Supreme Court New South Wales Medium Neutral Citation: Papamakarios v Di Bona [2018] NSWSC 328 Hearing dates: 21 February 2018 Date of orders: 16 March 2018 Decision date: 16 March 2018 Jurisdiction: Common Law Before: Harrison AsJ Decision: The Court orders that: (1) Except for Grounds 1, 2, 3, 5, 6, 7, 8, 9 and 10, I make an order that leave to appeal is refused. (2) The appeal is dismissed. (3) The judgment of her Honour Magistrate Swain dated 20 October 2016 is affirmed. (4) The summons filed 18 November 2016 is dismissed. (5) The plaintiff is to pay the defendant's costs on an ordinary basis. Catchwords: APPEAL – Local Court – leave to appeal – Local Court Act ss 39,40, 41 – whether leave to appeal should be granted – leave to appeal refused except for groups 1 and 2 – group 1 - whether the Magistrate erred in her findings made with respect to the competing versions of the 2009 oral agreement – whether the Magistrate erred in law in failing to consider the claim in contract for the restoration work - group 2 – whether the Magistrate erred in her findings made with respect to the terms of the 2012 oral agreement – no error in the Magistrate's construction of either the 2009 or the 2012 agreement – appeal dismissed Legislation Cited: Local Court Act 2007 (NSW) Sale of Goods Act 1923 (NSW) Cases Cited: Araise Group Pty Ltd v Residential Lifestyles Pty Ltd [2014] NSWCA 187 Azzopardi v Tasman UEB Industries Pty Ltd (1985) 4 NSWLR 139 Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 Codelfa Constructions Pty Ltd v SRA of NSW (1982) 149 CLR 337 Equuscorp Pty Limited v Glengallan Investments Pty Limited [2004] HCA 55; (2004) 218 CLR 471; (2004) 211 ALR 101; (2004) 79 ALJR 206; (2004) 57 ATR 556 Franklins v Metcash [2009] NSWCA 407; (2009) 76 NSWLR 603; (2009) 264 ALR 15 He v Yeung [2015] NSWCA 392 International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 82 ALR 419 Lee v New South Wales Crime Commission [2012] NSWCA 262 (2012) 224 A Crim R 94 Pacific Carriers Limited v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 Scottish Amicable Life Insurance v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 211 ALR 342 Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429; (1968) 41 ALJR 348 Category: Principal judgment Parties: Jim Papamakarios (Plaintiff) Robert Di Bona (Defendant) Representation: Counsel: C Bolger (Plaintiff) RW Tregenza (Defendant) Solicitors: Blacktown Legal (Plaintiff) Watson Stafford Zipkis (Defendant) File Number(s): 2016/345924 Publication restriction: Nil Decision under appeal Court or tribunal: Local Court Jurisdiction: Civil Date of Decision: 21 October 2016 Before: Swain LCM File Number(s): 2013/263391 Judgment 1. HER HONOUR: This is an appeal from a Local Court Magistrate involving two oral contracts in relation to a 1967 Springtime Yellow Ford Mustang hatchback (the vehicle). 2. By summons filed 18 November 2016, the plaintiff seeks firstly, an order granting leave to appeal; secondly, the appeal be allowed; thirdly, the judgment of the court below in respect of (a) the proceedings commenced by way of statement of claim that the plaintiff pay the defendant $40,000 plus interest be set aside, (b) the statement of cross claim proceedings be set aside save for the order (or judgment and verdict) that the defendant (cross claimant in the proceedings below) pay the plaintiff $1,500 in respect of the engine block; fourthly, judgment for the plaintiff in the statement of claim proceedings; and finally, the proceedings be remitted to the Local Court for redetermination according to law. The summons sets out various alternate orders that are not necessary to be reproduced here. 3. The plaintiff in this Court is Jim Papamakarios who was the defendant/cross claimant in the Local Court proceedings. The defendant in this Court is Robert Di Bona who was the plaintiff/cross defendant in the Local Court proceedings. The plaintiff relied upon his affidavits dated 12 April 2017 and 8 November 2018. For convenience, I shall refer to the parties by name. 4. On 21 October 2016, Magistrate Swain (the Magistrate) entered judgment for Mr Di Bona in the sum of $40,000 and judgment for Mr Papamakarios on the cross claim in the sum of $1,500. Her Honour ordered that Mr Papamakarios pay Mr Di Bona's costs of the statement of claim and Mr Di Bona pay Mr Papamakarios' costs of the cross claim. The appeal 1. Section 39(1) of the Local Court Act 2007 (NSW) provides that a party to proceedings before the Local Court sitting in its General Division who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law. 2. Section 40(1) of the Local Court Act provides that a party to proceedings before the Local Court sitting in its General Division who is dissatisfied with a judgment or order of the Court on a ground that involves a question of mixed law and fact may appeal to the Supreme Court, but only by leave of the Supreme Court. 3. Section 40(2) of the Local Court Act relevantly provides that a party who is dissatisfied with an order as to costs may appeal to the Supreme Court, but only by leave of the Supreme Court. 4. Section 41 of the Local Court Act provides that this Court may determine an appeal made under ss 39(1) or 40(1) by either (a) varying the terms of the judgment or order, or (b) setting aside the judgment or order, or (c) setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) dismissing the appeal. Grounds of appeal 1. There are 20 grounds of appeal. The main issues raised on appeal can be grouped in a number of main topics. They are: 2. Group 1: The Magistrate erred in finding the terms of the 2009 oral agreement. (Grounds 1, 2 and 3). 3. Group 2: The Magistrate erred in finding the terms of agreement of the 2012 oral agreement. (Grounds 5, 6, 7, 8, 9 and 10). 4. Group 3: The Magistrate erred in finding that Mr Di Bona did not remove from Mr Papamakarios' work shop the CJ Pony parts that formed part of the sales agreement. (Grounds 11 and 12). 5. Group 4: The Magistrate erred in determining whether there was no agreement between Mr Papamakarios and Mr Di Bona in respect of the cost of importing Mr Di Bona's parts imported from the USA. (Grounds 14 to 17). 