Calabrese v Najar - [2012] SADC 146

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
CALABRESE v NAJAR & ANOR
[2012] SADC 146
Judgment of Her Honour Judge Cole
8 November 2012
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS
Contract for the supply of stone for a development - who were the contracting parties - enforceability of worker's lien.
Workers Liens Act 1893 (SA), referred to.

CALABRESE v NAJAR & ANOR
[2012] SADC 146

This matter is an action in contract concerning the supply of stone for a development at 129 and 131 Stephen Terrace, Walkerville.
The plaintiff is the owner of the business Rito Calabrese Stone Doctor. The defendants are the owners of the land at 131 and 131A Stephen Terrace, Walkerville (formerly 131 Stephen Terrace, Walkerville) (“the defendants’ land”). The plaintiff supplied stone which was used in the development of the defendants’ land and the adjacent land at 129 Stephen Terrace, Walkerville (now 129 and 129A Stephen Terrace, Walkerville). Four dwellings were built on the two parcels of land with two dwellings on each parcel. The land was then divided into five community titles; one for each dwelling and one for the common property. The plaintiff has not been paid for the stone he supplied, and seeks the amount which he says is due under the contract from the defendants.
In November 2010, the plaintiff lodged a Notice of Lien with the Registrar General under the Workers Liens Act 1893. The plaintiff seeks an order to enforce the lien.
At the trial, Mr Calabrese and Mr Swenson, a builder, gave evidence in the plaintiff’s case. Mr Najar was the only witness in the defendants’ case. Various documents were tendered.
The Facts
Mr Calabrese came to Australia at the age of 20 in 1967. He speaks English quite fluently, but it was his evidence that he does not write English.[1] Mr Calabrese has always worked in the stone industry and is the proprietor of Rito Calabrese Stone Doctor, which operates from a yard in Gillman. He also has some involvement with Tasmanian Sandstone Quarries Pty Ltd, which supplies stone to him for use in his business.
[1] Transcript p 169
Mr Najar is an architect who has practised in Adelaide for many years. Mr and Mrs Puccetti, the owners of the land at 129 Stephen Terrace Walkerville (“the Puccetti land”), were friends and clients of Mr Najar. Mr Najar and his wife (and co-defendant) purchased the defendant’s land at Mr Puccetti’s suggestion in order to develop the defendant’s land in conjunction with the development of the Puccetti land. Mr Najar was the architect for the project, which involved the construction of two dwellings on each allotment.
Mr Najar said that he and Mr Calabrese met in 1989 for the first time. Their recent contact, however, began in 2008, when Mr Najar approached Mr Calabrese in relation to a project Mr Najar was involved with in Kensington. Mr Calabrese gave evidence that Mr Najar placed with him a verbal order for some stone in relation to the Kensington project, explaining that he was going overseas, but that someone would call Mr Calabrese for the stone. Mr Calabrese obtained the stone, but did not receive a call. Upon his return, Mr Najar spoke to Mr Calabrese and asked him why he had not supplied the Kensington project. Mr Calabrese said that no-one had called him. Mr Najar’s recollection of this incident was that a discussion had taken place between him and Mr Calabrese, but that it did not progress to the placing of an order for the stone.
Mr Najar raised the Walkerville project with Mr Calabrese after the exchanges about the Kensington project. The two men had a series of discussions, and then, in early 2009, Mr Calabrese showed Mr Najar a pallet of stone blocks in Mr Calabrese’s yard at Gillman. Mr Calabrese’s evidence was that he told Mr Najar that the stone being produced at that time from the Tasmanian quarry had the “rich colour” that the stone on the pallet had, and that if Mr Najar wished to go ahead, it could be cut now (with the inference that the desired colour would then be secured). Mr Calabrese said that Mr Najar responded by saying “Yes, go ahead”.[2]
[2] Transcript p 16
At the same time as the discussions about the stone for the Walkerville project were taking place, Mr Calabrese was discussing with Mr Najar the drawing by Mr Najar of plans for a house for Mr Calabrese’s daughter, Rita, and her fiancé, for their vacant allotment at West Beach. Mr Najar drew plans, which are dated February 2009.[3] Mr Calabrese understood from his discussions with Mr Najar that the cost of the drawing of the plans was to be offset against the cost of the stone for the Walkerville project. Mr Calabrese gave his daughter the ability to draw money from his bank account for purposes associated with her house project. He was shocked when he received his bank statement and saw that considerably more money than he expected to be spent had been spent. Upon enquiry, he learned that Mr Najar had approached his daughter and her fiancé and had sought payment for his plans, which they had provided from Mr Calabrese’s account. Mr Calabrese understood from this incident that there was no longer to be a set off, and that Mr Najar would pay for the stone for the Walkerville project.[4] Mr Najar denied that a set off was ever discussed. I believe Mr Calabrese on this point. His evidence was clear, consistent and given with genuine emotion.
