Gainfoot Pty Ltd v T&H Keliher Contracting Pty Ltd
[2022] QDC 296
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- Unreported Judgment
- Gainfoot Pty Ltd v T&H Keliher Contracting Pty Ltd[2022] QDC 296
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Gainfoot Pty Ltd v T&H Keliher Contracting Pty Ltd[2022] QDC 296
Gainfoot Pty Ltd v T&H Keliher Contracting Pty Ltd[2022] QDC 296
DISTRICT COURT OF QUEENSLAND
CITATION: | Gainfoot Pty Ltd v T&H Keliher Contracting Pty Ltd [2022] QDC 296 |
PARTIES: | GAINFOOT PTY LTD (ACN 010 665 424) t/as THE PUMP HOUSE (plaintiff) v T&H KELIHER CONTRACTING PTY LTD (ACN 164 202 215) (defendant) |
FILE NO: | 15/2022 |
DIVISION: | Civil |
PROCEEDING: | Application |
ORIGINATING COURT: | Maroochydore Registry |
DELIVERED ON: | 6 October 2022 (oral reasons) 23 December 2022 (written judgment) |
DELIVERED AT: | District Court, Maroochydore |
HEARING DATE: | 6 October 2022 |
JUDGE: | Long SC, DCJ |
ORDER: | On 6 October 2022:
On 23 December 2022:
|
CATCHWORDS: | PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – DISCLOSURE – Where the plaintiff applies pursuant to UCPR 223 for an order that the defendant disclose “source and application documents” for various financial statements and tax returns – Where by UCPR 211 the defendant has a duty of disclosure to the plaintiff of documents which are directly relevant to an allegation in issue in the pleadings – Where an order for disclosure is permitted by UCPR 223(4)(b) if it appears there is an objective likelihood that a duty to disclose has not been complied with – Where the defendant contends that their duty to disclose has been complied with on the basis that source records which have not been disclosed are reflected in financial statements which have been disclosed – Where the plaintiff pursues the source documents on the basis that they are directly relevant to the ‘counterfactual’ nature of the defendant’s counterclaim – Where if financial statements are directly relevant so too are any available source documents PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – PLEADINGS – STRIKING OUT Where in answer to a counterclaim, the plaintiff contends an exclusion clause had been incorporated into a contract by reference – Where the plaintiff applies pursuant to UCPR 171 for an order striking out paragraphs 2, 3, 4, 23(b) and 38 of the defendant’s reply to the plaintiff’s answer to counterclaim – Where at the original hearing of the application, the plaintiff applied on the basis that the identified pleading, in seeking to contend that the exclusion clause was not incorporated as a term of the contract, was contrary to UCPR 154, particularly as it was inconsistent with an earlier pleaded admission – Where as a general rule if a person signs a document, which is known by that person to contain contractual terms and to affect legal relations, that person is bound by those terms – Where, the defendant contends that, as an exception to the general rule, if a term is so onerous or is otherwise of a kind that suggests it might not reasonably be expected to be part of the contract there is an issue as to whether the accepting party can reasonably be taken to have assented to the particular term – Whether the defendant has pleaded a necessary factual foundation for such assertion – Whether the identified paragraphs of the defendant’s reply to the plaintiff’s answer to the counterclaim disclose a reasonable cause of action or have a tendency to prejudice or delay the fair trial of the proceeding |
LEGISLATION: | Uniform Civil Procedure Rules 1999 (Qld) rr 149, 154, 171, 188, 211, 223, 229 |
CASES: | Gogetta Equipment Funding Pty Ltd v Mark & Liz Pty Ltd [2018] VSC 91 Maxitherm Boilers Pty Ltd v Pacific Dunlop Pty Ltd [1998] 4 VR 559 Metal Roofing and Cladding Pty Ltd v Amcor Trading Pty Ltd [1999] QCA 471 Pacific Carriers Ltd v BNP Paribas (2004) 208 ALR 213 Rattenbury and Anor v Elstak and Ors [2022] QDC 99 Surfstone Pty Ltd v Morgan Consulting Engineers Pty Ltd (No 2) [2017] 2 Qd R 66; [2015] QSC 290 Toll (FGCT) Pty Ltd v Alphapharm Pty Limited and Ors (2004) 219 CLR 165 TradeCoast Land Pty Ltd v TradeCoast Central Pty Ltd & Ors [2021] QSC 25 |
COUNSEL: | J W Lee for the plaintiff M White for the defendant |
SOLICITORS: | Tony Sowden Lawyer for the plaintiff Butler McDermott for the defendant |
Introduction
- [1]As is identified in the attached transcription of the orally delivered reasons for the orders made on 6 October 2022, the remaining issue to be determined in this application is that which seeks that identified parts of the defendant’s reply to the plaintiff’s answer to counterclaim, be struck out.
