Vyncan Pty Ltd v Vannella Dairy Distribution Pty Ltd
[2009] QDC 179
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- Unreported Judgment
- Vyncan Pty Ltd v Vannella Dairy Distribution Pty Ltd[2009] QDC 179
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Vyncan Pty Ltd v Vannella Dairy Distribution Pty Ltd[2009] QDC 179
Vyncan Pty Ltd v Vannella Dairy Distribution Pty Ltd[2009] QDC 179
DISTRICT COURT OF QUEENSLAND
CITATION: | Vyncan Pty Ltd v Vannella Dairy Distribution Pty Ltd [2009] QDC 179 |
PARTIES: | VYNCAN PTY LTD Applicant/appellant V VANNELLA DAIRY DISTRIBUTION PTY LTD Respondent |
FILE NO/S: | Cairns 19 of 2009 |
DIVISION: | Appellate |
PROCEEDING: | Application to extend time to lodge appeal; and, appeal under s 222 Justices Act 1886 |
ORIGINATING COURT: | Magistrates court of Queensland, Cairns |
DELIVERED ON: | 24 June 2009 |
DELIVERED AT: | Cairns |
HEARING DATE: | 15 June 2009 |
JUDGE: | Alan Wilson SC, DCJ |
ORDER: | 1 that the applicant have leave to appeal, limited to the ground set out in paragraph 3(a)(i)(2) of the Notice of Appeal appended to the Application filed 23 April 2009 2 that, subject to further order, the appeal be allowed in respect of the ground set out in paragraph 1 above 3 that the application for leave to appeal is otherwise refused 4 that within 14 days the parties exchange and deliver written submissions: (a) as to the form of order upon the application for leave to appeal, and the appeal (b) costs here, and below |
CATCHWORDS: | APPEAL – PRACTICE AND PROCEDURE – TIME FOR APPEAL – EXTENSION OF TIME – where notice of appeal served out of time – where extension of time application heard in conjunction with appeal proper CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – where additional work to a commercially leased premises was undertaken outside the lease contract – where the lessor received and paid invoices for the additional work – whether the additional work is to be paid for by the lessee or lessor – whether the conduct of the parties subsequent to the execution of the contract may be considered in its interpretation – whether the contract required the lessor to pay half of the outgoings of the entire premises or only the leased portion of the premises Uniform Civil Procedure Rules r 748 Cases considered: Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 251 ALR 322 Beil v Mansell [2006] 2 Qd R 199 Chapman v State of Queensland [2003] QCA 172 Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 Queensland Trustees Ltd v Fawckner [1964] Qd R 153 Ramana Hotels Pty Ltd v Luxon [2005] QSC 104 |
COUNSEL: | M Jonsson for applicant J Trevino for respondent |
SOLICITORS: | Daniel Towne and Associates for applicant Williams Graham Carman for respondent |
- [1]In 2005 Vyncan Pty Ltd was building some commercial premises at Cairns and offering units within them for lease. Vannella Dairy Distribution Pty Ltd became interested in one of the units, then under construction, and in April 2005 the parties entered into a lease for the unit now known as 2/18 Hollingworth Street, Portsmith, Cairns.
- [2]The parties agree the lease documents are a ‘Commercial Tenancy Agreement’ and dated 5 April 2005 and, also, a letter of Vyncan’s director Mr Hartley of 21 January 2005. Their disputes concern who should pay for certain additional work on the leased premises, and in what proportion they should share outgoings. These questions were decided in Vannella Dairy’s favour in the Magistrates Court under a judgment delivered on 19 December 2008. The appeal period expired on 16 January 2009. On 23 January Vyncan lodged an Originating Application seeking leave to file and serve a Notice of Appeal, out of time. By direction[1] that application, and the appeal proper, were argued together.
Extension of time
- [3]The failure to file a timely appeal occurred by reason of a mistake by Vyncan’s solicitor to note the relevant date correctly, and the absence of a transcript of either the hearing itself or the Magistrate’s Reasons – although neither transcript was actually ordered until 13 January; and, Counsel for Vyncan drew the Notice of Appeal without the benefit of either.
- [4]The discretion to extend time (which arises under r 748 of the Uniform Civil Procedure Rules) is unfettered. Mere lapse of time is not usually an insuperable obstacle[2]; nor is the lack of a satisfactory explanation[3]; and, the merits of the appeal itself are a relevant consideration[4]. Prejudice can also be relevant[5] but there was no evidence from the respondent about that question. It can be said, then, that none of these factors have particular force here save the merits, which were fully argued.
The issues in the appeal
- [5]The issues are conveniently separated into the ‘works’ issue – ie, who should pay for the additional work on the premises; and the ‘outgoings’ issue – ie, the proportion in which the parties are to pay these. That is the way the learned Magistrate addressed them, and the parties followed the same course here.
