A.S.I. Electrics TR Pty Ltd v Rockville Electrical Pty Ltd
[2025] FedCFamC2G 122
•5 February 2025
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
A.S.I. Electrics TR Pty Ltd v Rockville Electrical Pty Ltd [2025] FedCFamC2G 122
File number(s): MLG 1245 of 2022 Judgment of: JUDGE MANSINI Date of judgment: 5 February 2025 Catchwords: CONSUMER PROTECTION – Dispute between contractors about a sub-contract for goods and services in the building industry – where the Applicant seeks rectification of the sub-contract to correct party name – consideration of applicable principles – no order of rectification made – application by non-party must be dismissed. Legislation: Competition and Consumer Act 2010 (Cth) s.18
Corporations Act 2001 (Cth) s.477
Code for the Tendering and Performance of Building Work 2016
Cases cited: Fowler v Fowler [1859] EngR 598
James Adam Pty Ltd v Fobeza Pty Ltd (2020) 103 NSWLR 850
Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85
Division: Division 2 General Federal Law Number of paragraphs: 60 Date of last submission/s: 24 May 2024 Date of hearing: 19 - 21 February 2024 and 24 May 2024 Place: Melbourne Counsel for the Applicant: Mr Brimfield Counsel for the Respondents: Dr Weston-Scheuber Solicitor for the Applicant: Burch & Co Solicitor for the Respondents: Clarke Hemmerling Lawyers ORDERS
MLG 1245 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: A.S.I. ELECTRICS TR PTY LTD (ACN 006 203 710)
Applicant
AND: ROCKVILLE ELECTRICAL PTY LTD (ACN 617 892 449)
First Respondent
JACK REARDON
Second Respondent
ORDER MADE BY:
JUDGE MANSINI
DATE OF ORDER:
5 FEBRUARY 2025
THE COURT ORDERS THAT:
1.The name of the Applicant be amended in the title of the proceeding to A.S.I. Electrics TR Pty Ltd (ACN 006 203 710).
2.The application as amended on 28 April 2023 is dismissed.
3.Costs be reserved.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE MANSINI
IN SUMMARY
Before the Court is an application which relates to a dispute between contractors about a sub-contract for goods and services in the building industry.
For the reasons that follow, the application as amended on 28 April 2023 is dismissed.
FACTUAL CONTEXT
The parties came together to deliver an upgrade of existing light fittings for CSIRO. For present purposes, they shall be referred to as ASI (principal contractor) and Rockville (sub-contractor).
From September 2018, representatives of ASI and Rockville commenced engaging in discussions about proposals for sub-contracting works subject of the primary tender with CSIRO. An initial site walk was attended by a representative of Rockville on behalf of ASI and, subsequently, ASI requested a quote for Rockville’s services.
On 21 October 2018, Rockville sent a quote to ASI. On its face, the quote was for LED light fittings and light replacement at CSIRO’s Waite and Adelaide campuses in South Australia. The total quoted price was $302,589.74 comprised of components for Labour, Materials and Tax. There came to be a strong dispute about precisely what was included in the “Materials” component.
On 14 January 2019, the principal contract agreement for supply of the services to CSIRO was signed by a Mr Scott Edgcumbe on behalf of ASI Electrics Unit Trust ABN 61 642 737 437 in his capacity as Director.
On 15 and 16 January 2019, there was an exchange of verbal and email correspondence between a Mr Braden Williams of ASI and a Mr Jack Reardon of Rockville about the sub-contract. The contemporaneous records reflect that, in these exchanges, Mr J Reardon confirmed that his original quote had included the materials as well as the labour for the South Australia projects and Mr Williams requested that Rockville exclude the supply of lights from its tender as ASI would need to supply the lights.
On 25 and 26 March 2019, the sub-contract agreement subject of the present proceedings was prepared on the standard form “perpetual” document in use by ASI at the time and signed by:
(a)Mr Edgcumbe on behalf of ASI Electrics Pty Ltd - ABN 61 642 737 747 in his capacity as Managing Director; and
(b)Mr J Reardon on behalf of Rockville Electrical in his capacity as Director.
There also came to be a strong dispute about the scope of the sub-contract agreement.
Rockville started the job soon after signing.
By late March 2019, it was apparent that there would be pricing and cost overruns which were discussed between contractor representatives (a Mr David Reardon of Rockville and Mr Williams of ASI) before Rockville issued invoices for variations to the contract price in April and May 2019.
