Foyle Enterprises Pty Ltd v Steve Parcell Building Services Pty Ltd
[2015] QDC 225
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- Unreported Judgment
- Foyle Enterprises Pty Ltd v Steve Parcell Building Services Pty Ltd[2015] QDC 225
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Foyle Enterprises Pty Ltd v Steve Parcell Building Services Pty Ltd[2015] QDC 225
Foyle Enterprises Pty Ltd v Steve Parcell Building Services Pty Ltd[2015] QDC 225
DISTRICT COURT OF QUEENSLAND
CITATION: | Foyle Enterprises Pty Ltd v Steve Parcell Building Services Pty Ltd [2015] QDC 225 |
PARTIES: | FOYLE ENTERPRISES PTY LTD (plaintiff) v STEVE PARCELL BUILDING SERVICES PTY LTD (defendant) |
FILE NO/S: | Ipswich D79/2013 |
DIVISION: | Civil |
PROCEEDING: | Trial |
ORIGINATING COURT: | District Court at Ipswich |
DELIVERED ON: | 18 September 2015 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 27, 28, 29 April 2015 |
JUDGE: | Sheridan DCJ |
ORDER: |
|
CATCHWORDS: | CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - FORMATION OF CONTRACTUAL RELATIONS - CONTRACT IMPLIED FROM CONDUCT OF PARTIES - where no written record of initial conversation - where terms of agreement not put in writing – whether post contractual conduct admissible as to what agreement was CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – VARIATION BY CONDUCT – where absence of complaint – whether agreement varied by conduct – whether variation agreement supported by consideration ESTOPPEL – ESTOPPEL BY CONDUCT – GENERAL PRINCIPLES – where no complaint raised by plaintiff – where issuing of invoices by plaintiff was a representation that amount being offered was accepted CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – THE CONTRACT – LEGALITY – s 42 Queensland Building Services Authority Act 1991 – where he defendant says the work performed by the plaintiff was building work for which it was unlicensed under s 42 of the Act – where sketch plans and checklists were prepared and used in the preparation of working drawings - whether those sketch plans and checklists were used in the performance of building work LIMITATION OF ACTIONS – LIMITATION OF PARTICULAR ACTIONS – ACCRUAL OF CAUSE OF ACTION AND WHEN TIME BEGINS TO RUN – whether the work could be said to be done on the signing of the building contract or at some later time Limitations of Actions Act 1974 (Qld), s 10 Queensland Building Services Authority Act 1991 (Qld), s 42, Schedule 2 Ace Property Holdings Pty Ltd v Australian Postal Corporation [2011] 1 Qd R 504, cited Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 251 ALR 322, cited Australian Timber & Trusses Pty Ltd v T & M Buckley Pty Ltd & Anor [2012] QSC 110, considered Brambles Holdings Limited v Bathurst City Council [2001] 53 NSWLR 153, cited Coburn v Colledge [1897] 1 QB 702, followed D & C Buildings v Rees[1965] 3 All ER 837, considered Edwards v Bray [2012] 2 QdR 310, followed Fox v Percy (2003) 214 CLR 118, cited Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186, cited Mitchell v Pacific Dawn Pty Ltd [2010] QSC 243, considered Musumeci & Anor v Winadell Pty Ltd (1994) 34 NSWLR 723, followed SAS Realty Developments Pty Ltd v Kerr [2013] NSWCA 56, cited Schwartz v Hadid [2013] NSWCA 89, considered Swansea City Council v Glass (1992) QB 844, followed Update Constructions Pty Ltd v Rozelle Childcare Centre Limited (1990) 20 NSWLR 251, followed Williams v Roffey Bros & Nicholls (Contractors) Ltd (1991) 1 QB 1, cited |
COUNSEL: | S Malcomson for the plaintiff JSD Payne for the defendant |
SOLICITORS: | Eaton Lawyers for the plaintiff Archibald & Brown Lawyers for the defendant |
- [1]The claim by the plaintiff is for short-paid commissions in respect of 65 individual building contracts. In respect of each of those contracts, the plaintiff claims the difference between the amount paid to the plaintiff by the defendant and 5% of the contract price.
- [2]The defendant was the builder of residential homes in the greater Brisbane area. In association with that business, the defendant had a number of display homes, one of which was located in the suburb of Calamvale, Queensland. During the period that the plaintiff was working for the defendant, the display home shifted from Calamvale to Daisy Hill, Queensland.[1]
- [3]It is agreed between the plaintiff and the defendant that there was a meeting between MrDaniel Neil Friel, as the sole director of the plaintiff, and Mr Steven Parcell, as the sole director of the defendant, at the Calamvale display home. Mr Friel gave evidence that he could recall the date of the meeting as being 20 February 2006 because it was on his wedding anniversary.[2]Mr Parcell could not recall the date of the meeting[3], though it would not appear anything turns on that.
- [4]It is not disputed that Mr Friel of the plaintiff commenced working for the defendant following that meeting. The plaintiff was engaged by the defendant as an independent contractor.[4]The plaintiff worked for the defendant from approximately February 2006 to September 2011.
- [5]There does not appear to be a dispute as to the work which was to be performed by the plaintiff, except in relation to whether the work actually performed by MrFriel, as the plaintiff’s representative, could be described as ‘design work’.
Pleadings
- [6]The primary dispute between the plaintiff and the defendant is what was the rate of commission to be paid by the defendant to the plaintiff for the work performed. The plaintiff says the verbal agreement entered between the plaintiff and the defendant at the initial meeting required Mr Friel, as the representative of the plaintiff, to provide services to the defendant and, in consideration of performing the services, the defendant would pay the plaintiff 5% of the contract price of each of the homes designed by Mr Friel.
- [7]The plaintiff says that the plaintiff’s representative fully performed the services according to the verbal agreement from approximately February 2006 to September 2011. In that period, the plaintiff says it performed the services for approximately 74 houses.
- [8]The plaintiff says that from February 2006 to approximately November 2006 the defendant paid the full amount pursuant to the agreement for nine houses and, in breach of the agreement, from approximately November 2006 to September 2011, the defendant made only partial payment for approximately 65 houses and failed or refused to pay the remainder.
- [9]The plaintiff sues the defendant for those unpaid amounts in respect of each of those houses which it says total an amount of approximately $481,402.41; that amount being calculated in accordance with Annexure A to its further amended statement of claim (“statement of claim”).
- [10]The defendant denies that it is liable to the plaintiff upon several grounds. It denies that the defendant agreed to pay the plaintiff 5% of the contract price and says that the commission payable was to be calculated on a case by case basis and that for each building project the sum of $10,000 (exclusive of GST) was used as a rough starting point but ‘give or take’. The full terms of the commission structure, as alleged by the defendant, is detailed in paragraph 5 of its defence to the amended statement of claim (“defence”).
- [11]The defendant says the plaintiff issued invoices which reflected the varying quantum of commission in respect of each building project and accepted payment of those amounts.[5]
- [12]In the alternative, the defendant says that if there was ever an agreement to pay 5% of the contract price, that agreement was varied by conduct when the plaintiff began issuing invoices for the lesser amount and accepted payment of those amounts. The defendant says the plaintiff is estopped and precluded from now insisting on a payment of 5% of the contract price.[6]Further, or alternatively, the defendant by issuing invoices for the lesser amounts to the plaintiff has waived any obligation from the defendant to pay the plaintiff 5% of the contract price.[7]
- [13]By way of reply, the plaintiff says it would be unconscionable for the defendant to assert the agreement was varied or that the plaintiff is estopped from insisting upon its full remuneration and denies that it has waived any entitlement.[8]
- [14]Finally, the defendant says that the plaintiff’s claim is precluded entirely by s 42 of the Queensland Building Services Authority Act 1991 (Qld) (the QBSAA). It is argued that the provision by the plaintiff of professional design work required Mr Friel or the plaintiff to be licensed under the QBSAA and neither Mr Friel nor the plaintiff was so licensed.[9]
Evidence as to the Agreement
- [15]Mr Friel said in evidence that at the meeting on 20 February 2006 he requested to be paid 5% commission per building contract and Mr Parcell agreed. Mr Friel said MrParcell said he “was happy with 5% except for little slabbies… up to maybe 180,000”.[10]For those contracts, Mr Friel says it was agreed that they would have to discuss maybe a lesser amount.[11]
- [16]Mr Friel said the figure of 5% was 5% of the building contract price; though that seems to have been what Mr Friel understood rather than something which Mr Friel says was said at the meeting. Mr Friel said it was 5% of the final figure. The figure to be used for calculating any percentage payment does not seem to be in dispute.
