AAB Engineering and Inspection Services Pty Ltd v Brunel Energy Pty Ltd
[2004] WASC 124
AAB ENGINEERING AND INSPECTION SERVICES PTY LTD -v- BRUNEL ENERGY PTY LTD [2004] WASC 124
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2004] WASC 124 | |
| Case No: | CIV:2611/2001 | 18 & 19 MAY 2004 | |
| Coram: | PULLIN J | 10/06/04 | |
| 19 | Judgment Part: | 1 of 1 | |
| Result: | Claim dismissed | ||
| B | |||
| PDF Version |
| Parties: | AAB ENGINEERING AND INSPECTION SERVICES PTY LTD BRUNEL ENERGY PTY LTD |
Catchwords: | Contract Whether breach of contract Turns on own facts Trade Practices Act Claim for damages Turns on own facts |
Legislation: | Nil |
Case References: | Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435 BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348 Maggbury Pty Ltd v Hafele Aust Pty Ltd (2001) 210 CLR 181 ACCC v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491 ACCC v Samton Holdings Pty Ltd (2002) 117 FCR 301 Allen v Carbone (1975) 132 CLR 528 Bell v Lever Bros Ltd [1932] AC 161 Cook v Pasminco [2000] FCA 677 Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431 Hamlyn and Co v Wood and Co [1891] 2 QB 488 Legione v Hateley (1983) 152 CLR 406 Liverpool City Council v Irwin [1977] AC 239 Lukacs v Wood (1978) 19 SASR 520 Schuler (L) AG v Wickman Machine Tool Sales Ltd [1974] AC 235 Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206 Svanosio v McNamara (1956) 96 CLR 186 Taylor v Johnson (1983) 151 CLR 422 Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
- IN CIVIL
- Plaintiff
AND
BRUNEL ENERGY PTY LTD
Defendant
Catchwords:
Contract - Whether breach of contract - Turns on own facts
Trade Practices Act - Claim for damages - Turns on own facts
Legislation:
Nil
Result:
Claim dismissed
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Category: B
Representation:
Counsel:
Plaintiff : Mr J R Criddle
Defendant : Mr T H F Caspersz
Solicitors:
Plaintiff : J R Criddle
Defendant : Blake Dawson Waldron
Case(s) referred to in judgment(s):
Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99
Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435
BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266
Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337
Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348
Maggbury Pty Ltd v Hafele Aust Pty Ltd (2001) 210 CLR 181
Case(s) also cited:
ACCC v CG Berbatis Holdings Pty Ltd (2000) 96 FCR 491
ACCC v Samton Holdings Pty Ltd (2002) 117 FCR 301
Allen v Carbone (1975) 132 CLR 528
Bell v Lever Bros Ltd [1932] AC 161
Cook v Pasminco [2000] FCA 677
Equity Access Pty Ltd v Westpac Banking Corporation (1989) 16 IPR 431
Hamlyn and Co v Wood and Co [1891] 2 QB 488
Legione v Hateley (1983) 152 CLR 406
Liverpool City Council v Irwin [1977] AC 239
Lukacs v Wood (1978) 19 SASR 520
Schuler (L) AG v Wickman Machine Tool Sales Ltd [1974] AC 235
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Shirlaw v Southern Foundries (1926) Ltd [1939] 2 KB 206
Svanosio v McNamara (1956) 96 CLR 186
Taylor v Johnson (1983) 151 CLR 422
Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099
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1 PULLIN J: The primary claim by the plaintiff is for the enforcement of a contract between the plaintiff and defendant dated 14 October 2000 or alternatively damages for breach of the contract. If those claims fail, the plaintiff claims damages under s 82 of the Trade Practices Act for alleged misrepresentation.