By email of 2 May 2019, Mr Williams claimed that the variations were not valid. Also on 2 May 2019, Mr J Reardon sent an email to Mr Williams confirming that their representatives would be made available for stage 2 works induction and requested a time and location.
On 3 May 2019, Mr Williams queried whether Rockville would be returning to site to complete the balance of the works, to which Rockville confirmed that they would be completing stage 2 as per their (sub-)contract agreement. Rockville did not return after that date.
On 28 May 2019, ASI formally requested that Rockville’s variations be withdrawn.
On 3 June 2019, ASI made a payment to Rockville which was characterised as a termination payment for the work Rockville had already undertaken prior to the breakdown of the relationship.
On 30 June 2021, following a report to the then building industry regulator, A.S.I. Electrics Pty Ltd (ACN: 006203710) was issued a statutory compliance notice which required payment of $62,671.70 for its alleged contravention of subparagraph 11D(1)(a) of the Code for the Tendering and Performance of Building Work 2016. The payment required under the statutory compliance notice was comprised of the variation invoice amounts minus the payment made on 3 June 2019. The notice was paid, on a non-admissions basis, so that ASI would retain the ability to tender for Commonwealth Government work.
On 3 June 2022, ASI Electrics Pty Ltd (ACN 642 737 437) brought these proceedings claiming to have suffered loss and damage on account of Rockville’s alleged breach of contract and misleading and deceptive conduct (being for cost overruns having to engage an alternate sub-contractor to complete the works and refund of monies paid pursuant to the statutory compliance notice). On 28 April 2023, the applicant entity was sought to be amended to A.S.I. Electrics TR Pty Ltd (ACN 006 203 710) and an additional claim for rectification of the contract was made. At the time of hearing, the amended applicant sought damages in the amount of $142,722.94.
The claim was met with denials and a defence of estoppel and equitable set-off in the amount of $31,740.
KEY ISSUES
The parties jointly asked the Court to determine the following issues to resolve their dispute:
(a)Whether the first respondent was permitted to charge the applicant for variations under the sub-contract agreement and, if so, whether the variations were approved by the applicant?
(b)Whether either party breached and/or repudiated the sub-contract agreement?
(c)Whether the applicant was mistakenly described in the sub-contract agreement and whether the sub-contract agreement is liable to be rectified?
(d)Whether the first respondent engaged in misleading and deceptive conduct and whether the second respondent is accessorily liable for any misleading or deceptive conduct of the first respondent?
(e)Whether the applicant is estopped from bringing its claim?
(f)Whether the (first) respondent is entitled to an equitable set-off in relation to the applicant’s claim?
(g)Whether there is any entitlement to loss and damage?
THE MISTAKE AND RECTIFICATION ISSUE
Whether the applicant was mistakenly described in the sub-contract agreement and whether the sub-contract agreement is liable to be rectified are, together, a threshold issue which it is appropriate to resolve at the outset.
The pleadings
By the amended statement of claim, the applicant name was sought to be amended from ASI Electrics Pty Ltd (ACN 642 737 437) to A.S.I. Electrics TR Pty Ltd (ACN 006 203 710). Further, the applicant added a claim for rectification of the sub-contract agreement as follows:
Rectification of Subcontract
25. The Subcontract mistakenly listed the Applicant as “ASI Electrics Pty Ltd” not “A.S.I. Electrics Pty Ltd”.
26. It was the mutual common intention of the parties at the time of execution of the Subcontract that the named principal under that Subcontract was to be “A.S.I. Electrics Pty Ltd”, because:
a. the Applicant was the builder under the head contract with the CSIRO;
b. it was the Applicant’s employees who corresponded with the First Respondent and Reardon;
c. it was the Applicant who partly paid the First Respondent pursuant to the Subcontract; and
d. at the time of entry of the Subcontract, the entity “ASI Electrics Pty Ltd” did not exist.
27. In the premises, the Subcontract is to be rectified so as to list “A.S.I. Electrics Pty Ltd” as the principal.
In their amended defence, the respondents denied each of the above pleadings. In particular, they denied the mistake as plead and further said that the sub-contract agreement referred to ASI Electrics Pty Ltd ABN 61 642 737 437.
To the extent necessary, leave will be granted to amend the applicant name in the title of the proceeding as sought. I do so in the knowledge that the preparation of the case progressed on the amended pleadings with ample opportunity afforded to address the issues.