- [17]Under cross-examination, Mr Friel gave conflicting evidence as to the conversation with Mr Parcell regarding the rate of 5%. The effect of an answer initially given to a question in cross-examination regarding the request made by Mr Friel to Mr Parcell for 5% commission was that he had not mentioned it directly to Mr Parcell because he had already told Laury (meaning MrLaury Gills, an independent contractor working for the defendant as an estimator at the time) he wanted 5%.[12]However, as the cross-examination of MrFriel continued, Mr Friel repeated the evidence he had given earlier during his examination in chief. When he was then asked in cross examination, “So you didn’t say it to him. You just told Laury?”, Mr Friel said, “…it was mentioned and he said I’ve got no problem with 5%, except little slabbies, he called them, which were up to 180,000, maybe out at Ipswich or whatever. Those were his words”.[13]
- [18]Mr Friel denied that Mr Parcell had said he could give him $10,000 per job, give or take and that the commission would depend on the package Mr Friel sent.[14]
- [19]Mr Friel said that, prior to the meeting on 20 February 2006, he had already commenced doing some work for the defendant following an earlier discussion with Mr Gills. Mr Friel says that he had agreed with Mr Gills on an amount of 5%.[15]MrFriel said that, “in reaching the agreement of 5% with Laury, there were no big negotiations”[16]. In fact, he said Laury had said, “…we don’t care if you – if you want to stick 10% on as long as we keep our margins. I said no, I’m happy with five. That’s it.”[17]
- [20]The conversation between Mr Gills and Mr Friel is not pleaded, and it is not pleaded by the plaintiff that any agreement reached with Mr Gills bound the defendant. It does not appear to be disputed between the parties that, at all times, Mr Gills was working as an independent contractor for the defendant through his company, Donic Homes, and in his role with the defendant Mr Gills was responsible for doing take-off sheets and was paid a fee per house.[18]
- [21]Mr Parcell said that Mr Gills continued doing the take-offs until he finished with the company due to ill health in late-2007.[19]Mr Gills could not be called to give evidence as he had passed away on 5 November 2007.
- [22]In giving his evidence of the conversation at the display home on or about 20 February 2006, Mr Parcell recalled meeting Mr Friel at the display home. Mr Parcell said that he was in the market for a salesman. He said that just prior to Christmas he had split with IDH, a sales company with whom he had had a relationship for some four years.[20]MrParcell said he had been paying IDH a commission of 3%.[21]
- [23]Mr Parcell admitted that in the conversation at the display home Mr Friel had said to him “he was looking for a 5% commission”.[22]Mr Parcell said that 5% was a “very large commission”.[23]MrParcell said, when asked what his response to the suggestion of 5% commission was, “Humorous or shock, I guess.”[24]Mr Parcell said, “I’d never been involved with any salesperson that asked for that type of commission before”.[25]When asked again how he reacted, Mr Parcell said, “Surprised, I guess.”[26]In giving particulars of the commission structure in its defence, it was pleaded, “Mr Parcell laughed at that suggestion.”[27]
- [24]The use of the expression ‘laughable’ seems an exaggeration, particularly as there were occasions when the plaintiff received 5% or even slightly more. There was, however, no evidence that Mr Parcell had previously entered an arrangement where he committed to paying a commission of 5%. There was evidence of the amounts of commission in the vicinity of 10% paid by the defendant to Mr Shields but the fee paid to Mr Shields was a referral fee for foreign buyers and was quite different in character.
- [25]Mr Parcell said that what he said to Mr Friel was, “…we’ll be working on a base rate of about $10,000 plus GST.”[28]Mr Parcell said to Mr Friel, “…if you can bring the customers through the door and the money’s in the job, then obviously we’re all going to get more money out of it”.[29]Mr Parcell also said, “If there’s not a lot of money in the job or we can’t win the job, then everyone misses out”.[30]
- [26]Under cross-examination, he said, “what I told Danny was – exactly – is we’re going to go a job-by-job basis, and if he can bring me the deals in with the extra money he’ll get some extra money. And if he doesn’t bring the deals in with the extra money, then they will be adjusted to suit.”[31]He then repeated what he said in examination in chief, “we were going to work on a $10,000 base rate plus GST.”
- [27]Later, whilst still under cross-examination, he agreed that the evidence he had given was that the agreement between him and Mr Friel was for $10,000 give or take depending on the profitability of the job.
- [28]The agreement had no fixed term, a matter accepted by both Mr Friel and Mr Parcell.[32]In fact, Mr Parcell gave evidence that that was the nature of the sales industry. He referred to the fact that salesmen come and go. He said “... they’ll come and work for you for a little while, and if they don’t like it they’ll leave, and …same thing, if we’re not happy with them we’ll ask them to leave.”[33]
- [29]The agreement was also not intended to be an exclusive agreement. The plaintiff was free to work with others and did in fact continue to work for others, as appears from various invoices issued and tendered as part of Exhibit 9.[34]Mr Friel was also free to work on other projects. Whilst working for the defendant, Mr Friel gave evidence of having developed a product, namely “solar powered house numbers”.[35]
- [30]Unfortunately, no written record was ever made of the initial conversation, nor were the terms of the agreement ever put in writing.
- [31]Reference was made by defence counsel to the decision in Brambles Holdings Limited v Bathurst City Council[2001] 53 NSWLR 153 at [26]. It was submitted that post-contractual conduct was not admissible on the question of what a contract means. In this case, the ambiguity is not in any written terms of the agreement but rather as to what the agreement was as a result of the oral discussion between the parties.
- [32]In resolving that issue, I am aware of the need for caution to be exercised in assessing a witness by their appearance and demeanour.[36]Unfortunately, there was little in the way of contemporary materials or objectively established facts in this case. The majority of the evidence consisted of the oral evidence of witnesses.
- [33]I was not impressed by Mr Friel as a witness, but leaving aside his appearance as a witness, and having regard to his own evidence in relation to certain other events, it is clear that Mr Friel’s evidence as to the terms of the oral agreement cannot be relied upon.
- [34]MrFriel gave evidence in chief that he had always been paid 5% commission. In cross examination it became clear that that evidence was not true. In examination in chief, Mr Friel said that he had worked for Inka Homes (who also had an association with Nevins Homes) for a period of seven years[37]and had been paid 5% commission.[38]During cross-examination, Mr Friel was referred to invoices he had issued to Inka Homes and Nevins Homes for amounts of $10,000 plus GST.[39]Mr Friel’s answers to the questions raised in cross examination in relation to those invoices was less than frank. When asked whether all the homes to which the invoices related were co-incidentally priced at $220,000 exactly, Mr Friel initially said that he knew one of them for Nevins was and, then a few questions later, he said it was definitely a small house “around $220,000”.[40]If charging a commission of 5%, the invoice even for that home would not necessarily have been for $10,000 precisely. No documents evidencing the agreement with Inka Homes were produced. Further, at the time the plaintiff entered the agreement with the defendant, Mr Friel had been working with GarthChapman. No evidence was led as to the rate of commission he was due to be paid in that role. Mr Friel was only in that role for a short time and did not sell any homes.