6. There are separate grounds of appeal namely Grounds 3, 4, 8, 19 and 20. They are firstly, that the Magistrate made findings of fact that were not supported by the evidence and or the facts inferred by evidence were incapable of justifying the findings of fact based upon those inferences that challenges 27 findings (Ground 4); secondly, the Magistrate erred in finding that possession of the goods under the sales agreement passed from Mr Di Bona to Mr Papamakarios; and finally, the Magistrate erred in dismissing Mr Papamakarios costs for storage fees. ("storage fees"). (Grounds 8 and 19). 7. Finally, the Magistrate erred in dismissing Mr Papamakarios' notice of motion in relation to costs. ("costs"). (Ground 20). Whether leave to appeal should be granted 1. The first issue to be determined is whether leave to appeal should be granted. 2. Counsel for Mr Di Bona referred to the well known case of Azzopardi v Tasman UEB Industries Pty Ltd (1985) 4 NSWLR 139 ("Azzopardi"), where Glass JA (with Samuels JA agreeing) stated: 1. that the judicial tribunal determines the primary findings and inferences and that that process is solely one of fact (159G); 2. The tribunal then determines the law and any error at that stage is an error of law (157A); 3. The tribunal then applies the law as stated to the facts as found which is only an error of law if no other application is reasonably open (147B). 1. The first stage of the test articulated by Glass JA in Azzopardi is that the determination of the primary judge of facts and inferences is not vulnerable to attack as an error of law as a result of "a reasoning process marred though it be by patent error, illogicality or perversity" (156G-157A). Counsel for Mr Di Bona accepts that a primary finding of fact can be challenged on the basis that there is no evidence to support the finding: see Araise Group Pty Ltd v Residential Lifestyles Pty Ltd [2014] NSWCA 187, Giles JA at [8]. I accept that is so. 2. At the hearing of the appeal, counsel for Mr Di Bona submitted that all the grounds of appeal concern solely findings of fact for which there is no right of appeal or, alternatively, some of the grounds of appeal involve mixed fact and law and as such leave is required and it should be refused. This Court sought to have counsel for Mr Papamakarios identified a "question of law" but was largely unsuccessful. 3. In Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164, the Court of Appeal set out the principles to be considered in deciding whether leave to appeal should be granted. At [32], [33] and [35], Basten JA stated: "[32] The principles governing cases such as these have recently been restated in Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. As Campbell JA noted (with the agreement of Young JA) at [22]: 'It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute.' [33] In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Campbell JA, with the agreement of Young and Meagher JJA, expanded on his summary of Carolan, noting that Kirby P had recognised 'that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable': at [46]. … [35] In Coulter v The Queen [1988] HCA 3; 164 CLR 350, dealing with a challenge to a refusal of the South Australian Full Court to grant leave to appeal in a criminal matter, the majority noted that a leave requirement was a preliminary procedure 'recognised by the legislature as a means of enabling the court to control in some measure the volume of appellate work requiring its attention': at 356 (Mason CJ, Wilson and Brennan JJ). That statement is clearly applicable to civil, as well as criminal, appellate jurisdiction." 1. The principles governing leave were also stated by the Court of Appeal in Lee v New South Wales Crime Commission [2012] NSWCA 262, (2012) 224 A Crim R 94, Bathurst CJ, (Macfarlan and Barrett JJA agreeing) at [12]: "The principles upon which leave to appeal is granted are well established. Ordinarily it is only appropriate to grant leave concerning matters that involve issues of principle, questions of general public importance or where it is reasonably clear there has been an injustice in the sense of going beyond it being reasonably arguable that the primary judge was in error Carolan v AMF Bowling Pty Ltd [1995] NSWCA 69, Zelden v Sewell [2011 ] NSWCA 56 at [22] Javcar Pty Ltd v Lombardo [2011] NSWCA 284 at [46], GKD v Director-General Attorney-General v Department [2012] NSWCA 219 at [10], Be Financial Pty Ltd v Das [2012] NSWCA 164 at [32]-[34]." 1. If leave is required for any of the appeal grounds, counsel for Mr Di Bona submitted that leave ought not be granted because (a) the amount in dispute is relatively small, (b) there is no clear injustice to Mr Papamakarios, and (c) there is no issue of principle or general public importance. 2. As to the size of the claim, that is only one discretionary matter to be taken into account by the Court and even when relatively small amounts are involved, leave ought not to be denied where there has been a clear injustice: see He v Yeung [2015] NSWCA 392 per Bergin CJ in Eq at [49]. 3. I consider that despite the many appeal grounds, there are only two issues that raise a question of law. These issues are set out in Groups 1 and 3. They involve the Magistrate's findings of the construction of the oral agreements made between the parties in 2009 and 2012. 4. Aside from the construction of the oral agreements made in 2009 and 2012, I consider that the other grounds of appeal concern solely factual findings, although some may involve mixed questions of fact and law. Factual findings cannot be the subject of an appeal, unless there is no evidence to support those findings. That is not the case here. The amount in dispute is relatively small, namely $40,000; there is no clear injustice to Mr Papamakarios; and the appeal raises no issue of principle or general public importance. In these circumstances, in the exercise of my discretion, leave to appeal should be refused. 5. So far as the appeal point concerning costs (Ground 20), leave is required. The Magistrate made the usual order as to costs in relation to the statement of claim and the cross claim. I have carefully read Mr Papamakarios' submissions on costs and I am of the view that the Magistrate's discretion did not miscarry. Hence, leave to appeal in relation to costs is refused. 