The ‘works’ issue
- [6]The extra work paid for by the plaintiff but which, it said, was the defendant’s responsibility involved construction of a gas bottle room; modification of another room; preparation of plans; electrical works; and painting, at a total cost of $23,535.60. Vyncan’s case was that Vannella Dairy was obliged to pay for these things either because the contract provided to that effect, or by way of “…restitution to prevent unjust enrichment”[6].
- [7]The defendant admitted the work had been done at its request and was “…necessary to meet the requirements to operate a cheese factory”[7] but denies that it was an express or implied term of the contract that it would pay for the works; and says that, under the contract, the plaintiff agreed to build a “…purpose built premises which could be modified and designed to suit the defendant’s requirements, namely a cheese factory” and the work was undertaken to that end.
- [8]The learned Magistrate found that the works did fall within the scope of the contract between the parties but in doing so also held that it was appropriate to consider not only the documentary evidence but, also, the conduct of the parties including “…their conduct subsequent to the execution of it”[8].
- [9]During the course of the trial his Honour heard evidence from one of Vyncan’s directors Mr Hartley, two of the defendant’s directors Messrs Vito and Guiseppi Minoia, and various contractors associated with the performance of the work mentioned earlier. In summary, Vyncan’s witnesses said the defendant agreed to pay for the additional work, but the evidence for the defendant was to the contrary.
- [10]The Reasons make plain findings preferring the defendant’s evidence, and contain persuasive grounds for those findings: in particular, that no quotes or estimates for the additional work were ever delivered to the defendant; rather, the invoices for the work were sent to the plaintiff; and, it paid them. In some instances quotations for the additional work were raised up but, again, sent to the plaintiff which apparently accepted them. The learned Magistrate’s conclusions about these matters are, with respect, persuasive. In its appeal Vyncan recognized that and, through its counsel, acknowledged that any alternative claim of the nature, eg, of a quantum meruit, was extinguished by those findings.
- [11]The learned Magistrate held that the resolution of the “credit issues” raised up in the evidence was “…fundamental to a determination of the threshold issue of the scope of the works agreed to be provided by the plaintiff”. It was agreed, however, that all of the discussions to which the evidence of the parties and the various witnesses related occurred after the contract came into being. They could not, then, be relevant to the construction questions. As the High Court reiterated very recently in Agricultural and Rural Finance Pty Ltd v Gardiner (2008) 251 ALR 322[9] it is not legitimate to use, as an aid in the construction of a contract, anything which the parties said or did after it was made.
- [12]That said, the difficulty is that the contract is not helpful about the answer to question here. It was comprised of the commercial tenancy agreement, and the letter mentioned earlier. One of the conditions of the contract referred to the letter and said it was the “…accepted details of this building and lease arrangements”. The letter itself lists “building construction details” including some painting on the inside and outside but excluding signwriting, a security system, data and telephone, and internal fitout. Otherwise, the letter says:
The building layout configuration can be modified to suit Vannella Cheese requirement. The benefit of working with The Hartley Group is we are our own Architects, Builder and Property Developer. We are more than happy to meet with your client and modify this proposal and work together to develop the design to satisfy their requirements. (emphasis added)
- [13]This is the only part of the contract that might have been intended to have some direct application to the issue which arises here but neither it (nor any other part of the contract documents) cogently addresses the question of responsibility for the additional works. The passage leaves open the possibility of additional changes, but says nothing about who will pay for them.
- [14]Vyncan contends that the primary conclusion below improperly strains the wording of the contract, and also flies in the face of commercial common sense in that it was the respondent which possessed specialized knowledge about what was required to set up a working cheese factory. The submission is not without merit but, ultimately, Vyncan’s principal difficulty is that the contract simply fails to address this additional work; and, the passage set out earlier carries the ordinary meaning that there will be further discussions and negotiations about additional works.
- [15]As remarked, the learned Magistrate was persuaded that conjoint consideration of both the documents and the evidence he had heard pointed to the conclusion that the plaintiff had contracted to construct a building to the defendant’s requirements and specifications and they were “…in part ascertained as the construction progressed”[10]. As also observed, that process of construction wrongly imports irrelevant material; but, for reasons which follow, the phrase used by the learned Magistrate seems to me, with respect, to comprise a correct summary of what the parties did, in fact, agree.
- [16]The phrase reflects, in truth, just what happened. There were various meetings as a result of which additional works were authorized, and approved – and paid for by Vyncan.