- [35]In support of the 5% commission, Mr Friel gave very strident evidence that the defendant had previously been paying 5% commission to IDH Pty Ltd. He said he had been told that by Mr Gills.[41]When it was put to him in cross examination that IDH was paid 3%, he responded, “I believe that to be a lie.”[42]Despite the service of a Notice to Admit about what IDH was paid, he still maintained 5%. When asked further, he responded, “I don’t know, but I’m pretty sure it was five.”[43]Mr McMillan, a director of IDH Pty Ltd, was called by the defendant and confirmed that his company was paid a commission of 3%.[44]
- [36]In cross-examination, Mr Friel was asked whether, while selling homes for MrParcell, he had sold a ‘slabby at Ipswich’, and Mr Friel said, “Not at the value of 180,000.” Mr Friel subsequently admitted that he knew he would not be doing any ‘slabbies’ and “so it was okay”.[45]MrParcell denied having made any reference to ‘slabbies’ at Ipswich.[46]A reference to Annexure A to the Statement of Claim is clear evidence that there were no contracts for an amount of $180,000; the cheapest home in that schedule being an amount of around $217,000. If Mr Parcell’s business was not directed to ‘slabbies at Ipswich’, then in his discussions as to the rate of commission with Mr Friel, it is improbable that Mr Parcell would have used that expression with Mr Friel.
- [37]The evidence of Mr Friel was that he raised an objection to issuing his invoices for an amount less than 5% “all the time”.[47]Whilst he said he objected all the time, in answering further questions in examination in chief, he conceded, “Maybe not every time but a lot of the time.”[48]Interestingly, he then continued, “I think I was sort of trained that this was what I had to accept.”[49]Despite that concession, when then taken by his counsel to each of the individual contracts, he continued to repeat his evidence of having objected to the lesser amount which he was being told to invoice; and only on one or two occasions hesitated to suggest that maybe he did not object on that occasion. The fact of any objection having been raised is denied by both Mr Parcell and, the defendant’s accounts’ person, Ms Darlene Keats. Whilst his evidence was that he raised complaints all the time, he accepted that he never had a more general discussion with Mr Parcell, or any other representative of the defendant, as to the amount he was going be paid on future jobs. He never raised his grievance in writing. Taking all these matters into consideration, I do not accept MrFriel’s evidence on this point.
- [38]Mr Friel’s evidence as to his discussions with Mr Parcell regarding his solar house number concept also seems implausible. He said he had shown the product to Mr Parcell but that Mr Parcell had not shown a lot of interest.[50]Despite that statement, Mr Friel said that Mr Parcell did ask questions like, “What did it cost you, was it hurting?”.[51]MrFriel says, in response to the questions asked by Mr Parcell, he told Mr Parcell, “I put my life savings into it, and it was hurting.”[52]Mr Parcell denied that Mr Friel had ever made any such statements to him.[53]Likewise, Ms Keats said that no such statement was made to her.[54]
- [39]In support of the plaintiff’s case, counsel in his submissions referred to the fact that the first four invoices issued by the plaintiff claimed commission at the rate of 5% and those invoices were all paid. Counsel stated that the plaintiff was invoiced for and paid at the rate of 5% for seven of the first nine building contracts and for two further contracts in early 2007.[55]
- [40]In relation to these initial contracts, Mr Parcell gave evidence that Mr Gills was the person responsible for looking after the estimations for these particular contracts. MrParcell gave evidence that whilst he and Mr Gills had not spoken about the rate of commission to be paid, Mr Gills had been looking after his estimations for some period and was “in total control of the costings”.[56]Mr Parcell said that Mr Gills was in charge of the take-offs and “made his own mind up what he was doing”.[57]MrParcell said that he “never instructed Mr Gills to do a percentage.”[58]
- [41]On this point, I accept as submitted by defence counsel that the fact of the first few invoices being issued and paid at 5% does not help resolve the issue; particularly when it is not disputed that the amount being invoiced was the amount which the plaintiff was being told to invoice albeit after some discussion. Similarly, whilst it was also suggested by counsel that the performance of an analysis of the 74 invoices actually issued would lend support to the evidence of Mr Parcell that it was a ‘give or take’ figure, I do not accept it is appropriate to give any weight to that exercise in resolving the discrepancy in the evidence as to what was said in the conversation where the agreement occurred.
- [42]The plaintiff’s counsel submits that Mr Parcell’s evidence as to the agreement should not be accepted as his evidence of the conversation means that there should be a correlation between the actual commission paid to the plaintiff and the profit made by the defendant on any particular job. The particular evidence of Mr Parcell being relied upon by counsel was the evidence given by Mr Parcell of having said to Danny, “…we’ll be working on a base rate of about $10,000 plus GST, but I did say to him, if you can bring the customers through the door and the money’s in the job, then obviously we’re all going to get more money out of it. But if you bring the customers through the door where there’s no money in it, then obviously that will change.”[59]In considering the truthfulness of that evidence, the further following exchange between Mr Parcell and his counsel in examination in chief appears pertinent:
“Would it go up or down if it was the second scenario?‑‑‑Well, if there’s no money in the job, obviously everyone’s pay’s got to go down. That’s if you’re trying to win it. It might be too far away to win. But that’s part of the sales system.
And what did you say to Mr Friel about that?‑‑‑Exactly that. If you bring the customers in with a big budget and it’s all going to work, then obviously everyone can earn more money. But vice versa. If there’s not a lot of money in the job or we can’t win the job, then everyone misses out.”[60]
- [43]In cross-examination, Mr Parcell was taken to some of the individual take-offs, forming part of the agreed bundle of documents.[61]Based on that review, and the further analysis performed by counsel for the plaintiff,[62]there certainly does not appear to be any precise formula for determining commission and profit and the actual commission and profit allowed on any particular job seems to be amounts which the person performing the estimation task believed could be charged in relation to a particular contract. I accept, as stated by Mr Parcell in cross examination, that each job is assessed individually on how difficult it is to build and on the problems that may occur in each individual particular job.[63]I also accept, as submitted by the plaintiff’s counsel, that there appears to be no correlation between commissions paid and the initial profit allowance on any particular job.
- [44]I do not accept that the absence of a correlation means that the evidence of Mr Parcell should not be accepted. It would seem there are a number of potential factors. Certainly, it is true that the more money the client has to spend the greater the likelihood of there being more money to distribute between profit and commission.
- [45]Having regard to the unsatisfactory evidence of Mr Friel and the evidence of Mr Parcell which I accept, I am unable to find that it was more probable than not that the agreement reached at the meeting on 20 February 2006 was that the plaintiff would be paid the rate of commission of 5%. I find that it is more likely than not that the plaintiff would be paid on a case by case basis around $10,000 plus GST give or take.
Was the contract varied?
- [46]Given the issues raised on the pleadings, it is appropriate to also consider, if I had determined otherwise that the agreement initially reached between the parties was for the plaintiff to be paid commission at the rate of 5%, whether on the evidence it could be said that agreement was varied by conduct. In the defence, it is pleaded that the agreement was varied “on or from August or November 2006 when the plaintiff began to issue invoices and accept payment for a lesser amount than 5%”.[64]In response, the plaintiff says “that it would be unconscionable for the defendant to assert that the agreement was varied … as the defendant, being in a position of power vis-à-vis the plaintiff and knowing the position of the plaintiff, took advantage of its superior position in refusing to pay the plaintiff’s full remuneration and insisting that the plaintiff issue invoices for less than the full amount”.[65]
- [47]Counsel for the plaintiff has raised the issue of consideration in his submissions and no objection has been taken to that point being argued. However, the plaintiff has not pleaded in its reply that the variation, if one were made, is unenforceable as there was no consideration. There is no suggestion that additional evidence would have been led on that issue and it is therefore appropriate to consider it.
- [48]The evidence before the Court which is said to support the variation is the uncontested evidence that for contracts 7 onwards, with one or two possible exceptions, Mr Friel was told the amount to be inserted on the invoice, payment was then made in accordance with the amount on the invoice, and that payment was accepted by the plaintiff. What is contested is whether Mr Friel raised any objection to issuing the invoices for the lesser amount with a representative of the defendant.
- [49]The first contract in which an invoice for a lesser amount was issued was contract 7. The evidence given by Mr Friel in relation to contract 7 is largely set out in the plaintiff’s submissions.[66]The evidence was that in the course of discussions arising in relation to that contract:
“And what did you invoice for?--I was told that I am to just invoice 10,000 plus GST.
