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- Unreported Judgment
Bliss Luxury Awnings Pty Ltd v Uzan QCATA 34
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Bliss Luxury Awnings Pty Ltd v Uzan  QCATA 34
BLISS LUXURY AWNINGS PTY LTD
CHERIE UZAN ATF THE BALBOA ITALIAN TRUST T/AS BALBOA ITALIAN RESTAURANT
ORIGINATING APPLICATION NO/S:
20 March 2019
13 March 2019
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where parties entered into a contract for supply and installation of a retractable roof – where time not of the essence – where delivery delayed – where the Tribunal found the contract was frustrated because of delay – where delay should have been reasonably within the consideration of the parties at time of contract – where there was no evidence of an intention of the supplier not to comply with the contract – where the customer’s refusal to pay the balance of the contract on tender of performance by the supplier a repudiation of the contract entitling the supplier to damages for breach of contract
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd  HCA 23
Pickering v McArthur  QCA 294
Sanctuary Cove Golf and Country Club Pty Ltd v Machon  QCATA 1
APPEARANCES & REPRESENTATION:
Grauf O'Brien Lawyers
REASONS FOR DECISION
- The respondent (‘Ms Uzan’) conducts a restaurant business at the Gold Coast. The appellant (‘Bliss’) is a company which specialises in awnings.
- In October 2017 Ms Uzan engaged Bliss to supply and install a retractable roof for the restaurant premises. The cost was $17,900 and the ‘lead time’ (approximate delivery time) agreed at 8 weeks. It had to be made to measure in Turkey and shipped from there to Australia.
- On 15 November 2017 Ms Uzan met with her engineer, her builder, and with a representative for Bliss (Mr Medrano) at the restaurant. Ms Uzan said she wanted a retractable roof supplied and installed at the restaurant in time for New Year’s Eve. She had also obtained a quotation from another company but they said they could not supply the retractable roof by New Year’s Eve. Hence she engaged Bliss who said they could.
- Bliss submitted an invoice on 20 November 2018 requiring a 70% deposit. She paid them 50% instead, $8,950. Bliss accepted that.
- The awning did not arrive before New Year’s Eve. On 12 and 17 January 2018 Mr Medrano asked her builder to confirm measurements. He did that on 18 January 2018. On 5 February 2018 Ms Uzan asked Bliss for a date of delivery and installation. The next day on 6 February 2018 Bliss told her the system would be in Australia on 9 March 2018 and Bliss was working ‘with freight to intercept it late next week from Singapore’ to see if it could be air-freighted to Australia and possibly install it by 20 February 2018.
- It did not arrive by 20 February 2018 and Ms Uzan attempted to contact Mr Medrano but without success. On 26 March 2018 she received an email from Mr Medrano giving shipping details and advising the pickup date (in Turkey) had been 16 March 2018, the estimated departure date 25 March 2018 and estimated arrival date 1 May 2018.
- Also on 26 March 2018 Ms Uzan arranged for a temporary roof to be erected at the restaurant. That was installed on 29 March 2018.
- Ms Uzan tried to contact Mr Medrano again. She wanted to get the vessel number of the ship transporting the goods. Again she could not contact him.
- On 24 April 2018, not having been able to contact Mr Medrano, she obtained a quote for side awnings to be added to the temporary roof.
- Because of the delays in having missed New Year’s Eve, Valentine’s Day and Easter and the Commonwealth Games held at the Gold Coast in early April 2018 she made a complaint to the Queensland Building and Construction Commission on 27 April 2018 and QBCC advised her to contact the Tribunal.
- On 15 May 2018, not having heard further from Bliss, she paid to install the side awnings and permanently fixed in place the temporary roof.
- Ms Uzan had not been able to contact Mr Medrano over the period 26 March 2018 to 28 May 2018. On 28 May 2018 Mr Medrano contacted her saying the roof had arrived from Turkey and he asked her to pay the balance 50% due on the invoice from November 2017.