2 The background leading up to the contract is as follows. Mr Alan Arthur Bollands had worked for over 35 years in the oil and gas industry as a quality assurance engineer. Mr Bollands is, and was, a director of the plaintiff. In 2000 the plaintiff entered into a contract with a labour hire company called Atria/TRS JV ("Atria") whereby the plaintiff would from, time to time, provide professional contracting services to clients of Atria. During 2000 the plaintiff provided Mr Bollands' services to one of Atria's clients, namely TIGA JV ("TIGA"). As a result, Mr Bollands worked for TIGA, carrying out quality assurance work. He was located on the first floor of 1 Mill Street, Perth. TIGA was carrying out engineering and procuring services for Phillips Petroleum, which was planning to produce gas from platforms in the Timor gap, in an area known as Bayu-Undan which was 500 km north-west of Darwin in the Timor Sea. It was known that Phillips would, in due course, contract with Hyundai to construct equipment for the "top side module" for the gas production system at Bayu-Undan. Phillips Petroleum's office in Perth was located on the fourth floor of 1 Mill Street, Perth.
3 Mr Bollands started work with TIGA on 7 March 2000. His supervisor in TIGA was Jack Hesketh. In about August of 2000, Mr Hesketh came into the area where Mr Bollands was working, along with others, and asked if they were interested in work in relation to the "top side" project. A Mr Derrick Stanwix then asked to see Mr Bollands. Mr Stanwix was a site manager working with Phillips Petroleum. He was located at the Phillips Petroleum office on the fourth floor. Mr Bollands went to the fourth floor and met with Mr Stanwix. Mr Stanwix told Mr Bollands that Mr Stanwix wanted Mr Bollands to work for Phillips Petroleum as a quality assurance engineer. Mr Stanwix showed him a chart with Mr Bollands' name as quality assurance engineer shown on it. Mr Stanwix then made contact with Mr Paul Pullen, a representative of the defendant. The defendant was a labour hire company. Mr Pullen in turn made contact with Mr Bollands and the two men had a meeting. There was a short conversation, during which Mr Pullen and Mr Bollands discussed the possibility of a contract between the plaintiff and the defendant which would result in him working for Phillips Petroleum on the "top side" module contract in Korea. Mr Pullen said that he would put
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- Mr Bollands' name forward at the rates of $800 per day with an uplift of 25 per cent when Mr Bollands went to Korea.
4 Subsequently, an envelope turned up on Mr Bollands' desk. It was a Phillips Petroleum document with an introduction indicating that it was Phillips Petroleum's common guidelines and approach in determining terms and conditions for extended overseas assignments. Mr Bollands understood that this came from Mr Pullen, but there was no conversation with Mr Pullen about this document.
5 On 6 October 2000, Mr Stanwix and Mr Bollands spoke on the telephone. Mr Stanwix said that Mr Bollands should apply for the position which was to be advertised the next day by the defendant.
6 An advertisement appeared in the newspaper. It had been placed by the defendant. The advertisement indicated that the defendant was seeking to provide a "valued client" with senior off-shore fabrication/construction personnel for a gas recycle project. Although Mr Bollands said that this advertisement appeared on 7 October 2000, that appears not to be correct because by an email dated 6 October 2000, Mr Bollands sent a communication to Mr Pullen which read:
"I am applying for the position of Welding and Materials Engineer/Quality Engineer that appeared in the 'West' last saturday and forward my CV for your attention."
7 Mr Bollands then discussed with Mr Stanwix a date when he might start (on the assumption that Phillips Petroleum wanted him to do the work). 6 November 2001 was proposed as the start date.
8 Mr Bollands then spoke to his supervisor about holidays which he wished to take before he commenced working via the defendant, for Phillips Petroleum. Mr Bollands told Mr Pullen that he would take two weeks holiday. Mr Pullen told Mr Bollands that a contract would be ready for him to sign at 4.30 pm on Friday 13 October 2000.
9 There is a dispute about exactly what happened on 13 October 2000 and so I will relate the evidence from the witnesses. Mr Bollands gave evidence that he called at the defendant's office at 4.30 pm. Mr Bollands said that he spoke to the receptionist and asked for Mr Woudstra. He said that as a result, Mr Woudstra came out, took him into an office where he had the contract on the table. Mr Bollands said Mr Woudstra signed the contract, and then Mr Bollands said he would read it that evening and send it back the next day. He took the contract away with him, along with
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- a letter from the defendant signed by Mr Woudstra and dated 13 October 2000, which enclosed, inter alia, the contract and a Phillips Petroleum confidentiality undertaking. Mr Bollands signed the two documents on 14 October 2000 and sent them back to the defendant in the mail.
