Miccon Hire Pty Ltd (in liq) v Birla Mt Gordon Pty Ltd
[2013] QSC 139
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- Unreported Judgment
- Appeal Determined (QCA)
- Miccon Hire Pty Ltd (in liq) v Birla Mt Gordon Pty Ltd[2013] QSC 139
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Miccon Hire Pty Ltd (in liq) v Birla Mt Gordon Pty Ltd[2013] QSC 139
Miccon Hire Pty Ltd (in liq) v Birla Mt Gordon Pty Ltd[2013] QSC 139
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Civil Trial |
ORIGINATING COURT: | |
DELIVERED ON: | 31 May 2013 |
DELIVERED AT: | Brisbane |
HEARING DATES: | 27 and 28 May 2013 |
JUDGE: | Chief Justice |
ORDERS: |
|
CATCHWORDS: | CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – PERFORMANCE – the plaintiff performed haulage and waste dumping services for the defendant under a written contract – the plaintiff submitted monthly invoices to the defendant, which were not paid in full – the defendant claimed that the plaintiff had failed to provide sufficient information as required by the contract – representatives of the defendant attended daily meetings at which progress information was provided – whether the plaintiff had established its claim for unpaid haulage charges under the agreement – whether the plaintiff had discharged the onus of proof for its claim with as much precision as the subject matter reasonably permitted ESTOPPEL – ESTOPPEL BY CONDUCT – ACT, OMISSION OR ASSUMPTION – ACQUIESCENCE, ENCOURAGEMENT OR SILENCE – the plaintiff carried out work under a variation to a written contract at the request of the defendant – the contract required that the variation be proposed and accepted in writing, with non-compliance barring an entitlement to payment – the evidence as to whether a written variation existed was unclear – the defendant accepted the benefit of the work and monitored its progress – whether a claim for payment was sustainable under the doctrines of waiver and estoppel RESTITUTION – GENERAL PRINCIPLES – whether the plaintiff could recover for work performed under the variation of the written contract under a quantum meruit claim CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – INTERPRETATION OF MISCELLANEOUS CONTRACTS AND OTHER MATTERS – the plaintiff’s claims against the defendant included, inter alia, payment for maintenance work on a crusher and lighting for night time work – the defendant requested a quotation for the crusher maintenance work and provided tax invoices in respect of both services – whether the work constituted “incidental services” and was thereby included in the existing price of the contract – whether the conduct of the parties suggested the work constituted “incidental services” under the contract Cohen & Co v Ockerby & Co Ltd (1917) 24 CLR 288; (1917) 23 ALR 427; [1917] HCA 58, cited Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) ALR 257; [2003] HCA 10, followed Update Constructions Pty Ltd v Rozelle Child Care Centre Pty Ltd (1990) 20 NSWLR 251, followed |
COUNSEL: | DA Savage SC and A Moon for the plaintiff PJ McCafferty for the defendant |
SOLICITORS: | Connolly Suthers for the plaintiff Corrs Chambers Westgarth for the defendant |
[1] CHIEF JUSTICE: The defendant is the owner and operator of the Mt Gordon Copper Mine situated west of Mt Isa. Before going into liquidation, the plaintiff carried on the business of providing haulage and waste dumping services.
[2] The plaintiff entered into an agreement with the defendant termed the “Surface Mining Services Agreement”. It was finally executed by 4 May 2010, although the provision of the services for which it catered commenced on 29 January that year.
[3] There is a map behind tab 49B in Ex 19 which shows the layout of the defendant’s operation. In this proceeding the plaintiff claims unpaid haulage charges for the plaintiff’s movement of waste material from the stockpile at the south of the site, to another site about 500 metres away (called the “South Esperanza Portal” site), and to another location about 1.8 kilometres distant from the stockpile (called the “Direct Shipping Ore” site).
[4] The plaintiff submitted invoices to the defendant, and the defendant only partly paid those dated 31 May 2010 (number 25926) and 30 June 2010 (number 126066), accounting for the bulk of the claim made in this proceeding.