What invoice is that?-- Number 89.
Okay. So this is the - how did it come to be invoiced at this amount?‑‑Because they weren’t giving me my five per cent anymore.
And how did that occur?--Well, there was a few invoices that we’re coming to … this particular one I was advised that was all I was getting.
So why was that? Why did that take place?-- That - the - that would have taken place at the estimation stage. This is all we’re giving you.
And what did you say?--I said no, we had an agreement for five per cent.
Who was the conversation with?--With Laurie Gills.
The conversation was with Laurie Gills?-- Yeah. He was - he told me he was advised that this was all we were getting on this job.
Okay, and what did you say to that?-- I said I’m not happy, but at that stage I was starting to pay out big money to the - get my product made and I didn’t - I was over a barrel.”[67]
- [50]The invoice for contract 8 was issued for 5% and was paid as issued, and so whilst that invoice was issued on the same date as invoice 7, it is not the subject of any claim by the plaintiff.
- [51]In relation to the next contract, being contract 9, Mr Friel gave essentially the same evidence as he gave for contract 7. He said contract 9 was issued for a different amount because he was told to by Mr Gills. In fact, on each occasion, while Mr Gills was responsible for the take-offs, Mr Friel says he was told by Laurie the amount to invoice. He says he said to Laurie on each occasion, “That’s not our agreement.”[68]and on each occasion, Mr Gills replied, “It’s all you’re getting.”[69]
- [52]When asked whether he had any conversation with Mr Gills or MrParcell at or about this time as to how the future jobs were going to be priced, Mr Friel said, “No.”[70]As referred to above, the evidence of Mr Friel was that he raised an objection every time when he was told the amount to invoice but never had a more general discussion as to the amount he would be paid on future jobs.
- [53]In relation to the remainder of the invoices the subject of the dispute, Mr Friel’s evidence was that he continued to issue the invoices for the amounts he was told and that he continued to object, he was then paid in accordance with those invoices and accepted the payment.
- [54]Mr Parcell’s evidence was that at no time did Mr Friel raise any complaint with him in relation to the amount of commission being paid nor the amount he was being asked to invoice and/or was being paid.[71]MrParcell’s evidence was that while he was responsible for the take-offs, Mr Friel and he liaised over commissions on every job. He accepted that through negotiations with MrFriel and the builder, the contract price may be increased and the commission to be paid to the plaintiff may be increased.[72]Mr Friel accepted that on occasions the amount of the commission to be paid was increased but said that such increases occurred because he was objecting all the time.[73]
- [55]Mr Friel said he issued the invoices for the amounts he was told, “because I had invested a lot of money in solar powered house numbers”.[74]Mr Friel said, “I had no choice; I was over a barrel.”[75]He continued, “And I had bills coming in all the time.”[76]Further into his evidence, he often used phrases, such as “I had to accept it.” and “I needed the money.”[77]When Mr Friel was asked in cross-examination why he did not send a letter of demand to Mr Parcell, Mr Friel replied, “It was the only source of income I had at the time, so I was over a barrel. I had to put up with it.”[78]
- [56]Both Mr Parcell and Ms Keats denied that any objection was ever raised by Mr Friel with them.[79]Despite the evidence given by Mr Friel, Ms Keats said that she had never heard the phrase ‘over a bar’. She said that she was aware of a phrase ‘over a barrel’ but she had never heard that phrase from Mr Friel.[80]
- [57]When counsel suggested he could have gone elsewhere, Mr Friel agreed.[81]When counsel suggested, “That’s far from being over a barrel, don’t you think, if you could go somewhere else quite easily?”[82]Mr Friel replied, “There’s not many builders in Brisbane that actually do individual stuff. So, I mean, I nearly lost my house in the process of – from leaving Parcell to finding where I am now.”[83]The exchange continued:
“But that’s not Mr Parcell’s obligation, to keep you in a house, is it?‑‑No, it is Mr Parcell’s obligation to pay me the five per cent which was agreed, which he didn’t.
And any time he didn’t pay you that five per cent that you were agreed, you were perfectly entitled to leave?‑‑That is true.”[84]
- [58]It was certainly the evidence of the parties that the agreement was for no fixed term. Mr Parcell gave evidence, which I accept, that if Mr Friel had insisted on 5% commission, the defendant would have found other avenues;[85]that is, in effect ceased using the services of the plaintiff.
- [59]I have not been provided with any documents as to the financial position of MrFriel. Mr Friel accepted he had not been issued with a notice of foreclosure.[86]I am prepared to accept that Mr Friel had invested large sums of money in establishing his solar powered house number product.
- [60]However, I do not accept that Mr Friel made his financial position known to MrParcell or any other representative of the defendant. Mr Parcell denied any conversation with Mr Friel in relation to any of the financial circumstances or viability of the solar house numbers business.[87]
- [61]Further, the assertions made by Mr Friel as to the statements made to Mr Parcell, and other representatives of the defendant, are not supported by any documents. The invoices as issued by the plaintiff, whilst working with the defendant, did not indicate on the face of the invoice that the amount being invoiced was disputed or that any balance was owing or that the amount claimed was a part payment. There is one exception being an invoice issued by the plaintiff to the defendant after the plaintiff had ceased working with the defendant.[88]
- [62]The approach taken by the Mr Friel when issuing invoices to the defendant is to be contrasted to the approach taken by Mr Friel when issuing invoices for work performed for others. In issuing those invoices, it was clearly stated on the face of the invoice that the amount being claimed was in respect of ‘part commission’ or there was a ‘balance owing’.[89]Whilst it is acknowledged that the terms of payment in relation to the invoices to which reference was made were different, it did show, as counsel for the defendant submitted[90], that Mr Friel was proactive to ensure on those occasions that he was protecting his rights.
- [63]It is certainly telling that in this case no document was put before the Court which recorded Mr Friel’s grievance. The absence of any written complaint from Mr Friel to Mr Parcell makes it difficult to accept the evidence of Mr Friel that he was raising complaint on each occasion or at all.
- [64]This is particularly so in circumstances where it does not appear that Mr Friel was adverse to raising matters of complaint in writing. Under cross-examination, it became apparent that Mr Friel had a standard letter of demand and that he had used that letter of demand on past occasions to recover amounts for claimed infringement of copyright.[91]
- [65]Based on the foregoing, I confirm that I am unable to accept the evidence of Mr Friel that he objected every time that he issued an invoice for less than 5%, or nearly every time, and further that he had made his financial position known to the defendant, or the defendant’s representatives.
- [66]Instead I find that a position grew where the defendant would nominate an amount and this would result in the issue by the plaintiff of invoices for that amount. If the contract was initially as alleged by the plaintiff, then it was subsequently varied by that conduct.
- [67]The plaintiff’s counsel, relying on the decision in Musumeci & Anor v Winadell Pty Ltd[92], said that a contractual variation necessarily involved the same elements that give rise to a new contract. He said consideration flowing from the promisor is one of such elements. He submitted that there was no evidence of any change in circumstances that could give rise to a suggestion that any consideration flowed from the defendant to the plaintiff as a result of the decrease to its commission.
- [68]If the relevant act was consideration flowing from the defendant, clearly the defendant obtained a benefit from the change in the terms of the contract and therefore there was good consideration. The issue is more likely to be, however, whether the plaintiff obtained a benefit from the changed terms. The varied agreement is said by the defendant to be one where the plaintiff in effect promised to accept a lesser sum than the original agreement.
- [69]There is no doubt that fresh consideration is required to make valid an agreement varying another contractual agreement.[93]In Musumeci’s case, the case relied on by counsel, a question arose which required the Court to consider the application of the doctrine of consideration to a lease variation. In that case, the Court determined that when a lessee of premises in a shopping centre claimed to be unable to remain viable and to continue paying rent because of the introduction of a larger, competing tenant, the practical benefit to the lessor of retaining the lessee as a viable tenant and keeping the space occupied could serve as consideration. In so doing, the Court allowed a practical benefit to suffice as consideration. The Court approved the approach of the English Court of Appeal in Williams v Roffey Bros & Nicholls (Contractors) Ltd[94] where it was held that the general rule is avoided where the promisor in fact obtains a benefit or obviates a disbenefit.