10 Mr Woudstra's account of the meeting was as follows. He said that he was not expecting Mr Bollands to call. He says that Mr Bollands came along at 3 pm and that Mr Woudstra saw him when he was told that Mr Bollands was in reception. He said that Mr Bollands introduced himself and explained that he was there to collect a contract relating to Phillips Petroleum. Mr Woudstra asked if Phillips Petroleum had confirmed his appointment. Mr Bollands said that there had been discussions with Mr Stanwix and that all approvals were to be completed. Mr Woudstra instructed an assistant to prepare the contract, which happened.
11 It seems unlikely that Mr Woudstra would have acted entirely upon Mr Bollands' word that he should have a contract made up for him. However, when Mr Woudstra's assistant went off to prepare the contract, she would have found, if she looked, a record of most of the details to be inserted in the schedules to the contract. This is because the evidence revealed that within the defendant's office there existed a document prepared on 12 October 2000, entitled "Rate Analysis Sheet" which provided most of the details which were included in the schedules to the contract. It is likely, and I find, that Mr Bollands did tell Mr Woudstra that approval was to be given by Phillips Petroleum. It is likely because that is what Mr Bollands believed as a result of his conversations with Mr Stanwix.
12 There was an issue about whether Mr Woudstra or Mr Bollands had met before that day. It is not improbable that they had met at some stage earlier as Mr Bollands said, but I also accept Mr Woudstra's evidence that as far as he knew, he had not met Mr Bollands before. That simply means that he may have met Mr Bollands but not remembered having done so. In my view the point is not significant. The time of the meeting is also not a critical issue and it is not necessary to make a finding about the time. There is evidence that the contract was being worked on within the office before 4.30. That however, may mean that somebody was working on the document as a result of instructions given by Mr Pullen, or it may mean that Mr Bollands did attend at the office earlier than 4.30 pm and that events unfolded as Mr Woudstra said.
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13 It is clear, however, that on both accounts of the events of the day, Mr Woudstra signed the contract and Mr Bollands took it away with him as he said, signed it on 14 October 2000, and sent it back in the mail along with the confidentiality undertaking.
14 On 14 October 2000 Mr Bollands left for his holiday in Queensland and Melbourne. He returned early on the Thursday in the second week of his holiday because it was raining in Melbourne. He then worked the Thursday and Friday 26 and 27 October 2000. On 28 October 2000 he delivered to Atria an envelope containing notice of termination of his contract with Atria.
15 On Monday 30 October 2000 Mr Bollands spoke on the telephone with Mr Pullen, who said that not all the personnel within Phillips Petroleum who had to approve his appointment had done so. Mr Pullen said that Phillips Petroleum was not happy with the daily rate which had been agreed in the contract between the plaintiff and the defendant. Mr Pullen asked if he would agree to reduce the rate. Mr Bollands did not agree to do so. This was the first time Mr Bollands had heard anything about Phillips Petroleum not having agreed to his appointment. He had assumed from his conversations with Mr Stanwix that there was such agreement. Unfortunately for the plaintiff, it appears that Mr Stanwix was not the decision-maker.
16 There was no more communication between Mr Pullen and Mr Bollands until Friday 3 November 2000. On that day Mr Pullen sent an email to Mr Bollands which read:
"It is with great regret I have to inform you that Brunel Energys efforts up to this date to secure you a start date and a person of responsibility to report to within the Phillips organisation have been unsuccessful."
17 Mr Bollands held out hope until Christmas 2000 that Phillips Petroleum would still call for his services, but the call was not forthcoming.