- [2]With the benefit of further written submissions of the parties, it is now clear that the plaintiff applies for the identified parts of the pleading to be struck out on the basis of not disclosing a reasonable cause of action (or as having a tendency to prejudice or delay the fair trial of the proceeding), in terms of raising any viable response to the plaintiff’s reliance upon clauses in its terms of trade to exclude liability for the defendant’s counterclaim.
- [3]For each party, reference is made to Toll (FGCT) Pty Limited v Alphapharm Pty Limited and Ors.[1]Each draws attention to the statement of principle, at [57], that:
“If there is a claim of misrepresentation, or non est factum, or if there is an issue as to whether a document was intended to affect legal relations or whether, on the other hand, it was tendered as a mere memorandum of a pre-existing contract, or a receipt, or if there is a claim forequitable or statutory relief, then even in the case of a signed document it may be material to know whether a person who has signed it was given sufficient notice of its contents. The general rule, which applies in the present case, is that where there is no suggested vitiating element, and no claim for equitable or statutory relief, a person who signs a document which is known by that person to contain contractual terms, and to affect legal relations, is bound by those terms, and it is immaterial that the person has not read the document. L’Estrange v Graucob explicitly rejected an attempt to import the principles relating to ticket cases into the area of signed contracts. It was not argued, either in this court or in the Court of Appeal, that L’Estrange v Graucob should not be followed.”
As is correctly acknowledged for the defendant, this appears to reflect the approach taken by McPherson J in Metal Roofing and Cladding Pty Ltd v Amcor Trading Pty Ltd.[2]
- [4]As is further noted for the defendant, this is to be viewed in the context of the broader statement of principle in Pacific Carriers Ltd v BNP Paribas[3]and affirmed in Toll v Alphapharm,at [40]:
“This court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”
[citations omitted]
Later in that judgment there is particular notation of the potential significance of “signature (or execution) of a contractual document”, to the necessary objective approach:
“[42] Consistent with this objective approach to the determination of the rights and liabilities of contracting parties is the significance which the law attaches to the signature (or execution) of a contractual document. In Parker v South Eastern Railway Co, Mellish LJ drew a significant distinction as follows:
‘In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents. The parties may, however, reduce their agreement into writing, so that the writing constitutes the sole evidence of the agreement, without signing it; but in that case there must be evidence independently of the agreement itself to prove that the defendant has assented to it.’”
- [5]For the defendant, there is also notation of the following passage in Toll v Alphapharm, which is the precursor to the summation of principle extracted above and in which there is warning as to the risk of introducing principles relating to “ticket cases” to the position relating to signed or executed agreements:
“[51] The reasoning of the primary judge, accepted by the Court of Appeal, was based upon the proposition that, in order for those terms and conditions to be made part of the contract, it was necessary for Finemores to establish that it had done what was reasonably sufficient to give Richard Thomson notice of the terms and conditions (the major premise), and the further proposition that Finemores had not done what was reasonably sufficient to give Richard Thomson such notice (the minor premise).
[52] It would be possible to dispose of the appeal by disagreeing with the minor premise. What more Finemores could have done to give Richard Thomson notice of the terms and conditions than requiring their representative to sign a document, and to place his signature immediately below a request that he read the conditions on the reverse side of the document before signing, is difficult to imagine.