[3] Exhibit P3
[4] Transcript p 18
Mr Najar and Mr Calabrese discussed the price of the stone for the Walkerville project. Mr Calabrese told Mr Najar that the usual price would be $240 per square metre, but that he would supply the Walkerville project for $220 per square metre, plus GST and delivery. This was for the bulk of the order, which was diamond cut Tasmanian sandstone blocks.[5] A figure of 70 square meters was discussed between Mr Calabrese and Mr Najar as the quantity likely to be required, but Mr Calabrese actually obtained more from the quarry in Tasmania to be safe. Mr Calabrese understood from his early discussions with Mr Najar that additional, specially cut pieces of sandstone would be required for corners and quoins, and there were discussions about how to achieve a certain appearance with differently cut pieces.[6] It was clear in the discussions that both men understood that the price of these pieces would be additional to the price for the bulk of the order. $60 each for quoins was agreed.[7] Mr Calabrese gave Mr Najar a discount because he was an architect and Mr Calabrese thought there might be the prospect of future work from Mr Najar. Mr Najar agreed, in evidence, that he thought the prices discussed were “fine”.[8]
[5]    Transcript p 19-21
[6]    Transcript p 19-20
[7]    Transcript p 33
[8]    Transcript p 76
Mr Najar admitted that at the time that he first discussed with Mr Calabrese the supply of stone for the Walkerville project, no builder had been appointed for the project.[9] Mr Najar also thought it was possible that he had referred to the Walkerville project as “my project” and that he may not have mentioned the Puccettis in his early discussions with Mr Calabrese.[10] Mr Najar also admitted that he did not indicate to Mr Calabrese that he would have to get back to him about whether or not he would be the supplier.[11]
[9] Transcript p 112
[10] Transcript p 113
[11] Transcript p 135
Mr Calabrese ordered the sandstone blocks for the Walkerville project from Tasmania on the basis of his conversations with Mr Najar. The stone was delivered and sat in Mr Calabrese’s yard in Gillman on a pallet with “Keith Najar” written on it. There was no written contract. It was not Mr Calabrese’s practice to do business by way of written contracts.[12]
[12] Transcript p 169
Mr Najar’s memorandum of a meeting that he had with Mr and Mrs Puccetti on 8 July 2009 was tendered in evidence.[13] In a list, it included this item:
Stone Discount? – KN →RITO
[13] Exhibit P18
In cross examination, Mr Najar said that this item simply indicated that he recommended Mr Calabrese. He went on to say, however, that Mr Calabrese offered him a discount from $240 per square metre to $220 per square metre and that he had accepted that price. Also tendered with the memorandum[14] was a copy of two further memoranda, dated 3 June 2009 and 19 June 2009. These memoranda were headed “Re-Pricing of Successful Tenderer To Achieve Bank’s Budget”. In a list in both memoranda there appeared this item:
Peter Fisher            Others  Credit            Debit
Stone (Supply &   (Direct – Rito)
Delivery)                 $12,000                $10,910                  $1,090
[14] Exhibit P18
In cross-examination, Mr Najar said that he arrived at the figure of $10,910 by subtracting the builder’s margin from Peter Fisher’s quote. There was no evidence that Mr Calabrese ever saw this document or knew anything about the figures in it.
In cross-examination, Mr Najar claimed that, in September 2009, he was told by Cathy Anderson, an officer of his financier, that he was not permitted to do deals directly with suppliers for the Walkerville project. Mr Najar said that he told Mr Calabrese this at a meeting when Mrs Najar was present.[15] Mrs Najar did not give evidence. It was Mr Calabrese’s evidence that Mr Najar did not tell him that he could not deal directly with him. I do not believe that Mr Najar told Mr Calabrese that he could not deal with him directly (except that he told Mr Calabrese to address his invoice to Matrix (ie Matrix Building Group), as described below). He may well have been told by Ms Anderson in September 2009 not to deal directly with suppliers, but I do not believe that Mr Najar ever told Mr Calabrese that.
[15] Transcript p 138
