Barry Stoodley P/L v Simar Engineering P/L No. DCCIV-02-198

BARRY STOODLEY PTY LTD
v
SIMAR ENGINEERING PTY LTD
[2003] SADC 175
Judge Trenorden
District Court Civil

The plaintiff company (Stoodleys) claimed from the defendant company (Simar) the sum of $44,176.00 plus costs, for goods supplied and delivered to the defendant, namely one new tri-axle semi-trailer concrete agitator chassis with accessories (the trailer). The Statement of Claim revealed that Stoodley invoiced Simar on 31 October 2001 and subsequently letters of demand were sent on the plaintiff’s behalf to the defendant on 10 January 2002 and 29 January 2002.
Although the defendant company admitted that the agreed price with respect to the trailer was the amount of $44,176.00, it denied that that sum was due and owing, and further, counterclaimed the amount of $10,000 plus costs in respect of loss and damage it had suffered as a result of alleged defects in the trailer.
At the trial Mr George Baryczka, who is not an admitted legal practitioner, sought to represent the defendant. The defendant company had not applied for leave in accordance with Rule 36.11 of the District Court Rules. The plaintiff’s counsel, Mr McCarthy, applied to have judgment entered for the plaintiff; on an application based on Rule 75.14, in the absence of an appearance at trial by the defendant. Mr Baryczka sought to tender to the Court a letter purported to be signed by the director of the defendant company, but not under the seal of the company, purporting to authorise Mr George Baryczka to appear on behalf of and represent the company at the trial. This was clearly inadequate compliance with the Rules of Court.
Following a short adjournment granted by the Court, the Court heard evidence from the director Mr Mark George Baryczka by way of an application by the defendant company for leave to be represented by Mr George Baryczka. Having been satisfied that Mr George Baryczka had been duly authorised by the company to represent it in these proceedings, I granted leave, as sought. However, it is important for a party that is a company to understand and appreciate that it cannot be represented in proceedings by the Court by other than a legal representative, unless it has obtained the leave of the Court. Further, the leave of the Court should be obtained in accordance with Rule 31.11 of the District Court Rules, well prior to the trial. Generally, it is wasteful of allocated trial time, and therefore unfair on any other party to the proceedings, for a party to wait until the commencement of a trial to obtain the necessary leave.
This matter concerns the supply of a tri-axle semi-trailer suitable to have mounted thereon a concrete agitator bowl for the supply and delivery of concrete. Simar was in the business of supplying and fitting concrete agitator bowls to trucks and semi-trailers. Upon receipt of an order, Simar contracted with Stoodley to construct and supply the trailer, upon which Simar would mount the agitator bowl constructed by it. This arrangement required co-operation at the design stage between the two parties. It appeared that there had been a history of dealings between the parties, with the plaintiff and the various companies which Mr George Baryczka has been associated, wherein Stoodleys built a trailer on which Simar (or earlier, another company with which Mr Baryczka was associated) had fitted a concrete agitator, for a client.
In the matter before the Court, Simar had arranged to supply a trailer with mounted agitator bowl, to a business known as Davalan Concrete. Simar engaged Stoodleys to supply a suitable trailer. Upon the design being finalised on 5 August 2001, the quoted price (including GST) was $44,176.00, with delivery “estimated at eight weeks from receipt of order, subject to materials’ availability”. There was a faxed communication from Mr Barry Stoodley of Stoodleys to Mr George Baryczka of Simar, on 30 August 2001, of the dimensional layout of the trailer.
I find that there was a contract between the parties for the supply of a trailer in accordance with the drawing faxed to Simar on 30 August 2001, for the quoted price. This was admitted in evidence by Mr George Baryczka, who sought by his evidence to deny the credit terms alleged by Stoodleys and explain the circumstances which had resulted in payment not having been made to Stoodleys.
