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ChongHerr Investments Ltd v Ardent Group Pty Ltd QCATA 41
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
ChongHerr Investments Ltd v Ardent Group Pty Ltd  QCATA 41
CHONGHERR INVESTMENTS LTD
ARDENT GROUP PTY LTD
ORIGINATING APPLICATION NO/S:
03 April 2019
On the papers
Application for leave to appeal refused.
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where parties agreed upon a costs of preparation of environmental reports – where invoices rendered – where the appellant refused payment on an invoice on the grounds the respondent had not completed the scope of work agreed – whether the respondent had performed all work able to be performed without additional information from the appellant – where part of scope of work performed by the respondent on a complimentary basis without charge
Pickering v McArthur  QCA 294
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld).
REASONS FOR DECISION
- The respondent (‘ChongHerr’) is the holder of a sandstone mining lease at Helidon. They engaged the applicant company (‘Ardent’) to prepare a stormwater management plan for both existing and future activities on the lease and to update a Plan of Operations due to expire.
- Ardent quoted $6,000 plus GST to prepare the stormwater management plan. The scope of work included a site visit. That quote was given on 14 October 2016.
- The Plan of Operations was a summary of planned disturbances and the rehabilitation techniques to be employed rehabilitating the disturbances. A ‘financial assurance’ covering the cost of rehabilitation was also required. There were two options for this. Either use the Department of Environment and Heritage Protection (‘DEHP’) standard contractor rates or source independent third-party contractor rates.
- On 2 December 2016 Ardent quoted $7,600 for the Plan of Operations and confirmed its quote of $6,000 for the stormwater management plan. Ardent noted ‘[w]e have assumed that ChongHerr will use this [DEHP rates] rather than individual contractor rates’ in quoting on the Plan of Operations.
- ChongHerr wanted to pay less. ChongHerr asked if Ardent would be prepared to map the stages of rehabilitation for the next 5 years and prepare a stormwater management plan for $10,000 all up.
- On 8 December 2016 Ardent prepared an updated proposal in which they said, assuming ChongHerr used the DEHP new financial calculator to determine rehabilitation liability, they would prepare rehabilitation costings based on the calculator and complete the financial assurance lodgement form, together with an ‘initial stormwater management plan’ for $10,000.
- ChongHerr queried what ‘initial stormwater management plan’ was and asked if it would satisfy DEHP requirements raised during an earlier compliance inspection and Ardent said it would and described it as ‘a stormwater plan for the current layout of the quarry, but not for future stages.’
- On 12 December 2016 ChongHerr asked Ardent to proceed with the Plan of Operations together with a stormwater management plan for $10,000. However, they asked Ardent to make the quote ‘reflect’ that the entire cost was for the scope of work of the stormwater management plan, and complimentary with respect to the Plan of Operations.
- Ardent sent through a new quotation on 12 December 2016, which described the charge was $10,000 to prepare ‘a stormwater management plan that meets the requirements of the Environmental Authority’ and now noting the update of the Plan of Operations would be complimentary at no cost.
- On 9 January 2017 Ardent wrote to ChongHerr and said work was being done on the stormwater plan and because now there was no site visit as part of that work it would be helpful to be provided with various documents which were then listed. No issue was taken by ChongHerr about there being no site visit associated with preparation of what had become described as an initial stormwater management plan.
- Ardent sent an invoice on 22 December 2016 for $3,300 charging for consulting from 16 December to 22 December 2016 ‘preparing Plan of Operations and stormwater plan’. That was paid by ChongHerr without demur on 7 March 2017.
- The Plan of Operations was finished and forwarded to ChongHerr on 11 January 2017. It was lodged with DEHP and accepted by the department but the department had questions about the financial assurance calculations. Ardent said they could assist with that but that was outside the agreed scope of work.
- Ardent then invoiced ChongHerr on 25 January 2017 the further amount of $6,325. The invoice said it was for consulting from 22 December 2016 to 11 January 2017 ‘preparing the Plan of Operations and stormwater plan’.
- ChongHerr ultimately refused to pay. Ardent commenced proceedings in the Tribunal to recover on the unpaid invoice and the matter was heard on 24 January 2018 and then on 29 May 2018. The learned Adjudicator who heard the matter ordered ChongHerr pay Ardent the sum of $6,437.50 representing its full claim plus filing fee.
- ChongHerr now 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. There may be other relevant considerations, but these are primary.
- ChongHerr raises a number of issues in its application for leave to appeal:
The Adjudicator was wrong allowing Ardent to recover for its work on the stormwater management plan because no plan was ever provided to ChongHerr.
DEHP required further information about rehabilitation cost and Ardent failed to supply it though that was within the scope of work of the Plan of Operations.