Several months subsequent to the arrival of the stone, Mr Najar brought Mr Puccetti to Mr Calabrese’s yard to meet Mr Calabrese and to view the stone. Mr Calabrese was not precise as to the date of this meeting. Mr Najar thought that there had been a meeting on 13 October or November 2009 at the Gillman yard, with Mr Calabrese, Greg and Arthur Kalyvas and the entire Puccetti family.[16] Mr Calabrese remembers two separate meetings, several months apart, one with Mr Puccetti and a subsequent one with the builders. Mr Najar said that he introduced Mr and Mrs Puccetti to Mr Calabrese as “my partners and clients in this projects”, about 6 months after he agreed the price for the stone.[17] Mr Calabrese’s attitude, in summary, was that his contract was with Mr Najar, so that the business arrangements Mr Najar had in relation to the Walkerville project were not something he needed to enquire into.
[16] Transcript p 81 and 116
[17] Transcript p 84
It was Mr Calabrese’s evidence that, at the time when Mr Najar instructed Mr Calabrese to “go ahead” and order the stone, Mr Najar mentioned that the builder for the Walkerville project would be Uniq Homes.[18] Some months later, after the arrival of the stone and the visit to the yard by Mr Najar and Mr Puccetti, Mr Najar told Mr Calabrese that Uniq Homes’ quote had been too expensive, and that the builder would be Matrix. Mr Calabrese formed the view that the Matrix quote was low, and he expressed that view to Mr Najar, but, as he was dealing direct with Mr Najar, it did not concern him greatly.[19]
[18] Transcript p 24
[19] Transcript p 25
Mr Najar gave evidence that the Walkerville project was put out to tender to five builders. Mr Najar admitted in cross examination that he told the tenderers that the stone would be supplied by Mr Calabrese.[20] The highest quote submitted was $2.98 million and the lowest was $1.594 million. The lowest quote, which was from Peter Fisher, was accepted. Subsequently, however, Mr Fisher became unable to undertake the project. Mr Najar then telephoned the two builders who were closest in price to Mr Fisher, one of whom was Greg Kalyvas on behalf of Matrix. Mr Najar met with Greg Kalyvas and Matrix’s quote of $1.62 million was then accepted ($810,000 per pair of dwellings).[21] The contract between the defendants and Matrix was tendered.[22] There is no specific mention of stone in the contract. An extract from the specification the subject of the private certification for the building rules consent for the project was tendered.[23] The specification simply says “Stonework to front of each unit to be machine-cut Tasmanian Sandstone complying to relevant Australian Building Standards”. Mr Najar said in evidence that Matrix was engaged on 25 June 2009. On the same day, Matrix was asked to supply to Mr Najar’s office the cost of stone supply and delivery, among other prices. Mr Najar then received a fax which included a figure in Greg Kalyvas’ handwriting of $36,120, which included a builder’s margin of 15% and GST of 10%, for all of the stone for the Walkerville project. This figure was given among other prices.[24] The written contract entered into between the defendants and Matrix is undated, but Mr Najar gave evidence that it was signed on 6 July 2009. There is no evidence that anyone from Matrix ever discussed that price with Mr Calabrese. There is no evidence that Mr Calabrese was aware that Matrix had quoted that price for stone prior to the commencement of these proceedings. There is also no evidence that either Mr Najar or Mr Kalyvas ever approached any other stone supplier in relation to the Walkerville project.
[20] Transcript p 115
[21] Transcript p 76-80
[22] Exhibit D6
[23] Exhibit D7
[24] Exhibit D9
In February 2010, soon after building began on site, a problem arose. Some of the stone which had been delivered to the site had been cut to the wrong size by the quarry. Mr Calabrese arranged with the quarry for pieces to be cut to the correct size and shipped urgently. They arrived in March 2010, and the stonemasons returned to the site in April 2010. Mr Calabrese bore the cost of this error.[25] In May 2010 a new team of stonemasons took over from the first team.
[25] Transcript p 86