[5] The amounts now pursued are the amounts of haulage claims unpaid under the Surface Mining Services Agreement, the value of some additional works requested, the amounts of some miscellaneous claims (which were not disputed) and a claim for a variation under a separate Esperanza Creek contract. The large claim is the first.
[6] A schedule (Schedule 3) to the Surface Mining Services Agreement specifies haulage rates payable to the plaintiff: $1.30 per tonne for haulage to the point 500 metres from the stockpile, and what equated to $3.51 per tonne for haulage over 1800 metres (in each case plus GST). The dispute is limited to the plaintiff’s claims under those two invoices for haulage to those locations.
[7] The plaintiff was obliged to invoice the defendant monthly, providing sufficient detail to allow the defendant to calculate the amount owing, and including all supporting documentation (item 6 schedule 1). The plaintiff was also obliged to deliver a “shift report” (heading F item 2 schedule 2) for each shift (to include a summary of the activities undertaken and chargeable time, with detail) and provide that daily to the defendant (heading F).
[8] Mr McDonnell was the plaintiff’s director and shareholder, and he was on site at Mt Gordon. The plaintiff used dump trucks with a basic 60 cubic metre capacity, which after expiration of warranty were modified to incorporate so-called “hungry boards” which extended that capacity.
[9] At the conclusion of a shift, the truck driver would hand a load sheet to Wendy Cochrane, the plaintiff’s office assistant on site at Mt Gordon. Mr McDonnell checked those sheets and took them to a daily 7 am meeting with the defendant’s representatives, where by reference to those sheets, the defendant was informed of the tonnes of material which had been transported from the stockpile.
[10] It was, unsurprisingly, in the interest of the plaintiff, an interest advanced by Mr McDonnell, that prior to moving off the trucks be filled to capacity.
[11] Ms Cochrane sent the details she was given at Mt Gordon to the plaintiff’s Mt Isa office manager Jenny Tyrrell. Ms Tyrrell used that information to prepare the tax invoices presently in issue.
[12] The defendant raised an issue whether the plaintiff provided sufficient explanatory information to satisfy its contractual obligation. Exhibit 3, a collection of documents in the defendant’s own possession, illustrates the documentation passed over at the 7 am meetings. Pages 19, 20 and 21, begin with reference to the provision of “ore and waste sheets”, of which there are a number of examples elsewhere in the evidence.
[13] That the records handed over were sufficient, and accepted as such, is consistent with the document behind tab 7a in Ex 19, a document prepared by a financial officer of the defendant by reference to the daily sheets presented at the 7 am meetings. Significantly, that document confirmed that a substantial amount was then due to the plaintiff (having regard to the credit claimed of only $276,452), contrary to the position taken in this proceeding by the defendant, which was that nothing was due for haulage.
[14] None of the defendant’s representatives who attended the 7 am meetings was called to give evidence at the trial. There was consequently no evidence contrary to the contentions of the plaintiff’s representatives that the defendant’s representatives were through those meetings kept reliably and comprehensively informed.
[15] Although the defendant tended to disavow this, the main thrust of the defendant’s approach to the case as it was run was to put the plaintiff to strict proof, and while that is an approach increasingly unusual in civil litigation, it was an approach open to the defendant here. On my assessment, the plaintiff satisfied its obligation of proof.
[16] In calculating the weight of the volume of the material moved, I accepted the evidence of the geotechnical engineer Mr Bowler, of a density of 2.194 t/m3. That was based on test probes by a soil technician Mr Chappel, who I accept was appropriately qualified. Mr McCafferty, who appeared for the defendant, queried Mr Bowler’s view on various bases (including that Mr Bowler did not personally visit the site or carry out the tests, that the tests were carried out after haulage had been accomplished and the stockpile consequently altered, and because Mr Bowler could not say where the probes were located), but I was satisfied with Mr Bowler’s responses to those criticisms.