18 The issue between the parties is whether the contract was as the plaintiff contends, a contract whereby the plaintiff was to make Mr Bollands' services available to Phillips Petroleum for two years and that, in consideration of the plaintiff being ready, willing, and able to supply those services, the defendant was obliged to pay the plaintiff the daily fee for two years; or whether, as the defendant contends, the contract was one whereby the plaintiff was to be paid the daily fee only for such
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- days as Mr Bollands' services were actually provided, and that his services would only be provided when they were required by the defendant.
19 The defendant's case is that Phillips Petroleum did not want to use Mr Bollands' services, that as a result the defendant did not require Mr Bollands' services, that the defendant was not obliged to require Mr Bollands' services to be provided, and that, in consequence, the contract did not oblige the defendant to make any payment at all to the plaintiff.
20 I now turn to examine the terms of the contract entered into between the plaintiff and the defendant. The contract refers to the defendant as the "Company" and the plaintiff as the "Contractor". The contract had two recitals which read:
"A. The Company conducts business as a personnel placement agency.
B. The Contractor has agreed to provide services to the Company on the terms and conditions set out in this Agreement."
21 Clause 1.1 contained the following definitions:
"'Client' means [Phillips Petroleum]".
"'Commencement Date' means [6 November 2000]".
"'Expiry Date' means [November 2002]".
"'Fee' is defined in clause 4.1".
"'Nominated Personnel' means the persons supplied by the Contractor to provide the Services as named in a Personnel Order."
"'Personnel Order' means a personnel order in the form contained in Schedule B".
"'Services' is defined in clause 3".
"'Term' means the term of this Agreement as provided for in clause 2".
22 Clause 2 of the contract read:
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- "The Term commences on the Commencement Date, and subject to clause 10, expires on the Expiry Date."
23 Clause 3 read:
"The Contractor will provide the Services specified in Item 4 of Schedule A (the 'Services') for the Client at the location specified in Item 5 of Schedule A (the 'Location') or such other location as may be agreed between the Client and the Company."
24 Clause 4.1 read:
"In consideration of the Contractor providing the Services, the Company will pay the Contractor the fee specified in Item 10 of Schedule A or such other rate as may be agreed in writing between the Company and the Contractor (the 'Fee')."
25 Clauses 5.1, 5.2, 5.3 and 5.4 read:
"5.1 The Contractor must submit to the Company for approval an invoice ('Invoice'), a timesheet ('Timesheet') and such other documents relating to the provision of the Services as requested by the Company by the last working day of the month for the Services provided during the previous month.
5.2 The Invoice shall include the number of hours taken to provide the Services, the days on which the Services were provided and the amount the Contractor is claiming as payment for the Services the subject of the Invoice and any GST payable for the Services.
5.3 The Timesheet shall include details of the Services provided during the previous month the names of the Nominated Personnel providing the Services, the days on which the Services were provided, the number of hours taken to provide the Services on each day and such other details as the Company may require.
5.4 If the Services the subject of the Invoice and the Timesheet have been provided to the satisfaction of the Company and the Invoice and the Timesheet are considered by the Company to comply with clause 5.2
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- and 5.3 then the Company shall make payment to the Contractor's Australian bank account within 10 Business Days of the receipt of the Invoice and the Timesheet (whichever is later)."
26 Clause 7.1 provides:
"The Contractor agrees and warrants that:
(a) it will provide the Services with all necessary professional skill and diligence to the reasonable satisfaction of the Company within the hours specified by the company from time to time.
(b) …
(c) …
(d) it will provide the Services as and when required by the Company …"
27 Clauses 8.1 and 8.2 read:
"8.1 The Contractor will nominate personnel to provide the Services and specify the names of those persons in Item 1(a) of Schedule B (the 'Nominated Personnel').
8.2 The Company may from time to time nominate to the Contractor persons the Company wishes to be Nominated Personnel under this Agreement …"
28 Clause 9 provided that the contractor was to be engaged as an independent contractor and that nothing in the agreement "… shall be deemed to constitute …" the contractor or nominated personnel as employees. Clause 9.2 provided that the contractor must pay all wages required by law to be paid to the nominated personnel.
29 Clause 10 provided that either party could terminate the contract by giving the amount of notice specified in Schedule A.