Quite early in the building phase, a telephone conversation took place between Mr Najar and Mr Calabrese about quoins for the windows. It was necessary for Mr Calabrese to see a plan in order to understand what Mr Najar wanted, and Mr Najar told Mr Calabrese to visit Matrix to get a copy of the plan. Mr Calabrese visited Matrix and spoke to Greg and Arthur Kalyvas. They gave him a copy of the plan in question, but could not explain to him what Mr Najar wanted. They suggested that he discuss it further with Mr Najar. A further telephone discussion with Mr Najar did not give Mr Calabrese the information he needed, so he suggested that he view the site once the footings were down and the windows up. Mr Calabrese and Mr Najar met on the site at that stage, without the builder being present, and Mr Najar showed Mr Calabrese that he wanted to set the windows back, so Mr Calabrese understood the need for larger pieces of stone around the windows. There was also a pillar or column at the front of the buildings which needed to be done in stone. Mr Calabrese gave evidence that at this meeting he had Mr Najar write down “the size, how many and all the numbers”.[26] Mr Calabrese warned Mr Najar that this would lead to “a lot” of extra expense. Mr Najar said “Yeah, we got to do it, we are doing it”.[27]Mr Najar denied that the figures Mr Calabrese attributed to him were in his writing.[28] I prefer Mr Calabrese’s evidence on this point. Mr Najar had no plausible explanation for the figures, which are obviously not in Mr Calabrese’s handwriting. As the author of the plans, Mr Najar was the person most likely to be calculating the quantities reflected in the figures. I find that Mr Najar wrote the figures on P1, page 1.
[26] Transcript p 28-30. Exhibit P1 page 1
[27] Transcript p 28
[28] Transcript p 143
Subsequent to the meeting on site about the windows and the columns, a further problem arose on site, on Mr Calabrese’s evidence. The stonemason had erroneously used stone pieces intended for quoins for a line delineating the ground floor from the first floor, with the result that he was running short of quoins. It was necessary for Mr Calabrese to order more stone pieces for the quoins. He visited Mr Najar at his home, and Mr Najar wrote, in figures, on a piece of paper, what was required. Mr Calabrese added figures, including prices. Those prices were discussed with Mr Najar.[29] Following this discussion, Mr Calabrese prepared some sketches and figures and faxed them as an order to the quarry in Tasmania.[30] Mr Najar provided a further document to Mr Calabrese showing his intention with respect to the window surrounds.[31] Mr Najar thought that this may have occurred in about May 2010.[32] In handwriting, on the document, there appears “8 off”. Mr Calabrese believes this to be Mr Najar’s handwriting. Mr Najar believes it to be the builder’s handwriting, and that the builder must have annotated his copy of the sketch and faxed it on to Mr Calabrese.[33] Mr Calabrese told Mr Najar that the plans would create a drainage pattern which would not suit stone.[34] A further sketch was faxed from Mr Najar to Mr Calabrese on 31 May 2010 showing the solution that Mr Calabrese had suggested.[35] Again, Mr Najar denied that it was his handwriting on P1 page 2 or on P1 page 8.[36] He indicated that he had no direct knowledge of those documents, but theorised that Greg Kalyvas may have written the figures because he and Greg Kalyvas went to architecture school together and learned the same script.[37] Whilst I accept that Mr Najar and Mr Kalyvas did architecture together and learned the same script, I reject Mr Najar’s evidence that the writing in question is not his. Mr Calabrese was certain on the point. Mr Kalyvas was not called to give evidence. Mr Najar was seeking to create links between Mr Calabrese and Mr Kalyvas where none, in fact, existed. I find that Mr Najar wrote the figures on P1 page 2 that Mr Calabrese said he wrote.
[29] Transcript p 30-32, Exhibit P1 page 2
[30] Exhibit P1 pages 3, 4 and 5
[31] Transcript p 36, Exhibit P1 page 8
[32] Transcript p 146
[33] Transcript p 85
[34] Transcript p 38
[35] Exhibit P1 page 10
[36] Transcript p 143
[37] Transcript p 153
The stone work was finished shortly after 9 June 2010.
Mr Calabrese addressed the task of producing an invoice for the stone once the stone had been used, because he wished to charge for what had been used, rather than what had been delivered. He asked the stonemason who had finished the job, Alex, to calculate what stone had been used, and Alex did so.[38] Mr Calabrese telephoned Mr Najar. In evidence, Mr Calabrese gave the following account of the conversation:
“Keith, what do you want me to put on the invoice? Just your name, you and your wife or Mr Puccetti or you got a company for that?” “Oh, no – you got to put Matrix.” “wait a minute. Remember when you told me what I told you, they need the turnover? I cannot end up in the situation where I not get paid with this.” We thought – you must put his name because I can’t pay you, the money has got to go through him and then he pay you.” “Well, okay, I will put Matrix on the invoice, but now you make sure when you release the money to him you to be present and you say “Can you write the cheque to Rito because I’m responsible for?” You pick up and I need that money quickly, don’t post, I come and pick up from you.” Well I never heard that Rito come around, I got the cheque in here.
[38] Transcript p 40

