Supreme Court
New South Wales

Medium Neutral Citation:

Rashid Raashed v Mosharrof Hussein [2011] NSWSC 1342

Hearing dates:

13 September 2011

Decision date:

13 November 2011

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

(1) The appeal is dismissed.

(2) The decision of her Honour Magistrate Swain dated 29 October 2010 is affirmed.

(3) The summons filed 7 December 2010 is dismissed.

(4) The plaintiff is to pay the defendants' costs as agreed or assessed.

Catchwords:

APPEAL FROM LOCAL COURT - whether error of law - whether Magistrate erred in relief granted - whether Magistrate erred in failing to hold that party had not discharged evidentiary burden - appeal dismissed
CONTRACT - contract for sale of business - Contracts Review Act 1980 - contract unjust - discretionary relief

Legislation Cited:

Contracts Review Act 1980
Local Court Act 2007
Uniform Civil Procedures Rules 2005

Cases Cited:

House v The King (1936) 55 CLR 499
Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41
S H Lock (Australia) Ltd v Kennedy (1988) 12 NSWLR 482
Swain v Waverley Municipal Council (2005) 220 CLR 517; [2005] HCA 4
US Manufacturing Co Pty Ltd v ABB Service Pty Ltd [2008] NSWSC 705
Verduci v Golotta [2010] NSWSC 506
West v AGC (Advances) Ltd (1986) 5 NSWLR 610

Category:

Principal judgment

Parties:

Dr Rashid Raashed - Plaintiff
Mosharrof Hussein - First Defendant
Mehjabin Hussein - Second Defendant

Representation:

Counsel:
J Paine - Plaintiff
V Thomas - Defendants
Solicitors:
Kinghan & Associates - Plaintiff
Turner Freeman - Defendants

File Number(s):

2010/406425

Decision under appeal

Citation:

Dr Rashid Rasheed v Mosharrof Hussein

Date of Decision:

2010-10-29 00:00:00

Before:

V M Swain LCM

File Number(s):

401/2009

Judgment

1HER HONOUR : By summons filed 7 December 2010, the plaintiff seeks firstly, an order that the time for appeal be extended pursuant to rule 50.3(1)(c) of the Uniform Civil Procedures Rules 2005 ("UCPR"); secondly, leave to appeal from the whole of the decision of her Honour Magistrate V M Swain dated 29 October 2010; thirdly that the Local Court judgment be set aside and there be judgment for the plaintiff; or alternatively that the matter be remitted to the Local Court to be reheard according to law.

2The plaintiff is Dr Rashid Raashed, who was the plaintiff in the Local Court proceedings. The first defendant is Mosharrof Hussein and the second defendant is Mehjabin Hussein ("the Husseins"). The Husseins are husband and wife and were the defendants in the Local Court proceedings. Dr Raashed relied on the affidavit of Ann Christine Kinghan sworn 9 June 2011.

The appeal

3On 16 March 2011, leave to appeal out of time was granted by Hall J.

4Section 39 of the Local Court Act 2007 provides that a party who is dissatisfied with a judgment or order of the Court may appeal to the Supreme Court, but only on a question of law.

5Section 40 of the Local Court Act provides that a party may appeal on a question of mixed law and fact but only with leave of this Court.

6Section 41 of the Local Court Act provides that this Court may determine an appeal 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 Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal.

7In Swain v Waverley Municipal Council [2005] HCA 4 (2005); 220 CLR 517, Gleeson CJ at [2] reiterated that in the common law system of civil justice, the trial process determines the issues between the parties. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal.