30 Clause 19.1 provided that the agreement constituted the "… entire agreement between the parties …" and replaced "… any prior arrangements, agreements, representations or undertakings."
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31 In Schedule A, Item 4 provided that the services were "QA Engineer". Item 5 provided that the location was Perth. Item 6 described the "Client" as "Phillips Petroleum", and the "Fee" in Item 9 (wrongly referred to as "Item 10" in cl 4.1) was specified to be "A$800.00 per day".
32 Schedule B was headed "PERSONNEL SERVICES ORDER". It named Mr Bollands as the "Personnel", that the nature of services was "QA Engineer", the location to perform the services was "Perth WA, or any other location as the client may reasonably require". The "Termination Notice Period" in both Schedule A and B read:
"20 working days Contractor to Phillips Petroleum …
20 working days Phillips Petroleum … to Contractor."
33 As I have already said, the plaintiff's argument is that this contract obliged the defendant to make Mr Bollands' services available to Phillips, that in consideration of the plaintiff being ready, willing, and able to do so, the defendant was obliged to pay the plaintiff the daily fee for each day of the two year term and that the plaintiff was at all times (until the plaintiff terminated the contract on 29 September 2001) ready, willing, and able to supply Mr Bollands' services. The plaintiff claims that the defendant is indebted to the plaintiff for the fees said to have fallen due. Alternatively, the plaintiff claims the defendant repudiated the contract by:
(a) "failing to engage the services of Bollands on 6 November 2000, a working day, or upon any of the 227 working days between 6 November 2000 and 29 September 2001 when the contract was terminated by written notice by the Plaintiff to the Defendant";
(b) "failing to pay the Plaintiff A$800.00 in respect of 6 November 2000, a working day, or in respect of any of the 227 working days to 29 September 2001 …".
34 The defendant denies that the contract obliged the defendant to "engage" the plaintiff's services, and denies that on the facts of the case the defendant came under an obligation to pay any fee, and thus the failure to engage the services and the failure to make payment did not constitute a repudiation of the contract.
35 The issue is therefore one of interpretation of the contract. Interpretation of a written contract involves the ascertaining of the
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- meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation which they were in at the time of the contract. That knowledge may include matters of law: see Maggbury Pty Ltd v Hafele Aust Pty Ltd (2001) 210 CLR 181 at [11].
36 The background knowledge which would reasonably have been available to the parties and which was available to the parties in the situation they were in at the time the contract was entered into was as follows. The defendant was a labour hire company or, as the recital to the contract says, a "personnel placement agency". These agencies are important in the oil and gas industry. The advantages to the clients of placement through these agencies is that the client does not have to spend time and money sourcing persons; they utilise the skills and contacts of the agency to do this. The client avoids the usual obligations and costs associated with employing individuals. There are some advantages also for the individuals concerned. They are freer to move from assignment to assignment in order to maximise earnings. Relatively short notice may be given to terminate an assignment. The practical effect of the arrangement is that a person carries out work for the client but is not employed by the client. There is usually a trio of contractual arrangements in place as follows:
(a) First there will be a contract between the client and the agency. This will require the agency to locate suitable persons for employment and then to arrange, via a company employing the person, for the company to supply that person's services to the client for a fee payable by the client to the agency.
(b) Secondly, there will be a contract between the agency and the company employing the person who is to carry out the work. This will provide that the company will agree to supply the services of that person to the client for a fee payable by the agency to the company. This fee will be less than the fee referred to in the contract referred to in (a). The difference is the income earned by the agency.
(c) Thirdly, there will be a contract between the company and the person, whereby the company pays the person's wages and is responsible for tax and other on-costs.
37 It was well-known to both the plaintiff and the defendant that Phillips Petroleum had to agree to the appointment of a person who was to carry out services. It was also well understood by the plaintiff and defendant that, although the contract between those parties provided that
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- the plaintiff was to supply Mr Bollands' services as a QA engineer, those services would be provided not to the defendant, but to Phillips.