Simar alleged that the credit terms between it and Stoodleys were not as alleged, namely “30 days net”, but that Stoodleys would be paid after Simar had been paid by Davalan Concrete. Mr Barry Stoodley did not agree that the terms of payment were agreed as alleged. However he could not recall whether payment was even discussed. There was nothing in writing about payment. Mr Barry Stoodley had a deal of trouble recalling the details of communications between himself and Mr George Baryczka in relation to the ordering of the subject trailer. He could not recall them. However, it appears more likely than not, that Mr George Baryczka ordered the trailer on behalf of Simar, for the customer and eventual purchaser Davalan Concrete. It was alleged by Mr Barry Stoodley that this was a unique course; in the past, he claimed, the ultimate purchaser had ordered the trailer from Stoodleys for it to be delivered to Simar for the addition of the concrete agitator. The following evidence led in examination-in-chief of Mr Barry Stoodley, illustrates that the agreement alleged by Stoodleys here was unusual:
“Q.I think, just so her Honour can understand, this is the one and only trailer that you have directly been requested to quote by Simar Engineering; is that right.
A.Yes, I’m pretty sure that’s correct, yes.
Q.And the only one where you can recall that you have directly invoiced Simar Engineering.
A.Yes, we were asked during the course of manufacture of the trailer by Davalans to invoice them for it, and when it came to the time of completion at the end of October we rang Davalans to get an order number or find out what to do with the invoice. They said ‘No, invoice Simars. We are making progress payments to Simars’.”
It is interesting to note that Mr Barry Stoodley later in cross examination denied any knowledge of the financial side of Stoodleys’ business claiming that his wife looked after that. There was no evidence from any person associated with Davalan Concrete and the Court heard nothing to support Simar’s contention regarding the credit terms of the contract except the evidence of Mr George Baryczka. However although the evidence of Mr Barry Stoodley was that the company’s standard trading terms on larger capital outlays was net cash on delivery, he later responded that payment was not sought “on delivery of the trailer straight off”. That was because, I find on Mr Barry Stoodley’s own evidence, Stoodleys first attempted to invoice Davalan Concrete directly, and in so doing were either following past practice with respect to the supply of a trailer ordered by Simar (or its predecessor) or following up a request by Davalan Concrete to invoice it directly. It was only after Stoodleys were told in the response to a telephone call made to Davalan Concrete, to invoice Simar, that they did so. Thus, I do not accept that Stoodley’s “standard terms” were applied in this case. To be determined in this case is whether the credit terms were as alleged by Simar.
The trailer was delivered to Simar on or about 20 October 2001. The invoice no. 120278 addressed to “Simar” is dated 31 October 2001. Whatever the credit terms were, the money has not been paid by Simar, and remains due and owing. Mr Baryczka admitted that Simar had not paid any moneys due to Stoodleys, and acknowledged that Davalan Concrete had paid Simar in full for the trailer, by 30 April 2002.
After the trailer was delivered to Simar, the latter began fitting the agitator unit. This work was completed on 17 or 18 December 2001. Davalan Concrete collected the fitted-out trailer, to conduct load (acceptance) tests at its premises at Gillman. Problems arose. They were rectified by Stoodleys on or before 21 December 2001. However Davalan Concrete refused to accept the trailer for further load tests, given the proximity of the Christmas holiday period, and the trailer was not accepted by the customer until about 18 or 19 January 2002.
A letter of demand dated 10 January 2002 was delivered to Simar on Stoodleys’ behalf, in January 2002 following which the plaintiff’s solicitors pursued Simar for payment. On 17 May 2002, Simars ceased trading, on the advice of Mr George Baryczka; he being of the view that the company was then unable to pay its debts.
The conclusion from the evidence is that Mr Baryczka took the course he did, namely advised Simar to cease trading, because he did not accept that Simar should have to pay Stoodley’s legal fees incurred in pursuing the debt. Mr Baryczka believed that a term of the contract was that Stoodleys would be paid when Simar had been paid by Davalan Concrete and so considered that the plaintiff, in pursuing the amount due under the contract, through solicitors, and before Simar had been paid, had breached one of the terms of the contract. On Mr Baryczka’s evidence, Simar was ready to pay the full amount of the debt, but not including legal fees, once Davalan Concrete had paid Simar.
The sole issue to be determined in this case is whether, as alleged by the defendant, it was a term of the contract that the plaintiff would be paid for the trailer by the defendant, only after the defendant had been paid by Davalan Concrete. If this was the case, the question then is whether the plaintiff had a good claim at the date of the commencement of the proceedings.
The summons commencing these proceedings was filed on 13 February 2001. Davalan Concrete paid Simar $45,000.00 on 1 March 2002, and a further amount on or before 30 April 2002. If I accept Mr George Baryczka’s evidence concerning the credit terms of the contract and that concerning payment made by Davalan Concrete, the amount claimed by Stoodleys was not due to be paid by Simar until 2 March 2002; about 17 days after the commencement of these proceedings.