Mr Calabrese here is saying that he agreed, at Mr Najar’s request, to make out the invoice to Matrix, but reminded Mr Najar of the reservations he had expressed earlier about Matrix’s low quote and its ability to pay, and asked Mr Najar to deliver the invoice by hand and collect a cheque for Mr Calabrese at the same time. That did not happen. It was Mr Calabrese’s evidence that, prior to this conversation, it had never been suggested to Mr Calabrese that he would bill Matrix.[39] I believe Mr Calabrese on this point. Mr Najar denied that he had a conversation with Mr Calabrese about who Mr Calabrese should invoice. I prefer the evidence of Mr Calabrese on this point.
[39] Transcript p 47
Mr Calabrese wrote an invoice dated 18 July 2010 to Matrix BG. It said:[40]
[40] Exhibit P1 page 11; Transcript p 40-42

QUANTITY

DESCRIPTION

RATE

$

414

COINS [sic]

26,210

80m²

Of solid sandstone D cut

$220

17,600

2

Rises reset FOR THE NAME

250

8

WINDOW SELL [sic]

150

1,200

8

CAPPING FOR WINDOWS

100

800

Delivery charge

1,500

47,560

GST

4,756

52,216

All of the prices except for the 2 pieces for the name plate had been agreed with Mr Najar in advance of the preparation of the invoice.[41] The pieces for the name plate had been ordered by Mr Najar, but the price was not discussed. The delivery charge was half what Mr Calabrese had been charged by the delivery contractor. Mr Calabrese bore the cost of the other half of the delivery charges on account of the wrong size pieces having been delivered in February.
[41] Exhibit P1 pages 1, 2 and 9
Mr Swensen gave evidence in the plaintiff’s case.[42] Mr Swensen is a builder with Federation Homes. Federation Homes is an established builder in Adelaide. It was Mr Swensen’s evidence that Federation Homes builds 15 – 20 homes per year. Federation Homes also has display homes. Mr Swensen said that approximately 80 – 90% of the homes built by Federation Homes in 2010 used sandstone. Federation Homes uses sandstone supplied by Mr Calabrese. Mr Swensen said, in his statement, that the price for solid sandstone blocks was $220 per square metre (plus GST, plus delivery) in 2007. He said that the current rate is $305 per square metre (plus GST, plus delivery). He also said that he was aware that Mr Calabrese supplied individual pieces of sandstone for quoins, risers, window sills and capping, and that prices range from about $50 to $200 per piece, plus GST and delivery. Federation Homes does not purchase such pieces. In cross examination by Mr Najar, Mr Swensen agreed that Mr Calabrese’s prices per metre were very similar to the prices charged by Allstone, an alternative supplier. No evidence was called in the defendant’s case in relation to price. No real challenge was mounted with respect to the reasonableness of Mr Calabrese’s prices. I accept that the amount charged in Mr Calabrese’s invoice was a reasonable amount for the stone supplied.
[42] Transcript p 69-70, Exhibit P5
Mr Calabrese has received no payment from anyone in relation to his invoice or in relation to the supply of stone to the Walkerville project. Mr Calabrese lodged a workers lien on the title to the defendant’s land on 3 December 2010. An administrator was appointed to Matrix on 16 March 2011. The dwellings were completed in early 2011.
Mr Najar gave evidence that he had a meeting at the office of Matrix on 30 July 2010 to discuss variations to the contract. He was shown a variation for the stone supply of $16,196. Matrix had prepared the variation. Mr Najar rejected the variation (that is to say, he refused to pay it).[43]
[43] Transcript p 89
Mr Najar gave evidence that on 30 October 2010 he received a list of outstanding items and costs from Matrix, which did not include the stone. Mr Najar said that he assumed that the stone had been paid for by Matrix.[44]
[44] Transcript p 91
Mr Najar claimed to believe that Matrix had paid Mr Calabrese for the stone and delivery. He tendered progress claim 5[45] which was dated “Claim Month; 26-Feb-2010 for $162,000 for “Roof and External Cladding Substantially Complete”. Mr Najar approved this claim on 3 March 2010 for payment by the financier for the Walkerville project. In evidence, Mr Najar claimed to believe that “External Cladding” included the stone.[46] I do not accept this evidence. The error in cutting by the quarry meant that the stonework had not progressed very far by the end of February, and, at the time of the progress claim, the stonemasons were some weeks away from resuming work. I do not believe that Mr Najar thought that this progress claim included the supply and delivery of the stone. In authorising the claim for payment, as he did, Mr Najar was certifying that the work had been completed. The stonework was far from being completed by 3 March 2010, when Mr Najar certified the progress claim. Had the progress claim, in truth, in Mr Najar’s mind, included the stone, he would not have authorised it for payment in March, well prior to the stonework being completed. Mr Najar also tendered progress claim 6, which was dated “Claim Date – 3^rd September 2010” and was for “Linings and Lock up Substantially Complete” for $162,000. Obviously, this claim did not include the stone supply and delivery either.