- [70]In Schwartz v Hadid [95] the Court had to consider whether there was consideration for the alleged variation to a loan agreement which it was said allowed the loan of $260, 000 owed to Dr Schwartz not to be repaid by Mr Hadid until one or other of various business transactions matured into profit. In submissions, on behalf of Mr Hadid the practical benefit obtained by Dr Schwartz was described as:
“[T]he fact that Mr Schwartz would continue to have Mr Hadid working for him almost full-time as a result of agreeing that Vicbuy Pty Ltd could pay the $260, 000 to Mr Hadid and Mr Hadid could retain those funds in order to defray his own expenses (incurred as a result of working for Mr Schwartz) until the occurrence of certain defined events.”[96]
- [71]The court rejected the argument on the basis that the evidence did not actually identify any benefit that the parties contemplated Dr Schwartz would obtain as a result of the alleged loan variation beyond that to which he was entitled under the original loan agreement. Macfarlan JA said:
“There was, for example, no promise by Mr Hadid to continue working for Dr Schwartz ‘almost full time’ (or at all), nor was there any indication in the evidence that if Dr Schwartz extended the time for repayment that that work would be likely to occur (even if not promised by Mr Hadid).”[97]
- [72]In referring to Williams v Roffey Bros & Nicholls (Contractors) Ltd and Musumeci & Anor v Winadell Pty Ltd, Macfarlan JA commented:
“These authorities provide no support for a proposition that there was consideration for the present alleged oral variation agreement in a circumstance where there was not even any evidence that Dr Schwartz contemplated, or a reasonable person in his position would have contemplated, deriving a benefit from the extension of the time for repayment.”[98]
- [73]Adopting the approach in Musumeci, the issue of the invoices for the lesser amount meant that the plaintiff retained its position with the defendant and continued to be paid. That fact is consistent with the evidence given by Mr Friel; in particular statements like, “I had to put up with it”[99]and “… I said I’m going to bite my tongue and see how much longer this goes.”[100]Mr Parcell had given evidence, which evidence I accept, that had the plaintiff insisted on a 5% commission, the defendant would have found other avenues; in effect would have ceased using the resources of Mr Friel and the plaintiff. The practical benefit to Mr Friel of keeping his job clearly amounts to consideration.
- [74]The issue raised by paragraph 4A of the reply as to whether it would be unconscionable for the defendant to rely on the variation is dealt with in paragraphs 87 - 104 below.
Estoppel
- [75]By paragraph 9 of its defence, the defendant pleads the basis on which it is alleged the plaintiff is estopped and precluded from insisting on a payment of 5% of the Contract Price.
- [76]In paragraph 4 of its reply, the plaintiff denies it is estopped and precluded as the defendant did not rely upon the invoices issued by the plaintiff and has suffered no detriment. In its written submissions, counsel for the plaintiff submits that the issuing of the invoices by the plaintiff cannot amount to representations or conduct that could give rise to an estoppel.
- [77]Further, the plaintiff says, as it does in relation to the alternative pleading by the defendant that the contract was varied, it would be unconscionable for the defendant to be entitled to make such an assertion. The issue of unconscionability is dealt with in paragraphs 87 – 104 below.
- [78]Based on the evidence in relation to the issue of the invoices, I have accepted that at no time did the plaintiff raise any complaint, either verbally or in writing, nor indicate on the face of the invoice (with the one exception after the plaintiff had ceased working for the defendant) that the amount stated on the invoice was part-payment or that there was a balance owing.
- [79]The issue of the invoices by Mr Friel was clearly a representation by him that the amount being offered was acceptable to him and that, if there had been an agreement for 5% commission, he was not insisting on payment of that amount.
- [80]The defendant gave evidence, which evidence I accept, that various steps were taken by him in reliance on the representations made. In terms of that evidence, the defendant continued for the next six years to use the services of the plaintiff in circumstances where it was agreed by both parties that the agreement was for no fixed term. Mr Parcell gave evidence as to options he could have pursued if Mr Friel had insisted on a 5% commission.[101]Mr Parcell gave evidence that he would have engaged the services of others within his organisation or extraneous to his organisation, including MrPaul Wilson who was a design contractor who had worked for the defendant in the relevant years between 2006 and 2011 and was currently still working for the defendant.[102]Mr Parcell also gave evidence that another alternative open to him was to do the sales work himself, which work he had done in the past.[103]
- [81]The defendant cannot now seek to engage the services of others because the work has already been done, the contracts entered into and the homes built. Through the evidence of both Mr Parcell and Mr Friel, once the contracts are signed by the customers, the value of the contracts cannot be changed[104]: “it’s a fixed contract.”[105]The payment of any further commission to the plaintiff could not be an amount included in the contract price and recovered from the customer. Rather, it would be an amount which would decrease the profit of the defendant on each contract. In Update Constructions Pty Ltd v Rozelle Childcare Centre Limited,[106]Priestly JA in summing up the estoppel case before him concluded:
“… an estoppel arose in the present case when the conduct of Rozelle’s agent lead Update (i) to suppose that the requirement of writing under cl 6(b) would not be enforced, and (ii) to act to its detriment by both not giving the written notice when it could still have done so, and doing the work; the estoppel being that Rozelle could not after those events rely on the writing requirement in cl 6(b).”[107]
The representation by Rozelle’s agent and subsequent action by Update would have made it inequitable for Rozelle to have gone back on his promise.
- [82]Likewise, in this case, the acceptance of the payment by the plaintiff without any complaint or reservation of right, lead to the continued engagement of the plaintiff by the defendant for a six year period and some 64 further contracts making it inequitable for the plaintiff to now complain.
Waiver
- [83]By paragraph 11 of its defence, the defendant pleaded that by issuing the invoices for the lesser amounts and accepting payment, the plaintiff has waived, and is not entitled to rely upon, any obligation upon the defendant to pay the plaintiff 5% of the contract price. In its reply, the plaintiff denies it has waived any entitlement.[108]
- [84]Defence counsel in her submissions refers to the decision of the Court of Appeal in Ace Property Holdings Pty Ltd v Australian Postal Corporation[109]and says that, on the facts here, the waiver forms part of the same estoppel (being the estoppel as pleaded and earlier discussed in counsel’s submissions). Based on the submissions made by counsel for the plaintiff, counsel does not appear to cavil with that submission and simply relies on his submissions made in relation to estoppel.
- [85]Defence counsel then appears to make a submission consistent with a reliance, in the alternative, on waiver by election. However, if such a submission were intended, that is not consistent with the pleading. The necessary elements of waiver by election have not been pleaded in the defence. I do not propose to separately consider waiver by election as distinct from estoppel.
- [86]The findings made in relation to estoppel are determinative of the defence of waiver.
Unconscionability
- [87]In the discussion on variation and estoppel, reference was made to the pleading of the plaintiff that it would be unconscionable for the defendant to assert a variation or that the plaintiff was estopped from insisting on its full remuneration.
- [88]Counsel for the plaintiff in his submissions relied primarily on the decision of D & C Buildings v Rees[110]and Mr Friel’s evidence that he had invested heavily in a project to produce solar house numbers and that he had informed Mr Parcell about the scheme. Any acceptance by Mr Friel of the lower amount was because he was “over a barrel”[111]or “over a bar”.[112]
- [89]The preliminary question before the Court in D & C Builders v Reeswas whether the plaintiff company was barred from recovering the balance of the debt on the grounds that there was no true accord. In his submissions, counsel for the plaintiff says the two cases are analogous. In part, perhaps reliance is being placed on certain comments made in Anson’s Law of Contract.[113]The plaintiff’s case here, however, is not pleaded as one of there being no accord and satisfaction.
