COFP Pty Ltd v Dhanush Infotech Pty Ltd
[2015] QCA 1
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- Unreported Judgment
- Appeal Determined (QCA)
- COFP Pty Ltd v Dhanush Infotech Pty Ltd[2015] QCA 1
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COFP Pty Ltd v Dhanush Infotech Pty Ltd[2015] QCA 1
COFP Pty Ltd v Dhanush Infotech Pty Ltd[2015] QCA 1
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Court of Appeal | |
PROCEEDING: | General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 3 February 2015 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 21 November 2014 |
JUDGES: | Holmes, Fraser and Morrison JJA Separate reasons for judgment of each member of the Court, each concurring as to the order made |
ORDER: | The appeal is dismissed with costs. |
CATCHWORDS: | PROCEDURE – SUPREME COURT PROCEDURE – QUEENSLAND – PROCEDURE UNDER UNIFORM CIVIL PROCEDURE RULES AND PREDECESSORS – SUMMARY JUDGMENT – where the appellant brought proceedings against the respondent for moneys owed for services rendered and damages for breach of contract – where the primary judge gave summary judgment for the respondent on the basis that any agreement had been made not with the respondent but a related company – where the appellant appealed, submitting that documents relied on by the respondent as constituting the agreement were false – where no such contention was made before the primary judge – where the terms of the documents were consistent with the appellant's statement of claim – where, whatever the status of those documents, the appellant had produced no evidence of an agreement with the respondent – whether the primary judge erred in giving summary judgment APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – POWERS OF THE COURT – FURTHER EVIDENCE – where the appellant sought leave to adduce further evidence regarding which company the appellant had contracted with – whether leave should be granted to adduce the further evidence Uniform Civil Procedure Rules 1999 (Qld), r 293(2) |
COUNSEL: | D Munro, appeared in his capacity as director of COFP, on behalf of the appellant B Kidston with R Haddrick for the respondent |
SOLICITORS: | D Munro, appeared in his capacity as director of COFP, on behalf of the appellant Mahoneys Law for the respondent |
[1] HOLMES JA: The appellant brought proceedings against the respondent for moneys owed for services rendered and damages for breach of contract. Those proceedings were defended on the basis that any agreement had been made not with the respondent, but with another company, Dhanush Academy of Technology and Management Pty Ltd (DATAM). The respondent succeeded in obtaining summary judgment, against which this appeal is now brought. The appellant’s sole director, Mr David Munro, appeared on its behalf at first instance and here.
The statement of claim
[2] The statement of claim made the following allegations. The appellant had agreed with the respondent, on or about 15 February 2010, that the latter would hire the services of the appellant’s servant or agent, David Munro, as chief executive officer of a company to be incorporated. The appellant would be paid $140,000 for providing Mr Munro’s services for two years. In consideration of Mr Munro’s services, the respondent would pay the appellant $40,000 “for use of its intellectual property as specified on NTIS website ‘scope of registration’”. In accordance with that part of the agreement, $40,000 was paid. The company, DATAM, was incorporated on 17 March 2010, as envisaged by the contract, and Mr Munro worked as its consultant chief executive officer from 15 February 2010 until 11 January 2011. The respondent had repudiated the contract by dismissing Mr Munro or allowing DATAM to do so. The appellant was owed $61,561.64 for services already rendered and $78,438.36 as damages for breach of contract.
The defence
[3] The respondent admitted in its further amended defence that Mr Munro had worked as the chief executive officer of DATAM, but alleged that while there were discussions between a Mr Gupta and Mr Munro, those discussions contemplated the execution of formal documents. The agreement made was constituted by three written agreements (referred to as the “Formal Agreements”): a letter of intent to purchase a business made between DATAM as buyer and David Munro as seller; an agreement between DATAM and David Munro dated 15 February 2010, referred to as “the CEO agreement”; and an agreement between DATAM and the appellant made on 25 May 2010, referred to as “the services agreement”.
[4] If the earlier discussions had resulted in a binding agreement, it was varied by the Formal Agreements. To the extent they were entered prior to DATAM’s registration (on 17 March 2010), they were subsequently ratified by the company’s paying the purchase sum of $40,000 for the business and making payments to Mr Munro under the CEO agreement. The amounts sought to be recovered in the proceedings were payable under the CEO agreement made between Mr Munro and DATAM, so that the appellant had no standing to sue and was suing the wrong defendant.