[53] Of wider importance, however, is the major premise. If correct, it involves a serious qualification to the general principle concerning the effect of signing a contract without reading it. The proposition appears to be that a person who signs a contractual document without reading it is bound by its terms only if the other party has done what is reasonably sufficient to give notice of those terms. If the proposition is limited to some terms and not others, it is not easy to see what the discrimen might be.
[54] It appears from the reasoning of the primary judge and the Court of Appeal that the proposition was given a narrower focus, and was limited to exclusion clauses, or, perhaps, exclusion clauses which are regarded by a court as unusual and onerous. The present happens to be a case about exclusion clauses, but there is no apparent reason why the principle, if it exists, should apply only to them. Nor is the criterion by which a court might declare a contractual provision to be unusual or onerous always easy to identify. The origin of the proposition, clearly enough, is in the principles that apply to cases, such as ticket cases, in which one party has endeavoured to incorporate in a contract terms and conditions appearing in a notice or an unsigned document. When an attempt is made to introduce the concept of sufficient notice into the field of signed contracts, there is a danger of subverting fundamental principle based on sound legal policy. There are circumstances in which it is material to ask whether a person who has signed a document was given reasonable notice of what was in it. Cases where misrepresentation is alleged, or where mistake is claimed, provide examples. No one suggests that the fact that a document has been signed is for all purposes conclusive as to its legal effect. At the same time, where a person has signed a document, which is intended to affect legal relations, and there is no question of misrepresentation, duress, mistake, or any other vitiating element, the fact that the person has signed the document without reading it does not put the other party in the position of having to show that due notice was given of its terms. Furthermore, it may be asked, where would this leave a third party into whose hands the document might come?
[55] In L’Estrange v Graucob, Scrutton LJ said that the problem in that case was different from what he described as “the railway passenger and cloak-room ticket cases, such as Richardson, Spence & Co v Rowntree”, where “there is no signature to the contractual document, the document being simply handed by the one party to the other”. His Lordship said:
‘In cases in which the contract is contained in a railway ticket or other unsigned document, it is necessary to prove that an alleged party was aware, or ought to have been aware, of its terms and conditions. These cases have no application when the document has been signed.’
[56] In the same case Maugham LJ, who agreed with Scrutton LJ, referred to three possible circumstances in which the party who signed the document might not have been bound by its terms. The first was if the document signed was not a contract but merely a memorandum of a previous contract which did not include the relevant term. The second was a case of non est factum. The third was a case of misrepresentation.”
[citations omitted]
- [6]However, the position for the defendant is developed by pointing out that, as noted in this passage, Toll v Alphapharm is concerned with an executed document which contained the conditions in issue and that the distinction with the “ticket cases” is expressed to be in respect of those “in which one party has endeavoured to incorporate the contract terms and conditions appearing in a notice or an unsigned document.”
- [7]
- [8]Although there is no reference to a decision in which there is an expressly executed statement such as set out in the annexed transcription of the oral reasons delivered on 6 October 2022, each of the Maxitherm and Surfstone decisions were in respect of contracts formed by a sequence of exchange of written communications and an ultimate acceptance of an offer found to contain the offeror’s reference to the engagementof some identified standard terms and conditions, which were to be found else where or on further enquiry.
- [9]
“Once the conclusion has been reached that an express offer containing a party's standard terms has been accepted, there is no occasion to then consider whether sufficient steps have been taken to bring the standard terms to the attention of the other party. The ultimate question is whether the party relying upon the standard terms can properly assume that the other party has consented to those terms.