- She did not do that. Rather she filed her application in the Tribunal seeking return of the monies already paid.
- Bliss filed a counter application seeking $7,960, the balance of the amount due under its invoice less installation costs.
- The matter came on for hearing on 7 November 2018 and the learned Adjudicator found the contract between the parties had been frustrated by delay and ordered Bliss to repay Ms Uzan’s deposit of $9,066.40 plus the filing fee for her application. The counter application was dismissed.
- Bliss seeks leave to appeal that decision.
- Given this is an appeal from a decision made in the Tribunal’s Minor Civil Dispute jurisdiction, leave to appeal must first be obtained before any appeal proceeds.
- Leave to appeal will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.
- Bliss raises two grounds of appeal. First that the learned Adjudicator fell into error in concluding that the contract had been frustrated, given Bliss was always ready and willing to carry it out with time not being of the essence of the contract.
- Second that the learned Adjudicator fell into error in determining that the terms of payment of the invoice by Bliss were unfair contract terms.
- The learned Adjudicator found the contract between the parties was partly oral and partly evidenced by writing. To the extent it was in writing it was the invoice of 20 November 2017 calling for payment of a large deposit. In so far as it was oral it was what was discussed between the parties on 5 October 2017.
- The date of the meeting between the parties is unclear. In her written statement of evidence Ms Uzan referred to a meeting on 15 November 2017 but in giving her evidence at the hearing she gave the date of the meeting as 5 October 2017.
- The learned Adjudicator said it was unfortunate that the invoice from Bliss did not make time of the essence of the contract. The learned Adjudicator also said however that the invoice should be read in context of the discussions of 5 October 2017.
- Then the learned Adjudicator stated:
Last, I would accept that time had ceased to be of the essence, in so far as New Year’s Eve, on the 31 December 2017, is concerned. Nevertheless, in all the circumstances, there was an implied term of the contract necessary to give commercial efficacy to her that the delivery would occur within a reasonable time after that.
- The learned Adjudicator then detailed the delay by Bliss and concluded:
And as a consequence, in late April and in the course of May, other arrangements were made by Ms Uzan for the installation of side blinds and a temporary roof, which ultimately became the permanent roof by reason of the non-delivery of the awning. Unfortunately, both parties appear to have disengaged after 28 May 2018, when, as appears in paragraph 59 of Ms Uzan statement, an email was received from Mr Medrano saying that the roof had arrived...
There was really no communication after 28 May 2018 between the parties. Ms Uzan didn’t communicate to say that the contract was rescinded. Mr Medrano didn’t communicate to say that he or his company Bliss was insisting on performance and that it was tendering delivery. Each party just sat on their hands and did nothing.
The consequence, though, of that is I find that the contract was frustrated. It could no longer be performed because, in the meantime, alternative arrangements had been made. That the delay, in Bliss being in a position to supply, was so extensive that the contract could no longer be performed, certainly by the 28th May or prior to 28 May 2018, but in May 2018, a reasonable period for performance of the contract by Bliss had more than expired.
- The doctrine of frustration applies only within very narrow bounds. A party relying on it must show that the parties never agreed to be bound where unexpected circumstances arise making performance of the contract as agreed impossible. Further, the unexpected circumstances must not be attributable to the fault of either party.
- The unforeseen event making performance impossible must be just that, unforeseen.
- Here the parties could have made time of delivery and installation of the retractable roof an essential term of the contract. They did not. Delay in shipping the roof from foreign shores was surely a real possibility. During the hearing the following exchange took place between the learned Adjudicator and Ms Uzan:
Ms Uzan: He had not given me an amount until that time. I actually had 2 people quote the awning, both of them quoting the exact same awning. One was a company that I’ve used to install my awnings throughout the whole venue, and he said to me that he couldn’t deliver it on time. It was absolutely impossible as his orders had been cut off for Christmas. I then went…
Adjudicator Walsh: When did he tell you that?
