CGP (Aust) Pty Ltd v Stevens
[2014] VSC 105
•31 March 2014
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2013 02092
| CGP (AUST) PTY LTD (ACN 114 235 504) | Appellant |
| V | |
| JUDITH STEVENS | Respondent |
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JUDGE: | GINNANE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 November 2013 | |
DATE OF JUDGMENT: | 31 March 2014 | |
CASE MAY BE CITED AS: | CGP (Aust) Pty Ltd v Stevens | |
MEDIUM NEUTRAL CITATION: | [2014] VSC 105 | |
CONTRACT – Magistrates’ Court - appeal on questions of law from Magistrates’ Court - claim based on invoice for work performed- identification of issues in proceeding - whether issues in respect of earlier invoice wrongly determined - proof of payment – whether Magistrate required to disclose findings about credibility of witness – whether no evidence to support finding – whether failure to take relevant consideration into account - standard of proof applied- findings as to appropriate payment for work
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APPEARANCES: | Counsel | Solicitors |
| For the Appellant | Ms S M C Fitzgerald | Consult Solicitors |
| For the Respondent | Mr I W Upjohn | Thomas Egan |
HIS HONOUR:
CGP (Aust) Pty Ltd (‘CGP’)[1] (the appellant) appeals from a judgment of the Magistrates' Court given on 28 March 2013, which dismissed its claim against Judith Stevens (the respondent). CGP’s claim was for payments said to be owing by Ms Stevens’ company, Polymould Pty Ltd, or by Ms Stevens, under a guarantee or directly as primary debtor, for accounting, bookkeeping and financial services. The claim was brought in contract or, alternatively, on a quantum meruit.
[1]The Applicant was described incorrectly in the Notice of Appeal as CPG (Aust) Pty Ltd. This judgment adopts the correct title, CGP (Aust) Pty Ltd.
Ms Stevens was sued in her capacity as a guarantor of the liabilities of Polymould which operated a real estate agency and a café and also as a direct recipient of taxation, superannuation and financial planning services. Ms Stevens accepted that she was liable under the guarantee for any money owed by Polymould to CGP.
The Magistrate stated that Ms Stevens in February 2010 was under “huge” financial pressure and needed help urgently.[2]
[2]Magistrates’ Court Transcript (“MCT”) 7-8.
The proceeding in the Magistrates' Court extended for 10 days in February last year. On 22 February 2013, the Magistrate reserved his judgment. He delivered an oral judgment on 28 March 2013, which extends for 72 pages of transcript.
The notice of appeal relies on seven questions of law, but the fourth question of law was not pressed. I will consider each of the other questions in turn.
In summary of my decision, I have decided that the appeal succeeds on the first question of law because the Magistrate made decisions disentitling CGP for work for which it had already been paid and which was not before the Court as part of its claim under the third invoice. These matters which I consider that the Magistrate incorrectly adjudicated were called the second invoice claims.
None of the other grounds of appeal succeed. No error has been established in the Magistrate’s determination of the third invoice claims.
The first question of law
The question of law 1 states:
When claiming a debt for work done under a specific invoice is the onus on a plaintiff to show that moneys previously paid by a defendant under earlier invoices were also owed under the contract?
The grounds of appeal that relate to this question are as follows:
1.His Honour erred by imposing an onus upon the Appellant to show that moneys previously paid by the Respondent under an earlier invoice were due under the contract.
2.His Honour should only have imposed an onus to prove the debt claimed under the specific invoice being sued upon and imposed the onus on the Respondent to prove that any other money paid should be set off against that debt.
3.His Honour should not have found that work under earlier invoices was not done on the basis of his incorrect application of the onus, and should not have set off moneys paid under the earlier invoice.
The two invoices in issue were invoice 6881, which was referred to as the second invoice, and invoice 7111, which was referred to as the third invoice. CGP asserts that it only sued for the moneys owing for work described in invoice 7111, the third invoice.
There was no issue raised by either party about CGP’s first invoice No. 6782.