Grounds of appeal

8Grounds of appeal (1) and (5) were not pressed at the hearing of this appeal. Hence, the grounds of appeal are secondly, that the Magistrate erred in making an order under s 7(1)(a) of the Contracts Review Act 1980 that Dr Raashed could not enforce a contractual terms that the defendants pay the balance of the contract of $50,063 in circumstances where the Magistrate made a finding that in the absence of evidence of valuation it was not possible to determine whether the Husseins had suffered any financial loss pursuant to the contract, and if so to what extent; thirdly, the Magistrate erred in failing to hold that there was an evidentiary burden on the defendants in seeking relief under the Contracts Review Act to adduce evidence as to the value of the property that had passed to them under the contract; and fourthly, the Magistrate erred in failing to hold that the defendants had not discharged such burden; lastly, the Magistrate erred in failing to consider pursuant to s 9(5) of the Contracts Review Act the conduct of the defendants in relation to the performance of the contract in failing to give restitution in integrum and placing themselves in a position where they were unable to give restitution in intergrum , or alternatively, the Magistrate erred in failing to give any or sufficient reasons as to why she did not have regard to such conduct.

The Local Court proceedings

9The hearing in the Local Court was conducted over a 6 day period, namely 12 August 2009, 16 November 2009, 23 and 24 March 2010 and 9 and 10 August 2010.

10Dr Raashed sued the Husseins for breach of contract and sought payment of $51,987. The Husseins cross claimed that the contract was unjust pursuant to s 7(1)(a) of the Contracts Review Act .

11On 29 October 2010, her Honour Magistrate Swain found that the contract between Dr Raashed and the Husseins was unjust pursuant to the Contracts Review Act . There is no challenge to this finding.

12The Magistrate entered judgment for the Husseins and ordered that the requirement for them to pay the balance of the Contract of $50,063 could not be enforced by Dr Raashed in accordance with s 7(1) of the Contracts Review Act .

The Contract

13The Contract reads:

"1. Dr R Raashed

...

(The First Party & Seller)

2. Mr & Mrs Mosharraf Hossain (sic)

...

(The Second Party & Buyers)

Provisions

By this legally enforceable contract, the two parties i.e. the Seller and Buyers agree as follows:

1. The Buyers agree to purchase the existing frozen stock, equipments and good will of the Seller (excluding the trading name) of Barakah International Sydney. On the day of signing this contract, these frozen stock are stored inside 2 two 20" freezer containers situated at XX Carlingford St. Sefton NSW 2162. This contract also includes the 25% share of the seller in his frozen vegetable container scheduled to arrive on 6 th September 2007.

2. The buyers fully understand and agree to purchase goods they have already seen and inspected. As such the sale and purchase has been accepted on the basis of " As is where as ". No complaint afterward will therefore, be raised or heeded to nor would such complaint have any bearing on paying the dues of the sale by the buyers to the seller.

3. Two yet to be received bills for custom clearance and other local costs for the two recently arrived containers (one delivered on 25 th August 2007 and another is scheduled to be delivered on 10-11 September 2007) will be paid by the purchaser/buyer. Payment for these two bills will be made within one week of submitting them to the buyer/purchaser.

4. The total purchase price agreed for the sale is A$ 80,000.00 (Eighty Thousand Australian Dollars). These amounts will be paid to the seller in three fixed dates as follows: (a) A$ 20,000.00 (twenty thousand dollars) to be paid to Mr. NasiruIIah on 17 th September 2007. (b) A$ 30,000.00 (thirty thousand dollars) to be paid to the seller on 4 th October 2007. (c) A$ 30,000.00 (thirty thousand dollars) to be paid to the seller on 4 th November 2007. Any failure to make these payments on fixed dates as above will authorise the buyer (sic) to take necessary actions to recover the funds including seizing goods and equipments and selling them for this purpose.

5. Upon signing this contract, the buyers have received the keys to the two containers from the seller and therefore, have fully accepted both the charges and responsibilities consequential to this contract." (Parties' emphasis)

14The Contract was signed by the parties and their signatures were witnessed. The Contract was entered into on 4 September 2007, the day Dr Raashed left to go overseas for a period of two months.

The Magistrate's decision

15The Magistrate referred to a three stage process to be considered in relation to a Contracts Review Act claim. Her Honour quoted from Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41, where Handley JA stated that consideration of a claim under the Contracts Review Act involves a three stage process. Handley JA stated at [99]:

"... the making of findings of primary fact where these are disputed, the formation of an evaluative judgment as to whether or not the contract is unjust, and why, and then, if necessary, the exercise of the Court's discretionary power to grant relief and determine its extent."