- [90]In D & C Buildings v Rees, the plaintiff was a small building company. The company had sued Mr and Mrs Rees for the balance of a debt owing for work done for them. On the hearing of the appeal on the preliminary point whether the action was barred by accord and satisfaction, Lord Denning said:
“The creditor is barred from his legal rights only when it would be inequitable for him to insist on them. Where there has been a true accord, under which the creditor voluntarily agrees to accept a lesser sum in satisfaction, and the debtor acts on that accord by paying the lesser sum and the creditor accepts it, then it is inequitable for the creditor afterwards to insist on the balance. But he is not bound unless there has been truly an accord between them.”[114]
- [91]Based on the facts as found by the trial judge, Lord Denning concluded that it seemed there was no true accord. In summarising the facts, he said:
“The debtor’s wife held the creditor to ransom. The creditor was in need of money to meet his own commitments, and she knew it. When the creditor asked for payment of the £480 due to him, she said to him in effect: ‘We cannot pay you the £480. But we will pay you £300 if you will accept it in settlement. If you do not accept it on those terms, you will get nothing.’”[115]
- [92]Lord Denning found that the debtor, by the words used, put undue pressure on the creditor. He said:
“when she said: ‘we will pay you nothing unless you accept £300 in settlement’, she was putting undue pressure on a creditor. She was making a threat to break the contract (by paying nothing) and she was doing it so as to compel the creditor to do what he was unwilling to do (to accept £300 in settlement): and she succeeded. He complied with her demand.”[116]
- [93]Lord Denning concluded, “... there is no reason in law or equity why the creditor should not enforce the full amount of the debt due to him.”[117]
- [94]Lord Justice Danckwerts, in agreeing with the conclusion reached by Lord Denning, commented:
“Mr and Mrs Rees really behaved very badly. They knew of the plaintiffs’ financial difficulties and used their awkward situation to intimidate them. The plaintiffs did not wish to accept the sum of £300 in discharge of the debt of £482, but were desperate to get some money. It would appear also that the defendant and his wife misled the plaintiffs as to their own financial position.”[118]
- [95]Putting to one side the nature of the case pleaded, based on the facts as I have accepted them to be, the two cases are clearly distinguishable. Importantly, in this case I have found:
- Mr Friel was told by representatives of the defendant the amount to be invoiced for commission;
- the amount of commission was determined in the process of finalising the take-off for the purposes of agreeing the contract price between the defendant and the home buyer;
- Mr Friel issued an invoice for the amount and did not raise any objection either orally or in writing;
- the defendant paid to the plaintiff the amount of commission stated in the invoice, which amount accorded with the amount stated in the take-off;
- the plaintiff accepted the payment and at the time of accepting payment MrFriel, as the representative of the plaintiff, did not raise an objection with Mr Parcell, or any other representative of the defendant, that the amount he was being paid was less than the full amount owing; and
- Mr Parcell, or any other representative of the defendant, were not aware of the financial position of the plaintiff.
- [96]Reference was also made in the plaintiff’s submissions to a decision in Mitchell v Pacific Dawn Pty Ltd.[119]The question formulated for the decision of the court in that case was whether an agreement between the plaintiff and the defendant had been arrived at by the application of coercion or duress such as to make it unenforceable or as a result of unconscionable conduct. No case for economic duress was pleaded here.
- [97]In terms of unconscionable conduct, certainly the evidence of the plaintiff, had that evidence been accepted, pointed to establishing the elements of an action premised on the doctrine of unconscionable conduct.
- [98]In Mitchell v Pacific Dawn Pty Ltd Douglas J, in referring to the defendant’s submissions in that case, summarised the elements of an action premised on the doctrine of unconscionable conduct as: a plaintiff labouring under a special disadvantage, the defendant knowing of the special disadvantage and proof that the defendant took advantage of that special disadvantage. Douglas J said the statement of the elements was “not treated as a controversial statement of the law”.[120]
- [99]On the facts of that case, Douglas J did not consider that the resulting agreement reached at the settlement meeting could be described as an unconscionable bargain. In support of a submission here, counsel for the plaintiff referred to Mr Friel’s evidence of having accepted the lower amount because he was ‘over a barrel’ or ‘over a bar’.[121]
- [100]I accept that Mr Friel had invested heavily in the project to produce solar house numbers. I have not been provided with any documents as to the extent of that investment nor the extent of Mr Friel’s actual financial position. In giving evidence, Mr Friel said he was under significant financial pressure. I certainly accept that he considered he had no choice but to keep working with the defendant. However, I do not accept that he had made known to Mr Parcell, or any of the other representatives of the defendant, his desperate financial position, if it was such. I accept, in the process of finalising the take-offs, Mr Friel on occasions requested additional commission but such a request was made simply in the process of finalising the take-off. On a case by case basis, that request would sometimes result in an increase in the commission payable to him on a particular contract.[122]
- [101]However, I do not accept that on any occasion when he was paid less than his 5% commission he raised an objection. In fact, towards the end of day one of his evidence, there was an interesting exchange between Mr Friel and counsel for the defendant. In discussing contract 69, Mr Friel was asked, “what did you say though when you were getting paid these lesser amounts?”[123], and Mr Friel responded:
“I kept quiet because I just wanted to see how far it would go. I really needed the money and just to see how many times he would do it because I knew this day was coming at that stage.”[124]
- [102]Further, when asked as to whether he had ever made a demand on Mr Parcell for short payment of invoices, he said, “I wasn’t in a position to do so.”[125]Shortly after, the following exchange occurred:
“And if Mr Parcell had been underpaying you along the way, you were quite capable of sending him a letter demanding that amount earlier?‑‑It was the only source of income I had at the time, so I was over a barrel. I had to put up with it.”[126]
- [103]I believe that was in fact the true position for the entire period. I accept that Mr Friel believed he was worth more than he was being paid and he had hoped he would be able to get his 5% commission on some jobs. In fact, he probably hoped that he would be able to do so on most jobs, but that was not the agreement. I also accept that as time went on and Mr Friel was never getting his 5% commission, he became increasingly unhappy but he did not complain to anyone. The fact was he believed he was trapped as he needed the job. That was a position created by his own actions and was not the result of any conduct on the part of the defendant.
- [104]I am not satisfied that, if the original agreement was subsequently varied by conduct, such varied agreement as pleaded in paragraph 5(f) of the defence was the result of unconscionable conduct as alleged in paragraph 4A of the reply. Further, I am not satisfied that the estoppel would be defeated by unconscionability.
Queensland Building Services Act
- [105]In the alternative to its other grounds of defence, the defendant denies liability to the plaintiff on the basis that the plaintiff’s claim is precluded entirely by s 42 of the Queensland Building Services Authority Act1991 (Qld) (“QBSAA”). This is because the defendant says the work performed by the plaintiff was “building work” for the purposes of s 42, for which the plaintiff did not hold a licence, as it was required to, under the QBSAA.
- [106]Section 42 of the QBSAA provides, in part, as follows:
“42 Unlawful carrying out of building work
- (1)A person must not carry out, or undertake to carry out, building work unless that person holds a contractor’s licence of the appropriate class under this Act.
…
- (3)Subject to subsection (4), a person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so.
- (4)A person is not stopped under subsection (3) from claiming reasonable remuneration for carrying out building work, but only if the amount claimed –
- (a)is not more than the amount paid by the person in supplying materials and labour for carrying out the building work; and
- (b)does not include allowance for any of the following –
- (i)the supply of the person’s own labour;
- (ii)the making of a profit by the person for carrying out the building work;
- (iii)costs incurred by the person in supplying materials and labour if, in the circumstances, the costs were not reasonably incurred; and
- (c)is not more than any amount agreed to, or purportedly agreed to, as the price for carrying out the building work; and
- (d)does not include any amount paid by the person that may fairly be characterised as being, in substance, an amount paid for the person’s own direct or indirect benefit.
…
- (9)A person who contravenes this section commits an offence. Maximum penalty – 250 penalty units.”