After judgement was reserved in the matter, the Court was notified that the amended applicant has since entered into liquidation. It was not contentious between the parties that, pursuant to s.477(2) of the Corporations Act 2001 (Cth), the appointed liquidators are entitled to act on their behalf.
I turn then to consider the case as to mistake and rectification.
The applicable principles
A mistake or error in a contractual agreement may be corrected by construction in common law or rectification in equity. There is a fine distinction between the two doctrines. The orthodox approach is to first attempt to resolve the meaning by manner of construction before turning to rectification. The common features were usefully summarised since Simic v New South Wales Land and Housing Corporation (2016) 260 CLR 85 (Simic) in James Adam Pty Ltd v Fobeza Pty Ltd (2020) 103 NSWLR 850 (James Adam) per Bell P, Macfarlan and Leeming JJA at [31] – [33]:
[31] Both doctrines are founded on an error in the expression of an instrument.
Both doctrines result in the legal meaning departing from what would
otherwise be the ordinary meaning of the instrument. And both doctrines
involve an elevated standard of proof. Like other doctrines which displace the
orthodox approach to construction, such as sham or non est factum, there is a
need to keep these doctrines within narrow limits. Although rectification by
construction does not resort to the parties’ subjective intentions, it remains an
aspect of construction which is circumscribed lest it detract from the certainty
and predictability of ordinary principles of the construction of written
documents.[32] In the case of rectification in equity, reference is regularly made to the need
for “clear and convincing proof” (or variants to the same effect), as explained
in Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009]
NSWCA 407 at [451]–[461] and Newey v Westpac Banking Corporation
[2014] NSWCA 319 at [170]. Rectification in equity turns upon establishing
that the document does not reflect the parties’ actual intentions, viewed
objectively from their words or actions: Simic v New South Wales Land and
Housing Corporation (2016) 260 CLR 85; [2016] HCA 47 at [41]–[42] and
[103]–[104].[33] Evidence of the parties’ intentions is not to the point in rectification by
construction. Instead, as the primary judge said, it is necessary to conclude that
the literal meaning is absurd or inconsistent, and that it is clear what the
objective intention is to be taken to have been. The elevated standard of proof
applies to both limbs of that test:(1)In respect of the existence of an obvious error, Lord Hoffmann
explained that the court does “not readily accept that people have
made mistakes in formal documents”: Chartbrook Ltd v Persimmon
Homes Ltd [2009] AC 1101; [2009] UKHL 38 at [23]. Further,
“[c]ourts which are asked to delete, insert or rewrite part of a
contract because of what is said to be an obvious error should bear
steadily in mind that imperfections and infelicities and ambiguities in
contractual language commonly reflect the give and take of negotiations, or the parties’ appreciation that some obscurities are
incapable of resolution”: Seymour Whyte Constructions at [10].(2)The condition that the correct meaning be “self-evident” or “clear”
must also be satisfied to a high level of conviction. It must be
“perfectly clear what legal meaning [was] to be given to the literally
absurd words”: National Australia Bank Ltd v Clowes [2013]
NSWCA 179 at [38].The Court was taken to Simic as authority for the principle that rectification to correct the name of a contracting party is permissible. Those reasons emphasise that proof of intention must be to a high standard and by admissible evidence. Further, it was explained that consideration proceeds on an objective view of the evidence regarding actual intention, in that the Court does not “merely accept what a party says was in his or her mind, but instead considers and weighs admissible evidence probative of intention”: per Kiefel J (as she then was) at [41]-[42], citing the following guidance of Lord Chelmsford in Fowler v Fowler [1859] EngR 598 as to the bar for establishing rectification:
“a person who seeks to rectify a deed upon the ground of mistake must be required to establish, in the clearest and most satisfactory manner, that the alleged intention to which he desires it to be made conformable continued concurrently in the minds of all parties down to the time of its execution”.
There are cases where the intention is not clear. Even in such cases, there may be a correction of an obvious mistake that admits of no other construction: see, for example, the discussion in James Adam at [46]-[47].
The evidence
Relevantly, the following evidence about the ASI structure was before the Court:
(a)A trust deed for the Associated Service Industries Unit Trust was tendered which showed that this trust was established in 1983 and its corporate trustee was Associated Service Industries Pty Ltd ACN 006 203 710.
(b)ASIC and InfoTrack records were tendered and together traced the history of name changes of the corporate trustee of the Associated Service Industries Unit Trust - at the relevant time, A.S.I. Electrics Pty. Ltd. (later renamed A.S.I. Electrics TR Pty. Ltd.).
