budget was committed to another event. He said to the second defendant: "I will do it if the drive is paid for in its entirety by you but only under those circumstances." 14 She accepted this condition, and it was arranged for the two of them to fly to Darwin. They were originally to fly together on the evening of 21 June but at the airport, it transpired that the flights had not been paid for and the first defendant had to pay for his own flight. The second defendant said that she would reimburse him on their return. She flew separately to Darwin the following day. 15 On the following Tuesday, after the event was over, they both flew back to Sydney. 16 On 4 July, the first defendant received a phone call from an employee in the Fraud Division of the Suncorp Bank in Queensland expressing serious concerns about the second defendant. This was the first notification the first defendant had that she was not what she held herself out to be. Ultimately, it transpired that the second defendant had none of the qualifications or credentials which she professed. As I understand it, she has been charged with fraud as a result of these events. 17 The plaintiff's case against the first defendant was based on contract. For reasons which I shall return to, it was dependent upon the plaintiff establishing an agency relationship between the first and second defendants. 18 It was not suggested that there was any actual agency between the two defendants in that the first defendant had in fact authorised the second defendant to act on his behalf in her dealings with the plaintiff. Rather, the case was based on an apparent or ostensible authority. In this regard, the Magistrate made the following findings: "The position is simply that there is nothing about Mr Davison's conduct which did any more even just negligently which went to hold out Ms Weeden as binding him in the contract with Mr Pachos.