Iyengar & Anor v Kashyap [2008] ACTSC 8 (11 February 2008)

Last Updated: 21 February 2008

HARI IYENGAR & ANOR v YOGESH CHANDER KASHYAP

[2008] ACTSC 8 (11 February 2008)

APPEAL AND NEW TRIAL - leave to appeal - small claims court - no error of law - appeal dismissed

Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235, 243-244

ON APPEAL FROM THE SMALL CLAIMS COURT OF THE AUSTRALIAN CAPITAL TERRITORY

No. SCA 74 of 2007

Judge: Higgins CJ

Supreme Court of the ACT

Date: 11 February 2008

IN THE SUPREME COURT OF THE )

) No. SCA 74 of 2007

AUSTRALIAN CAPITAL TERRITORY )

ON APPEAL FROM THE SMALL CLAIMS COURT OF THE AUSTRALIAN CAPITAL TERRITORY

BETWEEN: HARI IYENGAR and

RAISHA PROJECTS PTY LTD

Appellant

AND: YOGESH CHANDER KASHYAP

Respondent

ORDER

Judge: Higgins CJ

Date: 11 February 2008

Place: Canberra

THE COURT ORDERS THAT:

1. Leave to appeal be refused; but

2. The judgment on the claim be amended so as to be awarded against Raisha Projects Pty Ltd alone.

1. This is an application by the appellant for leave to appeal against a decision of Magistrate Doogan delivered in the Small Claims Court on 31 July 2007. That application was filed on 27 August 2007. It was heard on 5 October 2007. The applicant/appellant sought to put its case in writing. Mr Hari Iyengar, was, without objection, given leave to appear for the applicant company, Raisha Projects Pty Ltd (the company) as well as, of course, for himself. The claim before Magistrate Doogan, including the cross-claim, involved both Mr Iyengar and the company as parties. It appears that, in truth, the claim was against the company of which Mr Iyengar was the managing director. In so far as the purported to be against Mr Iyengar personally it must be dismissed.

2. The claimant was the present respondent, Mr Yogesh Kashyap. His claim arose out of a construction contract dated 28 May 2006 to be supervised by the applicant company as Construction Manager on behalf of the respondent. The construction was a new residence to be built at Harrison in the Australian Capital Territory.

3. The parties fell into dispute by November 2006. They then decided to seek advice from a mutual friend, Mr Hasib Khan. They reached an apparent agreement. Mr Kashyap paid the agreed sum. However, on 28 February 2007, despite having accepted the cheque, Mr Iyengar, on behalf of the company, purported to reject the settlement, alleging he was coerced by impending bankruptcy to accept the negotiated figure. Mr Kashyap then repudiated the agreement. Mr Khan had, in fact, been appointed to arbitrate the dispute by the Master Builders Association, in purported compliance with the construction contract. The company retained a kitchen kit purchased for the construction which it had, by the settlement agreement, agreed to surrender to Mr Kashyap.

4. Mr Kashyap claimed the replacement cost of the kitchen kit and the refund of sums paid by him for it, being $4,124. Mr Kashyap had also paid $21,000, being the agreed settlement figure. Mr Kashyap's claim, including interest, was for $8,667.35.

5. Mr Iyengar personally counterclaimed for $10,000 for damages for "stress anxiety and loss of health" and "lost time and effort on this project".

6. Magistrate Doogan heard the parties on 31 July 2007.

7. The respondent pointed out, tendering relevant documents, that by mutual agreement the dispute had been referred to Mr Khan for arbitration.

8. On 18 November 2006, an agreement in the terms referred to above was concluded and signed before Mr Khan by the respondent and by Mr Iyengar for the company. Mr Iyengar, however, despite receiving the agreed sum from Mr Kashyap, did not cause the kitchen kit to be released.

9. He conceded to her Honour that he had agreed to arbitration by Mr Khan and then reneged on the agreement that was then executed. However, he contended that he had no choice but to agree. He "had to grab hold of any kind of money that he would give". He could not, he said, afford to wait. He felt he was entitled, as a result, to repudiate the agreement.

10. His counter claim was for stress caused, inter alia, by late payment of invoices. However, in submitting invoices, he had not produced any supporting documents to justify payment. As her Honour noted:

... who in their right mind, would pay an invoice without supporting documentation on it ... that's not unreasonable for a person to be asking for you to support the information that you have on your invoice.

11. Mr Khan was then called. He confirmed that he was a mutual friend of the parties. He agreed that there were "pressures" for Mr Iyengar to settle the matter but felt that he was assisting the parties to avoid litigation.

12. Mr Iyengar proposed to support his counter-claim by reference to his wife's testimony as to how stressed he was as a result of the dispute with the respondent.

13. Her Honour delivered her decision ex tempore. She noted that, effectively, Mr Iyengar had offered no rational answer to Mr Kashyap's claim. His claim to set aside the settlement which supported that claim her Honour described as "disturbing".

14. She accepted that the settlement agreement was brokered by Mr Khan in good faith. Mr Kashyap had kept his side of the bargain. Mr Iyengar and, hence, the company did not. As her Honour said:

Why he did this, is incomprehensible except that he explains it on the basis that he was put under pressure. There is no evidence, apart from his own word to me, that he, the respondent, was put under pressure. Mr Khan said that both men were excited in the negotiation and in the process.

15. I support her Honour's view. The fact that a party feels economically pressured to accept a compromise neither proves nor even supports any vitiating event, such as coercion or unconscionability (see for example, Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235, 243-244). It is apparent that, rather than pursue his claim for a higher sum, Mr Iyengar committed the company to a deal he felt served its interest by an immediate substantial payment. It was consummate bad faith on the part of Mr Iyengar and contrary to law for him then to turn around and renege on that agreement having received the benefit of it.

16. Her Honour rightly dismissed the defence he offered on behalf of the company.

17. The counter-claim was transparent nonsense. It was not supported, even so far as damage was concerned, by any relevant evidence. Of course, disputes and negotiations to resolve them are stressful. They may even cause or exacerbate a medical condition. That does not, however, render the other party legally liable for that result. A party cannot claim damages for the lawful act of another, even if it causes them damage. It must be a wrongful act. There was no evidence, as her Honour found, of any wrongful act on the part of Mr Kashyap. Thus her Honour rightly dismissed Mr Iyengar's purported counter-claim. It was in fact an original claim, not a counter-claim, as there was no personal claim against Mr Iyengar. Though nothing turned on that.

18. An applicant for leave must show an error of law to be given leave. There is none, save in the respect I have noted. Leave is granted simply to correct the record. The judgment on the claim is to be recorded against the company alone, and not Mr Iyengar as well. Otherwise, leave to appeal is denied.

19. I will hear the parties as to costs.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of his Honour, Chief Justice Higgins.

Associate:

Date: 11 February 2008

Counsel for the appellant: Self represented

Solicitor for the appellant: Self represented

Counsel for the respondent: Self represented

Solicitor for the respondent: Self represented

Date of hearing: 5 October 2007

Date of judgment: 11 February 2008