[45] Exhibit D13
[46] Transcript p 94
By 17 December 2010, Greg and Arthur Kalyvas were avoiding contact with Mr Najar. A number of tradesmen and suppliers had not been paid. Mr Najar said that at about this time he became aware of the amount of Mr Calabrese’s invoice, and the fact that Matrix was disputing the amount of it.
Matrix provided Mr Najar in December with a copy of a letter dated 30 July 2010 to Mr Calabrese. That letter told Mr Calabrese that the total owing to him was $31,179.[47] Mr Najar accepted that Mr Calabrese had never received that letter from Matrix, and that he became aware of it for the first time when Mr Najar provided it to his solicitor on 15 December 2010
[47] Exhibit D15
In relation to the two dwelling on the defendants’ land, Mr Najar said:
We did not sell our properties. The market is too low so we together are working to pay what we need to pay and we have rented both properties out at far less than the market rate.
Credibility
Two versions of the relevant facts were presented at the trial; Mr Calabrese’s version and Mr Najar’s version. They overlapped to some extent. Mr Calabrese gave his evidence in a relatively simple, straightforward manner. He was consistent and confident, though occasionally angry.
In assessing Mr Najar’s evidence, I take into account the fact that he chose to represent himself, and was under a significant amount of pressure on that account. I also take it into account that Mr Najar has lost a considerable amount of money on the Walkerville project, which is clearly having a detrimental effect on his life. Even bearing those matters in mind, however, Mr Najar gave his evidence in an unsatisfactory way. He was evasive, and there were significant gaps in his memory. He preferred to reiterate his arguments, rather than answer questions factually. He tended to assert his interpretation of a set of events as if his interpretation were the fact of the events. He tended to compile self serving versions of events as he went along in evidence.[48] Where Mr Najar’s evidence is at odds with Mr Calabrese’s evidence, I prefer Mr Calabrese’s evidence. It seems to me that Mr Najar had, in his own mind, a rigid idea of what the contractual framework of a building project “must” look like, as though there were only one possible way of arranging such a thing. For example, Mr Najar kept insisting that Mr Calabrese could not have contracted with him to supply all of the stone, because Mr and Mrs Puccetti owned one of the parcels of land and were his partners in the project. Mr Najar simply would not accept that Mr Calabrese’s state of knowledge at various times is also important in the context of this claim.
[48] Transcript p 138
Contract
The first question to be answered is whether a contract for the supply and delivery of the stone to be used in the Walkerville project came into existence between Mr Calabrese and Mr Najar. It is asserted in the Second Statement of Claim that a contract was entered into between Mr Calabrese and the defendants in or about February 2010 for the supply of the stone.[49] On the basis of the evidence before me, I find that a contract was formed between Mr Calabrese and Mr Najar for the supply and delivery of the stone to the Walkerville project early in 2009. All of the elements of the contract were present at that point. I find that the contract was formed before Mr Calabrese became aware of the involvement in the project of Mr and Mrs Puccetti or Mrs Najar. I find that the contract was formed between Mr Najar and Mr Calabrese before Matrix had any involvement in the project. I find that Mr Najar accepted the price of $220 per square metre for the bulk of the stone blocks to be used, and that the prices for the other pieces – the quoins, the lintels, the window surrounds, the fascia line and the pillar – were agreed between Mr Najar and Mr Calabrese as the project progressed,[50] and that it was implicit in the contract that Mr Calabrese would