- [17]Although the learned Magistrate did not precisely express his conclusions in that way, and his conclusion that the evidence of the various witnesses about oral negotiations could be used to construe the written documents was mistaken, his ultimate finding does, it seems to me, reflect the true position; he said[11]:
The plaintiff, in my view, agreed to construct the building to the defendant’s requirements and specifications and those were in part ascertained as the construction progressed.
- [18]In other words, the contract between the parties deliberately left open both the possibility of additional works, and final agreement about their nature, the associated works and, of most relevance here, who would pay for them. Those matters were resolved by additional ad hoc negotiations and, in each respect, the learned Magistrate made specific findings that each lead to an agreement which required Vyncan, not Vannella Dairy, to pay for them.
- [19]The findings about credit were, then, necessary and relevant to the proper determination of questions about which party agreed to pay for the ‘additional’ works. Further, in light of them, no other remedy was open to the appellant. It is not uncommon in cases where things have happened adjunctive, but not subject to, contractual relationships to find a claim for restitution for expense associated with additional works, but a claim of that kind must rest upon a proven basis for a finding of – as Vyncan claimed here – unjust enrichment[12].
- [20]The Magistrate made specific findings, consistent with evidence for the defendant, that “…whatever work needed to be undertaken, to enable the building to be used for the agreed purpose, was to be at Hartley’s cost”[13]. That finding extinguishes the prospect of a successful claim based upon unjust enrichment. Vyncan expressly agreed to pay for the extra works. No obvious injustice arises from its voluntary acceptance of the obligation. For these reasons, the first ground of appeal must fail and a grant of leave to bring an appeal would be futile.
The outgoings issue
- [21]The second limb of the action concerned the extent of outgoings payable by Vannella Dairy to Vyncan under the terms of the commercial tenancy agreement.
- [22]The agreement provided, in clause 4.1, that Vannella Dairy would pay 50 per cent of the outgoings “…for the Premises, or the property of which the Premises is part as applicable”. The agreed outgoings included rates, insurance premiums, the cost of cleaning the areas adjacent to the premises used by the tenant, and the cost of maintaining gardens on the land on which the premises were situated.
- [23]Vyncan argued that this meant Vannella Dairy had agreed to pay 50 per cent of these charges in respect of the whole of the property of which the leased premises formed part. Vannella Cheese contended, however, that the obligation only extended to those premises leased by Vyncan to it. The learned Magistrate held that, in the face of evidence that Vyncan always intended “strata titling” the larger parcel of which the leased premises formed part and, in fact, did so before Vannella Cheese took up occupancy, its analysis was the correct one.
- [24]The question turns upon the proper meaning of the word “premises” as it is used in the agreement between the parties. The letter of 21 January 2005 clearly refers to an existing allotment upon which it is proposed to construct a building containing two distinct spaces, or units. It is plain that, irrespective of the ultimate state of title for any parts of the existing allotment there would eventually be two occupiers of the site. In that context the application of the 50 per cent multiplier to the expenses attributable to the whole of the then undeveloped site produces a result which is both objectively logical, commercially sensible, and accords with the language of the agreement, and the letter. That construction is consistent with the principle that the construction of commercial contracts should be undertaken in a manner that applies sensible commercial operation[14].
- [25]I am persuaded, then, that the learned Magistrate fell into error by, here, giving too much weight to the proposed issue of two separate strata titles for the two units and in doing so overlooked the fact that the figure of 50 per cent did, in truth, sit comfortably and “commercially” with that intention.
- [26]There is a complication with this aspect of the appeal in that the quantum of this claim was neither agreed nor proven before his Honour and the parties signified, when he handed down his Reasons, that that would occur “subsequently”. As I understand the position, that has never occurred. Nor, it seems, has any order ever been made about the costs of the proceedings below.
- [27]The appeal on this second limb succeeds. That finding justifies the conclusion that Vyncan should have leave to appeal, but only in respect of that limb.
- [28]I will hear the parties about the appropriate form of order, and costs, both here and below.
Footnotes
[1]Order Everson DCJ, 13 February 2009.
[2]See Queensland Trustees Ltd v Fawckner [1964] Qd R 153.
[3]Ibid.
[4]Ibid; and, see Chapman v State of Queensland [2003] QCA 172 at [3]; and, Beil v Mansell [2006] 2 Qd R 199, page 207 at [40].
[5]Beil v Mansell (supra) page 208 at [43].
[6]Plaintiff’s Amended Statement of Claim, para 4.
[7]Amended Defence, para 6(b).
[8]Reasons for Judgment 19 December 2008, page 6.
[9]Gummow, Hayne and Kiefel JJ, page 330 at para [35].
[10]Reasons for Judgment, page 25.
[11]Reasons for Judgment, page 25.
[12]Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221.
[13]Reasons for Judgment, page 24.
[14]Ramana Hotels Pty Ltd v Luxon [2005] QSC 104.