When a party is issued with a ticket or document containing terms, and the ticket or document performs a function other than being the embodiment of the terms of the contract, proof of consent will usually depend upon the efforts taken to bring the terms to the attention of the recipient of the ticket or other document. In Parker v South Eastern Railway Co. (1877) 2 C.P.D. 416 , Mellish L.J. said at 423:
‘The railway company, as it seems to me, must be entitled to make some assumptions respecting the person who deposits luggage with them: I think they are entitled to assume that he can read, and that he understands the English language, and that he pays such attention to what he is about as may reasonably be expected from a person in such a transaction as that of depositing luggage in a cloak-room. The railway company must, however, take mankind as they find them, and if what they do is sufficient to inform people in general that the ticket contains conditions, I think that a particular plaintiff ought not to be in a better position than other persons on account of his exceptional ignorance or stupidity or carelessness. But if what the railway company do is not sufficient to convey to the minds of people in general that the ticket contains conditions, then they have received the goods on deposit without obtaining the consent of the persons depositing them to the conditions limiting their liability.’
On the other hand, a party relying upon a document containing conditions may be relieved of the need to take steps to inform the other party that the document contains conditions where the other party expressly accepts an offer of which the document forms part.
I do not intend to convey that express acceptance of an offer which incorporates other terms by reference necessarily connotes acceptance of all those terms. In a case where the person expressing consent has not read the terms, his consent may be taken to be a consent to those terms which are appropriate to a contract of the type in question. If the terms include provisions which no one would anticipate in a contract of the type in question, it would not be appropriate to assume consent to those provisions. The basic enquiry remains whether it is reasonable to assume that a contracting party has assented to the terms put forward by the other party.
….
As I have said, in my opinion the inclusion of an unusual term, at least in an unsigned document, may require its proponent to take special steps to bring it to the attention of the other party, for otherwise it may not be reasonable to assume consent to the term. Whether special steps are required, and what those steps must be, will depend upon the circumstances of each case. Further, I think that a term may be unusual because it is more than ordinarily onerous. However, I do not consider that the mere fact that a provision is onerous entitles a court applying the common law to reject it as a term unless special steps have been taken to draw attention to it. The relevant question is whether a contracting party can be reasonably taken to have assented to a particular term, not whether a contracting party should be subject to an unreasonable term.”
Callaway JA expressed agreement with the reasons of Buchanan JA, subject to some observations, which included:[7]
“Pacific Dunlop was therefore in the position of a person receiving an offer in the form “I offer to contract on my standard terms and conditions”, who does not know what the other party's standard terms and conditions are and does not enquire but goes ahead and accepts the offer. In such a case there is no question whether the offer is a contractual document or whether a reasonable person in the position of the offeree would understand that it contained conditions. The document is plainly a contractual document; as an offer, it necessarily contains, or refers to, terms of the proposed contract. Subject to what I shall say hereafter, Pacific Dunlop must be taken to have assented to them, including Maxitherm's standard terms and conditions.
It is not uncommon to enter into a transaction on another party's standard terms and conditions without enquiring what they are. It is often not worth doing so and a sensible commercial risk to run. The law reflects commercial reality by holding the party who does not enquire to such of the other party's standard terms and conditions as may fairly be regarded as within the risk the first party took. Some terms are outside the risk and the first party is not bound by them. A term may be contrary to industry practice or, however appropriate to other contracts into which the other party regularly enters, unsuited to the particular contract. It is rarely, if ever, sufficient that a term is onerous, but its onerous quality or some other feature may show that it was not reasonably to be expected.”
Ormiston JA also agreed with the reasons of Buchanan JA and “the observations of Callaway JA in his judgment”, adding his own observations, including that:[8]
“Where terms are explicitly referred to by an offeror, it can be rare that an apparent acceptance by the offeree should not carry with it the offeree’s assent to the whole of the terms described but I would agree that, where a term is so onerous or is otherwise of a kind such as to suggest it might not reasonably be expected to be part of the terms of the contract, the issue is whether the accepting party can reasonably be taken to have assented to the particular term.”
