Saravinovski v Duncombe

1. [1]

   HER HONOUR: These proceedings involve an appeal of the decision of his Honour, Magistrate Degnan (“the Magistrate”), in the Local Court, Campbelltown.

2. [2]

   The plaintiff in the Local Court proceedings was Roderick Bruce Duncombe t/as All State Investigations (“Mr Duncombe”) (the defendant in this Court) obtained a verdict and judgment against the defendant, Louie Saravinovski (“Mr Saravinovski”) (the plaintiff in this Court), in the sum of $15,489.65 with interest to be calculated under s 100 of the Civil Procedure Act 2005 (NSW) from 17 March 2015. For convenience I shall refer to the appellant and respondent by name.

3. [3]

   By further amended summons filed 19 May 2017, Mr Saravinovski seeks firstly, an order that leave to appeal be granted and that the appeal be allowed; secondly, that the judgment dated 24 November 2016 in the Court below be set aside; thirdly, a verdict for Mr Saravinovski be ordered; and finally, an order that Mr Duncombe pay the Mr Saravinovski’s costs in the Court below and in this Court. Mr Saravinovski also sought a stay of proceedings pending the determination of the appeal. Mr Duncombe does not oppose that order. A stay of proceedings pending the determination of the appeal is therefore granted.

4. [4]

   Mr Saravinovski relied upon the affidavit of Gordon Bryant dated 19 June 2017. Both parties relied upon the joint appeal book filed 21 September 2017 (“Joint Appeal Book”).

The appeal

1. [5]

   Section 39(1) of the Local Court Act 2007 (NSW) provides that a party to proceedings who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court, but only on a question of law.

2. [6]

   Section 40(1) of the Act provides that a party to proceedings who is dissatisfied with a judgment or order of the Local 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. [7]

   Section 41 of the Act provides that this Court may determine an appeal made under ss 39(1) or 40(1) either (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by 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) by dismissing the appeal.

4. [8]

   Mr Saravinovski made no submissions on this topic. Mr Duncombe submitted that the appeal involved a matter of fact only and leave to appeal should not be granted.

5. [9]

   If that was so, I would not grant leave to appeal on the basis of the modest sum in dispute, as the current proceeding is not concerned with either a miscarriage of justice or a matter of public importance. However, the terms of the contract were oral and the proper construction of a contract is a matter of law. Hence, Mr Saravinovski can appeal on a question of law as of right pursuant to s 39(1) of the Local Court Act.

Grounds of appeal

1. [10]

   Mr Saravinovski appeals from the whole of the decision of the Magistrate dated 24 November 2016 on the following grounds:

   1. (1)

      The Court erred in law by failing to take into consideration the context of the contract between the parties as required by Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 at [35] (“Electricity Generation”).

   2. (2)

      The Court erred in law by failing to take into consideration an implied term of the contract as required by BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 16 ALR 363 at 377 (“BP Refinery”).

   3. (3)

      The Court erred in law by failing to take into consideration an oral term of the contract as required by Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 121 (Deane J) (“Hospital Products”).

   4. (4)

      The Court erred in law during the course of its fact finding process by reaching an erroneous conclusion contrary to the overwhelming weight of Mr Saravinovski’s evidence.

   5. (5)

      The Court erred in law by drawing an inference in favour of Mr Duncombe that could not be reasonably drawn when considering the evidence before it.

   6. (6)

      The Court erred by taking into account irrelevant considerations.

   7. (7)

      The Court erred in ordering Mr Saravinovski to pay Mr Duncombe’s costs of the proceedings below.

Background

1. [11]

   The hearing in the Local Court took place on 29 July 2016 and 28 September 2016.

2. [12]

   The agreed facts were as follows.

3. [13]

   Mr Duncombe was licensed to carry out private investigations including surveillance services.

4. [14]

   On 25 February 2015, Mr Saravinovski engaged Mr Duncombe to provide surveillance services. The surveillance related to an ongoing Supreme Court case that was due to resume of 16 March 2015.

5. [15]

   The agreement was oral and without any written contract. It was agreed between the parties that the plaintiff would charge a rate of $90 per hour. At the hearing, the parties also gave evidence that the charge out rate was $90 an hour, so this issue was no longer in dispute.