The sum of $3,300 paid Ardent was reasonable value for the work done by Ardent which was less than the agreed scope of work.
Stormwater management plan
- ChongHerr submits that the learned Adjudicator made a mistake when he found that Ardent had provided a stormwater management plan. No such stormwater management plan had ever been provided. Therefore Ardent was not entitled to be paid.
- The learned Adjudicator in fact found that a draft initial stormwater management plan had been prepared and that Ardent claimed a reduced amount reflecting that the claim was only for preparing a draft. The full amount owing was $11,000. $3,300 had been paid which left a balance of $7,700 due under the contract. The amount claimed for the draft initial stormwater management plan was $6,325. The full claim had therefore been reduced by $1,375.
- The learned Adjudicator said Ardent couldn’t complete the initial stormwater management plan because it needed information from ChongHerr and that information was not forthcoming.
- A perusal of the documents available at hearing shows the disputed invoice for $6,325 was sent undercover of an email dated 25 January 2017 and the email referred to it as a ‘progress invoice for the Plan of Operations/Stormwater Management Plan’.
- In the proposal of 12 December 2016 Ardent had said their estimate of fees assumed they would be provided with relevant site information regarding the existing layout of the site and existing stormwater infrastructure and management. They said they further assumed that ChongHerr would provide maps indicating the stages of mining over the next Plan of Operations area and the staged rehabilitation proposed. ChongHerr did not challenge that.
- On 9 January 2017 Ardent emailed ChongHerr to say Ardent was working on the stormwater plan and because there would be no site visit as part of the work it would be helpful if ChongHerr could provide additional information and then went on to detail various maps that were required and other information about the lowest point of each pit and where water typically pooled after rain.
- There was no response to that email and Ardent wrote again on 10 February 2017 asking for the same information. Significantly, in the email of 10 February 2017 Ardent said ‘if you can provide some of the information above, then I can complete this plan for you’.
- In a statement of evidence of William Haylock filed on behalf of Ardent Mr Haylock said Ardent was unable to complete the stormwater plan because, despite multiple requests, ChongHerr failed to provide the requested necessary information. According to Mr Haylock, if Ardent had received the information the initial stormwater management plan could have been completed.
- Ardent said it invoiced ChongHerr monthly, although there was apparently only the two invoices ever generated. Also according to Ardent, the disputed invoice sent on 25 January 2017 was never challenged until some 4 months after it was rendered.
- At the hearing of 29 May 2018 the learned Adjudicator invited the parties on two occasions to make submissions or to clarify any matters that they would care to highlight or to add to the written material submitted. The oral submissions made by Ms Ting for ChongHerr in response to that invitation were somewhat lacking in clarity or precision. This is well understandable because clearly English is not Ms Ting’s primary language. The transcript reveals however the following statement by her concerning Ardent’s failure to complete the work:
Ms TING: Yeah. I should think that we were still waiting for them to put the work to us for assessment and the work didn’t come through. And their building, actually, as I has touch on in the respond that they actually build earlier than the – you know, the work that had completed so I don’t buy that.
- I assume Ms Ting was saying ‘billing’ rather than ‘building’ as recorded in the transcript. Further that the reference to ‘the respond’ is a reference to the Response document filed by ChongHerr. At paragraph 7 of the Response the following statement is to be found:
7.In the proposal of the stormwater management plan, the scope proposed by Ardent includes site visit and prepare a storm management plan that meets the requirement of DEHP, as detailed as per paragraph 3 of quote dated on 14/10/2016 in appendix 1. Ardent had requested for some information for the plan from ChongHerr and Ardent was advised that the information that it holds does not reflect the current status and is of little value for the proposed plan and that Ardent needs to make site visit for the purpose. Ardent did not make any site visit and until today ChongHerr have not received the proposed stormwater management plan.
- ChongHerr’s position seems to have been that it considered the information requested by Ardent of little value and instead Ardent should have made a site visit.
- Ardent didn’t consider the information requested irrelevant. Whilst a site visit was included in the original quote of 14 October 2016, there is no reference to it in the subsequent cheaper proposals of 8 and 12 December 2016.
- The learned Adjudicator found that there was no evidence to support ChongHerr’s proposition that a site visit was within the final scope of work. He found it telling that the later proposals of 8 and 12 December 2016 were all reasonably detailed yet made no mention of a site visit.
- The learned Adjudicator found that a satisfactory Plan of Operations had been prepared, submitted and approved by DEHP and that a draft initial stormwater management plan had been prepared. The learned Adjudicator concluded the reduced claim representing the work done preparing a draft initial stormwater management plan on the information available at the time was appropriate in the circumstances.
- I conclude, given the material available to the learned Adjudicator at hearing, those findings were reasonably open to him on the evidence.