The respondent’s evidence on the summary judgment application
[5] The respondent brought an application for summary judgment on 9 December 2013, supported by an affidavit of Mr Murthy, a director of the respondent. That affidavit deposed to what was said to have been a conversation between Mr Munro and Mr Gupta, an officer of the respondent, who is now dead. According to Mr Murthy’s affidavit, Mr Gupta proposed that DATAM would be incorporated; that it would purchase a registered training organization from Mr Munro; that it would appoint him as chief executive officer of its financial planning business for two years; and that the consideration for the business would have two components, $40,000 for the acquisition of the business and $140,000 for Mr Munro’s remuneration as chief executive officer.
[6] Mr Murthy annexed two emails from Mr Gupta to Mr Munro, dated, respectively, 15 January 2010 and 15 February 2010. The first thanks Mr Munro for their meeting and says that Mr Gupta is working on the letter of intent. The second addresses Mr Munro and Mr Neville Smith (a director of DATAM on its incorporation) and proposes an offer of payment of various amounts: $5,000 to be paid immediately, $35,000 to be paid in instalments, and monthly payments of $3,000 to Mr Munro, together with fees according to student enrolments up to an amount of $140,000.
[7] Mr Murthy also annexed signed copies of the Formal Agreements. The letter of intent is expressed to be a confirmation of the parties’ intentions as to a potential transaction between DATAM as buyer and Mr Munro as seller, the terms including DATAM’s acquisition of the appellant’s business and its appointment of Mr Munro as chief executive officer of a financial planning business unit, with the consideration for the business consisting of components of $40,000 as payment for the acquisition of the business and $140,000 “for remuneration as chief executive officer”. DATAM is to pay Mr Munro a retainer fee, to end once the total payment reaches the figure of $140,000. All payments are to cease if DATAM stops operating as a business. The letter of intent is said to be binding once signed by each party. It bears what appears to be the signature of Mr Munro, above the appellant’s name, and that of Mr Smith as director of DATAM. No date is visible under the signature of Mr Smith on the copy, and the date under what appears to be Mr Munro’s signature is not legible.
[8] The CEO agreement is dated 15 February 2010 and sets out the conditions of engagement of Mr Munro as chief executive officer of the financial planning business unit of DATAM. Among other things, it says that he is to be paid as per the schedule specified in the letter of intent. The CEO agreement appears to be executed by Mr Munro and by Mr Gupta on behalf of DATAM, with both signatures witnessed by Mr Smith.
[9] The services agreement is made between the appellant and DATAM. By it, the appellant agrees to provide services and resources “described in the Scope of registration of NTIS website at 25/5/2010 to this agreement” to DATAM for the consideration of $40,000 previously agreed. (The evidence did not show what the services and resources described on the website were.) In the same agreement, DATAM agrees to deliver programs “through an exclusive arrangement with [the appellant]” and to carry out its training services in accordance with Australian Quality Training Framework standards. The document appears to be signed by Mr Munro for and on behalf of the appellant and by Mr Smith as director of DATAM. The signatures are dated 21 May 2010.
[10] The respondent’s solicitor filed an affidavit to which he annexed a copy of a letter dated 5 April 2011 from the appellant to the managing director of DATAM, apparently signed by Mr Munro. It makes similar allegations to those in the statement of claim, but they are addressed to DATAM, not the respondent. It asserts an agreement for the hire of Mr Munro’s services to DATAM; an agreement that he would act as chief executive officer of DATAM; and an agreement that the appellant would be paid $40,000 for the use of intellectual property and $140,000 for the provision of Mr Munro’s services. The letter acknowledges the payment of $40,000 and demands the payment of $140,000 on the basis that $21,000 is owed pursuant to the “consultancy agreement” and $119,000 is owed as damages, because the appellant has lost the benefit of its contract.
The appellant’s evidence on the summary judgment application
[11] Mr Munro filed an affidavit for the purposes of the summary judgment application. He deposed that the appellant was incorporated to operate as a training organization, offering courses in financial planning. He disputed the conversation which Mr Murthy alleged had occurred between him and Mr Gupta. His account was that Mr Smith contacted him in about December 2009 about the possible sale of the appellant’s business. The proposal was discussed at a meeting of Mr Munro, Mr Smith and Mr Gupta.
[12] According to Mr Munro, Mr Gupta advised him that he was a director of the respondent, which was interested in starting a training organization in Australia. They discussed the price for “them” to purchase the appellant’s business. Mr Smith suggested a sale price of $40,000, together with a contract in which Mr Munro took on the position of chief executive officer for two years at the rate of $70,000 per annum. All three men concurred that the figures were fair.
[13] Mr Munro said he regarded the agreement as “substantially completed” at that meeting, although Mr Gupta said he would send a letter of intent. There was no mention that DATAM would be incorporated or involved in the transaction, or that it would employ him. It was now in liquidation and had no assets. Mr Munro agreed that he had received the emails annexed to Mr Murthy’s affidavit. He did not mention the Formal Agreements in his affidavit.
The submissions on the summary judgment application
[14] Counsel for the respondent on the summary judgment application referred to the three Formal Agreements, each signed by Mr Munro. In particular, Mr Munro had not disputed that he entered the CEO agreement. It was he who suffered the loss when payment was not made under that agreement, not the appellant. In the course of the application, counsel for the respondent submitted that DATAM’s bank statements showed that it had made payments to Mr Munro under the CEO agreement. He offered to take the primary judge to the relevant statements, but his Honour responded:
“I’m not interested in what can be said in defence of that.”
Subsequently, it was admitted that the submission was wrong, as was the pleading that DATAM had made payments to Mr Munro under the CEO agreement. There were payments made by DATAM to Mr Munro, but the respondent could not say that they were made under the CEO agreement.
[15] Mr Munro’s position at the summary judgment application seems to have been that he, on the appellant’s behalf, had made an oral agreement with Mr Gupta acting on the respondent’s behalf, and the Formal Agreements were of no real effect. In his written submissions he said that he had signed the letter of intent as the appellant’s director. It was unconnected with the contract between the appellant and the respondent. By the time it was signed, the appellant had already provided its intellectual property to the respondent. There had been other offers in letters of intent, copies of which he annexed to his submissions. He had completed a services agreement in January 2010. There would have been no prospect that DATAM could provide the services referred to in the agreement it relied on.
[16] Mr Munro acknowledged that the CEO agreement was between him and DATAM and not the appellant. He asserted, however, that it was made in the expectation that the respondent would pay all expenses. DATAM had no resources and never traded. He was never its chief executive officer because it did no business and it had no financial planning division. He had never been paid by it. In the course of Mr Munro’s oral submissions, the primary judge asked him to look at the CEO agreement which the respondent had put in evidence. Mr Munro agreed that he had signed it; he said that he had done so in the knowledge that he was contracted by the respondent to do the work. He signed because he “knew that it was a nonsensical arrangement”. He would have signed the agreement with anyone in order to perform the work.
[17] Mr Munro explained the sending of the letter of demand to DATAM on the basis that his barrister had suggested it. The company was not then in liquidation. The respondent’s lawyers had done the same thing; having made a claim on DATAM which went unpaid, they had referred it to the respondent and been paid. The implication was that he was entitled to expect the same.
[18] The primary judge explained that what was being put against Mr Munro was that he had sued the wrong defendant. Tellingly, he responded:
“That may well be, but I have got written references to DIPL [Dhanush Infotech Pty Ltd] paying all of the expenses: my expenses, anybody else’s expenses.”
He said he had wanted to put in a statutory declaration from someone who had served as an officer of both DATAM and the respondent to the effect that the latter would pay all the expenses, but he had not had time to get it signed. He went on to say that Mr Gupta and Mr Murthy and other company officers knew that payment was guaranteed by the respondent “for all the work done in respect of Dhanush Academy.” He would not have gone into an agreement without that guarantee. One could infer from that exchange that Mr Munro was content to sign agreements with DATAM so long as the respondent was meeting the costs.
[19] The primary judge gave summary judgment against the appellant. His reasons, it must be said, were not extensive, but they conveyed what was behind his decision:
“It seems to me that sympathetic as one might be to Mr [Munro] and the view that he’s formed about the way he was treated by those natural persons who represented a constellation of companies, the proceedings today appear to me to be proceedings in which the plaintiff has, by reference to the documents which are common ground, indicate that the wrong defendant has been brought to court in respect of these proceedings. In that regard, I propose to make an order that bring [sic] these proceedings to an end. Some [summary] judgment will be given for the defendant.”
The submissions on appeal
[20] The appeal ground contained in the appellant’s notice of appeal was as follows:
“Judge Griffin has erred in his decision to grant the application for “summary judgment” as, DSN Murthy, in his sworn affidavit, has falsely defined “a signed service agreement” when, in fact, it is an “outsource agreement” and Mr Kidston relentlessly pursued an extremely unsound argument based on this false definition and has seriously misled Judge Griffin into believing an “Outsource Agreement” was a service contract when it clearly is not. This outsource agreement has no consequence what so ever to the application “wrong plaintiff, wrong defendant”.