38 I now turn to the interpretation of the contract.
39 The plaintiff submits that its entitlement for fees or damages arises from the combined effect of cl 2, cl 3 and cl 4.1 of the contract.
40 It is trite that in the interpretation of a provision in a contract the contract must be read as a whole: Australian Broadcasting Commission v Australasian Performing Right Association Ltd (1973) 129 CLR 99 at 109. When the contract is read as a whole, it becomes clear, in my opinion, that while the plaintiff agreed to provide (ie to supply) the services of Mr Bollands to Phillips, it was only obliged to do so "as and when" those services were required by the defendant. This is clear as a result of the clauses referred to by the plaintiff read in conjunction with a number of other clauses, the first of which is cl 7.1(d). In practical terms, I assume Phillips Petroleum would tell the defendant when it wanted the services to be provided and the defendant would then require the plaintiff to make Mr Bollands' services available at those times. The contract contained no provision obliging the defendant to require the plaintiff to provide the services. Another clause, cl 4.1, stated that the defendant was obliged to pay the daily fee "in consideration of [the plaintiff] providing the services", meaning, in my opinion, that the fee was payable only in respect of services actually provided (ie furnished or supplied); it was not payable for each day merely because the plaintiff was ready, willing and able to supply the services. The contract was one which would govern the supply of personal services, if the services were called for by the defendant. Although the contract was not a conventional two party employment contract of the type under consideration in Automatic Fire Sprinklers Pty Ltd v Watson (1946) 72 CLR 435, nevertheless, observations made in that case are of relevance here. As Latham CJ said at 452:
"An agreement may amount to an agreement for an annuity or other periodical payment with an independent promise by the beneficiary to do work for the other party to the agreement, but the ordinary contract of employment is not of that character. The general rule with respect to contracts of employment was stated in Browning v Crumlin Valley Collieries Ltd [1926] 1 KB 522 at p 528, by Greer J in the following words 'The consideration for work is wages, and the consideration for wages is work.' In O'Grady v M Saper Ltd [1940] 2 KB 469, at
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- p 473, MacKinnon LJ in the Court of Appeal said: 'It was rightly said ... by Atkinson J (Petrie v Mac Fisheries Ltd [1940] 1 KB 258 at p 269), "The question must depend, as is indicated in the notes to Cutter v Powell (1795) 6 TR 320 [101 ER 573] (Smith's Leading Cases, 13th ed (1929), vol 11, p 49), on the terms of the contract. 'The right to wages depends upon whether the consideration therefor has been performed.' It is submitted in the notes to that case, as I think rightly, that it must be ascertained from the contract whether the consideration for the payment of wages is the actual performance of the work, or whether the mere readiness and willingness, if of ability to do so, is the consideration.'"
41 From that passage can be drawn the following points. The first is the obvious one, that the terms of the contract are critical; the second is the need to examine the contract to see whether there are independent promises; and thirdly, that in contracts of employment, the usual rule is that consideration for work is wages and the consideration for wages is work.
42 The promise by the plaintiff to provide the services when required, and the promise by the defendant to make payment of the "Fee" are not independent. The terms of this contract provide that the consideration is payable only if there is actual provision or supply of "Services". Consideration is not payable merely because of the ability and the readiness and willingness of the plaintiff to provide the "Services". There are other indicators that this is so. First, I point again to the express statement in cl 4.1 that the defendant is only obliged to pay the fee in consideration of the plaintiff providing the services. Secondly, the obligation to make payment within any particular time is set out in cl 5.4. This provides that the defendant shall make payment within 10 days after the receipt of an invoice or timesheet, whichever is the later. The timesheet must include the details of the services provided, the days when the services were provided and the number of hours taken to provide the services. The invoice must set out the number of hours taken to provide the services, the days on which the services were provided and the amount that the plaintiff is claiming as payment for the services. These particulars set out in cl 5.2 and cl 5.3, and are particulars of the obligation imposed on the plaintiff in cl 5.1 to submit an invoice and timesheet relating to the provision of services "during the previous month". It is true that there may be other reasons for a timesheet (these might be useful to Phillips Petroleum if it wished to record time spent on its work) but the invoice is
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- explicable only as being the machinery for payment. Payment is related to the services actually supplied.