- [107]The term “building work” is defined within Schedule 2 of the QBSAA as follows:
“building work means –
- (a)the erection or construction of a building; or
…
- (f)the preparation of plans or specifications for the performance of building work; or
…
but does not include work of a kind excluded by regulation from the ambit of this definition.”
- [108]It is not in issue that in the course of performing its work, the plaintiff prepared
‘sketch plans’ and ‘checklists’. The defendant contends that the production of those documents by the plaintiff constituted “building work” as defined in Schedule 2.
- [109]It is not contended that the work was of a kind which is excluded by regulation from the ambit of the definition.
- [110]It is common ground that neither the plaintiff nor Mr Friel was licenced to carry out “building work” under the QBSAA. Therefore, it is argued the plaintiff is “not entitled to payment as alleged or at all”.[127]By virtue of the prohibitions contained in s 42(3), it is submitted the plaintiff is precluded from enforcing any contract against the defendant and receiving any payment.
- [111]The question is whether the plaintiff in producing the ‘sketch plans’ and ‘checklists’ was preparing a “plan for the performance of the building work”. If in fact what the plaintiff provided was not such a plan, then the plaintiff would not be precluded by s 42 from enforcing the contract.
- [112]Based on the evidence given and the submissions made, it does not seem to be disputed by the parties that the documents prepared by the plaintiff were not “working drawings”. Based on the evidence of Mr Wilson, who worked for Williams H Wilson and Associates, and who was a building designer licenced under the QBSAA, it was his firm that prepared the working drawings “based on Danny’s sketches”.[128]The drawings prepared by his firm were CAD plans, prepared using computer aided drafting.[129]
- [113]
- [114]Counsel for the defendant, nevertheless, submitted that the ‘sketch plans’ and ‘checklists’ were “plans for the performance of building work”. In her submissions, counsel for the defendant in part relied on the evidence of Mr Parcell. Counsel submitted that the effect of Mr Parcell’s evidence was that “without the plans and checklists prepared by Mr Friel, he would not have been able to proceed to construct and fit out the homes.”[132]
- [115]On a close analysis of the whole of the evidence given by Mr Parcell, it is difficult to give his evidence that meaning.
- [116]In examination-in-chief, Mr Parcell was asked, “And you engaged him – without those, would you be able to proceed to construct and fit out the homes?”[133]The answer given by Mr Parcell was:
“With the initial plans and the checklists, whether Wilsons do them or on other jobs or whether Danny was doing it on mine, that’s – the most crucial part is that initial plan and checklist, and without that being right, I – I don’t see the job proceeding anywhere.”[134]
- [117]Mr Parcell was then subsequently asked, “… why are the plans and the checklists and specifications so crucial?”[135]Mr Parcell answered:
“It’s the first step. If – if they draw them, a plan that they just don’t like or it’s too small, too big, or the checklist is wrong and it’s not going to – it’s not going to add up to a – to a package that saleable, then – then it was all a waste of time, so getting that checklist and getting that sketch right first is crucial.”[136]
- [118]It is clear from that evidence that it is crucial as the first step; that is, the first step towards the job proceeding. As Mr Parcell had said earlier in his evidence, it is critical to get the contract price right; each job is a competitive process.[137]
- [119]It is also clear from the evidence that the ‘sketch plans’ as prepared by the plaintiff were then used to prepare the CAD plans; that is the working drawings. It is the working drawings that are necessary in order to obtain Council approval, and it is those drawings which are required in order for the house to be built.[138]It is on this basis that this case is clearly distinguishable from the “layout plans” which were the subject of consideration of the Court in Australian Timber & Trusses Pty Ltd v T & M Buckley Pty Ltd & Anor.[139]In that case, McMurdoJ, in considering whether the term “building work” necessarily included “the design of a building or part of it” said:
“It is relevantly defined to mean the preparation of a document to be used by those who will perform the construction work. There is an evident importance in such documents being competently prepared and by appropriately qualified persons, although such documents might not involve that quality of creativity which would make them a design of a building.”[140]
- [120]The “layout plans” in that case, McMurdoJ said, were in fact a more detailed drawing of the loose structure as designed there by engineers. Nevertheless, he said, “they are distinct plans, serving the particular purpose of assisting those who undertake the actual construction work.”[141]Whilst his Honour acknowledged a competent builder could have performed the work without the benefit of a layout plan, he said that was not to say that the document serves no purposes. McMurdoJ there concluded, “… the layout plan required by each contract was a plan for the performance of building work …”.[142]
- [121]It is that that becomes the distinguishing feature here. While the ‘sketch plans’ and ‘checklists’ were clearly necessary as a first step in the process and in the preparation of the working drawings, there was no evidence that they were produced for use or in fact were used “in the performance of the building work”. In my view, in preparing the ‘sketch plans’ and ‘checklists’, the plaintiff was not required to be licenced under the QBSAA and, pursuant to that Act, is not precluded from otherwise enforcing the contract.
Limitation of Actions Act
- [122]In reliance on s 10 of the Limitations of Actions Act1974 (Qld) (the Limitation Act), the defendant says that in respect of certain of the amounts claimed the plaintiff must fail because a six year limitation period applies and in respect of some of the amounts claimed the cause of action accrued more than six years prior. Section 10(1)(a) of the Limitation Act provides that, amongst other things, an action founded on simple contract “shall not be brought after the expiration of 6 years from the date the cause of action accrued.”
- [123]In assessing the validity of this defence, it is necessary to determine which of the causes of action, if any, accrued before 17 August 2007; the statement of claim having been filed on 16 August 2013.
- [124]In its submission, the defendant says that the first 30, or in the alternative the first 22, contracts are out of time.[143]
- [125]The defendant asserts that in respect of each contract, the cause of action accrued on the signing of the building contract; rather than the date of the invoice or alternatively the date of payment of the invoice.
- [126]The plaintiff maintains that the relevant date is the due date for payment of the invoice and submits that due date for payment is 12 months from the date of each of the invoices.[144]
- [127]Counsel for the defendant relied on the decisions of Coburn v Colledge[145]and Edwards v Bray.[146]Both of these cases concern proceedings brought by solicitors for the recovery of fees. In those cases, the Courts held that the cause of action accrued when the work was completed, rather than upon the delivery of the bill of costs or the expiration of one month from the delivery of the bill of costs. In both cases, the relevant statutes of limitation provided that the action must be brought within the period of 6 years from the time when the cause of action accrued. Further, in both cases, there was a statutory requirement that a solicitor had no right of action for its costs until a month had elapsed from the delivery of a signed bill of costs. In Coburn v Colledge the court said that such a provision was procedural; it was said “it takes away… the right of the solicitor to bring an action directly the work is done, but it does not take away his right to payment for it, which is the cause of action.”[147]In both cases, the solicitor had argued unsuccessfully that the limitation period ran from one month after delivery of the bill of costs.
- [128]Even if it is accepted those cases should be restricted to their unique facts, counsel for the defendant also referred to an English decision in Swansea City Council v Glass.[148]In that case, the Court held that the Council’s cause of action to recover expenses incurred by it accrued when the works were completed and not when demands for payments were served.
- [129]It is clear from the evidence here that the plaintiff would only be paid commission in respect of “job’s won”.[149]On the evidence of both Mr Parcell and Mr Friel, it was clear that both accepted ‘job’s won’ meant a contract was signed.
- [130]The earliest point in time when it could be said the plaintiff’s work was done was therefore when the contract was signed. Counsel for the defendant submitted that the plaintiff did not have any ongoing duty after the building contract was signed.[150]
- [131]The plaintiff through Mr Friel says that the agreement was that the plaintiff was entitled “to be paid on slab down”.[151]Certainly, the evidence was that the plaintiff issued its invoices at that time and was paid “within a week or so”.[152]Mr Friel regarded payments as being due immediately upon issue of the invoice but accepted there was a few days’ grace.[153]Mr Parcell gave evidence that he thought Mr Friel was to issue invoices when the full deposit was paid by the customer; though he did say he was not sure and it could have been at “slab stage”.[154]
- [132]Mr Friel was not asked whether his entitlement to issue an invoice when the slab went down was because he considered that his work was done.