- [10]Similarly, in Surfstone, it was observed:
“[51] The learned primary judge, having conducted a thorough review of the authorities in this area, adopted the following propositions for determining whether an offeree is bound by a term set out or incorporated in an unsigned document which the offeror has provided to the offeree in circumstances which show the offeror intends the document to identify terms of the contract:
(a) it is not always the case that the offeree is not bound by an exemption clause, unless the offeror directs attention to the clause;
- (b)the fundamental question is whether the offeror is reasonably entitled to conclude that the offeree has accepted the terms in the document, including the exemption clause;
(c) that conclusion should be reached where the offeree has had a reasonable opportunity to consider the terms, including the exemption clause, and has behaved in a way which manifests acceptance of the document as recording contractual terms;
- (d)in other cases, where the clause is one reasonably to be expected in contracts of the kind in question, acceptance of the document makes the clause binding, even if the offeree does not know its terms, or even that it is contained in the document; and
(e) if the clause is not one reasonably to be expected, then something more is required by way of provision of information about the clause to the offeree before the contract is formed; what information will be required will depend on the circumstances, but particularly on the terms of the clause.”
[citations omitted]
- [11]
“[72] In my view, the contention that cl 4.3 was unusual or onerous, cannot be sustained. The evidence of Cox, Motto and Quigley, referred to above, demonstrates that such a clause is not onerous or unusual. It is part of a standard set of terms that have been promoted for use by structural and civil engineers for many years, and adopted by many such engineers over the years. Many of those retainers, whilst made between the project owners and the engineers, were brought about by architects acting on the owners’ behalf. The promotion and adoption of those terms, including cl 4.3, over many years by architects and engineers, weighs very heavily against a conclusion that the clause is onerous and unusual.
[73] Irespectfully agree with the learned primary judge’s conclusion on this issue:
“In my respectful opinion, expressions such as ‘more than ordinarily onerous’, or ‘extremely onerous’ or ‘particularly onerous’ present some difficulty. They posit a level of burden which is ordinary or common, against which the burden imposed by the clause in question is to be measured. Nevertheless, the evidence in the present case makes it possible to apply them. There is evidence from Ms Motto and Mr Thomas demonstrating that the ACEA promoted the use of the Guideline Terms. There is also evidence from Mr Quigley, Mr Cox and Mr Thomas about their experience of the incorporation of these terms in contracts for the provision of engineering services. Although in each case this is the evidence of an individual it nevertheless represents somewhat extensive experience. There is no evidence to suggest that the experience of these individuals is unusual, nor that the recommendations of the ACEA about the use of the Guideline Terms was usually disregarded. In my view, the evidence permits a conclusion that the use of the Guideline Terms is sufficiently common to make it unnecessary for [Morgan] to have taken particular steps to draw the attention of [the owners] to clauses such as cl 4.3.”
[citations omitted]
- [12]Otherwise, it is unnecessary to dwell on other authorities to which reference is made for the defendant, save for noting the following observations in Gogetta Equipment Funding Pty Ltd v Mark & Liz Pty Ltd:[11]
“Counsel for the plaintiff has helpfully summarised in the plaintiff’s further submissions relevant authorities as to incorporation of standard terms and conditions by reference to them in a signed document. The defendant takes no issue with this summary. In Ange v First East Auction Holdings Pty Ltd, the decision of the Victorian Court of Appeal, Sifris AJA, with whom Neave and Tate JJA agreed, upheld the judgment of a trial judge that general auction conditions which were not attached to a signed agreement had nevertheless been incorporated into the agreement by reference. A significant factor tending to that conclusion was that the paragraph of the agreement immediately above the signature of the consignor stated that the agreement was subject to the general conditions and that the consignor had read and accepted those conditions. That is the same situations as in this case. Sifris AJA also considered, as had the trial judge, whether the auction house had taken reasonably sufficient steps to bring the general conditions to the attention of Mrs Ange, and held that it had. In the course of that discussion, Sifris AJA considered Maxitherm Boilers Pty Ltd v Pacific Dunlop Ltd, an earlier decision of the Court of Appeal, in which the Court had left open the possibility that ‘the inclusion of an unusual term, at least in an unsigned document,may require its proponent to take special steps to bring it to the attention of the other party, for otherwise it may not be reasonable to assume consent to the term’.”