I find these facts, based on the following evidence (the references in brackets are to transcript pages):
·There was one face-to-face meeting between Mr Barry Stoodley and Mr George Baryczka about the trailer, on about 16 July 2001. Mr Barry Stoodley agreed that Mr George Baryczka visited him to discuss manufacture of the trailer for Davalan, about 16 July 2001 (p74). The first, faxed quote was dated 13/7/01 (p2). Mr Barry Stoodley thought Mr George Baryczka spoke to him, at Stoodleys’ premises, about a revised quote, which would place a face-to-face meeting at between 13/7/01 and 5/8/01 (the dates of the quote and revised quote) (p98). Mr George Baryczka claimed that there was one meeting with Mr Barry Stoodley to discuss the ordering of the trailer and that it occurred “before the 17 of the 3^rd ‘01” (p181). I believe he was mistaken as to the month, and that he meant July. This interpretation would agree with the form of the question Mr George Baryczka put to Mr Barry Stoodley at p74 of the transcript, namely as to a meeting on 16 July 2001.
·At the only face-to-face meeting, Mr George Baryczka told Mr Barry Stoodley that the trailer was for Davalan, that Mr Tudorovic of Davalan was going to arrange for Davalan to lease the trailer and that Stoodleys would get paid when Simar got paid. This was expected to be as soon as the trailer was delivered to/accepted by Davalan Concrete, which was anticipated to occur before the Christmas-New Year holiday period in 2001. This course was either agreed, or no objection was taken to it, by Mr Barry Stoodley, but nothing was documented. I accept the evidence of Mr Baryczka. It was a term of the contract that Simar would pay Stoodleys when Simar had been paid by Davalan Concrete.
·The trailer was expected to be delivered within about 8 weeks of acceptance of the revised quote; that is, in early October 2001.
·The trailer was finally delivered on about 20 October 2001.
·Mr George Baryczka expected that Simar would complete its work and that the trailer with agitator would be accepted by Davalan before the end of 2001, with payment being made promptly upon acceptance.
·The trailer was finished by Simar on 17 or 18 December 2001, but as a result of problems that were rectified by Stoodleys on 20-21/12/01, Davalan refused to accept the trailer with agitator prior to the Christmas-New Year shutdown of 2001. Mr George Baryczka was clearly disappointed with Davalan’s refusal at this point.
·The trailer with agitator was finally accepted by Davalan Concrete on 18 or 19 January 2002, before which date Simar had received a letter of demand from Stoodleys’ solicitors.
In conclusion, I find that at the time the proceedings were instituted, the debt on account of the trailer was not due, based on my finding as to the credit terms of the contract. Stoodleys were premature in issuing proceedings against Simar. It follows that the plaintiff’s claim must fail.
Simar counter-claimed in the amount of $10,000 for the rectification work allegedly done by it on the trailer. In evidence, Mr Baryczka admitted that this work would not have been valued at more than $4,500, but failed to produce any documentation or other evidence to support this claim. I do not accept Mr Baryczka’s evidence that he telephoned Stoodleys at any time in 2002, to advise of further defects (additional to those advised and rectified in late 2001) in the trailer as supplied. Simar’s counter-claim has not been made out, and must fail.
It is not necessary for the judgment in this matter, but it is obvious that the amount of $44,176.00 is now due and owing and has been payable since at least 30 April 2002, by which date Davalan Concrete had paid Simar. This was acknowledged by Mr Baryczka.
This case reflects the problems that can be encountered when parties to a contract do not note the elements of the agreement, in writing.
I should add that I was referred, by Mr McCarthy, counsel for the plaintiff, in his submissions, to the District Court judgment in Simar Transit Mixers v Baryczka Judgment No D3633, delivered 17 June 1997, which was tendered as evidence. I did not find it appropriate to rely on any conclusions in that judgment, except to note that insofar as I was led to believe that Mr Baryczka was unfamiliar with civil proceedings and court procedure, I was in error. That judgment concerned an entirely different matter, and I am not prepared to draw inferences about Mr George Baryczka’s credibility from His Honour’s findings in that judgment, preferring to rely upon my own observations.
The plaintiff’s claim is dismissed. The defendant’s counter-claim is dismissed.

[2003] SADC 175

9 December 2003