[17] I accept that Mr Bowler was satisfied with the professional accuracy of the testing – as was I, and there was no objection to Mr Bowler’s reliance on Mr Chappel’s results notwithstanding that Mr Chappel was not called as a witness. The defendant advanced no contrary technical evidence as to density.
[18] While that last matter alone does not compel me to accept this lone view, I was satisfied as to its legitimacy.
[19] I accepted the evidence given by Mr McDonnell (with a possible exception, as to reliability, concerning a contract variation, to which I will come), Ms Tyrrell and Ms Cochrane, and that the amounts hauled and their destinations were as invoiced. They were all indubitably honest witnesses. Nothing was advanced to impugn even remotely either their honesty or (save in the confined respect mentioned as to Mr McDonnell) reliability.
[20] The weights moved, as claimed, are (conservatively) consistent with the amalgamation of: the number of truck movements (not in issue), the capacities of the trucks (allowing for increased volumes with extra railing), the reasonable assumption – supported by the direct evidence of Mr McDonnell – that the trucks ran at full load, and the density confirmed by Mr Bowler.
[21] In Ex 2, arithmetically amended into the form of Ex 20, Mr Bowler has calculated the distribution of waste material hauled, between respectively the 500 metre location and the 1800 metre location, leading to the unpaid haulage charge specified in Ex 20, on which the claim as ultimately pursued was based. (I record that I accepted the evidence of the surveyor Mr Atkinson on which Ex 2 was partly based.)
[22] The defendant has consistently complained about non-disclosure by the plaintiff of daily load sheets. They are the documents which I accept Ms Cochrane used to prepare the information she transmitted to Ms Tyrrell leading to the production of the invoices given to the defendant.
[23] I accepted the explanation given by the liquidator Mr Brennan, although he made his search (and could have made his search) only as at 8 February 2011. There is nevertheless absolutely no basis for any insinuation that documentation was destroyed or withheld by the plaintiff in order to frustrate analysis of its claims by the defendant.
[24] I considered, as I have said, that the plaintiff’s witnesses were undoubtedly honest and reliable, and on that basis alone I am satisfied of the accuracy of the invoices presented.
[25] I am satisfied that the claim has been established with the degree of precision militated by Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd (2003) ALR 257, paras 37 and 38 (an authority relied on by Mr McCafferty), and that the plaintiff has discharged the onus of proof it bore.
[26] The plaintiff has established its claim for unpaid haulage charges under the Surface Mining Service Agreement.
[27] I turn to the claims of lesser magnitude, first for work done by the plaintiff for the defendant under a variation to the Esperanza Creek contract. The amount of this claim is $72,020.31, for work done on the Esperanza Creek diversion dam wall. There is no question but that the plaintiff carried out this work, and did so at the request of the defendant, and that the price for the work carried out is the amount claimed.
[28] A copy of the contract separately relevant to this particular project is Ex 4. Clause 23 of that contract requires a variation to be proposed in writing to the defendant, and accepted (or rejected) in writing, with non-compliance barring an entitlement to payment. The defendant defends this claim on the basis that a variation was not approved in writing.
[29] Mr McDonnell gave evidence that it was, and he has sworn to that effect in other proceedings in Western Australia. No written variation was in evidence. He also gave evidence that down the track an extension of time for carrying out the work was the subject of a written approval. While I accepted his evidence in all other respects, I was left in some doubt about whether there was a written acceptance of the variation, and any absence of a written acceptance may be explained by the circumstance that at the time the environmental protection authority was pressuring the defendant.
[30] I should say that I was not inclined to doubt the reliability of Mr McDonnell’s recollection in this limited respect because of the statement of Mr Jose admitted under the Evidence Act. I attributed very limited weight to that statement because of the late stage at which the absence of a written variation was raised by way of defence, and because I considered that with more effort exerted earlier, Mr Jose could have given evidence at least by telephone, with the consequence that his version could have been tested by cross-examination. (I accepted the limited evidence of Mr Lonie.)