6. Except for Grounds 1, 2, 3, 5, 6, 7, 8, 9, and 10, I make an order that leave to appeal is refused. Background 1. In summary, Mr Di Bona owned a 1967 Springtime Yellow Ford Mustang hatchback. It is not dispute that in 2009 there was an oral agreement between the parties that Mr Papamakarios would restore the vehicle for Mr Di Bona; however, the terms were in dispute in the proceedings. It is common ground that Mr Di Bona paid $27,000 to Mr Papamakarios. The restoration commenced. Later, in 2011, a dispute arose. Mr Di Bona says that Mr Papamakarios then agreed that Mr Papamakarios would purchase from Mr Di Bona the vehicle together with certain parts (the parts included in the contract were an issue in the proceedings) for $40,000. Mr Papamakarios says that he did not agree to purchase the Mustang. The sum of $40,000 was not paid. Mr Di Bona sued for the $40,000 sale price. 2. During the time of the restoration (which was over a period of years) Mr Di Bona arranged for Mr Papamakarios to import vehicle parts into Australia from the United States in shipping containers which also carried other goods and vehicles being imported by Mr Papamakarios. Many of the parts were kept at Mr Papamakarios' premises (a rural property with a workshop below his home). Mr Papamakarios sued for the cost of importation and storage and these aspects of his claim were dismissed. 3. Mr Di Bona also arranged for other parts to be delivered to Mr Papamakarios' premises from Australian suppliers which Mr Di Bona claimed were subject to a further agreement of sale to Mr Papamakarios. Mr Di Bona sued on that agreement for the price of those goods which were sold. 4. Mr Papamakarios also cross claimed for the balance of moneys he claimed were due on the purchase by Mr Di Bona from Mr Papamakarios of an engine for the vehicle. In his cross claim, in the alternative to Mr Papamakarios claim for repair and restoration of the vehicle pursuant to a contract, Mr Papamakarios alleged that he provided goods and services to Mr Di Bona at his request for the repair of the Mustang vehicle for which he claimed $38,800 on the basis of quantum meruit (cross claim [2]). Group 1 - The competing versions of the terms of the 2009 agreement 1. The grounds of appeal are firstly, that the Magistrate erred in finding that the terms of the agreement for the restoration work to be performed by Mr Papamakarios in respect of Mr Di Bona's vehicle included the costs of the sheet metal and the costs of painting the vehicle; secondly, the Magistrate erred in finding that Mr Papamakarios agreed to perform the restoration work in respect of Mr Di Bona's vehicle, supply the necessary sheet metal and paint the vehicle for $27,000; and thirdly, the Magistrate erred in law in failing to consider and determine Mr Papamakarios' claim in contract for the restoration work to be performed by Mr Papamakarios in respect of Mr Di Bona's vehicle. Ground 3 rises or falls on my decision in relation to Appeal Grounds 1 and 2. 2. As previously stated, it is not in dispute that in June 2009, Mr Papamakarios agreed to perform work on Mr Di Bona's vehicle. However, what was in dispute were the scope of the works; whether a fixed price was agreed; what was the price of the works; and the cost of supply of sheet metal. 3. The competing versions of the conversations in relation to the 2009 oral agreement for the restoration of the Mustang between Mr Di Bona and Mr Papamakarios are set out below. Mr Di Bona's version 1. Mr Di Bona's version of the agreement is set out at [6] to [12] of his affidavit dated 24 February 2014. It is as follows. 2. It is common ground that Mr Di Bona made arrangements for Mr Papamakarios to inspect the Mustang at the place where he stored it, which was at his mother's home at Smithfield. Mr Papamakarios attended and examined the Mustang. This was the first time that Mr Di Bona had met Mr Papamakarios in person. (Aff [6]). When Mr Papamakarios inspected the Mustang it was complete in its original state. It had not been stripped back (Aff 3 April 2014, Papamakarios [9]). 3. Following the inspection at Smithfield, Mr Di Bona says the following conversation took place (Aff [7]): Mr Papamakarios: To completely restore the body work, body and paint: $27,000. That consists of $10,000 for the sheet metal and $10,000 labour and $7,000 for paint and labour. I will need $10,000 paid up front for the parts. It will take about a year to complete. I run an earth moving business and I do it when I'm not doing that. 1. Mr Di Bona says that he had already discussed the cost of the repairs with two other firms. He was impressed by the thoroughness of Mr Papamakarios' examination of the Mustang, which contrasted to that conducted by another firm which had previously quoted $27,000. Mr Papamakarios removed the front and rear seats and physically climbed under the car and examined the undercarriage whereas the other firm appeared to have made only a cursory examination of the vehicle. Also, Mr Papamakarios was based at Tennyson and it was more convenient for Mr Di Bona to inspect the progress of the work from time to time, whereas the other firm was located in Queensland and had an employee inspect the Mustang rather than the proprietor. 2. Mr Di Bona says that he then said words to the effect: "I need to see your work before I accept your quote." Shortly after that Mr Di Bona attended Mr Papamakarios' workshop, which adjoined his home, and inspected a vehicle, also a 1967 Mustang, which Mr Papamakarios said that he had restored. Mr Di Bona also attended a private home at Castle Hill with Mr Papamakarios where he inspected a vehicle which Mr Papamakarios said he had also restored. 3. Mr Di Bona's evidence is (Aff [8]) that following the inspection at Castle Hill he had a conversation with Mr Papamakarios to the following effect: Mr Di Bona: Ok, you can do the job. Can you give me something in writing? Mr Papamakarios: Sure, no worries. 1. A short time prior to 9 June 2009, Mr Di Bona says that he delivered the Mustang to Mr Papamakarios at his workshop at Tennyson. (Aff [9]). It is common ground that there was no written agreement. 2. Mr Di Bona delivered the vehicle to Mr Papamakarios. On 8 April 2009, Mr Di Bona paid $10,000 to Mr Papamakarios to purchase sheet metal. On 30 March 2010, Mr Di Bona paid a further $10,000 on account of labour. (Aff [11] to [12]). On 8 April 2010, he paid $7,000. Finally, on 22 April 2010, he paid a sum of $2,500 for the engine. Mr Papamakarios does not dispute that he was paid $27,000 by Mr Di Bona. 3. In his latter affidavit dated 23 April 2014, Mr Di Bona deposed that he replied to Mr Papamakarios' question "Do you want it painted" by saying "Yes". (Aff [4]). Mr Papamakarios' version 1. Mr Papamakarios' version of the 2009 agreement is set out in his affidavit dated 3 April 2014. It is as follows. 