Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Raashed v Hussein [2012] NSWCA 264
• Hearing dates: 17 August 2012
• Decision date: 24 August 2012
• Before: Macfarlan JA; Sackville AJA

Decision

Application for leave to appeal dismissed with costs.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: APPEAL - application for leave to appeal - no issue of principle
• Legislation Cited: Contracts Review Act 1980
• Cases Cited: House v R [1936] HCA 40; 55 CLR 499; Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41; (2005) 14 BPR 26,639
• Category: Principal judgment
• Parties: Rashid Raashed (Applicant); Mosharrof Hussein (First Respondent); Mehjabin Hussein (Second Respondent)
• Representation: Counsel: B Levet (Applicant); V Thomas (Respondents); Solicitors: Valerie Gibson-Tilley (Applicant); Turner Freeman Lawyers (Respondents)
• File Number(s): CA 2012/231849; CA 2012/45220

Decision under appeal

• Citation: Rashid Raashed v Mosharrof Hussein [2011] NSWSC 1342
• Date of Decision: 2011-11-13 00:00:00
• Before: Associate Justice Harrison
• File Number(s): SC 2010/406425

Judgment

1 THE COURT: This is an application for leave to appeal from a judgment dated 13 November 2011 of Harrison AsJ, in which her Honour dismissed an appeal, brought by leave, against a decision dated 29 October 2010 of Magistrate Swain of Blacktown Local Court.

2 The proceedings in the Local Court were brought by Dr Rashid Raashed, the present applicant, against Mr and Mrs Hussein, the present respondents, to enforce a written contract for the sale of property by Dr Raashed to Mr and Mrs Hussein described as follows:

"The Buyers agree to purchase the existing frozen stock, equipments and goodwill 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 60 Carlingford St. Sefton NSW 2162. This contract also includes the 25% share of the seller in his frozen vegetable container scheduled to arrive on 6th September 2007".

3 The purchase price of $80,000 was not allocated between the components of the sale. However, counsel for Mr and Mrs Hussein informed this Court, without contradiction by counsel for Dr Raashed, that the evidence in the Local Court and the judgment of the magistrate suggested that figures of approximately $25,000, $29,000 and $15,200 had been attributed by the parties to goodwill, stock and equipment respectively.

4 Magistrate Swain found that the contract was, for the purposes of the Contracts Review Act 1980, unjust to the Husseins by reason of the circumstances in which it was entered into and that Dr Raashed should be precluded from enforcing payment of the balance owing in respect of the purchase price, a payment of $29,937 having already been made.

5 The magistrate said that she was unable to determine the value of the "existing frozen stock" received by the Husseins pursuant to the contract but it is clear from her discussion of that issue that that value did not exceed $28,917 (Local Court Judgment [68]). Her Honour found that the Husseins had realised $3,000 on the sale of one of the two 20 foot freezer containers referred to in the contract for sale and had found only one of eight glass top freezers which were apparently intended to be encompassed by the word "equipments" in the contract for sale. The magistrate's reasoning suggests that they were worth $800 each (Judgment [80]).

6 The magistrate also found that the Husseins paid 100 per cent of the cost of the "frozen vegetable container" referred to in the contract. Independently of the contract the Husseins were entitled to a 75 per cent share in that container and its contents (and were therefore bound to pay that proportion of its cost). Their payment of the remaining 25 per cent was effectively a part payment (seemingly between $15,000 and $20,000: Judgment [88]), of the contract purchase price, additional to their payment of $29,937.

7 The magistrate also held that she could not determine the value of the goodwill of the business that was transferred to the Husseins under the contract, although it was clearly less than the amount of $25,000 apparently attributed to it under the contract. Dr Raashed admitted as much in cross-examination (Transcript p 56), apparently because a valuation in the possession of the parties of $25,000 for the goodwill assumed that the business name formed part of it, whereas the contract for sale provided that Dr Raashed, as the seller, would retain the right to use that name.

8 The magistrate's conclusions on relief were expressed as follows:

"98 It is impossible to determine on the balance of probabilities, on the evidence available, whether the Hussains [sic] 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 [sic]. 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) [Contracts] Review Act, refusing to enforce the requirement that the Hussains [sic] pay the balance of $50,063.00 under the provisions of the contract. The $29,937 paid by the Hussains [sic] to Dr Rasheed [sic] is sufficient and no further amount need be paid under the contract".

9 Before Harrison AsJ, and before this Court, Mr Raashed contended that the magistrate made an error of principle in arriving at her admittedly discretionary decision concerning relief. He accepted that to challenge that decision he would have to satisfy the principles in House v R [1936] HCA 40; 55 CLR 499 (see Perpetual Trustee Company Ltd v Khoshaba [2006] NSWCA 41; (2005) 14 BPR 26,639). Dr Raashed's principal argument was that in reaching her conclusion on relief the magistrate failed to take into account a relevant consideration, namely, the extent of the benefits obtained by the Husseins under the contract. He submitted that the magistrate had simply decided that because the unjustness of the contract had been established, Dr Raashed should be precluded from enforcing it further.

10 However, it is not in our view clear that this is what the magistrate did. Her judgment is open to the interpretation that she did have regard to the overall benefits received by the Husseins under the contract and concluded that the payment of $29,937 by the Husseins was sufficient to cover the value of all the benefits they received: see [99] and the last sentence of [100] of the Judgment.

11 In any event, if the Husseins did receive benefits under the contract of greater value, the value of those benefits, and therefore the amount in issue on an appeal to this Court, if leave were granted, would be limited. First, there are the amounts of $3,000 obtained for the sale of the freezer container and $800 for the glass top freezer that the Husseins found. Secondly, there is the value of the goodwill which was conceded by Dr Raashed to be less than $25,000 and which may well have been significantly below that amount. The payment of $4,000 to $5,000 by the Husseins in respect of Dr Raashed's 25 per cent share of the frozen vegetable container is a neutral factor as there is no basis for thinking that the payment did not approximately reflect the value of what the Husseins received. The net result is that the amount in issue on appeal to this Court would be less than $29,000, and possibly substantially so.

12 Dr Raashed's further arguments did not rise any higher than his principal argument and did not suggest that any greater sum would be in issue on appeal.

13 In these circumstances we do not consider it appropriate to grant leave to appeal from the decision of Harrison AsJ because, whilst Dr Raashed has an arguable point concerning the correctness of the magistrate's judgment, it is by no means clear that an injustice has occurred, no question of general principle is involved and the amount at issue on an appeal would be far below the threshold of $100,000 at which an appeal as of right is available.

14 Moreover, the costs already expended by the parties on this litigation, which has included one appeal, have been disproportionate to the amount at issue. A further appeal would add to the disproportionate expenditure of costs, particularly having regard to the small amount that the applicant could realistically hope to achieve from the appeal.

15 For these reasons the Court orders that the application for leave to appeal be dismissed with costs.

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Decision last updated: 24 August 2012