16While not quoted in the Magistrate's judgment, Handley JA in Khoshaba continued at [100]:

"[100] The first stage may involve credit findings, and the drawing of inferences which attract the usual standards of appellate review, the second involves a drawing of inferences and the application of an indeterminate legal standard which, as to fact is subject to review in accordance with Warren v Coombs (1979) 142 CLR 531, and as to law is open to full review. The exercise of the Judge's discretion on the nature and extent of relief is subject to review in accordance with the principles in House v R (1936) 55 CLR 499."

And in Khoshaba Basten JA at [109] stated:

"[109] The third step involves the exercise of the power to grant relief which may, but need not, follow from the conclusion that a contract or a provision thereof is unjust. That is truly a discretionary power to be exercised if the Court "considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result": s 7(1). The exercise of the power will be reviewable only in accordance with the principles established in House v R (1936) 55 CLR 499 at 504-505."

17The Magistrate referred to s 9 of the Contracts Review Act and set out the matters to be considered by the Court in determining whether a contract is unjust or not.

18Section 9 of the Contracts Review Act reads:

"9 Matters to be considered by Court

(1) In determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, the Court shall have regard to the public interest and to all the circumstances of the case, including such consequences or results as those arising in the event of:

(a) compliance with any or all of the provisions of the contract, or

(b) non-compliance with, or contravention of, any or all of the provisions of the contract.

(2) Without in any way affecting the generality of subsection (1), the matters to which the Court shall have regard shall, to the extent that they are relevant to the circumstances, include the following:

(a) whether or not there was any material inequality in bargaining power between the parties to the contract,

(b) whether or not prior to or at the time the contract was made its provisions were the subject of negotiation,

(c) whether or not it was reasonably practicable for the party seeking relief under this Act to negotiate for the alteration of or to reject any of the provisions of the contract,

(d) whether or not any provisions of the contract impose conditions which are unreasonably difficult to comply with or not reasonably necessary for the protection of the legitimate interests of any party to the contract,

(e) whether or not:

(i) any party to the contract (other than a corporation) was not reasonably able to protect his or her interests, or

(ii) any person who represented any of the parties to the contract was not reasonably able to protect the interests of any party whom he or she represented,

because of his or her age or the state of his or her physical or mental capacity,

(f) the relative economic circumstances, educational background and literacy of:

(i) the parties to the contract (other than a corporation), and

(ii) any person who represented any of the parties to the contract,

(g) where the contract is wholly or partly in writing, the physical form of the contract, and the intelligibility of the language in which it is expressed,

(h) whether or not and when independent legal or other expert advice was obtained by the party seeking relief under this Act,

(i) the extent (if any) to which the provisions of the contract and their legal and practical effect were accurately explained by any person to the party seeking relief under this Act, and whether or not that party understood the provisions and their effect,

(j) whether any undue influence, unfair pressure or unfair tactics were exerted on or used against the party seeking relief under this Act:

(i) by any other party to the contract,

(ii) by any person acting or appearing or purporting to act for or on behalf of any other party to the contract, or

(iii) by any person to the knowledge (at the time the contract was made) of any other party to the contract or of any person acting or appearing or purporting to act for or on behalf of any other party to the contract,

(k) the conduct of the parties to the proceedings in relation to similar contracts or courses of dealing to which any of them has been a party, and

(l) the commercial or other setting, purpose and effect of the contract.

(3) For the purposes of subsection (2), a person shall be deemed to have represented a party to a contract if the person represented the party, or assisted the party to a significant degree, in negotiations prior to or at the time the contract was made.

(4) In determining whether a contract or a provision of a contract is unjust, the Court shall not have regard to any injustice arising from circumstances that were not reasonably foreseeable at the time the contract was made.

(5) In determining whether it is just to grant relief in respect of a contract or a provision of a contract that is found to be unjust, the Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made."

19The Magistrate's finding that the contract was unjust is not the subject of challenge in this appeal. It is the relief that was granted that is in issue.