2. Mr Papamakarios says that in about April 2009, he received a telephone call from a person who identified himself as Robert Di Bona. During the telephone conversation Mr Di Bona said words to the following effect (Aff [8]): Mr Di Bona: I've got an old rusted out 1967 Mustang that I would like to restore. Can you come and have a look at it and give me a rough quote? Mr Papamakarios: Yes. 1. After the inspection, Mr Papamakarios had a conversation with Mr Di Bona to the following effect (Aff [10]): Mr Papamakarios: Do you want me to replace all the sheet metal? Mr Di Bona: Yes. Mr Papamakarios: Do you want it painted? Mr Di Bona: I'm not sure. Mr Papamakarios: To do complete restoration can cost up to $165,000. That is when the car is in a drive away state and showroom condition. If you just want the body work done then based on an hourly rate and depending on how much cancer (rust) is in the vehicle I estimate it will cost about $27,000. My hourly rate is $77 per hour. The sheet metal will need to be imported from America. I can do that for you but it will be an extra cost for the supply of the sheet metal and the shipping and taxes." Mr Di Bona: What will that cost? Mr Papamakarios: The sheet metal will cost about $13,000 plus taxes and then there is shipping costs on top. Mr Di Bona: How much extra will it be for the paint? Mr Papamakarios: That will cost $25,000. Mr Papamakarios: It sounds like you know what you are looking at and you know what to do. I am confident. I would like to go ahead with that. 1. Mr Papamakarios says that a few days after the inspection at Castle Hill, he received a telephone call from Mr Di Bona. During that telephone conversation words to the following effect took place (Aff [13]): Mr Di Bona: I want to proceed. Mr Papamakarios: That's fine. When you finish dismantling the vehicle bring it around and I will get started. I will need you to bring a deposit of $10,000 as part payment for the sheet metal when you deliver the car. Mr Di Bona: I will do that. 1. The Magistrate did not only determine the terms of the 2009 agreement, but also Mr Papamakarios' cross claim seeking quantum meruit. The Magistrate made adverse findings concerning Mr Papamakarios' evidence in relation to the 2009 oral agreement when at [61] of her written reasons she stated: "61 When cross examined about quoting for restorations, the Defendant said "with previous customers I have agreed to a fixed price which sets out the entire scope of works and has always involved completing the restoration and repair work to showroom (drive away) stage…" (Para 14 Exb 9). The Defendant denied that that meant he provided written quotes. He confirmed that he always gives an oral quote. (T/S 19/6/15 T/S p 41 at 16-23). He was questioned further about paragraph 14 of his Affidavit (Exb 9) on 21st October 2015. The Defendant contradicted his own evidence, denying that in other cases he sets a fixed price, he denied charging a lump sum for other clients and then when paragraph 14 was read to him, stated that he'd never finished a vehicle, that he was only giving an example. The Defendant stated that charging $77.00 per hour ws for this one occasion only and that when he gave a set price the other agreements never went ahead, even though the Defendant showed the Plaintiff 2 other vehicles restored vehicles as examples of the Defendant's work. The Defendant stated that he had not fully restored those vehicles. (T/S 21/10/15 pp21 nd 22). 1. In relation to the terms of the 2009 agreement and Mr Papamakarios' claim for quantum meruit, the Magistrate carefully summarised the evidence given by both parties in her reasons at [51] to [70]. Her Honour discussed each party's evidence at [70] to [76] and concluded at [77]: "77. Taking into account and giving weight to: • The evidence given by the Plaintiff including that the quote was a fixed price for specific work, sheet metal and paint, that he was on a budget and need to know the costs involved, • Mr O'Connor's evidence about the hours of work involved in the work done on the vehicle he inspected, • Mr O'Connor's inclusion of an estimation of the number of hours of work to strip the vehicle, which was done by the Plaintiff before delivery and therefore must be excluded from his estimation of the total hours taken for work to be done, • work claimed by the Defendant … that was no longer on the vehicle, • Mr O'Connor's opinion that the hours claimed for the work done was excessive, • The Defendant's evidence that he did estimate the repair work at $27,000, •The Defendant's confusion about what items were included in the invoice sent to the defendant, •The Defendant's evidence that the balance of $11,800 was for work yet to be done, without stating what work was to be done, • The Defendant contradicting his own evidence about quoting a fixed price for other customers, which adversely affected his credit, I am satisfied on the balance of probabilities that the original agreement was for restoration work, for sheet metal work and painting of the vehicle (which includes sandblasting in preparation) and that it was for a fixed sum of $27,000.00. Accordingly, the cross claim in quantum meruit must fail." 1. Not surprisingly, the Magistrate after impugning Mr Papamakarios' credit in relation to his version of the agreement, preferred Mr Di Bona's evidence and was satisfied on the balance of probabilities that the original agreement was for restoration work, for sheet metal work and painting of the vehicle (which includes sandblasting in preparation) and that it was for a fixed sum of $27,000. After reaching that conclusion, Mr Papamakarios' claim for quantum meruit failed. Submissions of Mr Papamakarios 1. Counsel for Mr Papamakarios submitted that the Magistrate applied the wrong test for the formation of contract and referred to irrelevant evidence and considerations including subjective evidence in the form of post contractual conduct. Further, Mr Papamakarios submitted that the Magistrate did not refer to the relevant and unchallenged evidence of Mr O'Connor (his expert) which corroborated Mr Papamakarios' evidence as to the costs of the work and supply of sheet metal. 