An important task in deciding this appeal is to identify precisely what issues were before the Magistrate. The relevant particulars of the final version of the complaint state as follows:
8.On or about 31 March 2011 the Plaintiff rendered tax invoice No. 7111 to the Defendant in the amount of $62,874.90 for services provided to Polymould and pursuant to the terms of the guarantee.
PARTICULARS
A copy of the tax invoice may be inspected at the Plaintiff’s offices by prior appointment during normal business hours.
9.On or about 1 April 2011, the amount of $12,234.41 was applied to the outstanding Tax Invoice No. 7111.
10.On or about 7 April 2011 the Plaintiff wrote to the Defendant demanding payment in the amount of $50,640.49 for services rendered to Polymould and pursuant to the terms of the guarantee.
PARTICULARS
The amount of the demand represented the outstanding balance of Tax Invoice No. 7111 referred to at paragraph 6 above.
11.In breach of the terms of the guarantee, the Defendant has neglected and/or refused to pay the amount of $50,640.49 despite demands for payment by the Plaintiff.
CGP’s complaint alleged, in the alternative, a claim in quantum meruit for the performance of the services, which were accepted by Polymould and for which it claimed the reasonable market value of the services, which was said to be the same amount as was owing under the contract. CGP made alternative claims against Ms Stevens directly as debtor, rather than as guarantor, on the same two bases and for the same sums as it claimed against her under the guarantee.
Paragraph 8 of Ms Stevens’ particulars of defence stated:
Save that the plaintiff purported to render a tax invoice numbered 7111 and dated 31 March 2011 for the sum of $62,874.90 she otherwise denies the allegation in paragraph 8 thereof. Further:
(a)the Plaintiff has now issued 3 invoices for the amount of $50,640.49 being:
(i)invoice No. 6782 allegedly for the period ended 12 March 2010;
(ii)invoice No. 6881 allegedly for the period ended 29 June 2010;
(iii)invoice No. 7111 allegedly for the period ended 31 March 2011;
(b)each of the Plaintiff’s invoices No. 6782, 6881 and 7111:
(i)are for the same amount; and
(ii)are for different periods and for different items allegedly due;
(c)as to invoice 6782:
(i)the amount of the invoice is $50,640.49;
(ii)it is stated to be for the period ended 12 March 2010;
(iii)the amount of $50,640.49 is made up of:
A.Total fees/costs based on time involved
$5,000.00
B.Plus GST $500.00
C.Plus debtors balance $45,140.49
(d)as to invoice 6881:
(i)the amount of the invoice is $50,640.49;
(ii)it is stated to be for the period ended 29 June 2010;
(iii)the amount of $50,640.49 is made up of:
A.Total fees/costs based on time involved
$30,000.00
B.Plus GST
$3,000.00
C.Plus debtors balance $17,640.49
(e)as to invoice 7111:
(i)the amount of the invoice is $50,640.49;
(ii)it is stated to be for the period ended 31 March 2011;
(iii)the amount of $50,640.49 is made up of:
A.Total fees/costs based on time involved
$57,159.00
B.Plus GST
$5,715.90
C.Less debtors balance $12,234.41
…
11.Save that she has not paid the further amount of $50,640.49 claimed in the Plaintiff’s tax invoice No. 7111 she otherwise denies the allegations in paragraph 11 thereof. Further, if the Defendant is liable for such invoice, which is not admitted but which is expressly denied:
(a)it was a term of the agreement between the Plaintiff and Polymould Pty Ltd that the Plaintiff’s fees for the services to be provided to Polymould Pty Ltd would be $20,000.00;
(b)by reason of such term of the agreement the Plaintiff is not entitled to charge Polymould Pty Ltd more than the amount of $20,000.00;
(c)alternatively the Plaintiff provided a quote to the Defendant, for and on behalf of Polymould Pty Ltd, for the services to be provided by the Plaintiff for $20,000.00
PARTICULARS
The quote was confirmed in writing by the Defendant to the Plaintiff in an undated facsimile letter from the Defendant, for and on behalf of Polymould Pty Ltd, to David Baker, for and on behalf of the plaintiff.