[31] I am not rejecting Mr McDonnell’s evidence about this, simply expressing some reservation about its reliability.
[32] There is however no doubt that the defendant sought this work, the defendant knew that the plaintiff was carrying the work, the defendant accepted the benefit of the work, and the defendant monitored its progress. It is difficult to imagine a clearer case for the application of the doctrines of waiver and estoppel (as presently relevant, conveniently expressed in relation to a similar situation in Update Constructions Pty Ltd v Rozelle Child Care Centre Pty Ltd (1990) 20 NSWLR 251, 276-7, per Priestley J). Alternatively, the claim is sustainable on the basis of restitution (Update, p 262 per Kirby P), or if I may put it this way, quantum meruit notwithstanding the contractual matrix.
[33] I turn now to six comparatively small claims for additional work, covered by invoices 126059 (1), 126061 (2), 126062 (3), 1607710 (4), 160719 (5), and 11140720 (6).
[34] The claim which I have numbered 1 related to shifting copper concentrate from under the filter press to adjoining sheds. Mr McDonnell gave evidence that this was outside the scope of the contract, and it is important to acknowledge that he knew what work was done, where the description in the documentation – as in all cases in this part of this judgment – is brief if not cryptic. That the defendant sought a quotation for the work is consistent with Mr McDonnell’s conclusion, as was the defendant’s provision of a tax invoice. I note that Mr McCafferty made no submission in writing about this claim. I allow the claim.
[35] Claim number 2 concerns clearing the access road from ROM to crusher. Mr McCafferty relied on the provision in the agreement concerning “incidental services”, and referred there to the “haul road and access areas”. Mr McDonnell explained this related to different four-wheel drive access. Again the provision of a quotation and tax invoice was consistent with its amounting to additional works not otherwise covered by the contract.
[36] Claim number 3 related to maintenance carried out on the crusher. Mr McCafferty styled this work as incidental to the loading, hauling and dumping of material into the crusher feed bin. Notwithstanding the ordinarily wide breadth of the word “incidental”, one’s perception should legitimately in a case like this be influenced by the approach of the parties, because they had a clearer perception of the limits of the primary, and the subsidiary, work. Again, the defendant’s request for a quotation and its provision of a tax invoice strongly indicate that the parties considered this work to fall outside the ordinary scope of the contract. That probably reflects what the two “honest businessmen” referred to by Isaacs J in Cohen and Co v Ockerby and Co Ltd (1917) 24 CLR 288, 300 would have interpreted that word “incidental” to embrace in that context.
[37] Claim number 4, for pushing overburden from the eastern end, fell outside the scope of the works on the evidence of Mr McDonnell, because the contract extended only to moving material to the southern end. Again the issue of the tax invoice signed for the defendant’s general manager is telling.
[38] Claim number 5 related to shifting copper concentrate from under the filter press. I accepted Mr McDonnell’s evidence that the plaintiff was not obliged under the contract to shift any copper concentrate. A quotation and a signed tax invoice again apply.
[39] Finally, claim number 6 related to lighting. The contract originally required only daytime work. The move to night time work necessitated the provision of lighting. A site inspection and tax invoice issued. It is at least not clear, from p 47 of the contract (behind tab 8), that “incidental services” would extend to the provision of lighting for night time work. The approach of the parties is again significant.
[40] I should add that there was no oral evidence beyond that given by Mr McDonnell in relation to any of those six comparatively small claims. They should all be upheld.
[41] The amounts recoverable by the plaintiff are:
1. under the Surface Mining Service contract, $1,927,622.82;
2. for the Esperanza Creek Contract variation, $72,020.31;
3. for additional work (claims 1 to 6 above), $197,088.35;
4. for miscellaneous work (paras 17 to 19 statement of claim, not challenged), $53,180.60.
Those amounts total $2,249,912.08.
[42] There will be judgment for the plaintiff against the defendant for $2,249,912.08. I reserve the questions of costs and interest, pending the receipt of submissions in writing, which I ask Counsel to furnish as soon as may be.