43 It would be a somewhat surprising outcome if the defendant was obliged to make payment of $800 per day for 365 days per year, even if no services were provided. Indeed, the plaintiff's claim for damages assumes that payment is only due for "working days"; that the fee would not be paid during 4 weeks holiday each year; and that fees would not be payable on statutory holidays. The presentation of those particulars, perhaps reflected the difficulty that the plaintiff felt it might have in persuading the court that the plaintiff was entitled to be paid the fee every day, merely because the plaintiff was ready, willing and able to provide Mr Bollands' services every day.
44 I do not consider that the contract is ambiguous but in case I am wrong and there is some ambiguity, then the interpretation contended for by the plaintiff is not the reasonable one.
Implied terms
45 The plaintiff submits that the contract contained the following implied terms:
(a) "[I]f the plaintiff was ready willing and able to perform the contract, then the daily fee [$800] would be payable in respect of every working day during the Contract Period";
(b) "[I]f the plaintiff was ready willing and able to perform the Contract, the Defendant would engage the services of Bollands each working day during the Contract Period";
(c) "[T]he Defendant would by the 6th of November 2000 have in place an agreement with Phillips to provide the services of Bollands to Phillips."
46 It is submitted by the plaintiff that each of these terms, should be implied to give the contract business efficacy: Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337. Before a term will be implied for that reason, it must be shown that it is needed "in order to make the agreement work, or conversely, in order to avoid an unworkable situation": BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 292. The two cases to which I have just referred make it clear that before a term will be implied, the term
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- must be shown to be reasonable and equitable, and must be obvious in the sense that the parties would most likely have agreed on it had they considered the point. The proposed implied term must be capable of clear expression and must not contradict express terms in the contract.
47 The first two terms contended for would mean that the defendant had to pay the daily fee even if Mr Bollands did no work. The third term suggests that there was some obligation on the defendant to gain Phillips Petroleum's agreement to employ Mr Bollands. In my opinion, the first two implied terms contended for contradict express terms of the contract; they are not obvious in the sense that the parties would have agreed had they considered the point; they are not reasonable and equitable; and in my opinion they are in no sense necessary to make the agreement work or needed to avoid an unworkable situation. The third term contended for is not obvious in the required sense, it is not reasonable, and it is not necessary in the required sense. The defendant could not compel Phillips Petroleum to approve the appointment of Mr Bollands.
48 As a result the plaintiff's claims based in contract must fail; that is, the plaintiff's claim for a debt due, being a sum calculated by applying the daily rate to 277 working days until 29 September 2001, when the plaintiff terminated the contract, must fail, as must the claim that the defendant breached the contract.
49 Mr Bollands well knew from his experience in the industry that he would not start doing any work before the client, Phillips Petroleum, agreed to the placement. He said as much in his evidence. It seems to me that the plaintiff brought this action because it believed that Mr Bollands had been promised certain employment with Phillips Petroleum, and that Phillips Petroleum had agreed to his placement. That belief seems to have come about as a result of Mr Bollands' conversations with Mr Stanwix, and the fact that Mr Pullen contacted him about the contract and said that he too had been contacted by Mr Stanwix. The defendant, or Mr Pullen, doubtless thought also that Phillips Petroleum would approve Mr Bollands' appointment. What the plaintiff, or what Mr Pullen thought, however, does not translate into the cause of action for breach of contract upon which the plaintiff sues.
50 I should also mention that the contractual claim for debt could not, on any interpretation, succeed, because the plaintiff never sent to the defendant an invoice or a timesheet. The only obligation imposed on the defendant to make payment under the contract, was upon receipt of an invoice or timesheet (see cl 5.4). No invoice or timesheet was ever sent.