supply all of the stone for the project, and that prices for individual pieces would be negotiated as needed. The exception is the two risers for the name plate, which I find were ordered by Mr Najar without a price being agreed. Mr Najar raised no issue with respect to the prices of the risers or, indeed, any of the other prices. It is clear from Mr Calabrese’s evidence that he had no doubt, from about February 2009 to the end of the project, that he had a contract with Mr Najar for the supply and delivery of the stone. He had ample basis for that belief. Mr Najar spoke of “my project”. I find that Mr Najar did not, at any stage, tell Mr Calabrese that he was contracting with Mr and Mrs Puccetti, or even Mrs Najar. He may have referred to Mr Puccetti as “my partner”, but that did not convey to Mr Calabrese that Mr Puccetti was a party to the contract with him.
[49] The year may be a typing error.
[50] see Exhibit P1 page 2, in particular
I also find that at no stage did Mr Najar tell Mr Calabrese that Mr Calabrese’s contract was with Matrix, or that Mr Calabrese was to deal only with Matrix. There is no evidence of any conversation or correspondence between Greg or Arthur Kalyvas and Mr Calabrese upon which a conclusion could be founded that they were in a contractual relationship with each other. There was no evidence of Matrix appointing Mr Najar to act as its agent in any negotiations with Mr Calabrese. When Matrix provided a price for stone, it did so without reference to Mr Calabrese.[51] When the price was adjusted for the purpose of communication with the bank, no reference was made to Mr Calabrese.[52] Mr Najar occasionally directed Mr Calabrese to seek information from the builder, but that is not suggestive of the existence of a contract. A letter dated 30 July 2010 from Matrix to Mr Calabrese in relation to the contract variations and the amount purportedly owing to Mr Calabrese was tendered in evidence.[53] It was Mr Calabrese’s evidence that he did not receive that letter until it was provided to his solicitor in December 2010. Mr Najar accepted that. I find that Mr Calabrese did not receive that letter until it was provided to his solicitor in December 2010. There was no evidence about the circumstances in which that letter came into existence. I do not assume that it was written on the day it was dated. Mr Calabrese was not involved in any of the interactions between Mr Najar and Matrix regarding variations.
[51] Exhibit D9
[52] Exhibit P18
[53] Exhibit P23
I find that, in his dealings with Mr Calabrese in early 2009, Mr Najar intended to engage Mr Calabrese as the stone supplier for the Walkerville project and did so. Mr Najar ordered the stone blocks from Mr Calabrese in early 2009. He intended that Mr Calabrese would order those to be cut at the quarry and brought to Gillman, and this occurred. By the time the contract was formed between Mr Najar and Mr Calabrese, Mr Najar had not mentioned Mrs Najar or Mr and Mrs Puccetti. Mr Najar had not expressed any intention that Mr Calabrese would be contracting with a builder. The contract was formed prior to any contact between Mr Calabrese and Mr and Mrs Puccetti, and prior to any involvement by Matrix. Mr Najar may have had it in mind that he would save the builders margin on the stone by dealing direct with Mr Calabrese. There is nothing in the evidence or in the paperwork to suggest that Matrix considered itself to have entered into a contract with Mr Calabrese. Matrix’s price for the stone was arrived at without reference to Mr Calabrese.[54] I find that the progress claims did not include the stone or the delivery for the stone. I find that Mr Calabrese sent an invoice to Matrix at the express direction of Mr Najar, and not because he believed that he was in a contractual relationship with Matrix. If Mr Najar had it in mind at any stage in his dealings with Mr Calabrese that he was acting as an agent for either the Puccettis, Mrs Najar or Matrix, he did not divulge that to Mr Calabrese. Mr Calabrese had ample basis for concluding, as he did, that he was contracting with Mr Najar, alone, as principal, for the supply and delivery of stone to Mr Najar’s own project. Even if Mr Najar was, in fact, acting as an agent for others when dealing with Mr Calabrese, he was acting as an undisclosed principal.
[54] Exhibit D9