6. [16]

   Mr Duncombe then conducted the surveillance service.

7. [17]

   On 10 March 2015, Mr Saravinovski, through his solicitor Sundar Rajeev (“Mr Rajeev”), requested that Mr Duncombe cease all surveillance activities until further advice was received.

8. [18]

   On the evening of 17 March 2015, Mr Saravinovski provided a written report, run sheets and a tax invoice payable within 30 days.

9. [19]

   Mr Saravinovski has not paid any part of Mr Duncombe’s tax invoice which totals $15,489.65.

10. [20]

    The matters in dispute were identified as follows:

    1. (1)

       Whether Mr Saravinovski was contracting with Mr Duncombe on his own account or was acting as a “Tutor” only. The Magistrate made a finding that the contract was between Mr Duncombe and Mr Saravinovski. There is no challenge to that finding in this appeal.

    2. (2)

       The terms of the contract as to:

    3. (3)

       Whether the terms of the contract were fulfilled in part or at all;

    4. (4)

       Whether the information provided to the Mr Saravinovski was of such quality as to not warrant payment; and

    5. (5)

       Whether the Mr Saravinovski owes the Mr Duncombe any money.

The Magistrate’s reasons dated 24 November 2016

1. [21]

   The Magistrate identified that the main issue to be decided was whether or not the surveillance undertaken by Mr Duncombe complied with the terms of the oral agreement.

2. [22]

   On 24 November 2016, the Magistrate handed down his written reasons for the decision. I will outline these reasons later when I address the grounds of appeal. His Honour entered judgment in favour of Mr Duncombe in the sum of $15,489.65 together with interest and costs.

3. [23]

   I interpose here to draw attention to several well known authorities in relation to contracts.

4. [24]

   In John Holland Pty Limited v Kellogg Brown & Root Pty Ltd [2015] NSWSC 451, Hammerschlag J summarised the principles relevant to the formation of an oral agreement at [93] and [94]::

5. [25]

   The commercial context and any previous dealing between the parties are also relevant in determining whether a binding agreement has come into existence between the parties. It is also appropriate to consider the object of the transaction between the parties. (Codelfa Construction Pty Limited v State Rail Authority (NSW) (1982) 149 CLR 337 at 350 (Mason J)) (“Codelfa Construction”).

6. [26]

   So far as implied terms are concerned, in AAP Industries Pty Ltd v Rehau Pte Ltd [2017] NSWSC 390 (“AAP Industries”), Davies J stated at [64]:

7. [27]

   When determining the terms of the oral contract the Magistrate adopted the approach that in addition to assessing witnesses recall as to what was said during the meeting on 25 February 2015, he examined the post contractual actions and communications of Mr Duncombe, Mr Saravinovski and Mr Rajeev that bear upon the actual terms of the agreement. (Judgment, [17]).

8. [28]

   At the hearing in the Local Court, Mr Saravinovski, Mr Duncombe and Mr Rajeev relied upon affidavit evidence and were cross examined.

9. [29]

   The Magistrate made findings on the credibility of both Mr Duncombe and Mr Saravinovski and, to a lesser extent, Mr Rajeev. His Honour recorded the impressions he gained of Mr Duncombe and Mr Saravinovski when he observed them being cross examined during the proceedings. His Honour stated that they were vastly different. While Mr Duncombe had a sometimes smug demeanour, his evidence was consistent, honest and credible. On the other hand, his Honour recorded that Mr Saravinovski had an air of belligerence and was evasive in his answers. He displayed an attitude that suggested he should not be liable to pay for any of the surveillance work carried out by Mr Duncombe. This appeared to be because, despite some surveillance being conducted at night, the surveillance failed to produce anything useful against the targets, surveillance was conducted of the target’s parents and he did not receive the written report before the resumption of the Supreme Court proceedings. It was the Magistrate’s view that this stance was not reasonable. (Judgment, [15])-[16]).

