Veritas Property Group Pty Limited v Ronali Pty Limited

Judgment 1HIS HONOUR: The plaintiff moves on a notice of motion filed yesterday for an order staying execution of a judgment given in the Local Court by his Honour Magistrate Bradd on 20 March 2012. On 11 April 2012 the plaintiff filed a summons seeking leave to appeal from the decision of the Local Court. Two questions are raised. The first is whether there should be a stay of execution as sought. The second is whether the summons for leave to appeal should be dealt with at the same time and, if so, whether it should be allowed or dismissed. 2The strength of the application for leave to appeal is an important issue on the application for a stay of execution of the judgment. If the plaintiff has little prospect of obtaining the leave to appeal that is sought, or little prospects on the appeal if leave were given, that would be a powerful reason for refusing a stay of execution. 3Prima facie, the defendant, who was the plaintiff in the Local Court, is entitled to the fruits of its judgment. The plaintiff in this Court led no evidence that the defendant in this Court would be unable to repay any moneys paid to it pursuant to the judgment if an appeal were ultimately successful. That would be a reason for refusing the stay, even if I were of the view that the plaintiff has strong grounds for obtaining the leave that is sought and strong grounds for appeal. 4However, if the plaintiff has little prospects of success, then the stay should be refused. Hence, I would have expected the plaintiff to be in a position to deal both with the substantive relief sought in the summons and the relief sought in the notice of motion. 5The plaintiff's solicitor, who appears on the application for a stay, resists my dealing with both matters, but counsel for the defendant says that I ought to deal with both matters. 6It is convenient to deal with the issues raised by the summons. In the Local Court the learned magistrate gave judgment for the plaintiff (defendant in this Court) (Ronali Pty Limited) ("Ronali"), in the sum of $48,830.84. The plaintiff in this Court (defendant in the Local Court) (Veritas Property Group Pty Limited) ("Veritas"), accepts that it is liable to pay Ronali $25,000. Hence, the amount at issue is $23,830.84. 7It was common ground that Ronali and Veritas made an agreement by which Ronali agreed to provide services to Veritas for a sum of about $43,000 or $44,000. It is not clear to me whether the agreed price was that sum or $48,000, or whether the amount for which judgment has been given includes a sum for prejudgment interest. The work Ronali was to do appears to have been to find a sublessee for Veritas of certain premises. 8Veritas says that after reaching an agreement to pay the price to Ronali there were subsequent negotiations in which Veritas, through a Mr Mastronardo, said, in substance, that all Veritas was prepared to pay was $25,000. 9According to the reasons for judgment of the learned magistrate, Mr Mastronardo told Mr Mackay of Ronali that his commission for obtaining a tenant for the property would be only $25,000. Mr Mackay responded by saying that that was not fair as he had put a lot of work into the deal. Mr Mastronardo responded by saying words to the effect "That's all Qantas paid to their agent and that's all I was expecting to pay". According to the learned magistrate, Mr Mackay said "I've been working on this for a long time", and Mr Mastronardo replied "That's the deal if you don't like don't do the deal. I will pay you a $25,000 commission". 10Mr Mastronardo said that Mr Mackay did not reply and he assumed that the deal proceeded on the basis that the agent's commission was $25,000 plus GST. Mr Mastronardo said that if he had known that Ronali would claim commission of $48,830.34 he would not have proceeded with the assignment, but would have instructed other agents to find a lessee. 11However, it was common ground in the argument before me that there was a contract between Veritas and Ronali that provided for payment of the higher sum for the work that was done, namely the successful leasing of the premises. 12The learned magistrate found that there was no variation to the agreement. His Honour said that, on the evidence of Mr Mackay and Mr Mastronardo, Mr Mackay did not agree to an offer that the work be done for $25,000. His Honour recorded that Mr Mastronardo relied on the fact that Mr Mackay continued to do the work after the offer was made and so impliedly accepted $25,000. His Honour recorded that Mr Mackay's position was that he had a written agreement which set out the terms. 13In the argument before me Ronali relied upon an estoppel relying upon Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR 387. The learned magistrate summarised the conclusions from that case and asked the following questions: "24 Is Mr Mastronardo in the same position as Maher, believing that he has an agreement with Ronali for $25,000? Does Ronali encourage an assumption that he will perform the work for $25,000? Does Veritas rely on the promise to its detriment? Is the conduct of Ronali uncionscionable?" 14His Honour continued: "25 The facts of the case are distinguishable from Waltons in that the parties have a binding agreement. Mr Mastronardo has a change of mind, however he does not keep silent, he tells Ronali. At its highest, Ronali does nothing to encourage Mr Mastronardo that it will perform the work for $25,000." 15Mr Spackman, solicitor for Veritas, submitted that the learned magistrate was in error and that his Honour ought to have concluded that at least by silence Ronali encouraged Mr Mastronardo to believe that the work would be performed for $25,000. However, I do not understand how it is put that even if Mr Mastronardo formed that belief, that Veritas acted to its detriment on the basis of the assumption Mr Mastronardo is said to have made, so as to give rise to an estoppel. Any such argument based on detriment would appear to be unsustainable having regard to the contract between the parties. 