Mr Lazarevich referred to several texts which state that a party who has contracted with an undisclosed principal may elect to recover any loss under the contract against either the principal or the agent.[55] That is clear law. If, in fact, Mr Najar was acting as agent for Mr and Mrs Puccetti, then Mr Calabrese is still entitled to recover against Mr Najar. Mr Najar cannot have been acting as agent for Matrix at the time that the contract was formed, because Matrix had no involvement in the matter at that time. Subsequent events did not end the contract between Mr Najar and Mr Calabrese and substitute a fresh contract between Matrix and Mr Calabrese.
[55] Law of Agency 3rd ed, Kerr at 267-8, LexisNexis, The Laws of Australia at 8.1.58, Thomson Reuters and Fridman's Law of Agency, 7th ed at 242-3 and 270-1, LexisNexis
Mr Najar may well, in his own mind, have had a concept of himself as the architect for the project, acting as agent for his wife and Mr and Mrs Puccetti. He may also have genuinely believed that it was somehow the invariable rule that a supplier is always in a contractual relationship only with the builder in a project, regardless of the circumstances of that supplier’s engagement. Mr Najar’s mistaken beliefs do not alter the legal effect of Mr Najar’s words and actions in forming a contract with Mr Calabrese for the supply and delivery of stone. Mr Najar did not explain his ideas to Mr Calabrese about how the legal relationships concerning the project would be at any stage, including any stage prior to entering into a contract with Mr Calabrese.
Workers Lien
The Worker’s Liens Act 1893 provides, in s 5:
A contractor or sub-contractor shall have a lien for the contract price, so far as accrued due, on the estate or interest in land of any owner or occupier in each of the following cases:
(a) Where the work is done, with the assent, express or implied, of the owner or occupier to the land or to any fixtures thereon:
(b) Where the materials are, with the assent, express or implied, of the owner or occupier, used or intended to be used in or about work done, or intended to be done, to the land or to any fixture thereon.
The following relevant definitions appear in s 2 of the Act:
contractor means a person (not being a sub-contractor) contracting with or employed by another person to do work, or to procure work to be done, or to furnish materials in connection with work.
work means every description of manual work or personal service.
The plaintiff is entitled to a lien over the defendants’ land pursuant to s 5 of the Workers Liens Act 1893 in respect of the stone supplied and delivered for use on that land. In his Notice of Lien, the plaintiff claimed $52,216, which is the whole of the contract price. It was conceded on the plaintiff’s behalf that the lien over the defendants’ land could relate only to the materials used on the defendants’ land, which amounts to one half of the total contract price. The lien will be enforced, but only in relation to the sum of $26,108.
Summary and Conclusion
A verbal contract was entered into between Mr Najar and Mr Calabrese for the supply and delivery of stone for the Walkerville project in the first half of 2009. It was a term of the contract that the sandstone blocks would be supplied for $220 per square metre, and that individual prices for quoins, lintels and the like would be negotiated as the project progressed. It was an implied term of the contract that Mr Calabrese would be the sole supplier of stone for the project. If Mr Najar was acting as an agent for others, such as Mr and Mrs Puccetti, in undertaking his contractual negotiations with Mr Calabrese, he did not disclose that agency and Mr Calabrese is entitled to sue him on the contract. Mr Najar was not acting as the agent for Matrix in entering into the contract, because they were not involved when the contract was entered into. A contract did not subsequently come into existence between Mr Calabrese and Matrix.
Mr Calabrese performed his obligations under the contract. He rendered an invoice for the agreed contract price (agreed apart from the risers, in relation to which Mr Najar raised no issue). Mr Calabrese has not been paid for the stone and its delivery.
Mr Najar is in breach of his contract with Mr Calabrese. Mr Calabrese’s loss amounts to $52,216 plus interest. I will hear the parties as to the date from which interest should be calculated.
Mr Calabrese has a workers lien over the defendants’ land. Mr Calabrese has a right to enforce that lien against the defendants for the amount of $26,108.
I will hear the parties as to the form of the final orders.

QUANTITY	DESCRIPTION	RATE	$
414	COINS [sic]	26,210
80m²	Of solid sandstone D cut	$220	17,600
2	Rises reset FOR THE NAME	250
8	WINDOW SELL [sic]	150	1,200
8	CAPPING FOR WINDOWS	100	800
Delivery charge	1,500
47,560
GST	4,756
52,216