10. [30]

    In relation to Mr Rajeev, the solicitor who was acting for Mr Saravinovski, the Magistrate commented that his evidence was very short and his ability to recall the terms of the agreement was brought into question by Mr Duncombe. (Judgment, [16]). This was firstly due to the lapse of time between the meeting on 25 February 2015 and his affidavit, which was sworn on 29 June 2016; and secondly, the lack of any reference within the contemporaneous file note of the crucial, disputed details of the agreement. While the Magistrate did not suggest Mr Rajeev was not being honest, he was of the view that Mr Rajeev’s affidavit appeared to be more of a reconstruction than an actual recollection of events.

11. [31]

    It was common ground that on 25 February 2015, there was a meeting at the offices of Vaikon Law at Liverpool. Present at the meeting was, Mr Rajeev, Mr Duncombe and Mr Saravinovski, who arrived an hour later. It was at this meeting that the terms of the agreement were discussed.

12. [32]

    Mr Saravinovski relied upon two affidavits that referred to the meeting, both dated 29 June 2016. The first affidavit provides his version of events as follows (Joint Appeal Book, Tab 11):

13. [33]

    Mr Saravinovski also stated that he made a brief note of the meeting on 25 February 2016. It reads (Joint Appeal Book, Tab 17, Ex 15):

14. [34]

    In cross examination, Mr Saravinovski was asked the following question about the contemporaneous note (T55.7-11):

15. [35]

    Mr Rajeev relied on two affidavits, one dated 30 June 2016 (Joint Appeal Book, Tab 14) and the other dated 27 September 2016 (Joint Appeal Book, Tab 15). His version of events set out in his earlier affidavit are as follows:

16. [36]

    Mr Rajeev also produced his file note during the hearing in the Local Court (Ex A in this Court; Joint Appeal Book, Tab 17, Ex 15). The handwriting is hard to decipher but doing the best I can, it reads:

17. [37]

    Mr Duncombe relied on his affidavit dated 13 May 2016. (Joint Appeal Book, Tab 3). His version of events were as follows:

18. [38]

    As to post contractual events, Mr Duncombe deposed (Joint Appeal Book, Tab 3):

19. [39]

    Mr Duncombe in his affidavit dated 13 May 2016 denied that it was ever a term of the agreement that Mr Saravinovski be provided with the results of any surveillance by 6 March 2015 and stated that this date was never discussed. He said that Mr Saravinovski was provided with verbal updates, as was his legal representative who contacted him during this period. He was also aware that any useful information was required for the Supreme Court proceedings for 16 to 19 March 2015. Mr Duncombe denied that there was any agreement or term placed on the agreement that an activity report would be commissioned and supplied within 24 hours, because he had never provided an activity report as part of his surveillance services. Had this been requested by Mr Saravinovski, Mr Duncombe would have advised him that he did not provide this service. Finally, Mr Duncombe denied that there was any agreement or term placed on the agreement that he would conduct predominately night surveillance. (Joint Appeal Book, Tab 3, [34], [36] and [37]).

20. [40]

    Mr Duncombe gave evidence that normally he received instructions in writing but he was not in the habit of confirming instructions in writing when they were received during a meeting. (T17.21-34).

21. [41]

    The Magistrate referred to both the contemporaneous file notes of the meeting on 25 February 2015, one made by Mr Saravinovski and the other by Mr Rajeev.

22. [42]

    So far as Mr Saravinovski’s file note was concerned, the Magistrate commented that Mr Saravinovski produced a document he claimed was a notation of the terms of the discussion which he made after the meeting. (Joint Appeal Book, Tab 3, Ex 9, Annexure “A”). (My emphasis). Although the Magistrate noted that the contents of his file note were consistent with his affidavit. (Judgment, [10]).

23. [43]

    In relation to Mr Rajeev’s file note taken during the meeting, this was produced by Mr Rajeev during cross examination. (Ex A in this Court; Joint Appeal Book, Tab 17, Ex 15). The Magistrate made findings that within that short file note, while there was mention of the targets of the surveillance, there was no mention of any crucial deadline, any requirement for daily or update reports, any request for night time surveillance, or fees and the capping of the fees. (Judgment, [13]).

24. [44]

    Having read the file note (reproduced earlier in this judgment) the Magistrate accurately recorded its contents.