Appeal ground 2

20Counsel for Dr Raashed submitted that the Magistrate erred in making an order under s 7(1)(a) of the Contracts Review Act that Dr Raashed could not enforce a contractual term that the Husseins pay the balance of the contract of $50,063 in circumstances where her Honour had made a finding that in the absence of evidence of valuation it was not possible to determine whether the Husseins had suffered any financial loss pursuant to the contract, and if so to what extent.

21Both parties referred to the well known passage from House v The King (1936) 55 CLR 499 at 504-505 where Dixon, Evatt and McTiernan JJ in a joint judgment stated:

"... The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. ..."

22According to Dr Raashed, the test set out in House v The King forms the basis of the test required for an error of law. In support of that proposition he relied upon a recent decision of Hall J, US Manufacturing Co Pty Ltd v ABB Service Pty Ltd [2008] NSWSC 705, at [48] to [55]. Counsel for Dr Raashed also submitted that, because the Magistrate erred by making a finding of fact in the absence of evidence supporting that finding, there was an error of law so leave was not required.

23Counsel for the Husseins submitted that the plaintiff's analysis of House v The King was incorrect and that a number of the grounds of appeal, when properly analysed, did not raise a question of law. The Husseins submitted that the plaintiff must satisfy two criteria: firstly, that the appeal falls within the House v The King principle; secondly, that it involves a question of law. As relief afforded under the Contracts Review Act is discretionary, it is my view that Dr Raashed must satisfy this court that the appeal falls within the House v The King principle as outlined in Khoshaba.

24Counsel for Dr Raashed submitted that the magistrate failed to take into account relevant material and secondly, that the Magistrate's finding was "unreasonable or plainly unjust". The failure to take into account a material consideration is particularised as being that her Honour did not take into account the failure of the defendants to prove the value of the goods and goodwill they received under the contract.

25In making factual findings, the Magistrate did not accept Dr Raashed as being a witness of credit. Her Honour stated that he was evasive in many of his answers and referred to specific examples. Her Honour went further and found that Dr Raashed was not an honest or reliable witness. Her Honour made a finding that the Husseins' evidence was consistent and she accepted their evidence as evidence of truth (see judgment at [48] and [49]).

26I have reproduced the findings of fact in the judgment paragraphs [50] to [54] as it is these circumstances that underpin the Magistrate's determination as to whether relief should be granted under s 7(1)(a) of the Act and, if so, what relief.

27The Magistrate made the following findings at [50] where her Honour stated:

"I am satisfied on the balance of probabilities that:

The original partnership discussions were on a 50/50 basis

That Dr Rasheed (sic) was the author of both partnership documents. (See para 18 and 19 of this Judgment) I accept the defence submission that on the basis that these sums of money are known only to Dr Rasheed, and absent the suggestion that Mr or Mrs Hussain (sic) created the document.

That the contents of the container from Burma was stored in Dr Rasheed's containers in Sefton

That the Hussains owned a large proportion, of not all of the goods received from Burma

That Dr Rasheed suggested to the Hussains to purchase his business

That the contract was given to them only on 4 th September, 2007

That the Hussains did not inspect the contents of the containers on 3 rd September nor 4 th September, 2007

That when the Hussains had access to the container around 25 th August, 2007, it was for the purpose of storing the goods received in the container from Burma and not to inspect Dr Rasheed's goods which were already stored there.

That the Hussains did not in fact inspect Dr Rasheed's goods which were stored in that container.

It was not in the contemplation of any party at that time, that Mr and Mrs Hussain would purchase Dr Rasheed's business

That Dr Rasheed would not give them the keys to the containers unless they bought his business

That Dr Rasheed stated that he was going overseas for some time. ... The contract was given to the Hussains only on the morning of the 4 th September, 2007. The fact that the contract stated that the 2 nd instalment was to be paid to Dr Rasheed in early October, 2007 does not alter that fact that either way, without access to the keys to Dr Rasheed's containers at Sefton where the goods from Burma were stored, whether it be for 2 weeks or some other period the Hussains were unable to trade

That the Hussains were therefore unable to trade and unable therefore to obtain any income without access to the stock to trade

That there was no negotiation regarding the purchase price of $80,000."