(c)According to Mr Edgcumbe’s filed affidavit evidence, the ABN reference on the sub-contract agreement (ABN 61 642 737 437) was to the ASI Electrics Unit Trust and A.S.I. Electrics TR Pty Ltd (ACN 642 737 437) was its corporate trustee. There was no trust deed, schedule of variation, ASIC or InfoTrack record which confirmed the trustee of the ASI Electrics Unit Trust or the relationship between the ASI Electrics Unit Trust and A.S.I. Electrics Pty Ltd (ACN 006 203 710) (now A.S.I. Electrics TR Pty Ltd).
Also before the Court were copies of:
(a)Head contract between CSIRO and ASI Electrics Unit Trust ABN 61 642 737 437; and
(b)Sub-contract agreement between ASI Electrics Pty Ltd - ABN 61 642 737 437 and Rockville Electrical.
Consideration
No issue was taken with the jurisdiction of the Court to correct an obvious mistake (if one were found) in its accrued jurisdiction, the primary application arising under s.18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)).
In the present case, the amended applicant contends for an alleged mistake of the entity named as (principal) contractor and party to the sub-contract agreement. The respondents contend that there was no mistake as to justify rectification in equity.
The alleged mistake is in the name ASI Electrics Pty Ltd which immediately precedes the ABN 61 642 737 437 and together comprise the definition of “Contractor” on page 1 of the sub-contract agreement. The same name and ABN are repeated at the execution (signature) clause on page 7 and in the footer to each page of the sub-contract agreement.
By the amended application, the amended applicant said that the Court would find that the mutual common intention of the parties to the sub-contract agreement was that the named principal under the sub-contract was to be “A.S.I. Electrics Pty Ltd” because of 4 reasons developed as particulars. It is convenient to address each particular, but not in order of the pleading.
At the time of entry of the sub-contract agreement, the entity “ASI Electrics Pty Ltd” did not exist
On the independent business records before the Court (summarised above), it was established that there was no entity bearing the exact name “ASI Electrics Pty Ltd” at the time the sub-contract agreement was made. However, on the balance of the evidence supported by independent business records, the ABN cited at the definition of “Contractor” on the sub-contract agreement “ABN 61 642 737 437” did exist and related to an “ASI Electrics Unit Trust”.
Accordingly, it is not possible to construe the true meaning of the principal contractor to the sub-contract agreement by the plain words used. The question then is whether the Court should rectify the issue by application of the doctrine of equity such that the definition of “Contractor” in the sub-contract agreement be replaced with “A.S.I. Electrics Pty Ltd” (now named “A.S.I. Electrics TR Pty Ltd”).
The applicant was the builder under the head contract with the CSIRO
The head contract with CSIRO was made with the ASI Electrics Unit Trust ABN 61 642 737 437 which is not the amended applicant to these proceedings (whether under its former or current corporate name).
The head contract with CSIRO refers to “the supplier”. It does not define or otherwise specify that the “the builder” is the entity that is the amended applicant to these proceedings (whether under its former or current corporate name).
To the contrary, the head contract with CSIRO is made with an entity bearing the ABN identical to that defined as “Contractor” in the sub-contract agreement which is not the ABN of the amended applicant to these proceedings.
It is not established that the amended applicant was the builder under the head contract with the CSIRO and the evidence in this respect does not favour rectification as sought.
It was the applicant’s employees who corresponded with the respondents
The evidence was that the sub-contract negotiations were introduced by a Mr Dwyer of a Lumina Group entity, who sent an email introduction which referred Mr J Reardon to “Braden from ASI Electrics (another part of our business)”.
Mr Williams gave affidavit evidence that he was “the service manager for ASI Electrics, the Applicant”.
There was no probative evidence of the actual employing entity/ies of Mr Dwyer or Mr Williams.
It is not established on the evidence that the individuals who corresponded with the respondents and their representatives in pre-contractual negotiations were employees of the amended applicant to these proceedings.
This is not a basis for finding in favour of the rectification that the amended applicant sought as plead.
Although understood to be accepted, for completeness, correspondence that post-dated execution of the sub-contract could not assist the Court in this respect.
It was the applicant who partly paid the first respondent pursuant to the sub-contract agreement
As to the remaining particular of this ground, it was understood that the amended applicant ultimately accepted that any evidence which post-dated the execution of the sub-contract could not assist the Court in arriving at the conclusion that rectification was warranted.