25. [45]

    The Magistrate referred to and reproduced passages from County Securities Pty Ltd v Challenger Group Holdings Pty Ltd [2008] NSWCA 193, Spigelman CJ, at [21] and [24]; Lym International Pty Ltd v Marcolongo [2011] NSWCA 303 Campbell JA at [143] (“Lym International”); and Re Centura Global Holdings Pty Ltd [2016] NSWCA 62, Black J at [64] to [67]. As they are similar authorities referring to post contractual conduct, I shall only refer to Lym International where Campbell JA explained at [143]:

26. [46]

    The Magistrate analysed Mr Duncombe, Mr Saravinovski and Mr Rajeev’s evidence and made findings as to their credit (reproduced earlier in this judgment). His Honour then examined post contractual communications. His Honour stated (Judgment, [22]-[32]):

The grounds of appeal

1. [47]

   I turn now to consider the grounds of appeal that were raised by Mr Saravinovski. My understanding is that Mr Saravinovski’s main complaint is that the Magistrate did not properly analyse and consider the two contemporaneous file notes. While Mr Duncombe’s submissions addressed each ground of appeal, Mr Saravinovski’s submissions did not. They were framed so as to set out the applicable law then his summation of the evidence but they do not directly address the grounds of appeal. Therefore, perhaps the best way to approach the grounds of appeal is to first refer to Mr Saravinovski’s summary of the evidence and criticisms of the Magistrate’s findings, and then refer to the grounds of appeal.

Mr Saravinovski’s submissions on evidence

1. [48]

   Mr Saravinovski submitted that the context of the transaction between the parties was clear; he wished to obtain video and/or other surveillance in relation to witnesses in the Supreme Court proceedings in which he was embroiled. Mr Saravinovski’s version of events was that the costs were not to exceed $10,000, while Mr Duncombe’s version was that there was a price limit of $20,000. Neither party committed the terms of the agreement to writing, however, Mr Saravinovski made contemporaneous hand written notes of the terms of the agreement that were not challenge in cross examination, thereby giving rise to a Browne v Dunn (1893) 6 R 67 inference (“Browne v Dunn”).

2. [49]

   Three critical dates were argued to fall from the evidence. The 25 February 2015, being the date Mr Duncombe was engaged to carry out surveillance, 6 March 2015, being the date that any report was to be forwarded to either Mr Saravinovski or Mr Rajeev, and 16 March 2015, being the day the Supreme Court proceedings were listed for a continued hearing.

3. [50]

   Counsel for Mr Saravinovski submitted that there was no issue that some surveillance was conducted. Indeed, the evidence was that on 10 March 2015, Mr Rajeev instructed Mr Duncombe to cease all further surveillance. Mr Saravinovski raised the issue that there was no video evidence presented to him, only a written report by a third party.

4. [51]

   Mr Saravinovski also submitted that the direction by Mr Rajeev to cease all further surveillance was consistent with a term of the agreement that the report was required to be submitted by 6 March 2015, five business days before the resumed hearing. It was argued that such a term had an element of logic to it because any surveillance report would need to be considered by counsel appearing in the Supreme Court proceedings prior to the cross examination of the witnesses on 16 March 2015. Counsel for Mr Saravinovski further submitted that even if the date deadline was not a specific term of the agreement, it was an implied term to the agreement that any surveillance report would be provided before the Supreme Court hearing resumed. This was on the basis that if the agreement lacked such a term, it would be rendered a commercial absurdity because the report would serve no purpose.

5. [52]

   Mr Saravinovski argued that Mr Duncombe’s evidence in cross examination confirmed that he had not provided Mr Saravinovski or Mr Rajeev with any report prior to 16 March 2015. (T26.24-26). Additionally, it was not disputed that Mr Duncombe only forwarded a written surveillance report to Mr Saravinovski on the evening of 17 March 2015, being the day after the recommencement of the Supreme Court proceedings. (T27.17-26). Accordingly, the report could be of no assistance to Mr Saravinovski in those Supreme Court proceedings.