Ms Uzan: The alternate supplier that I had a quote with told me that on…
Adjudicator Walsh: No. When did…
Ms Uzan: Mario never said that he could never supply. The alternate supplier who had quoted me told me he could not supplier.
Adjudicator Walsh: Well, how would he know that?
Ms Uzan: Because he was informed by the manufacturer that the Christmas cut-off had been done.
- The delay which eventuated should reasonably have been within the contemplation of the parties when contracting and so when it did arise it cannot then be relied on to claim that the contract has been frustrated because of an unforeseen event.
- Certainly after the so called deadline of New Year’s Eve passed the contract was regarded by both parties as still on foot with no specific date set for delivery of the roof and installation. There was discussion about final measurements in January. In March Mr Medrano gave estimates of pick-up and delivery.
- The real issue for determination in these circumstances was therefore not frustration of contract but whether a party had repudiated their obligations under the contract. There may well have been an implied term of the agreement that delivery occur within a reasonable time. But the issue arising in that circumstance, namely one of the parties has failed to deliver within a reasonable time, is whether the other party is entitled to terminate the contract. That is the issue for determination.
- In concluding that the contract was frustrated by delay and thereby brought to an end the learned adjudicator fell into error. The doctrine of frustration of contract was not applicable in these circumstances.
Unfair contract terms
- The other ground of appeal is that the learned Adjudicator erred in concluding the terms of the Bliss invoice were unfair contract terms.
- The learned Adjudicator said this in giving his reasons for decision:
… An email was received from Mr Medrano saying that the roof had arrived. He also called for the remainder of the purchase price prior to the roof being installed. It seems to me that that request was a repudiation of the terms of the contract. The deposit was half of the invoiced amount. The invoice had actually asked for a 70% deposit to commence.
It is true, the invoice did say balance prior to installation, but I think that that was an unfair term of the contract, to the extent that it could be regarded as a term of a contract. Who could reasonably expect to have to pay for the supply and installation of an item such as this before it even arrived?
- It appears the learned Adjudicator was referring to the unfair contract terms provisions in the Australian Consumer Law (‘ACL’). Those provisions could have no relevance to the commercial contract in issue. By s 23 of the ACL a term of a consumer contract is void if the term is unfair and the contract is a standard form contract. The definition of consumer contract at s 23(3) is a contract for the supply of goods or services to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.
- These goods were for commercial use. The unfair contract term provisions of the ACL could have no application.
- Further, the Appeal Tribunal has determined that the Tribunal does not have jurisdiction to apply the unfair contract term provisions of the ACL.
- Accordingly the learned Adjudicator was in error insofar as his decision is to be understood as refusing Bliss its claim under its counter application on the basis of an unfair contract term.
- Given the errors in the Tribunal below leave to appeal is granted and must I proceed to determine the appeal.
- By s 147 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld), in deciding an appeal on questions of fact or mixed fact and law the appeal must be decided by way of rehearing. In deciding the appeal the Appeal Tribunal may confirm or amend the decision or set aside the decision and substitute its own decision.
- This matter involves questions of mixed fact and law.
- As explained in the High Court decision of Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd:
4.The difference between a contract which contains a stipulated day for performance of an essential term and a contract which, expressly or impliedly, requires performance within a reasonable time is important when the question is whether, on failure to perform within the time limited by the contract, the innocent party is entitled to rescind. In the former case, a right to rescind arises at law when the stipulated day passes; in the latter, that right does not necessarily arise when the reasonable time expires but only when repudiation is clearly to be inferred from the circumstances in which the delay occurs. Delay will amount to repudiation if the defaulting party "evinces an intention no longer to be bound by the contract ... or shows that he intends to fulfil the contract only in a manner substantially inconsistent with his obligations and not in any other way": Shevill v. Builders Licensing Board  HCA 47; (1982) 149 CLR 620, at pp 625-626; Progressive Mailing House Pty.Ltd. v. Tabali Pty.Ltd.  HCA 14; (1985) 157 CLR 17, at pp 33, 40. If the inference to be drawn from the circumstances is that the defaulting party intends to perform an essential promise after some minor delay, repudiation cannot be inferred; but if the inference is that the defaulting party intends so to delay performance that the promisee will be substantially deprived of the benefit of the promise, repudiation can be inferred. The inference is not lightly drawn: Progressive Mailing House Pty.Ltd. v. Tabali Pty.Ltd., at p 32.