(d)the amount that has been charged by the Plaintiff is substantially in excess of the amount of $20,000.00 as the Plaintiff has already been paid the sum of $104,000.00;
(e)the fees charged by the Plaintiff are excessive in that the Plaintiff has already been paid the sum of $104,000.00;
(f)the Plaintiff has failed to properly account for the amount of $104,000.00 that has been paid to it;
(g)the Plaintiff is not entitled to any more than the amount of $104,000.00 that has been paid to it;
(h)the Plaintiff has failed to provide any invoices for the amount of $104,000.00 that has been paid to it.
The matters set out in paragraph 8 of Ms Stevens’ defence were repeated in her defence to CGP’s claims made against her as a principal debtor.
The second and third invoices
Invoice 6881, the second invoice, stated:
Accountancy and Consultancy Services from February
2010 to June 2010
Work performed bookkeeping services, liaison with law firms including Bakerjones, Dandanis. Liaison with valuers and assessors Rogers Reidy and Woodards. Meeting and discussion with agent Russell Murphy. Discussion and work required regarding landlord Glenn Perriam. Attending various discussion and meetings with director Judith Stevens on several occasions at Blairgowrie, Melbourne and CGP office. Undertaking day to day bookkeeping and accounting services for both the cafe and the real estate business. Attending to queries from creditors, staff, ATO and superannuation. Attending to meeting with financial planner Ray Costello. Meeting with lawyers Jim Dandanis and David Baker on several occasions. Meeting with Stevens family members as well as liaison with same via e-mail and telephone. Attending to mediation on behalf of director. Work as required by client for various other duties
Total Fees/Costs based on time involved
Plus GST
30,000.00
3,000.00
TOTAL DUE
$33,000.00
Plus Debtors Balance
17,640.49
GRAND TOTAL INCLUDING DEBTORS
$50,640.49
Payment Terms: 14 Days from date of invoice.
Lodgement of documents upon receipt of payment.
Invoice 7111, the third invoice, stated:
Professional Services in relation to business and managerial
consultancy, accounting and bookkeeping.Total Fees/Costs based on time involved
Plus GST
57,159.00
5,715.90
TOTAL DUE
$62,874.90
Plus Debtors Balance
-12,234.41
GRAND TOTAL INCLUDING DEBTORS
$50,640.49
Payment Terms: 14 Days from date of invoice.
The fact that both the second and third invoices recorded the debt owing as $50,640.49 was due to a software error. That figure was to be disregarded.[3]
[3]Transcript (“T”) 19.
CGP provided to the Magistrate various sheets prepared on a MYOB program which recorded items of work that CGP said were done on particular days and which were referenced to either invoice 6881 or invoice 7111. There were nine items recorded under the heading of the second invoice 6881, and 98 under the heading of the third invoice 7111.
CGP accepted that it had received from Polymould or Ms Stevens the sum of $104,000 for work performed and that it was not owed any sum in respect of the work described in the second invoice. It said that it had disbursed part of the $104,000 to other professionals, who had performed work for, or which benefited, Polymould.[4]
[4]T 29.
The Magistrate considered CGP’s entitlement to payment for all the work claimed under the second and third invoices. He considered each of the items listed in the MYOB sheets and made findings of the extent of the work, if any, that CGP had performed in respect of each of them and what were the amounts to be paid for work performed at the contract rate.
The Magistrate concluded that CGP had received more than it was entitled to, but as Ms Stevens had not brought a counterclaim, he dismissed CGP’s proceeding. That result followed from his conclusion that CGP was entitled to some $14,000 less in respect of the work referred to in the second invoice than it had been paid. Most of the amounts that he disallowed were for work claimed to have been performed by Mr C. Parkes, who was a director of, and principal shareholder in, CGP.
The Magistrate found that the amount of $41,350.10 inclusive of GST was owing to CGP and that it had been paid the sum of $41,519.00.[5]
[5]MCT 64.
Much of the work said to have been performed by Mr Parkes and for which CGP claimed payment in the second and third invoices was described in terms which the Magistrate said were completely and utterly inadequate, and raised “really serious doubts about the veracity of his claim at all.“[6] He said that Mr Parkes’ evidence was “most unsatisfactory, highly [un]persuasive, creating very serious doubts as to his credibility, certainly as to his ability to remember and properly assess and calculate fees after the event.” [7]
[6]MCT 45.