6. [53]

   Counsel for Mr Saravinovski further submitted that the Magistrate had failed to consider or otherwise deal with the evidence he presented in support of his version of the agreement’s terms, including making adequate reference to the context of the commercial agreement. This evidence included the following:

7. [54]

   Counsel for Mr Saravinovski also submitted that Mr Duncombe did provide evidence from the three third party agents who carried out the surveillance work on his behalf. This was despite the work sheets and other related documents being the subject of a notice to produce. I interpose here. It was not necessary to call third persons to give evidence in what was, at best, a claim of $15,489.65 in the Local Court. Mr Saravinovski’s only evidence of the work being performed was an invoice. There was no underlying evidence to support the claim of an entitlement to fees by Mr Duncombe in the Local Court. Mr Duncombe conceded that he was only in telephone communication with his operatives and therefore was not in a position to provide daily updates to Mr Saravinovski. (T29.10-34).

8. [55]

   According to Mr Saravinovski, the Magistrate’s failure to “engage with, or grapple or wrestle with” this evidence leads to the conclusion that he erroneously overlooked or discarded it: see Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [116] (Campbell JA). If that is the case, then the Magistrate has fallen into error: see Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 at 151 (Kirby P). It was contended that had the Magistrate properly grappled or wrestled with this evidence, the inevitable result would have been that his characterisation of the agreement would have been accepted in preference to that of Mr Duncombe.

Ground 1 – context of the contract between the parties

1. [56]

   Counsel for Mr Saravinovski submitted that the Magistrate erred in law by failing to take into consideration the context of the contract between the parties. He referred to Electricity Generation at [35] where the High Court per French CJ, Hayne, Crennan and Kiefel JJ stated at [35]:

2. [57]

   Counsel for Mr Duncombe submitted that the Magistrate sets out in some detail the behaviour of the parties and Mr Rajeev in his judgment at [22] to [31]. This behaviour supported Mr Duncombe’s version of the terms of the oral contract and was inconsistent with the version proffered by Mr Saravinovski. The behaviour in Mr Duncombe’s submissions as follows:

3. [58]

   Mr Duncombe also submitted that the Magistrate took into account the context of the contract when he noted Mr Rajeev’s prior dealings with Mr Duncombe. (Judgment, [2]-[4] and [12]).

4. [59]

   Both parties gave the same evidence that the purpose of the surveillance was to see if the material could form as a basis to attack the credibility of family members who were giving evidence in the Supreme Court proceedings that commenced on 16 March 2016. It was also agreed that the charge out rate was to be $90 per hour. There was a dispute, however, as to whether it was two or four family members who were the subject of Mr Duncombe’s surveillance. The Magistrate resolved this dispute by finding that Mr Duncombe sent an email asking for Mr Saravinovski to send him a photograph of all four persons. He received back a photograph of “all four persons”. There was also a dispute about the reporting conditions.

5. [60]

   The Magistrate referred to the objective evidence, the two files notes, emails and telephone conversations. He preferred Mr Duncombe’s evidence as he made favourable findings as to his credibility. Mr Duncombe’s evidence was “consistent, honest and credible”. Not so for Mr Saravinovski, who the Magistrate considered as being “evasive in his answers”. (Judgment, [15]).

6. [61]

   So far as the reporting conditions are concerned, the Magistrate accepted that there was no deadline of 6 March 2015. This was on the basis of evidence regarding several communications that occurred between the parties. While several phone calls occurred, there was an email sent by Mr Saravinovski at 8:08 am on 9 March 2015 to Mr Duncombe which read “Hi Rod, Any news.” His Honour commented that this email displayed no expression of urgency or anger that Mr Duncombe was well past the alleged deadline. Nor did Mr Duncombe’s reply, which was sent on the same day at 9:12 am, carry an apology or sense of urgency. The Magistrate also referred to the email from Mr Rajeev to Mr Duncombe on 10 March 2015, thanking him for his emails regarding the status of the investigations and advising him that there was no point continuing the surveillance. This email was considered by his Honour to lack the “air of disappointment or displeasure” at the surveillance being well past the alleged deadline. Finally, The Magistrate also made a finding that the counsel in the Supreme Court proceedings would not require two weeks to consider the surveillance evidence. (Judgment, [28]).

7. [62]

   From my reading of the Magistrate’s reasons, he took into consideration the parties and Mr Rajeev’s evidence, as well as the objective language used by the parties, the circumstances known to them and the commercial purposes or objects to be secured by the contract. His Honour’s construction of the contract was construed to give it a business like interpretation. This was in accordance the discussion of Mason J in Codelfa Construction, set out earlier in this judgment. Therefore, it is my view that his Honour correctly considered the context of the contract. This ground of appeal fails.