- [133]Mr Parcell was also not asked as to when he considered Mr Friel’s work was done. Mr Parcell explained the process involved from the signing of the contract, the part payment of the deposit, the lodgement of the application with the Council, the payment of the balance of the deposit upon receipt of Council approval and then the commencement of the building work.[155]That process appears also to be accepted by Mr Friel.
- [134]The delay in the payment of the full deposit was explained by Mr Parcell as arising because the banks are not prepared to advance monies until Council approval has been obtained and it would seem that Mr Friel remained involved in ensuring Council approval was obtained. Whilst there was a delay between the lodging of the application with Council and obtaining Council approval, there was no evidence as to any significant delay between Council approval, payment of full the deposit and slab down.
- [135]Based on that evidence, it would seem that the latest point in time when it could be said the plaintiff’s work was done was when the slab went down. In determining that date, based on the evidence before this court, the plaintiff issued its invoices for a particular contract on the day the slab went down, or very close to that date.[156]It is appropriate to treat the date of ‘slab down’ as being the same as the date when the invoice was issued. The date appearing on the invoice is assumed to be the date the invoice was issued.
- [136]The decisions in Swansea City Council v Glass, Coburn v Colledge and Edwards v Bray show that a person who has done work for another at their request is entitled to sue as soon as the work which they were retained to do is finished. Based on the evidence given as to the time when the invoices were issued, the work of the plaintiff was at the latest done at that time and that date becomes the relevant date from which to determine the limitation periods.
- [137]By reference to the defendant’s Schedule 1[157]detailing the dates of the issue of the plaintiff’s invoices, any claim in relation to contracts numbered 1 to 23 are therefore statute barred.
Order
- [138]I dismiss the plaintiff’s claim and will hear submissions from the parties as to costs.
Footnotes
[1]T1-13 L 13
[2]T1-11 L 30
[3]T2-70 L 18
[4]T2-8 L 39
[5]Defence, para 5(c)
[6]Defence, paras 5(f) and 10
[7]Defence, para 11
[8]Amended Reply (“reply”), paras 4A and 5
[9]Defence, para 4(c)
[10]T1-11 L 37
[11]T1-11 L 39
[12]T2-17 LL 36-37
[13]T2-17 L 37
[14]T2-18 LL 27–32
[15]T1-11 L 22
[16]T1-12 L 20
[17]T1-12 L 21
[18]T2-69 L 38
[19]T3-27 L 6
[20]T2-70 LL 38–39, T2-68 LL 19–20
[21]T2-69 L 1
[22]T2-71 L 22
[23]T2-71 L 22
[24]T2-72 L 21
[25]T2-72 L 22
[26]T2-72 L 25
[27]Defence, para 5
[28]T2-71 LL 24-25
[29]T2-71 LL 25-26
[30]T2-71 LL 36-37
[31]T3-15 L 36
[32]T2-72 L 43, T2-8 LL 41-43.
[33]T 2-72 L 38
[34]Invoices numbered 54, 55, 61, 62, 64 and 65 directed to Inka Homes, 87 directed to Nevison Homes and 47 and 48 directed to Nuvo Homes
[35]T1-59 L 38
[36]Fox v Percy (2003) 214 CLR 118 and Goodrich Aerospace Pty Ltd v Arsic (2006) 66 NSWLR 186
[37]T1-9 LL 45-46
[38]T1-11 LL 10-11
[39]T2-14 L 29 – T2-15 L 30
[40]T2-15 LL 10-22
[41]T1-11 L 12
[42]T2-18 L 8
[43]T2-18 L 20
[44]T3-72 L 24
[45]T2-19 L 23
[46]T3-15 L 33
[47]T1-48 L 22
[48]T1-48 L 13
[49]T1-48 L 14
[50]T1-51 L 1
[51]T1-51 L 2
[52]T1-51 L 5
[53]T3-20 L 44 – T3-21 L 9
[54]T3-67 L 1
[55]Plaintiff’s submissions, para 24
[56]T2-91 L 4
[57]T3-22 L 34
[58]T3-22 L 30
[59]T2-71 LL 24-28
[60]T2-71 LL 30-37
[61]Exhibit 1
[62]Plaintiff’s submissions, paras 17 to 22 and Annexure A
[63]T3-39 L 18
[64]Defence, para 5(f)
[65]Reply, para 4A
[66]Plaintiff’s submissions, para 24
[67]T1-37 L 30 – T1-38 L 8
[68]T1-41 L 14
[69]T1-41 L 16
[70]T1-40 L 10
[71]T2-93 L 41, T2-96 LL 41
[72]T3-42 L 43, T3-43 LL 12
[73]T1-60 L 18, T1-65 LL 1 and 32
[74]T1-50 LL 38-39
[75]T1-41 L 43
[76]T1-42 L 1
[77]T1-74 L 43, T1-78 L 10
[78]T2-48 L 32
[79]T2-79 L 45, T2-3 LL 41–43, T3-66 L 38, T3-69 LL 4-8
[80]T3-66 L 40-46
[81]T2-48 L 39
[82]T2-48 LL 41-42
[83]T 2-48 LL 4 -44
[84]T2-48 L 46 – T2-49 L 2
[85]T2-95 L 21
[86]T 2-29 L 24
[87]T 3-13 LL 32-45.
[88]Part of Exhibit 20, Invoice dated 10/07/2012
[89]T2-10 L37, T2-12 LL 41-46
[90]Defendant’s submissions, para 43
[91]T2-48 LL 13
[92](1994) 34 NSWLR 723
[93]Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 251 ALR 322 at 346, [96] followed in SAS Realty Developments Pty Ltd v Kerr [2013] NSWCA 56 at [70]
[94](1991) 1 QB 1
[95][2013] NSWCA 89
[96]At [58]
[97]At [60]
[98]At [61]
[99]T2-45 L 32
[100]T1-72 L 13
[101]T2-95 L 6 – T2-97 L 39
[102]T3-84 L 14-25
[103]T2-97 L 36-40
[104]T3-10 L 47
[105]T3-11 L 1
[106](1990) 20 NSWLR 251
[107]At p 277
[108]Reply, para 5
[109][2011] 1 Qd R 504
[110][1965] 3 All ER 837
[111]T1-41 L 43, T1-55 L 43
[112]T1-48 L 5, T1-50 L 36
[113]Oxford University Press, 29th ed, 2010 at p 119
[114]At p 841
[115]At p 841
[116]At p 841
[117]At p 841
[118]At p 842
[119][2010] QSC 243
[120]At [159]
[121]Plaintiff’s submissions para 70
[122]T3-42 LL 43–44, T3-43 LL 11-12
[123]T1-80 L 6
[124]T1-80 LL 6-9
[125]T2-48 L 24
[126]T2-48 LL 30-32
[127]Defence, para 8(d)
[128]T3-84 L 15
[129]T3-78 L 24
[130]T3-83 L 4
[131]T3-76 L 4
[132]Defendant’s submissions, para 86
[133]T3-14 L 5
[134]T3-14 LL 7-10
[135]T3-14 L 20
[136]T3-14 LL 21–24
[137]T3-36 L 24
[138]T3-16 L 15, T3-78 L 23, T3-83 L 18
[139][2012] QSC 110
[140]At [29]
[141]At [32]
[142]At [33]
[143]Defence, para 12(b) and defendant’s submissions, para 96
[144]Reply, para 6(e)
[145][1897] 1 QB 702
[146][2012] 2 QdR 310
[147]Coburn v Colledge at p 706
[148](1992) QB 844
[149]T2-71 L 40
[150]Defendant’s Submissions in Reply, para 38
[151]T2-49 L 16
[152]T2-49 L 26
[153]T2-49 L 34-39
[154]T2-80 L 24
[155]T1-30 L 36
[156]T2-49 L 24
[157]Amended Schedule 1 to the defendant’s Particulars dated 1 November 2014 and filed 6 January 2015