Resolution
In conclusion, the evidence established that there was no entity named ASI Electrics Pty Ltd in existence at the time the sub-contract agreement was made. However, where the ABN that was expressly specified at the definition of “Contractor” was for the ASI Electrics Unit Trust which did exist at the relevant time, and that same ABN featured throughout the sub-contract agreement (at the execution clause where signed by Mr Edgcumbe and indeed in the footer on every single page), the matter might be resolved by means of construction.
The amended applicant urged the Court that it would be an error to find that the sub-contract agreement could be construed or rectified as the respondents sought, such that the “Contractor” was the ASI Electrics Unit Trust with ABN 61 642 737 437 because, in that case, there would be no binding contract at all with other legal ramifications. In this respect, it was not strictly plead nor directly submitted to the Court - but was perhaps supposed to be obvious - that if a party to the sub-contract agreement was a trust within the orthodox legal meaning, then it could only act or contract through its trustee. Even if it were so put, the evidence does not probatively establish such relationship between the amended applicant and the ASI Electrics Unit Trust ABN 61 642 737 437. The highest the evidence goes in this respect is a statement by Mr Edgcumbe that A.S.I. Electrics TR Pty Ltd (ACN 642 737 437) was the corporate trustee of the ASI Electrics Unit Trust. As earlier summarised, the independent business records trace the history of the name change of the amended applicant entity and establish that it was the corporate trustee for the Associated Service Industries Unit Trust. The independent business records do not establish the corporate trustee of the ASI Electrics Unit Trust. The Associated Service Industries Unit Trust deed as tendered had no schedule of variation or other proof that the trust subject of the deed has since changed its name. There were undated and unstamped certificates referring to unit distribution to family trusts which ultimately take the matter nowhere. Further, even if it were probatively established that the corporate trustee of the ASI Electrics Unit Trust ABN 61 642 737 437 is (and was) the amended applicant (by its previous corporate name), that fact would not of itself be dispositive.
The bar for rectification is set high. It is not for the Court to simply accept that which Mr Edgcumbe now says was in his mind (which would be problematic of itself given the materials were replete with errors in this respect).
There is limited evidence to illuminate the actual intention of the parties viewed objectively from their words and actions at the time the sub-contract agreement was made.
It may be accepted that there was a mutual intention at the time for ASI and Rockville to sub-contract part of the CSIRO LED light fitting project which work had been awarded to ASI by CSIRO.
Mr Edgcumbe’s evidence acknowledged the confusing similarity of entity names within his control and sought to explain, in brief terms, the corporate history of some of the entities within his control. However, as Counsel for the amended applicant acknowledged, there was no explanation in evidence for why the mistake for which the amended applicant contended was made.
What was established in evidence was that this was not a “one off” or inadvertent typographical error. In cross-examination, Mr Edgcumbe confirmed that the perpetual contract template that formed the basis of the sub-contract agreement was the regular standard form contract in use by ASI at the time. The alleged mistake of name appeared not just at the definition of (principal) contractor but in numerous places and on every single page of the sub-contract agreement.
Accepting there was some mistake of name, there is no basis to conclude that the entity bearing the ABN clearly defined as the “Contractor” on the sub-contract agreement, which entity was in existence at the relevant time, was a mistake on the admissible evidence of actual common intention of the parties.
In those circumstances, there would be no order as to rectification of the sub-contract agreement as sought by the amended applicant to these proceedings.
For completeness, that the same party to the sub-contract agreement was the party named on the originating documents by which these proceedings were commenced was at best unhelpful but does not underscore a conclusion as to actual intention at the time the sub-contract agreement was made.
The unfortunate consequence of the above conclusion is that the amended applicant to these proceedings is (and at the relevant times was) not a party to the sub-contract agreement and is not strictly entitled to any relief. In those circumstances, it is not appropriate that the Court go on to determine the remainder of the issues in dispute where a party with legal rights has not strictly had the opportunity to be heard.
The Court is mindful that, having heard the balance of the issues in dispute, this is a significant ruling on what appears to be a fine point. I caution to note that the amended applicant was on ample notice that the respondents pressed for this finding and its consequence. There was no claim put in the alternative or request that the matter be determined as a preliminary issue.
CONCLUSION
For the above reasons, the application as amended on 28 April 2023 will be dismissed. Costs will be reserved.
I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate:
Dated: 5 February 2025
0
6
3