Ground 2 – implied term of the contract

1. [63]

   Mr Saravinovski submitted that the Magistrate erred by failing to take into consideration an implied term of the contract as required by BP Refinery at 377.

2. [64]

   The applicable principles for the implication of terms in oral agreements was dealt with by Deane J in Hawkins v Clayton (1988) 164 CLR 539 where his Honour stated at 571:

3. [65]

   As I have previously noted, the Magistrate preferred Mr Duncombe’s evidence and made reference to the Mr Saravinovski’s file note that he made after the meeting which he “claimed” was a notation of the terms discussed. So far as the file note is concerned, it does not make reference to a deadline of 6 March 2015. But it does say: ‘Surveillance – report 6/3/15’ and ‘Review halfway through ??? Tuesday’. For the reasons I set out earlier, the Magistrate was satisfied that the deadline of 6 March 2015 was not a term of the contract. As I understand Mr Saravinovski’s submissions, he argued that if the 6 March 2015 was not a specific term of the contract, then it was an implied term of the agreement that any surveillance report would be provided before the Supreme Court hearing resumed on 16 March 2015. However, his Honour noted that Mr Duncombe was asked by Mr Rajeev to cease his surveillance on 10 March 2015, and accepted Mr Duncombe’s evidence that he had reported to Mr Saravinovski that there was nothing of interest in his surveillance. On 17 March 2015, Mr Duncombe also sent invoices for payment.

4. [66]

   In these circumstances, it would be inconsistent with the parties’ post objective actions to imply the deadline as a term of the contract. Nor is it necessary to be implied to give effect to the contract. It is my view that the Magistrate was correct not to imply such a term. His approach was also in accordance with the well known principles of implied terms as stated by Davies J in APP Industries, which I set out earlier. This ground of appeal fails.

Ground 3- consideration of oral term of the contract

1. [67]

   Mr Saravinovski submitted that the Magistrate erred in law by failing to take into consideration an oral term of the contract as required by Hospital Products.

2. [68]

   According to Mr Saravinovski, the oral terms that the Magistrate needed to consider were firstly that any report was required to be submitted by a key date, being either 6 March 2015 or prior to recommencement of the Supreme Court proceedings; secondly, the identity of the persons who were to be the subject of surveillance; and thirdly, the alleged cap on the fees which Mr Duncombe would be entitled to charge.

3. [69]

   This repeats what I said earlier but for completeness, the Magistrate set out the reasons for there being no key date for submission of the surveillance reports, except by the recommencement of the Supreme Court case in mid March 2015. However, because Mr Duncombe made reports and was told to cease work on 10 March 2015, there was nothing further to report between 10 March 2015 and 16 March 2015.

4. [70]

   As to the identity of the persons who were to be the subject of surveillance, it is clear that the Magistrate did take this issue into consideration. His Honour referred to the email sent by Mr Duncombe to Mr Saravinovski asking for a photograph of the “all four persons”, and Mr Saravinovski forwarded him a photograph showing four persons (Judgment, [23]).

5. [71]

   Mr Saravinovski’s evidence is that it was agreed that Mr Duncombe was given a cap of $10,000 on his work. However, the file note of Mr Rajeev of the meeting on 25 February 2015 makes no mention of any cap on fees. The Magistrate expressed scepticism when he stated that Mr Saravinovski produced a document which he claimed was a notation of the terms of the discussion which he made at the meeting. (Judgment, [13]). Further, Mr Duncombe’s evidence was that when he told Mr Saravinovski that his fees would be approximately $20,000, Mr Saravinovski made a phone call on his mobile phone and while he spoke in his native language, Mr Duncombe heard him repeat the quoted amount of $20,000. Due to issues with Mr Saravinovski’s credibility and the lack of logic in his version of events, the Magistrate preferred the evidence of Mr Duncombe and did not make findings favourable to Mr Saravinovski. His Honour was not obliged to do so.

6. [72]

   Therefore, it is my view that the Magistrate has taken into account all oral terms of the contract. This ground of appeal fails.