2. Mr Papamakarios submitted that whether a contract had been formed and the terms of contractual arrangements, requires objective determination: see Equuscorp Pty Limited v Glengallan Investments Pty Limited [2004] HCA 55; (2004) 218 CLR 471; (2004) 211 ALR 101; (2004) 79 ALJR 206; (2004) 57 ATR 556 (at [34]) per Gleeson, McHugh, Hayne and Callinan JJ; Pacific Carriers Limited v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 ("Pacific Carriers"); Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 211 ALR 342 (at [40]) ("Toll"). Objective determination requires consideration, not only of the text of the documents, but also the surrounding circumstances known to participants and the purpose and object of the transaction but not the participants' subjective beliefs. He referred to Pacific Carriers (at [22]) per Gleeson CJ, Gummow, Hayne Callinan and Heydon JJ; Toll (at [40]); International Air Transport Association v Ansett Australia Holdings Ltd [2008] HCA 3; (2008) 82 ALR 419 at [8] per Gleeson CJ. This principle is not in dispute. Submissions of Mr Di Bona 1. Mr Di Bona submitted that for a parol contract made orally, what was communicated by one party to the other in making an agreement is a question of fact. Secondly, the common intention of the parties in making any such agreement is also question of fact. He submitted that the construction to be placed on a particular document is a question of fact (Scottish Amicable Life Insurance v Reg Austin Insurances Pty Ltd (1985) 9 ACLR 909, McHugh JA at 923– 924) ("Scottish Amicable Life") and therefore the inferences to be drawn from and the consequences to be placed on particular conversations which may gave rise to a contract, are also solely questions of fact. 2. In Scottish Amicable Life, the appeal concerned an issue as to whether a person whose signature was made on an indemnity document, purporting to be made on behalf of an incorporated company, was nevertheless binding on them personally. McHugh JA stated at 923-924: "A commercial document, however, must be construed in its commercial setting — in accordance with the surrounding circumstances known to the parties: Codelfa Constructions Pty Ltd v SRA of NSW (1982) 149 CLR 337 at 352–353. This is so whether the issue concerns construction in the strict sense or whether, as here, the issue concerns the capacity in which a person signs a document. There is, however, a dictum of Atkin LJ in Ariadne Steamship Co Ltd v James McKelvie & Co [1922] 1 KB 518 at 536 to the effect that, if a person signs a document 'B by C his attorney', or 'C on behalf of B', it would seem irrelevant that the body of the contract expressed the contract to be made between A and C". The respondents rely on this dictum to circumscribe the inquiry before the court. You cannot go, they say, beyond the words "on behalf of" of Reg Austin Insurances Pty Ltd. when the Ariadne case went to the House of Lords, Lord Sumner and the Earl of Birkenhead had reservations about the accuracy of Atkin LJ's dictum: Universal Steam Navigation Co v James Mckelvie & Co [1923] AC 492 at 497 and 499 . But if that dictum is correct I think that it should be confined to the special case of the agent who signs for an undisclosed principal. It cannot be accepted as applicable in all cases. In some cases the contents of a document may indicate that the signatory is bound even though a qualification attaches to his signature. Expressly or by implication the body of the document may make it plain that the signatory is a party to the contract. In the examples given by Atkin LJ, it would usually follow that there was no liability on the part of the person signing. But this is because the express disavowal of responsibility in those examples is so strong that no other consideration, based on the terms of the document, can overcome it. In other cases, however, the qualification to the signature may be overcome by the terms of the document and the surrounding circumstances. In the end the decision must depend upon the terms of the document including the qualification attaching to the signature together with the surrounding circumstances. This is a question of fact, not of law. In the present case the contents of the Indemnity and the surrounding circumstances overcome the prima facie inference that is to be drawn from the setting of the signature and its qualification. On 4 March 1976 the appellant wrote to Mr Austin at his home address. The letter referred to the recent discussion "during which the basis for your operation as a senior consultant for the Society was established". The writer said that he now wished to confirm the details. One of the five details concerned housing finance. Mr Austin was informed that housing finance would be made available to him, presumably by the appellant, either to refinance his existing mortgage or to assist in the purchase of a new property. Motor vehicle finance was also to be made available. Paragraph 4 of the letter stated: "Your agency with the Society may be conducted in the name of a Pty Company if so desired. However, in this event we will require a 'personal guarantee' from each director of the company…" 1. Scottish Amicable Life supports the proposition that a contract is interpreted in the manner set out in Codelfa Constructions Pty Ltd v SRA of NSW (1982) 149 CLR 337. The issues for determination before McHugh JA were whether a person who signed indemnity documents meant it to be binding on him personally or binding on behalf of a company and whether this was a question of fact. The current case on appeal has nothing to do with this subject matter. 2. The Magistrate accepted that terms of the 2009 agreement were that Mr Papamakarios would undertake certain restoration work on the vehicle for a lump sum of $27,000 (at [77] dot point 1) which was in accordance with the evidence of Mr Di Bona as to his conversations with Papamakarios (judgment at [51]: Aff Di Bona). The affidavit evidence was primary evidence and available to be accepted. The Magistrate observed ([56] - [57]) that it had been put to Mr Di Bona in cross examination that the total amount to restore the vehicle was $165,000 which Mr Di Bona dismissed as ridiculous as he was on a limited income. The Magistrate also relied upon inconsistencies in Mr Papamakarios' evidence at ([61]-[65]) to find that his credit had been successfully impugned ([62]) and that his admissions corroborated Mr Di Bona's evidence ([65]-[66]). 3. The Magistrate preferred Mr Di Bona's evidence of his version of the conversation and from that derived the common intention of the parties, and irrespective of the reasoning process by which the Magistrate reached this conclusion, on this point, it is unassailable. 