- The complaint by ChongHerr is that the learned Adjudicator mistakenly concluded that a stormwater management plan had been submitted to them by Ardent. The learned adjudicator did not assume that, but rather he accepted that the stormwater management plan could be done in-house, without a site visit being required, subject to the paperwork needed being supplied by ChongHerr. ChongHerr however failed to supply it.
- The learned Adjudicator said that the Plan of Operations could be prepared (and had been approved) using existing data only and that supported the view that a site visit was similarly unnecessary for the preparation of the initial stormwater management plan. There was no evidence led by ChongHerr to counter that proposition, simply an assertion that a site visit was necessary.
- The Adjudicator made clear distinction between the preparation and submission of a Plan of Operations and the preparation but no submission of a draft initial stormwater management plan. He said:
What is clear, in the event, then, is that a satisfactory Plan of Operations has been prepared, submitted and approved as envisaged, and that Ardent – sorry – and that a draft initial stormwater management plan has been prepared. Part payment in terms of the 8 December and 12 December quotes has been made. A reasonable reduced sum only has been claimed: $6,325, inclusive of GST, in lieu of what otherwise would have been contractually owing: $11,000 minus $3,300 equals $7,700. That was to take account of preparation of the draft plan. The reduction, GST inclusive, is $1375. The deduction is specific and calculable in term of the quotes. That being the case, there is no basis for not paying the invoice as claimed.
- The agreement between the parties was without any great detail to it. There was no mention of when accounts could be rendered. There was no prohibition on Ardent rendering progressive accounts as the work was done.
- There is no suggestion that the intention was that the contract be entire, that is, that all the work had to be completed before Ardent would be entitled to payment. But even if it was entire, given the reasonable conclusion is that the initial stormwater management plan could not be finalised because ChongHerr failed to provide the required information as contemplated under the proposal of 12 December 2016, ChongHerr is not entitled to benefit from its own wrong doing in making the contract fail.
- On the information available to him the learned Adjudicator was entitled to conclude the costs claimed by Ardent were reasonable for the work done, that no site visit was necessary for the preparation of the initial stormwater management plan, that the completion of the work required the provision of further information by ChongHerr but that was not forthcoming despite repeated requests for it made by Ardent, and that Ardent was entitled to recover its invoice amount from ChongHerr.
- There is no discernible error in the findings and reasoning of the learned Adjudicator. ChongHerr has limited prospects of succeeding on this ground of appeal.
Further information about rehabilitation cost
- ChongHerr says DEHP required further information about rehabilitation costs after the Plan of Operations was lodged, Ardent failed to supply it, and responding to that request was within the agreed scope of work of the Plan of Operations.
- ChongHerr says it had to spend ‘resources’ to rework the calculations and therefore Ardent shouldn’t be awarded the full costs claimed for this work.
- A major difficulty with this proposition is that Ardent didn’t claim any costs for this work. It was done on a complimentary basis. That was at the request of ChongHerr. The charges, agreed at $10,000, were only for preparation of the initial stormwater management plan.
- In an email of 12 December 2016 Ms Ting said:
On the other note, we are happy to get you to proceed with the plan of operation together with stormwater management plan at $10,000. However we would like you to represent the quote to reflect that the entire cost be the scope for stormwater management plan with complimentary updating of plan of operation for 2017 – 2022. Having doing so, the actual scope of works still remains the same as what it was quoted/proposed.
- But in any case, Ardent maintained that there was no time to do more than rely on general DEHP rates in calculating rehabilitation costs. ChongHerr left it very late to engage them. On 6 December 2016 Ms Ting sent an email to Ardent advising that DEHP required the revised Plan of Operations by 15 December 2016, that is, within 9 days. The Plan was lodged and accepted by DEHP. As stated in its proposal of 12 December 2016, the DEHP rates would be used. They were. Ardent completed the agreed work. The matters raised by DEHP after that fell outside the agreed scope of the contract.
- The learned Adjudicator concluded that Ardent had reasonably completed the agreed scope of work for the Plan of Operations. He was entitled to make that finding on the evidence before him.
- This ground of appeal also has limited prospects of success.
Reasonable value for work done
- The final ground of appeal relied on is that the monies paid, $3,300, represented reasonable value for the work done by Ardent which was less than the scope of work agreed. In light of the abovementioned findings on the previous grounds of appeal, this ground of appeal similarly lacks reasonable prospects of success.
- In all the circumstances, leave to appeal is refused.
- Published Case Name:
ChongHerr Investments Ltd v Ardent Group Pty Ltd
- Shortened Case Name:
ChongHerr Investments Ltd v Ardent Group Pty Ltd
 QCATA 41
03 Apr 2019