[7]MCT 60.
I should add that the Magistrate also stated that he could not accept Ms Stevens’ evidence in respect of some issues. She had been called as part of CGP’s case. The Magistrate said that he did not trust her memory and found her evidence of little help to him.[8]
[8]MCT 19-24.
CGP called evidence concerning the second invoice. Counsel for CGP, who had also appeared in the Magistrates’ Court hearing, said that that evidence which described the work for which payment was claimed under the second invoice, was conceded to be relevant to CGP’s alternative claims in quantum meruit. She stated that:
…if His Honour found that there was no contract but was willing to decide the matter on the basis of a quantum meruit, and the plaintiff accepted that those other invoices would be relevant because a quantum meruit is concerned with reasonableness and questions of restitution, not what is contractually owed for time on a particular invoice. There was objection put down below to certain evidence being called and there was a significant amount of discussion between myself and the bench, and in the end I conceded that those earlier invoices were relevant to the issue of a quantum meruit, but not to any determination of what was owed under the contract.[9]
[9]T 91-92.
CGP called all the witnesses, who were Mr Parkes, Mr J Moleta, also a director of CGP, Mr B O’Shea, a forensic accountant, and Ms Stevens herself.
Ms Stevens did not give or call any evidence to establish that there had been overcharging for the work described in the second invoice. She had paid the amounts claimed under the second invoice.
No transcript of the hearing before the Magistrate was prepared, although there was a transcript of his oral judgment. It may be that the cost of preparing a transcript of a 10 day hearing was considered to be too great. However, the absence of a transcript adds difficulty to identifying the issues that were argued in the proceeding. CGP’s solicitor, Ms N. Zwier, swore an affidavit which provided some detail of the hearing. There was no affidavit filed on behalf of the respondent contradicting that affidavit.
Generally the pleadings or particulars of claim and defence will identify the issues that were contested. The identification of the issues in dispute provides procedural fairness to each party. CGP filed a complaint with a statement of claim and Ms Stevens had filed a defence. The way that the case was conducted can also be of importance to determining the issues in dispute. In Banque Commerciale S.A., EN Liquidation v Akhil Holdings Ltd[10] Mason CJ and Gaudron J stated:
The function of pleadings is to state with sufficient clarity the case that must be met. In this way, pleadings serve to ensure the basic requirement of procedural fairness that a party should have the opportunity of meeting the case against him or her and, incidentally, to define the issues for decision. The rule that, in general, relief is confined to that available on the pleadings secures a party’s right to this basic requirement of procedural fairness. Accordingly, the circumstances in which a case may be decided on a basis different from that disclosed by the pleadings are limited to those in which the parties have deliberately chosen some different basis for the determination of their respective rights and liabilities.
Ordinarily, the question whether the parties have chosen some issue different from that disclosed in the pleadings as the basis for the determination of their respective rights and liabilities is to be answered by inference from the way in which the trial was conducted. It may be that, in a clear case, mere acquiescence by one party in a course adopted by the other will be sufficient to ground such an inference.
[10](1990) 169 CLR 279, 286-287 (authorities omitted).
These observations of Mason CJ and Gaudron J are directed at litigation conducted by pleadings and are equally applicable to modern litigation in the Magistrates’ Court, where detailed statements of claim and defence have been exchanged in accordance with the Magistrates’ Court General Civil Procedure Rules 2010. They really give effect to the requirements of procedural fairness and are of general application. They ensure that litigants will know the case they have to meet.
The Magistrate found that:
… there was a contract for services with remuneration being agreed at an hourly rate. The hourly rates being for management accounting, $250; for senior accountant, $180; for accountant, $170; for a bookkeeper, $100; for administration, $100. This finding is important because counsel for the defendant quite properly said if the court were to find there was no contract, whilst the defendant acknowledges that there would be a proper basis for a quantum meruit claim that would attract the defence of unjust enrichment.
But because of my findings…I am of the opinion that there can be no such defence raised to the claim. And therefore, I do not see in the circumstances of this case, especially since - again, and I think quite properly, it has been conceded that those hourly rates are fair and reasonable that there is any distinction of practicality to be drawn between a contract claim or a quantum meruit.[11]
[11]MCT 15-16.