28The Magistrate decided at [51] to [54] as follows:

"51 I am satisfied that at the time the contract was entered, the Hussains were in an unequal position during the discussions concerning the business. Dr Rasheed had made it clear that he would not give them the keys to the container unless they signed the contract. That without access to the containers, where the goods from Burma were stored, they were unable to trade and therefore unable to gain any income to support their family. I find, on the balance of probabilities that, pursuant to s 9(2)(a) Contracts Review Act 19080 that there was material inequality in the bargaining power between Mr and Mrs Hussain on the one hand and Dr Rasheed on the other.

52 I am satisfied on the balance of probabilities, pursuant to s 9(2)(b) that prior to or at the time the contract was made, that Mr and Mrs Hussain were not able to negotiate the contract conditions.

53 I am satisfied on the balance of probabilities that Mr and Mrs Hussain were denied an opportunity to get legal advice, having been given the contract only on the morning on which it was entered, and that there was urgency in entering the contract before Dr Rasheed left for overseas that same day (s 9(2)(h)).

54 I find that Mr and Mrs Hussain were given no choice but to agree to the terms of the contract drawn by Dr Rasheed and entered into by them on 4 th September, 2007. Dr Rasheed was due to go overseas that very day. Their goods from Burma were stored there. These good were their stock in trade. Dr Rasheed refused to give them the keys to the locked containers unless they entered into the contract, agreeing to the sale price and the instalment conditions. Without access to their stock the Hussains were unable to trade and therefore unable to generate any income. According, pursuant to s 9(2)(j)(i) I find that undue influence and undue pressure were exerted on the Hussains."

29The Magistrate had limited jurisdiction as to the relief she could grant under the Contracts Review Act . Section 32 of the Local Court Act provides that the Local Court may grant relief pursuant to s 7(1)(a) of the Contracts Review Act.

30Section 7(1)(a) of the Contracts Review Act reads:

"Principal relief

(1) Where the Court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, the Court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following:

(a) it may decide to refuse to enforce any or all of the provisions of the contract".

31The task confronting the Magistrate in relation to considering what, if any, relief was to be granted is set out in S H Lock (Australia) Ltd v Kennedy (1988) 12 NSWLR 482 where Priestley JA stated at 492:

"Once a court finds a contract unjust in that sense, it is faced with the next and quite separate task, for which, the Act provides less guidance: the relief the court is empowered to give, is, if it consider it just to do so, to make appropriate orders "for the purpose of avoiding as far as practicable an unjust consequence or result". As I understand s 7(1), wide though the court's powers are to find a contract unjust, the remedies it may grant in respect of such injustice are strictly limited to avoiding an unjust consequence or result of the unjust contract. ..."

32On this topic the Magistrate made the following findings at [94] to [100]:

"94 What did the Hussains get for $29,937? The Hussains received the contents of both containers, which included the goods from Bangladesh and Dr Rasheed's goods. The list from 24th August, 2007 puts the value of the goods at $28,917, although the Hussains claim that that value was at wholesale price and they could not sell the goods for a profit. Some stock was not able to be sold. However, no stocktake was done soon after the contract and so it is not possible to determine the actual value of the goods obtained from Dr Rasheed and therefore it is not possible to determine whether the Hussains suffered any financial loss and if so, to what extent.

95 The Hussains did receive the 2 x 20' containers and received $3,000 when one was sold. They found one glass top freezer of the eight, which were part of the contract. If the valuation is correct (there was no cross examination of Dr Rasheed about the value of the Freezers) they may have lost $5,600.

96 In the absence of a valuation of the contents of the Bangladesh container it is not possible to determine whether the Hussains paid the 75% of the total value.

97 The Hussains received some business goodwill because they said that the business returned some $4-5,000 per week, although the return was not as expected. Dr Rasheed agreed that the $25,000 valuation of the goodwill with the business name Barakah International, was overvalued. He accepted that the goodwill should be less than that, particularly without his business name. However, in the absence of a valuation of the goodwill or the value of the business, it is not possible to determine any quantum of loss.

