Udowenko v Rasevi Pty Ltd (No.2) [1996] NSWCA 540

Udowenko v Rasevi Pty Ltd (No.2) SUPREME COURT OF NEW SOUTH WALES — COURT OF APPEAL

CLARKE JA, Simos AJA and ABADEE AJA 3 September 1996

[1996] NSWCA 540

Abadee AJA. The appellant, Wolodymyr Udowenko, by his amended notice of appeal, appeals from two judgments of Bryson J, sitting in the Equity Division and given on 12 March 1992 and 8 April 1992 respectively.

In 1991 the plaintiff Rasevi Pty Limited ('Rasevi') instituted proceedings by summons against four defendants, Valentyn Udowenko, Michael Udowenko, Helen Udowenko and the appellant. These persons were members of the same family. The first defendant is the brother of the appellant and the second and third defendants named in the summons are the parents of the appellant.

For reasons already given in relation to an application for adjournment the first three defendants are not parties to this present appeal. Indeed, in respect of the first defendant, in 1993 the judgment entered against him was set aside by Waddell CJ in Eq

The issues raised in the proceedings between the parties related to the ownership, possession and delivery of a number of horses then held at the defendant's property at Vacy, apparently a property that bore the description and name 'Windarra'.

The plaintiff's claim before Bryson J was that in, or about, April or May 1989, it was agreed as and between it and the defendants that they should engage in a horse breeding venture at the defendant's stud and that they would share the profits and losses of the joint venture. Importantly the agreement was claimed to have been an oral one, made by a Mr Jones, a director of Rasevi, and Mr Wolodymyr Udowenko, the appellant on behalf of all the defendants.

The plaintiff claimed that it was a term of the joint venture agreement that certain horses were to be agisted on the defendant's property. In June 1989 the plaintiff delivered horses to Windarra, including two mares. Between July of 1989 and April 1991 the plaintiff also delivered other horses to Windarra unrelated to the agreed horse breeding venture.

Between July 1989 and September 1991 the defendants rendered certain accounts for agistment to the plaintiff, which accounts were paid, or at least certain of which were paid.

In June of 1990 an alleged oral agreement was entered into between Mr Jones and the appellant in relation to the purchase by the plaintiff of two colts. This agreement also involved the matter of their agistment.

The plaintiff claimed that on or about 2 May 1991 the horse breeding agreement was repudiated by the appellant. The repudiation, it was said, was accepted by the plaintiff. On 10 May 1991 it endeavoured to collect the horses at Windarra. The plaintiff was permitted to remove two colts upon payment of outstanding agistment fees.

Between 9 May 1991 and 22 May 1991 the appellant refused to return or give possession to the plaintiff of its mares then at Windarra. On or about 16 May 1991 the plaintiff served a demand for the delivery of certain horses.

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Thereafter on 7 July 1991, the proceedings the subject of this appeal were instituted, and in those proceedings Rasevi sought orders and declarations in relation to horses referred to in schedules annexed to the summons.

On 19 July 1991 consent orders were made by Mr Justice Bryson in relation to the return of certain horses. The horses were returned or disposed of after the Court made its order.

It appears that on 29 August 1991 a consent order was made dealing with the disposition of the remaining horses at Windarra. This left still outstanding to be determined a number of relatively minor issues relating to money claimed between the plaintiff and the defendants arising out of the breeding joint venture and several other transactions. Also to beresolved was a cross claim brought by the defendant.

Against this background Mr Justice Bryson gave Judgment in the instant proceedings on 12 March 1992. On the plaintiff's claim he entered a Judgment for the plaintiff in the sum of $2,758. In respect of the cross claim of the defendant he entered a Judgment for the plaintiff. His Honour made a number of costs orders, but ordered that they be not then entered.

On 8 April 1992 the trial Judge delivered a further Judgment on the matter of costs. This was done after his Honour called for further submissions. His Honour then made certain costs orders. In his reasons for the further costs orders, his Honour observed that the case was not simply one where the plaintiff had pressed on with a small claim in terms of the Court's jurisdiction, and had recovered only $2,758, but that the plaintiff had endeavoured to settle the matter on the then:

Only sensible basis of withdrawal on all sides, but could not settle without paying $28,000. The plaintiff had no choice but to go on with its case, small though it was. It was locked in by the fact that the defendants had brought a cross claim (which has proved to be very grossly overstated).

The formal orders in relation to costs were entered.

In order to understand the numerous grounds of appeal advanced by the appellant, it is appropriate to refer in some greater detail to the reasons for Judgment of Justice Bryson given on 12 March 1992. In that Judgment his Honour described the issues for determination between the parties as being issues of fact. His Honour stated that his decision followed his view of the credibility of the principle figures on each side of the record, beingMr Jones the managing director of Rasevi, and the fourth defendant and sole appellant.