Ground 4 – fact finding process

1. [73]

   Mr Saravinovski submitted that the Magistrate erred in law during the course of his fact finding process by reaching an erroneous conclusion contrary to the overwhelming weight of his evidence. Mr Saravinovski referred to Mitchell v Cullingral Pty Ltd [2010] NSWCA 389, where Campbell JA (with whom Allsop P and McColl JA agreed) stated at [116]:

2. [74]

   Mr Duncombe submitted that it is not clear from Mr Saravinovski’s submissions what the erroneous conclusion is, but presumably it was that the Magistrate did not accept Mr Saravinovski’s evidence as to the alleged terms of the contract.

3. [75]

   Perhaps Mr Saravinovski is suggesting that the Magistrate reached his conclusion contrary to the overwhelming weight of his evidence. As pointed out in the earlier ground of appeal, this submission ignores the evidence of Mr Duncombe and the post contractual objective evidence. The Magistrate referred to several examples where Mr Saravinovski’s evidence did not support his version of the contract. These are:

4. [76]

   It is my view that the Magistrate engaged with, or grappled or wrestled with the cases presented by each party. Not only did he set out the evidence adduced by both parties, he considered the objective correspondence and telephone calls and critically analysed the actual issues in dispute. In doing so, his Honour clearly demonstrated his path of reasoning. This reasoning process was more than adequate and does not appear to reach an erroneous conclusion. This ground of appeal fails.

Ground 5 – drawing an inference (Browne v Dunn)

1. [77]

   Mr Saravinovski submitted that the Magistrate erred by drawing an inference in favour of Mr Duncombe that could not be reasonably drawn when considering the evidence before him. However, Mr Saravinovski failed to specify what that inference was in his submission on this ground of appeal. It appears to be Mr Saravinovski’s argument that because he made a contemporaneous file note that was not challenged in cross examination, a Browne v Dunn inference should have been made in his favour.

2. [78]

   However, Mr Saravinovski was challenged in cross examination on the contemporaneous file note. He was asked the following question (T55.7-11):

3. [79]

   The rule in Browne v Dunn is one of fairness. It was put to Mr Saravinovski that his file note was not accurate. He denied it. The rule in Browne v Dunn was complied with.

4. [80]

   In these circumstances, it was open to the Magistrate to make the findings he did and he was not obliged to draw a certain unspecified inference. Nor did the Magistrate have to accept the accuracy of the file note. This ground of appeal fails.

Ground 6 – irrelevant considerations

1. [81]

   Mr Saravinovski submitted that the Magistrate erred by taking into account irrelevant considerations. Mr Duncombe submitted that it is not clear what these irrelevant considerations are and it appears not to have been addressed by Mr Saravinovski’s counsel in his submissions.

2. [82]

   I agree that Mr Saravinovski has not set out the “irrelevant considerations”. From my reading of his submissions, he only set out the positive findings he believed should have been made. This ground of appeal therefore fails.

Ground 7 – costs in the Local Court

1. [83]

   Mr Saravinovski’s final submission was that the Magistrate erred in ordering him to pay Mr Duncombe’s costs of the proceedings in the Local Court.

2. [84]

   Mr Duncombe submitted that this is a “puzzling ground” because assuming that the Magistrate erred in finding in favour of Mr Duncombe, it is self evident that a costs order should not have been made in favour of Mr Duncombe. Such an argument is a non sequitur.

3. [85]

   In any event, 42.1 and 42.2 of the Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) read:

4. [86]

   The Magistrate properly applied 42.1 and 42.2 of the UPCR. Accordingly, this ground of appeal fails.

Conclusion

1. [87]

   As none of the grounds in Mr Saravinovski’s submission are made out, the result is that the appeal fails. The decision of his Honour Magistrate Degnan dated 3 February 2017 is affirmed. The further amended summons 19 May 2017 is dismissed.

2. [88]

   Costs are discretionary. Costs usually follow the event. The defendant is to pay the plaintiff’s costs on an ordinary basis of this appeal.

   1. (1)

      The appeal is dismissed.

   2. (2)

      The decision of his Honour Magistrate Degnan dated 3 February 2017 is affirmed.