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The daily "Fee"
51 Having dismissed the claims based in contract, there is, strictly speaking, no need to consider the issue about the amount of the daily fee. However, it was an issue at trial, so I will deal with it. The "Fee" is unambiguously stated in the contract to be $800 per day. The plaintiff, however, claims that it was entitled to $800 per day for 44 days in Perth and $1,000 per day for 663 days in Korea (less statutory holidays and annual holidays). The claimed entitlement to $1,000 per day and the claim that the plaintiff was to send Mr Bollands to Korea to provide the services, is claimed not because these matters appear in the contract, but because the plaintiff claims that:
(a) Mr Bollands, Mr Stanwix and Mr Pullen discussed the subject and planned for Mr Bollands to go to Korea, and
(b) the document entitled "Overseas Assignment of Contractors"[which was a standard Phillips Petroleum document] contained a provision that there should be a 25 per cent uplift as an "overseas incentive allowance".
52 In my opinion, neither the discussion nor the document have any contractual effect. Clause 19 of the contract makes it clear that the contract "constitutes the entire agreement between the parties in relation to the provision of services and replaces any prior … agreements …" That clause is effective. See Hope v RCA Photophone of Australia Pty Ltd (1937) 59 CLR 348. Further, there is nothing in the contract which incorporates the "overseas assignment of contractors" document by reference: the document could not be incorporated as it would contradict the express term in the contract that the "Fee" would be $800 per day. See "Cheshire and Fifoots: Law of Contract", 8th Ed, 10.27. Finally, in relation to the discussion between the plaintiff and Mr Stanwix, it seems clear, that Mr Stanwix did not have authority to bind Phillips Petroleum.
53 Counsel for the plaintiff pointed out that the defendant's "rate analysis sheet", to which I have referred earlier, contained information showing that there was to be an overseas site allowance for Korea of $200. However, this was a document about which Mr Bollands knew nothing before signing the contract. It therefore had no contractual effect.
Alternative claims for damages under the Trade Practices Act
54 The plaintiff claims that the defendant made misrepresentations to the plaintiff. The statement of claim pleads that "by the Contract" the defendant represented certain facts.
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55 Thus, in par 15, the plaintiff pleads that "by the Contract" the defendant represented to the plaintiff that the defendant had been contractually engaged by Phillips to secure and provide to Phillips the services of a contractor for a period of two years from November 2000. There is no such representation in the contract.
56 In par 17, it is pleaded that "by the Contract" the defendant represented that "Phillips had agreed to acquire from the Defendant the services under the Contract for the term of the Contract". No such representation is contained in the contract.
57 In par 18 it is pleaded that the defendant "misled the plaintiff about the availability of employment with the Defendant". Counsel in closing particularised this by saying that the representation was once again "by the Contract", and also by reason of the confidentiality agreement. In my opinion no such representation was made in the contract or the confidentiality agreement.
58 Finally, in par 16 it is pleaded that the defendant engaged in unconscionable conduct because, inter alia, "The prospect of Phillips requiring the engineering services the subject of the Contract was purely speculative". That was the reality, but that does not mean that the defendant acted unconscionably.
59 The pleading of the trade practices claims alleging misleading conduct by representations is in each case, deficient. It is not pleaded what the representations induced the plaintiff to do. If the plaintiff meant to plead that the misrepresentations induced the plaintiff to enter into the contract, then it is very difficult to understand how the contract could induce the defendant to enter into the contract. I can perhaps understand a plea that an unsigned contract was proffered containing statements of fact which constituted a misrepresentation, but that is not pleaded. The contents of an executed contract which only comes into existence upon signature by both parties cannot induce the parties to enter into the contract.
60 Counsel for the plaintiff submitted that Mr Bollands was induced by the representations not to apply for a job with another company (Shell). That is not pleaded. However, even if it had been pleaded, it is clear that Mr Bollands did not apply for a job with Shell because he believed that Phillips Petroleum would approve his appointment. That was a representation made by Mr Stanwix, not by the defendant. The defendant made no misrepresentation.
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61 I therefore dismiss the claims for damages under the Trade Practices Act.
62 There was also a claim in the statement of claim for exemplary and aggravated damages, but that claim was abandoned.
63 The result is that all of the plaintiff's claims must be dismissed.
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