His Honour concluded that at many points their evidence about significant agreements, communications and events differed. However, his Honour stated that he quite unhesitantly regarded the evidence of Mr Jones as being far more reliable than that of the appellant. He said that he formed the view that Mr Jones had made a sincere and honest endeavour to give a true account in his evidence.

On the other hand his Honour specifically stated that he had formed a very different view of the evidence of the appellant, concluding that he was a very untrustworthy witness. His Honour further observed that none of the first three defendants had given evidence in support of the contention that they were not parties to the arrangement with the plaintiff.

His Honour made a number of findings of fact which have been challenged in this appeal by the appellant. These findings may generally be summarised as follows. All four defendants, including the appellant, were parties to the joint venture agreement. The principle business of that agreement was a joint venture

URJ Udowenko v Rasevi Pty Ltd (No.2) (Abadee AJA) 3

of horse breeding at Windarra, using a number of mares provided by the plaintiff, a stallion provided by the plaintiff, and a stallion provided by the defendants.

His Honour found that the documents that passed preceding the creation of the dispute also did not indicate that the contracting party was the fourth defendant or appellant alone. His Honour found that Rasevi and not Mr Jones was the contracting party, and that its involvement was revealed by Mr Jones from the beginning of the negotiations. His Honourconcluded that there was never any doubt about that matter.

His Honour further found that the agreement for breeding venture was formed in several conversations in April and May 1989. He found that the identities of the parties to that agreement were the plaintiff company on the one side and the fourth defendant appellant and his family on the other side.

His Honour found and concluded that the significant terms of the breeding venture related to certain specified horses approved by both sides with most of the horses being provided by Rasevi and one stallion by the defendants with the defendants to supply as necessary agistment, stabling and general care of the horses and progeny. Provision was made by the agreement for agistment charges for foals produced in the joint venture with veterinary fees for the horses used in the joint venture to be shared equally. His Honour further found that the proceeds of sale of foals if any were to be divided fifty one per cent to the plaintiff company and forty nine per cent to the defendants. The agreement was found to have a duration of some three years.

His Honour also found that there was a separate arrangement in respect of two colts, which was, however, a separate venture to the breeding venture.

A specific finding was made that the breeding venture and every other venture involving the presence of the plaintiff's horses at Windarra were repudiated by the defendants in May of 1991 with acceptance by the plaintiff of that repudiation on 10 May 1991.

His Honour further found that the plaintiff offered to pay the sum of five hundred dollars, an extra amount for agistment, in May and June of 1991, but that such offer was not accepted by the defendants.

Indeed his Honour found that the defendants were quite unprepared to go on with the breeding venture in accordance with the terms of their agreement. In my view, despite the appellant's challenges, these findings were supported by the evidence and were clearly open to be made by the trial judge.

Findings were also made that the plaintiff company incurred expenses in attempting to collect its horses, being the amounts of eight hundred and forty five dollars and four hundred and fifty nine dollars fifty respectively. Indeed in relation to those matters his Honour allowed the two items that I have referred to be the subject of part of the plaintiff's recovery of damages caused by the defendant's repudiation of the breeding venture.

According to his Honour's reasons and findings the defendants also began to send to Mr Jones grossly overstated claims for payment for services for May of 1991. This his Honour concluded also demonstrated that the defendants were not prepared to go on with the breeding venture in accordance with its true terms, that the defendants were making claims which were manifestly unjustified and had embarked upon a course of resistance to the plaintiff's rights including its entitlement to a return of the horses.

In its cross-claim the defendants claimed that fees and charges totalling twenty four thousand two hundred and thirty three dollars andeighty four cents should have been brought into account to their credit in their dealings with the plaintiff.

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His Honour carefully considered each of the claims referred to in the summary as set forth in his Honour's reasons for judgment, which summary also appears to include fees claimed up to and including September of 1991.

His Honour made findings that the defendants had made claims month by month for payment of what was said to be due to them and that the usual outcome being that such claims were paid by the plaintiff.

His Honour carefully dealt with each of the defendant's claims, being described as D1 to D14 inclusive, giving reasons for allowing or rejecting such individual claims in whole or in part.

In most of the cases resolution of these disputes involved acceptance of Mr Jones" evidence and rejection of the evidence of the appellant. In some cases, for example items D9, D10, D11 and D12, his Honour rejected the claims for agistment upon the basis of a lack of entitlement to agistment for horses that should have been re-delivered to the plaintiff.

In respect of some of the items claimed by the defendants his Honour also had regard to the documentary evidence that had been tendered during the course of the proceedings.