- The time of completion of the contract was never of the essence of the contract from outset nor made such during its currency. The retractable roof was supposed to be ready for New Year’s Eve. It was not. Then Valentine’s Day came and went. Then Ms Uzan missed the Easter holiday trade and the Commonwealth Games. But rather than set a date by which Bliss had to deliver the product or the contract would be at an end, both parties let the matter go on without time ever being made of the essence. As the learned Adjudicator said below, both parties simply sat on their hands.
- In her statement of evidence dated 22 October 2018 Ms Uzan referred to New Year’s Eve and the other events as deadlines but there was no evidence that she told Bliss that any of those dates were deadlines that had to be met or the contract would be at an end.
- From Bliss’ perspective, there was no definite end date for supply ever set save that the parties agreed, initially, that delivery would be before New Year’s Eve. But that came and went and Ms Uzan did not dispute that the contract remained on foot. There was never anything in writing from Bliss to suggest that they did not intend to eventually fulfil the contract, although Mr Medrano’s failure to respond to telephone calls must have been very annoying and even troubling to Ms Uzan.
- With the troubling delay, what Ms Uzan had to do to end the contract was clearly establish that Bliss did not intend to abide by the terms of the contract. To make delay by Bliss a repudiation of that company’s obligations under the contract Bliss had to be put on notice to deliver by a certain date or the contract would be at an end and Ms Uzan would be entitled to terminate it; but she never did that.
- Bliss eventually advised that the roof had arrived and they were ready to install. They therefore complied with the terms of the contract as agreed between the parties – to deliver and install the retractable roof with no fixed date set for that, at least after New Year’s Eve 2017, and time never being of the essence. Ms Uzan was then obliged to allow them to install the roof and pay the balance money. Her failure to do that meant she was in breach under the contract, not Bliss.
- Bliss advised Ms Uzan by email that they were ready to complete the contract on 28 May 2018. The roof had arrived. Ms Uzan did not respond to that but she made it clear that she would not complete the contract by instituting the proceedings in the Tribunal. Her refusal to complete the contract was a repudiation of her obligations under the contract and entitled Bliss to damages for breach of contract.
- Bliss is entitled to the balance monies owing under the contract. It is entitled to be put in the position it would have been in had the contract been performed to agreed conclusion. It does not claim cost of installation which it estimates at $990. It has already received the deposit of $8,950. The balance due under the contract was $8,950. Less the cost of installation makes the amount due and owing to Bliss $7,960. Bliss is also entitled to its filing fee on the counter application in the amount of $116.40.
- Ms Uzan is entitled to the retractable roof which, according to Bliss, is currently held by them. There has been no issue taken by Ms Uzan about that. Bliss must make it available to her.
- The appropriate order is that the appeal is allowed and the order made in the Tribunal below on 7 November 2018 is set aside. The respondent pay the appellant the sum of $7,960.00 plus filing fee of $116.40 within 14 days.
QCAT Act, s 142(3)(a)(i).
Pickering v McArthur  QCA 294, .
T1-20, L 28.
T1-21, L 4-9.
T1-21, L 19-30.
T 1-5, L 38-x; T 1-6, L9.
Sanctuary Cove Golf and Country Club Pty Ltd v Machon  QCATA 1.
 HCA 23.
Ibid  (Brennan J).
- Published Case Name:
Bliss Luxury Awnings Pty Ltd v Cherie Uzan atf The Balboa Italian Trust t/as Balboa Italian Restaurant
- Shortened Case Name:
Bliss Luxury Awnings Pty Ltd v Uzan
 QCATA 34
20 Mar 2019