4. The Magistrate did not look to Mr Di Bona's subjective intention to ascertain the terms of the contract but rather as to why his evidence should be preferred to that of Mr Papamakarios. This is a rational basis for a conclusion which preferred Mr Di Bona. The submission by Mr Papamakarios that this is the acceptance of Mr Di Bona's subjective intention misconstrues the reasoning of the Magistrate. 5. Mr Papamakarios' witness, Mr O'Connor an expert body repairer gave evidence that the charge out rate of $77 per hour was within the range of rates for Sydney (CB 306). However, Mr O'Connor opined that the amount of time Mr Papamakarios claimed that he worked on the vehicle, being a total of 189 hours, was only reasonable if all the replacement sheet metal had been welded into place and if the work, including stripping the vehicle, had been performed (CB 306). However, it was an accepted fact that Mr Di Bona had already stripped the vehicle. The Magistrate said that this could not be assessed as not all the work was attached to the shell, and the estimate by Mr O'Connor appeared to include the dismantling of the vehicle when this had already been done by Mr Di Bona ([69]). Also, against Mr Papamakarios' credit was the Magistrate's assessment of Mr Papamakarios' confusion about which items were included in the invoice sent to Mr Di Bona by email on 4 April 2014 (CB 165; 203-207) and that the balance claimed by Mr Papamakarios was not particularised. Mr Papamakarios claimed that he kept a record of the time that he spent working on Mr Di Bona's vehicle, recording on pieces of paper and compiling them into one document (CB 188). The Magistrate rejected the evidence of Mr Papamakarios because his "record" of work done was inconsistent. The Magistrate rejected Mr Papamakarios as an accurate historian and preferred Mr Di Bona and applied this reasoning to the assessment of Mr Papamakarios' evidence as to the restoration agreement. 6. The Magistrate observed that Mr Papamakarios was not able to explain what constituted that part of his invoice for labour in the sum $25,000 (CB 207) in excess of $20,043 ([70]). The Magistrate gave weight to these matters which, together with Mr Papamakarios' unsatisfactory evidence concerning his invoice assisted her in preferring Mr Di Bona's version of the conversation giving rise to the contract. 7. Also, adding to the totality of evidence in favour of preferring Mr Di Bona's version, was the admission by Mr Papamakarios that he estimated that the repair work would cost $27,000. That observation simply corroborates the evidence by Mr Di Bona that the sum of $27,000 was mentioned in the conversation, such that the evidence of Mr Di Bona was easier to accept. 8. These reasons were a rational basis for preferring Mr Di Bona's evidence. However, even if it were not a rational basis, it does not advance Papamakarios' case on appeal because, as is made clear in Azzpoardi, the Magistrate's reasons for accepting Mr Di Bona's evidence on this point is beyond the scope of the appeal. Consideration 1. Aside from the cases referred to in relation to the construction of the terms of a contract, another helpful authority is set out in Franklins v Metcash [2009] NSWCA 407; (2009) 76 NSWLR 603; (2009) 264 ALR 15. In summary it establishes five principles. They are: 1. The tasks of construction are to determine what a reasonable person in the position of the contracting party would have understood the words of the contract to mean. 2. That involves consideration of surrounding circumstances as an aid to construction, given that words take meaning from their context. 3. It is not necessary to find ambiguity before reviewing the surrounding circumstances. 4. Negotiations may be admissible if they elucidate the surrounding circumstances but they are not receivable in so far as they are reflective of actual intentions and expectations. 5. Subsequent conduct would not generally be admissible, an exception may be if there was an admission as to the fact of some relevant past surrounding circumstance. Another one may be, in the case of an admission, if the contract was partly oral and the admission relation to the ascertainment of an oral term. 1. I accept the Magistrate (at [77]) says that she took into account and gave weight to Mr O'Connor's expert evidence that the amount claimed by Mr Papamakarios for the work done was excessive. This finding is relevant to Mr Papamakarios' quantum meruit claim, an issue which the Magistrate was determining at the same time. The Magistrate took into account Mr Papamakarios' evidence that he estimated the repair work at $27,000; his confusion about what items were included in the invoice sent to Mr Di Bona; his evidence that the balance of $11,800 was for work yet to be done, without stating what work was to be done; and his contradiction of his own evidence about quoting a fixed price for other customers, which adversely affected his credit. Mr Di Bona's evidence was that Mr Papamakarios gave him a fixed price quote for specific work, sheet metal and paint. I accept the Magistrate took into account that Mr Di Bona was on a budget and needed to know "the costs involved" which is his subjective belief that was not communicated to Mr Papamakarios. While the Magistrate took into account this factor, once Mr Papamakarios' evidence was comprehensively rejected, there is no other conclusion that the Magistrate could have been reached other than she was satisfied on the balance of probabilities that the 2009 agreement was for restoration work, for sheet metal work and painting of the vehicle, which included sandblasting in preparation, and that it was for a fixed sum of $27,000. There is no error of law. This ground of appeal fails. Group 2 - The 2012 agreement 1. The grounds in relation to this topic are 5, 6, 7, 9 and 10. They are: 2. Ground 5: The Magistrate erred in finding that the agreement for the sale of the vehicle and parts by Mr Papamakarios and Mr Di Bona was clear and enforceable. 3. Ground 6: The Magistrate erred in finding that there was a completed agreement for the sale of the vehicle and the parts. 4. Ground 7: The Magistrate erred in finding that the terms of the sale agreement were certain. 5. Ground 8: The Magistrate erred in finding that possession of the goods under the sale agreement passed from Mr Di Bona to Mr Papamakarios 6. Ground 9: The Magistrate erred in finding that the parts that formed the sale agreement were limited to Mr Di Bona's CJ Pony parts stored at Mr Papamakarios' workshop. 