His Honour also found for reasons carefully stated that the plaintiff was in any event entitled to a number of credits against various claimsmade by the defendants in addition to those which the appellant, Mr Udowenko had acknowledged in his evidence. His Honour said that these credits totalled the sum of three thousand two hundred and seventy dollars.

In his summary his Honour found that the plaintiff's damages were in the sum of one thousand three hundred and four dollars fifty. In respect of the defendant's claims his Honour allowed claims for items D4, D6, D7 and D8, which appear to total the sum of one thousand seven hundred and sixteen dollars. However, in his Honour's summary his Honour found credits totalling the sum of three thousand two hundred and seventy in favour of the plaintiff, thus giving the plaintiff an entitlement to recover the total sum of two thousand seven hundred and fifty eight dollars.

The appellant has, as I have said, advanced numerous grounds of appeal against his Honour's findings of fact. These include claims that his Honour in both judgments seriously and unjustly dealt with his case, that the judgments were, and particularly the judgment of 12 March 1992, in part formed by reference to lies, misleading evidence, untruths and perjurous statements of the witness Mr Jones. In particular he disputes the finding in appeal book at page 421 lines K to L, that in April and May of 1989 that the breeding venture was formed in several conversations in those months.

The appellant also claimed that Bryson J formed his findings from misleading and incorrect statements presented by Mr Jones. He has submitted that his brother and parents were not involved with the plaintiff and had no business dealings with the plaintiff or 'its horses'.

I would also observe in passing, however, that in support of hisHonour's findings his Honour specifically referred to the fact, as I have mentioned, that the first three defendants gave no evidence to support a contention that they were not parties.

The appellant also has submitted that his Honour's findings in relation to his being an untrustworthy witness are findings that should not have been made. He disputes the finding of the trial judge that Mr Jones did reveal the involvement of the plaintiff company from the beginning of the negotiations.

URJ Udowenko v Rasevi Pty Ltd (No.2) (Clarke JA) 5

Dispute is raised in respect of a number of items of damage dealt with by his Honour. It is also asserted that there is a mathematical error in the calculation of the total damages awarded to the plaintiff. As I understand it the appellant submits that instead of the Ravesi having an entitlement to recover the sum of two thousand seven hundred and fifty eight dollars the amount should be in the order of two thousand eight hundred and fifty eight dollars or thereabouts. In respect of this last matter it is appropriate to say that the plaintiff makes no complaint about the amount of damages which it was awarded, nor complains that there was any mathematical calculation that suggested some error in the calculation of the damages.

In my view the appellant's submissions in relation to his Honour's findings of facts should be rejected essentially for simple reasons. The decision of the trial Judge in the instant matter was one on the facts of the case in the context of conflicting evidence given by the two principal figures, one on each side of the record.

His Honour specifically based his decision essentially upon the viewthat he took of the evidence of Mr Jones and his rejection of the evidence of the appellant. His Honour made critical findings in relation to credibility, forming the view that Mr Jones had made a sincere and honest endeavour to give a true account in his evidence whilst he viewed the fourth defendant as a witness who had given very untrustworthy evidence.

His Honour did not merely express his assessment of the credibility of the defendant but also gave a number of reasons in support of such a conclusion. His Honour clearly indicated and considered that the evidence of Mr Jones was substantially more reliable than that of the appellant.

The finding of facts in this case depends substantially upon the credibility of Mr Jones and his Honour so held. In my view the trial judge did not fail to use his advantage of assessing the witness" credit, whom he believed in relation to what was said. See Abalos v The Australian Postal Commission (1990) 171 CLR 167 at 178.

In my view, favourable findings in relation to the acceptance of credibility of Mr Jones are an impenetrable barrier to the success of this appeal. Clearly the trial judge's findings depended upon such assessment. No ground exists in my view for setting aside the findings of fact made by the trial judge. See Devries & Anor v The Australian National Railways Commission & Anor (1993) 177 CLR 472 at 479.

The appellant also complains that there is a mathematical error in the final calculation of the costs awarded. However in my view no mathematical error is revealed in relation to the costs that have been awarded by the trial Judge.

For all these reasons I am of the opinion that no appeal ground has been made good. I would propose that the appeal should therefore be dismissed with costs.

Clarke JA. I agree. Simos AJA. I also agree.

Clarke JA. The order of the Court will accordingly be the appeal is dismissed with costs.

APPEAL - contract for agistmentof horses - findings on credibility - whether susceptible to appellate intervention - judge disbelieves appellant and believes respondent's witnesses - whether errors shown - Held: No errors - findings inpervious to appellate correction - appeal dismissed

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Counsel for the appellant: First Appellant in Person Counsel for the respondent: L V Stapleton

5 Solicitors for the respondent: Nash: Allen Williams and Wootton: Wyong