[citations omitted]
That is because the decision in Maxitherm was not determined upon such considerations, which were there noted to have been raised for the first time upon appeal and otherwise noted as a point which might have been met by evidence at trial.[12]
- [13]Returning to the present issue and in respect of addressing the fundamental question as to the objectively determined agreement of the parties, it may be observed that:
(a) an immediate problem with the defendant’s pleading in paragraph (2)(b) of the reply to the plaintiff’s answer to the counterclaim, seizes upon only the acknowledgment as to the terms of trade having been brought to the customer’s attention, whereas the immediate context in the executed quotation is the assertion that:
“all goods and services supplied by the Pump House (whether the Customer pays for those goods and services or receives them free of charge) are supplied on the basis of the Terms of Trade; and
- (b)it may be noted that upon this application the plaintiff relies upon the evidence of a graphic designer,[13]in respect of the establishment and content of the plaintiff’s website at relevant times and generally to an effect that whilst the ‘URL’ (or uniform or universal resource location) specified in the quotation and referred to at paragraph (2)(b)(iii) of the defendant’s reply, did not have an effect of allowing direct access to the terms of trade, it did allow access to the plaintiff’s website, not withstanding the resultant representation:
“No results found. The page you requested could not be found. Try refreshing your search or use the navigation above to locate the post.”
And that although appearing on that response page below rather than above this notification, there is a usable and operative “link”, comprised of the words “Terms of Trade”, which allowed access to those terms.
- [14]Whilst the evidence of Mr Sturgess may be of importance to establishing the existence of and therefore content of the terms and conditions which are to be taken to be the subject of the plaintiff’s offer in the quotation and the availability of those terms at the relevant time, this evidence does not determine the objective question as to the construction of the parties contract.
- [15]Moreover and as is correctly contended for the plaintiff, it is now, in the light of the further written submissions, clear that the defendant seeks to pursue a position which is not yet articulated in the pleadings and embracing the broader type of consideration to the essential question, as are the subject of the observations drawn from the Maxitherm decision and set out above. As has also been noted, such considerations are referable to questions of fact having regard to the particular context of a contract and therefore allow for the identification of relevant evidence. It is therefore necessary that the relevant factual issues be identified as required by rule 149 of the Uniform Civil Procedure Rules (1999).
- [16]I am not satisfied that there is necessarily any conflict in what is now more fully understood to be the defendant’s position and the admission to be found at paragraph [3] of the further amended defence, filed 11 April 2022, as to the pleading of paragraph [3] of the statement of claim that:
“Keliher signed and accepted the terms of the Quote on 23 July 2022 (the Contract).”
This is because, the real issue is in respect of what terms of trade were incorporated by the terms of the quote, as a question to be answered objectively. The authorities to which reference has been made arguably provide a basis for a contention for the defendant that a relevant clause of those terms of trade have not been so incorporated. However, a case to which such authorities may be referable, has not been articulated. There is at least clear tendency to prejudice or delay the fair trial of the proceeding and therefore appropriate for an order striking out, paragraphs 2, 3, 4, 23(b) and 38 of the defendant’s reply to the answer to the defendant’s counterclaim.
- [17]The parties will be allowed the opportunity to be further heard as to consequential and other orders.
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Footnotes
[1] (2004) 219 CLR 165, at [51]-[57]
[2] [1999] QCA 471, at [37] – [40].
[3] (2004) 218 CLR 451.
[4] [1998] 4 VR 559.
[5] [2017] 2 Qd R 66; [2015] QSC 290, (at first instance).
[6] At 568.
[7] At 561-562.
[8] At 561.
[9] [2016] 2 Qd R 194, at [64] – [67]; [2017] 2 Qd R 66, at [56] – [57].
[10] [2017] 2 Qd R 66, at [61].
[11] [2018] VSC 91, at [37].
[12] [1998] 4 VR 559, at 560-561, 562 and 569-570.
[13] Affidavit of SK Sturgess, filed 21/3/22.