98 It is impossible to determine on the balance of probabilities, on the evidence available, whether the Hussains suffered any loss taking into account the amount paid ($29,937) under the contract to date.

99 Having found that the contract was unjust at the time the contract was made, justice dictates that some relief must be granted to the Hussains. To do otherwise would be wholly unjust, taking into account all the circumstances in this matter.

100 Accordingly, it is appropriate to grant relief under s.7 (1)(a) Contract Review Act, refusing to enforce the requirement that the Hussains pay the balance of $50,063.00 under the provisions of the contract. The $29,937 paid by the Hussains to Dr Rasheed is sufficient and no further amount need be paid under the contract."

33Counsel for Dr Raashed highlighted the parts of paragraphs 94, 96, 97 and 98 of her Honour's reasons for judgment where she stated that she was unable to quantify the Husseins' loss in relation to the value of goods and goodwill they received under the contract. Dr Raashed submitted that these conclusions have been drawn without any evidentiary basis and without proper consideration of the range of options for relief available under the Contracts Review Act and that relief should not have been granted . Dr Raashed further contended that the magistrate did not grant the relief limited to the minimum required to do justice between the parties.

34Counsel for Dr Raashed referred to a passage from the recent decision of Verduci v Golotta [2010] NSWSC 506 where Slattery J at [53] had this to say:

"[53] An entitlement to relief is not made out merely because the circumstances relating to the transaction did not work out in favour of one party, a relevant principle which is consistent with the public policy in keeping parties to their bargains: Baltic Shipping Co v Dillon ("the Mikhail Lermontov") (1991) 22 NSWLR 1 at 9 per Gleeson CJ. Even if the court does find a contract to be unjust and warranting the provision of relief, the relief to be granted would be limited to the minimum required to do justice between the parties : S H Lock (Australia) Ltd v Kennedy ( 1998) 12 NSWLR 482. There should be a causative connection between the relevant injustice and the unjust consequence which requires relief to be granted: S H Lock (Australia) Ltd v Kennedy (1998) 12 NSWLR 482 at 492 per Priestley JA."

35Counsel for the Husseins submitted that a failure to take into account any purported failure of a party to prove certain facts is not a ground for challenging the exercise of discretion within the House v The King principles. The Husseins further submitted that it was plain that the Magistrate gave ample consideration to the issues of the value of goods and goodwill and further that the Magistrate did not consider that the absence of findings of fact as to the value of what the Husseins had received affected her view that, in all the circumstances, the dictates of justice required that some relief be granted.

36So far as what relief should be granted, the Magistrate analysed what the Husseins actually received for what they purchased. Pursuant to the contract, the Husseins were to receive the frozen stock, equipment and the goodwill of seller (excluding the trading name). Her Honour analysed what the Husseins got for $29,937 (the amount they paid) by referring to each item in seriatim . There was evidence of the value of the freezers, an acknowledgment by Dr Raashed that the goodwill was overvalued, but it was not possible to determine the quantum of the goodwill or of the contents of the container from Bangladesh. Her Honour took these matters into account. What her Honour was required to do was to exercise her discretion, where she considers it just to do so, to avoid as far as practicable an unjust consequence or result. It is my view that the Magistrate adopted the correct approach and concluded that, to avoid an unjust consequence or result of an unjust contract, the requirement that the Husseins pay the balance of the contract of $50,063 could not be enforced.

37Dr Raashed's next argument, under this heading, puts the same argument another way. Counsel submitted that the magistrate erred in drawing the conclusion that the amount paid was sufficient. According to counsel, such a conclusion would required a finding of fact, based on the evidence, that the value received by the Husseins was equal to the amount paid. Dr Raashed submitted that the Magistrate specifically found that the evidence was incapable of establishing that fact and in those circumstances, the Magistrate's conclusion was not supported by any evidence, suggesting a substantial wrong in the exercise of her discretion. I do not think so. Once again, the Magistrate was to exercise her discretion to avoid an unjust consequence or result of an unjust contact. That is the approach her Honour adopted.