16Moreover, as Mr Robertson, counsel for Ronali, submitted, the question sought to be raised as to whether Mr Mackay's statements or conduct, including silence, amounted to an encouragement for Mr Mastronardo to believe that the work would be done for $25,000 is itself a question of fact. 17An appeal lies from the Local Court with leave under s 40 of the Local Court Act 2007 only on a ground that involves a question of mixed law and fact. Nothing that is put on this application for a stay of execution of the judgment shows that the learned magistrate erred, whether on a matter of law or on a matter of fact. 18When asked what the consequence would be of the plaintiff's succeeding on the matters raised by the summons, Mr Spackman acknowledged that the consequence would have to be that the matter be remitted to the Local Court for a rehearing. Even if error were demonstrated, it is highly undesirable that the matter be the subject of a further hearing when all that is at issue is a sum of under $24,000 plus interest. But I agree with the submission of Mr Robertson for Ronali that the matter sought to be raised by the summons is an alleged error of fact, and not a question of mixed law and fact. 19It follows that the application for a stay of execution should be refused. 20Even if the plaintiff had good or reasonable prospects of obtaining the leave sought, it would not be proper to stay execution of the judgment. There is no evidence of hardship to Veritas. Hardship was not contended for. Veritas offered to pay the whole of the judgment sum into court. But there is also no evidence that if the judgment sum were paid that Ronali would not be able to repay that sum if an appeal was successful. There was evidence (admitted on this application over objection) that Ronali would be able to repay the judgment sum if an appeal were successful. 21The application for a stay was prompted by service of a statutory demand. The time for compliance with the demand expires today. Service of the statutory demand is not a reason for granting a stay of execution. 22But there is a further question as to whether or not I should also dispose of the summons. The return date for the summons is 11 May 2012. The proceedings were wrongly commenced in this Division. They are assigned by s 53 of the Supreme Court Act 1970 to the Common Law Division, there being no provision of the Uniform Civil Procedure Rules that assigns them to the Equity Division. However, I can deal with the application, notwithstanding that they were commenced in the wrong division. 23If the summons is not dealt with now, I would make an order for the transfer of the proceedings to the Common Law Division. Presumably in due course they would be transferred by the Registrar to an Associate Judge of the Common Law Division. The question is whether proceeding in that way would be consistent with the overriding purpose of the Civil Procedure Act 2005 of facilitating the just, quick and cheap resolution of the real issues in the dispute. 24In my view, it would not. It was necessary for me to form a view on the merits of the plaintiff's claim in order to deal with the stay application. It therefore behoved the plaintiff to be in a position to deal with the merits of that application. There would be no injustice to the plaintiff by the merits of its application being dealt with today. The defendant was in a position to deal with the merits and urged that I should do so. 25For the reasons I have given, I do not consider that the plaintiff has established a ground for obtaining leave. 26In its summons Veritas contends that the magistrate erred in finding that Ronali was not estopped from relying upon the contract of services between the parties on three grounds, namely: "(a) By finding the facts of the case were distinguishable from Walton Stores (Interstate) Ltd v Maher (1988) 164 CLR [sic] in that the parties had a binding agreement; (b) By incorrectly applying the Walton test of unconscionable behaviour; and (c) By finding the Defendant had done nothing to encourage the Plaintiff in its mistaken belief as to the nature of the agreement." 27None of those grounds is made good. The fact that the parties had a binding agreement does provide a salient point of distinction between the present case and Walton Stores (Interstate) Ltd v Maher. As I have said earlier, the existence of the prior binding agreement negates any relevant detriment. I see no error in the learned magistrate's approach. It could not have been unconscionable for Ronali to rely upon its contract. 28The final matter urged in the course of argument was that the learned magistrate was in error in finding that Ronali had done nothing to encourage Veritas in its mistaken belief as to the nature of the agreement. However, that finding was a finding of fact, not of law. Nothing was pointed to to show that the learned magistrate was in error in the finding of fact that he made, but that is by the way because an appeal does not lie in any event purely on a question of fact. 29Further, for the reasons that I have given, it would be quite inappropriate to remit the matter for further hearing having regard to the amount at stake. 30For these reasons, I should deal with the summons. The summons should be dismissed. 31I order that the summons and the notice of motion be dismissed. 32I order that the plaintiff pay the defendant's costs. I order that instead of assessed costs, the plaintiff pay the defendant's costs in the sum of $3,000. Those costs will be payable forthwith. 33I note that the plaintiff consents to the payment out of the Local Court of a sum of $25,000 that I am told has been paid in by the plaintiff (defendant in the Local Court) in proceeding 2011/00100386 in the Local Court.