7. Ground 10: The Magistrate erred in shifting the onus to Mr Papamakarios to establish what parts were included in the agreement that was pleaded and sued upon by Mr Di Bona. 8. It was agreed between the parties that there was at least a conversation between Mr Papamakarios and Mr Di Bona in relation to the purchase of the Mustang for $40,000, including certain parts but there was nothing in writing to evidence it. 9. The Magistrate set out the evidence of the parties in relation to the 2012 agreement. The Magistrate at [81] and [82] stated: "81 The Plaintiff says that a contract was entered into for $40,000 including the "CJ Pony" parts imported from the USA. He stated that the Defendant has spoken to him about having a client in Queensland who wanted a vehicle and asked the Plaintiff to consider whether he was interested in selling his. (Para 19, Exb 1).The Plaintiff contacted the Defendant often requesting payment for the car and parts. (Para 22, Exb 1). 82. In evidence the Plaintiff, confirmed in cross examination that there was an agreement by the Defendant to purchase the car and the "CJ Pony" parts. (T/S 19/3/15 p. 18 at .8 -.24, p. 19 at .10 and p. 25 at .40-.35). He denied that it was an offer only." 1. The Magistrate continued at [85], [87], [88] and [93]: "85. In his Affidavit, (Exb (9) the Defendant stated at para 35 that he only made the Plaintiff an offer. However, attached to his Affidavit (in Annexure E), was an email he sent to the Plaintiff where he said "My argument to you is, I agreed to buy the car and all the parts from you for $40,000, due to you wanting to sell the car"…. The defendant was cross examined about that but the Defendant maintained his denial that there was an agreement, only an offer. He says that he made a mistake, stating that he was not very literate. (T/S 19/6/15 p. 69 at .40 - p. 70 at .32). The Defendant agreed that in the following weeks after that conversation, the Plaintiff pressed him for payment of $40,000. The defendant also agreed that in these conversations, he never said to the Plaintiff there was not an agreement. The defendant maintained that the conversation was only an offer. … 87. The Defendants answers were evasive. This is a matter that I have taken into account when considering the credibility of the Defendant in respect of his evidence relating to his account of whether there was an agreement or not. 88. Further, when cross-examined, the Defendant conceded that he made an offer to the Plaintiff and that the Plaintiff accepted the offer. (T/S 21/10/15 p. 15 at .3-.38). … 93. Later, after the Plaintiff removed some parts from the Defendants workshop, the Defendant stated in his Affidavit (Para 38) that he said to the Plaintiff "I am no longer interested in purchasing the vehicle because I wanted the parts that came with it and you have taken them away."" 1. The Magistrate concluded at [100]-[101]: "100. On the Defendants own evidence, he said he made an offer to the Plaintiff. As discussed above, the terms were clear. The Defendant offered to pay $40,000 for the Mustang and parts. On that evidence, by making that offer, he had an intention to create legal relations with the Plaintiff. (Smith v Hughes (1871) LR 6 QB 597; Taylor v Johnson (1983) 151 CLR 422. 101. An agreement is made where, as in this case, there was certainty and completeness of terms. An offer was made for the Mustang and parts (although now subject to dispute and determined below), for $40,000. There was consideration, the exchange of the Mustang and parts for money, $40,000. There was also an intention to create legal relations, by an offer being made and the acceptance of that offer. I do not accept that the offer by the Defendant was nothing more than an offer. It was accepted and therefore an agreement was made. I am satisfied on the balance of probabilities that there was an agreement entered into by both the Plaintiff and the Defendant for the Plaintiff to sell and the Defendant to purchase the Mustang (including parts) for $40,000." Mr Papamakarios' submissions 1. Mr Papamakarios submitted that the Magistrate's findings and determination in respect of the 2009 agreement are inconsistent with the findings and determination of the 2012 agreement. 2. The specific disagreement or dispute between the parties concerned whether the subject matter of the sale was Mr Papamakarios' version that the Mustang (that was still being restored) and all the parts that were being stored at his premises; and Mr Di Bona's version that the Mustang (that was still being restored) and the CJ Pony parts that were being stored at Mr Papamakarios' premises. 3. Mr Papamakarios submitted that the Magistrate did not find either version of the agreement, but rather the Magistrate limited the CJ Pony parts to the sheet metal, being the parts necessary for the restoration work ([23]). Mr Papamakarios says that this was not the position of either party and it was not in evidence before the Magistrate and this error then infects the determination as to what was the subject matter of the agreement and whether there was any breach or repudiation. 4. The Magistrate found that Mr Di Bona could not identify which CJ Pony parts formed the 2009 agreement as alleged by him, namely the sale of the Mustang and the CJ Pony parts stored at Mr Papamakarios' premises for Mr Di Bona ([108]). Therefore, he says that Mr Di Bona could not prove what was or what was not, included in the 2009 agreement. 5. Mr Di Bona had the onus to establish the terms of the contract, or agreement, as he was suing on the agreement. 6. The Magistrate relied on a finding that Mr Papamakarios "did identify which parts came from CJ Pony". ([108]). Mr Papamakarios says that this finding was incorrect. Mr Di Bona's case was that "all CJ Pony parts" stored at Mr Papamakarios' premised on his behalf (which he could not itemise or specifically identify) formed part of the 2009 agreement. 7. Mr Papamakarios submitted that the Magistrate fell into error in determining the terms of the 2009 agreement and misconstrued the evidence. 8. Mr Papamakarios contended that the Magistrate's findings in respect of the terms and subject matter of the contract also did not have regard to the surrounding circumstances known to the parties and the purpose and object of the transaction. He says that at the time the parties were discussing the sale of the Mustang and the parts and a decision had been made by Mr Di Bona not to continue with the restoration of the vehicle. The vehicle and the parts represented the (or a) restoration project and it was the project that Mr Di Bona was selling to Mr Papamakarios. The restoration had not been completed and Mr Papamakarios was going to purchase the project from Mr Di Bona, and the suggestion by Mr Di Bona that he was selling limited and unspecified parts simply does not make sense. The evidence by Mr Di Bona that there was a subsequent and further agreement to sell other parts which had been stored at Mr Papamakarios' premises (2012 agreement) is at odds with the terms of the 2009 agreement. 9. The Magistrate dismissed Mr Di Bona's claim in respect of the 2012 agreement because Mr Di Bona could not identify the specific goods that were the subject of the alleged 2012 agreement, nor was the actual price for goods specific at the time of the alleged bargain being struck. Mr Papamakarios says that the only evidence that Mr Di Bona gave in relation to the 2012 agreement was a general statement as to the purchase of unspecified "RRS parts, the Chris Alston Chassisworks and the engine block for costs price". There was no actual price asserted and neither were the actual parts being sold. The identity of the parts that were the subject of the claim in respect of the 2012 agreement or the alleged price of those items were not particularised until the filing of the statement of claim. The parts that formed Mr Di Bona's 2012 agreement were also parts stored at Mr Papamakarios' premises and were to be used in the restoration project. 10. Mr Papamakarios submitted that the Magistrate's findings and consideration of the 2009 agreement was at odds with the approach to findings and considerations of the 2012 agreement. Mr Di Bona could not and did not particularise or specify the parts other than in the most general sense. Mr Di Bona's submissions 1. Mr Di Bona submitted that these appeal grounds are matter of fact. The evidence of Mr Di Bona (Aff, 24/2/2014 at [19] (CB 67- 68) is to the effect that there was a conversation between him and Mr Papamakarios in which Mr Papamakarios offered to buy the vehicle from Mr Di Bona and, having considered the offer, Mr Di Bona said to Mr Papamakarios "…you can have the car and the CJ Pony parts only" to which Mr Papamakarios agreed. A contract is sufficiently certain so long as it is capable of having a meaning whereupon the court will determine its construction and determine its application: see Upper Hunter County District Council v Australian Chilling & Freezing Co Ltd [1968] HCA 8; (1968) 118 CLR 429; (1968) 41 ALJR 348, Barwick CJ (with McTiernan, Kitto and Menzies JJ agreeing). 2. There is no issue that the car was the vehicle which had been delivered by Mr Di Bona to Mr Papamakarios for restoration and that the CJ Pony parts were those which had been imported by Mr Papamakarios at Mr Di Bona's request (Aff, Di Bona at [7] and [19]) (CB 66 - 8). Mr Papamakarios gave his version (at CB 161). Other parts had been imported by Mr Papamakarios at Mr Di Bona's request and others delivered to Mr Papamakarios' premises on Mr Di Bona's order. Mr Papamakarios admitted that he knew which parts had been imported by Mr Di Bona in Mr Papamakarios' containers (CB 167. [69]). The Magistrate made her findings of fact (at [123]). The Magistrate did not accept either version of the agreement but was not compelled to do so. She reached a conclusion as to what she considered to have been said. She found what the terms of the agreement were and determined the rights arising from it. This is a finding of fact against which appeal does not lie. Conclusion 1. The Magistrate stated the terms of the 2012 agreement were clear. Mr Papamakarios offered to pay $40,000 for the Mustang and parts. Her Honour did not accept Mr Papamakarios' version that he only made an offer for a number of reasons, the principal one being that when he was cross examined he conceded that he made an offer of $40,000 to Mr Di Bona and Mr Di Bona accepted it. 2. The Magistrate accepted Mr Di Bona's evidence, made a critical finding that Mr Papamakarios' answers were evasive and referred to Mr Papamakarios' concession that he made an offer to Mr Di Bona and Mr Di Bona accepted the offer. There was an agreement where the terms were certain and complete. An offer was made for the Mustang and parts for $40,000. There was consideration, the exchange of the Mustang and parts for money, $40,000. There was also an intention to create legal relations, by an offer being made and the acceptance of that offer. Due to Mr Papamakarios' concession referred to above, the Magistrate did not accept that the offer by him was nothing more than an offer. It was accepted and therefore an agreement was made. The Magistrate concluded that she was satisfied on the balance of probabilities that it was accepted by Mr Di Bona and therefore an agreement was entered into by both Mr Di Bona and Mr Papamakarios. This being, Mr Di Bona to sell and Mr Papamakarios to purchase the Mustang (including parts) for $40,000. 3. The disputed parts is a factual dispute that was determined later in the judgment. The goods were removed at some time later after the 2012 agreement was made. 4. So far as Mr Papamakarios' complaint about the Magistrate applying the Sale of Goods Act 1923 (NSW) it was conceded that if the grounds of appeal in relation to the 2012 agreement fails so does the appeal point raising the Sale of Goods Act. 5. There is no error in the Magistrate's construction of the 2012 agreement. This ground of appeal fails. 6. The result is that the appeal is dismissed. The judgment of her Honour Magistrate Swain dated 20 October 2016 is affirmed. The summons filed 18 November 2016 is dismissed. 7. Costs are discretionary. Costs usually follow the event. The plaintiff is to pay the defendant's costs on an ordinary basis. The Court orders that: (1) Except for Grounds 1, 2, 3, 5, 6, 7, 8, 9 and 10, I make an order that leave to appeal is refused. (2) The appeal is dismissed. (3) The judgment of her Honour Magistrate Swain dated 20 October 2016 is affirmed. (4) The summons filed 18 November 2016 is dismissed. (5) The plaintiff is to pay the defendant's costs on an ordinary basis. ********** 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. Decision last updated: 16 March 2018