38Next, Dr Raashed submitted that the Magistrate erred in saying that some relief must be granted and that the essence of discretionary relief is that the court is not bound to grant any relief at all. But this submission takes one sentence of the Magistrate's reasons out of context. The Magistrate had made findings that, at the time when the contract was entered into, the Husseins were in an unequal position. Prior to the contract being entered into the Husseins were not able to negotiate the contract conditions, were denied the opportunity to get legal advice and were denied access to their stock in trade unless they signed the contract. Further, Dr Raashed had conceded that the Husseins paid too much for the goodwill. Hence, the Magistrate decided, in those circumstances, that some relief must be granted.

39The Magistrate, in her reasons at [13] referred to the three-stage process in Khoshaba , in which the final stage, namely the granting of relief, is to be undertaken "if necessary". This process was adopted by the Magistrate.

40Finally, under this ground of appeal, Dr Raashed submitted that this is a case where the Husseins could, and did, make out procedural injustice as that term has been used in cases such as West v AGC (Advances) Ltd (1986) 5 NSWLR 610, but not substantive injustice . Again, it was a discretionary decision of the Magistrate and she was entitled, in the circumstances outlined, to grant the relief that she did.

Appeal grounds 3 and 4

41Counsel for Dr Raashed submitted that the Magistrate erred in failing to hold that there was an evidentiary burden on the Husseins in seeking relief under the Contracts Review Act to adduce evidence as to the value of the property that had passed to them under the contract. Counsel further submitted that the Magistrate erred in failing to hold that the Husseins had not discharged such burden.

42I accept that the Husseins had the burden of proving facts capable of supporting a finding that the contract was unjust. Once that finding was made, it was then a question of whether the discretion to grant relief should be exercised and the manner in which it should be exercised. This is in accordance with the three-stage process outlined in Khoshaba . Although the question of whether the contract was unjust and whether relief should be ordered are separate questions, this does not mean that the same evidence cannot be considered in relation to the two stages of the inquiry. An applicant for relief, under the Contracts Review Act , does not need to prove facts supporting relief that are distinct from those supporting a finding that the contract was unjust. The Husseins were not obliged to adduce evidence as to the value of the property that had passed to them under the contract.

Appeal ground 6

43Counsel for Dr Raashed submitted that the Magistrate erred in failing to consider, pursuant to s 9(5) of the Contract Review Act , the conduct of the Husseins in relation to the performance of the contract in failing to give restitution in integrum and in placing themselves in a position where they were unable to give restitution in integrum ; alternatively, the Magistrate erred in failing to give any or sufficient reasons as to why she did not have regard to such conduct.

44Section 9(5) of the Contracts Review Act reads:

"(5) In determining whether it is just to grant relief in respect of Court may have regard to the conduct of the parties to the proceedings in relation to the performance of the contract since it was made."

45Section 9(5) of the Contracts Review Act is in permissive terms.

46The Husseins submitted that there is no merit in this challenge to the orders made in the Local Court. The Court is not bound to take into account the conduct of the parties in relation to the performance of the contract since it was made. In any event, the Magistrate did have regard to the evidence of the conduct of the parties after the date of the contract. Far from supporting a finding that the Husseins had placed themselves in a position in which they could not return the goods, the Magistrate found that, after the contract had been entered into, Dr Raashed had declined to entertain any complaints by the Husseins as to the quality of the stock they had received but had referred them to their obligations under the contract to accept the stock "as is where is".

47It is my view that the Magistrate correctly set out the principles that she had to apply, made findings of fact and exercised her discretion in accordance with those principles. There is no error of law.

48The appeal is dismissed. The decision of her Honour Magistrate Swain dated 29 October 2010 is affirmed. The summons filed 7 December 2010 is dismissed.

49Costs are discretionary and usually follow the event. The plaintiff is to pay the defendants' costs as agreed or assessed.

The Court orders: