Griffith v Seuren[2019] QCATA 181

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   This case calls up the ghost of Salomon v A Salomon & Co Ltd ^[1] in which England’s highest court defined the distinct legal status of limited liability companies. Salomon is affirmed in section 1.5.1 of the modern Corporations Act 2001 (Cth):

As far as the law is concerned, a company has a separate legal existence that is distinct from that of its owners, managers, operators, employees and agents. A company has its own property, its own rights and obligations. A company’s money and other assets belong to the company and must be used for the company’s purposes.

In January 2018 the respondent Bronwyn Seuren (`Seuren’) purchased items of furniture stocked by a firm known as European Design Pty Ltd (`European’). At all material times European was a company duly incorporated according to law. ^[2] The present question is whether the Seuren’s vendor was the legal entity European or a natural person, namely the Appellant John Griffith, or both. 

2. [2]
   Seuren’s case is that her contract is with Griffith personally. Griffith denies that allegation, and asserts that her rights, such as they are, are against European only.
3. [3]
   On 30 January 2019 the Tribunal ordered:

   1. (a)
      The Respondents [European and Griffith] jointly and severally will pay to [Seuren] the sum of $3,330.50 within 7 days.
   2. (b)
      Upon receipt of clear funds [Seuren] will release the [subject goods] to the respondents at the respondents’ cost.
4. [4]
   Griffith now seeks leave ^[3] to appeal, and an order that that he be removed as a party to these proceedings. The defective condition of the subject goods is not seriously contested.
5. [5]
   The distinct legal personality of a body corporate is trite law. Of course it does not necessarily follow that a contract between Seuren and Griffith personally cannot be established. That is a separate issue of mixed fact and law which must now be examined.
6. [6]
   On or about 20 January 2018 Seuren contacted the Logan branch of European, which is presumably the one nearest to her Hope Island residence. At or about the same time she received a tax invoice, also dated 20 January, addressed to her and headed ‘European Design ... European Design Pty Ltd’. The description ‘European Design Pty Ltd’ is repeated at the foot of the document. There is no signature of any natural person, and no personalised message.
7. [7]
   The said invoice lists these goods and charges: (i) French pedestal dining table $2,331.82; (ii) writing desk $640.91; (iii) 2 French provincial dining chairs $736.36; and (iv) delivery $122.73 – Total $4,215.00.
8. [8]
   The next document also is dated 20 January 2018. Addressed to Bronwyn Seuren It is headed ‘European Design Order update’. It lists the same goods as the Tax Invoice, but now adds GST to the prices. For example, the dining table originally valued at $2,331.82 is now listed as $2,565, and the ‘Grand Totals’ are $3,831.82 (excluding GST) and $4,215.00. The delivery charge, previously noted as $122.73, is now omitted.
9. [9]
   This ‘Order update’ of 20 January 2018 ends with a cheery greeting, in the now fashionable style in which surnames, let alone honorifics, are seldom recognised: ‘Hello Bronwyn, so lovely to see you guys again .... Have a lovely weekend!  Kindest regards, Whitney.’
10. [10]
    Seuren does not suggest that she has a contract with Whitney. There is no mention here of Griffith.
11. [11]
    On 10 April 2018 European sent Seuren another ‘update’ signed ‘Warm regards, Whitney’. Whitney’s salutation is now supported by ‘Kylie’. There is still no appearance by Griffith.
12. [12]
    Seuren does not suggest that she has a contract with Whitney or Kylie.
13. [13]
    On 14 April 2018 European sent Seuren an invoice for an item not previously mentioned. This time the warm regards are Whitney’s alone: ‘Hello Bronwyn, lovely see you guys as always ... Warm regards, Whitney. Griffith is not mentioned, and as already noted, Seuren does not suggest that she has a contract with the attentive Whitney.
14. [14]
    On 16 May 2018, in an email addressed to European Seuren complained that the dining table was seriously defective. This missive simply begins: ‘Hello’, and no name of a European representative appears.
15. [15]
    On 24 May 2018 a ‘follow up’ note to European from Seuren is addressed ‘Hi Ellen’.
16. [16]
    Seuren does not allege that she has a contract with Ellen.
17. [17]
    By 29 May 2018 it appears that Seuren was seen as a ‘difficult’ customer, to be assuaged by someone more senior. On that date European promises to send a ‘repairman’ to her home at ‘a convenient time’. The email is signed ‘John Griffin, Owner.’
18. [18]
    In fact, as Griffith asserts, he was not at any material time a director of, or shareholder in European: ^[4]

During March of 2018 [I] had identified [myself] as the owner and shareholder of European Design Pty Ltd as there was an impending purchase from [my] wife whom [sic] is the current director and shareholder. This transfer/sale did not eventuate. ^[5]

19. [19]
    More to the point is this: no matter who, in a practical sense, was the ‘owner’ of European at material times, European had its own legal personality, and its own legal entitlements and obligations. ^[6]
20. [20]
    It is not entirely clear why Seuren fixed upon Griffith as the person with whom she contracted. It may be that she saw him as a more senior representative of the company than his precursors in correspondence, namely Whitney, Kylie or Ellen. In the documentation Griffith first appears some five months after the purchases were made, and five months after Whitney came into the picture.
21. [21]
    On 2 June 2018 Seuren informed European that she was taking the dispute to the Office of Fair Trading. That email was addressed impersonally to ‘Dear Sir/Madam’ and not to Griffith. Griffith’s reply ^[7] no longer describes him as ‘owner’.
22. [22]
    In Seuren’s application to the Office of Fair Trading ‘European Design’ is named, and in the section ‘Details of your complaint’ this appears: ‘On 20/1/2018 I purchased a French pedestal base dining table in rustic parquetry from European Design at Logan Super Centre’. ^[8]
23. [23]
    The sole issue is whether Seuren made her purchase from European, or Griffith, or both. That is a question to be resolved on the balance of probabilities. ^[9] The overwhelming probability is that she intended to contract, and did contract with European Design Pty Ltd alone. Accordingly Griffith was and is not a proper party to these proceedings. There is no evidence to suggest that this is one of those relatively rare cases in which the corporate veil may be lifted because of an abuse of corporate legal personality. ^[10]
24. [24]
    Griffith suggests that the quantum awarded to Seuren against European is excessive. That is a matter between European and Seuren, and European has not appealed. There is ample evidence to support the Adjudicator’s finding of liability against the company, and it unnecessary to canvass a quantum issue that the company has not seen fit to raise.
25. [25]
    Griffith’s application for leave will be granted, and the appeal allowed, but only to extent of removing Griffith as a party to these proceedings and a person jointly and severally liable to Seuren. Seuren’s judgment against European will stand.

ORDERS

1. Griffith’s application for leave to appeal is granted.
2. Griffith’s appeal against the judgment and orders against him is allowed, and to that extent only the orders of the primary tribunal are set aside.
3. Griffith is removed as a party to these proceedings.
4. The orders of the primary tribunal in favour of Seuren and against European Design Pty Ltd are confirmed.
5. No order as to costs of this appeal.