The Magistrate ruled, and I accept correctly, that because there was an existing contract, no claim on a quantum meruit claim could be brought.[12]
[12]Lumbers v W Cook Builders Pty Ltd (in liq) (2008) 232 CLR 635, 674.
The Magistrate stated:
The plaintiff has made the claim, the plaintiff must prove the claim. I must go through the plaintiff’s claim item by item to see if the plaintiff has done it. We must then sit down – or I have done it, and I have sat down to do it. I must then do the arithmetic calculations. That is the way I see the court’s duty.
Before doing that, again, a general comment, however, about my view about the appropriate determined method determining this case. Counsel for the plaintiff strived to persuade me that we were looking at one invoice and one invoice only. And that was the only invoice I would look at because there was no counterclaim. I reject that submission. This is a claim for the balance of fees under a contract. To pay fees on an hourly rate. The question is, were those fees earned? The question is, what monies were paid?
And even though I have found, perhaps implicitly, but I would expressly know, that the invoices were sent – they do not close off the book. They are not separate contracts, in other words. This is one contract. And all the invoices, or all the work, and all the payments, have to be brought into account. Except of course, the first invoice, because there has been a concession in relation to it.[13]
[13]MCT 25.
The Magistrate stated at a later point,
Now, as I said, the plaintiff makes this claim, the plaintiff must prove, and in order to undertake that, the plaintiff has called the evidence of Mr Parkes, the evidence of Mr Moleta, and to support them, the evidence of Mr O’Shea, a forensic accountant.[14]
[14]MCT 27.
This was not a case where there was an indivisible contract under which performance of the entire work was a condition precedent to payment. The work performed was carried out over many months as Polymould and Ms Stevens required. Those discrete portions of work created divisible obligations.[15] I consider that the Magistrate erred by, in effect, concluding that the consequence of finding that there was one contract was that he could reconsider the entitlement of CGP to the payments claimed under the second invoice.
[15]See Steele v Tardiani (1945) 72 CLR 386, 401.
Before considering that conclusion further, I note CGP’s argument that, insofar as Ms Stevens relied on payments made in respect of the second invoice to discharge amounts claimed under the third invoice, she bore the onus of establishing those payments. CGP relied on the principles discussed in Young v Queensland Trustees Ltd[16] that the burden of proof of repayment of moneys is borne by a defendant asserting that repayment.
[16](1956) 99 CLR 560.
While the principle in Young’s case is applicable beyond the situation presented by a loan by a lender to a borrower[17], it does not have much bearing on the determination of this case, as there was no dispute that either Polymould or Ms Stevens had paid the sum of $104,000 to CGP.
[17]See eg Gino D’Alessandro Constructions Pty Ltd v Powis [1987] 2 Qd. 40, 45 per McPherson J.
According to Ms Zwier’s affidavit, counsel for Ms Stevens in final submissions to the Magistrate, submitted that: there was no agreement; that it had not been proved that the services had been performed; that the services that were performed were outside the scope of any request for services; that the claim before the Court duplicated claims made in the earlier invoices; that CGP had already been paid, and; that the expert did not conclude that the amount of time taken on each task was fair and reasonable.
Counsel for CGP also submitted that the Court should make a global assessment of the work done and that it was unreasonable to expect that Mr Parkes would necessarily document every task that he did for the client. It appears that, at least in part, these submissions were directed at how the work that CGP had performed should be assessed on a quantum meruit, if the Magistrate decided the case on that cause of action.
On appeal, CGP submitted that the first two invoices were not before the Magistrate because the debts owing under those invoices had been paid and that the liability to make those payments had not been challenged by Ms Stevens. Because Ms Stevens or Polymould had not counterclaimed to recover amounts paid in respect of the first two invoices, there was no issue before the Court in respect of them. Ms Stevens could no longer challenge CGP’s entitlement to those amounts.
Ms Stevens contested that submission and pointed to the overlap in the claims made under the invoices. She submitted that CGP’s cause of action was based on the contract and not on an invoice. CGP, in addition to proving the making of the contract, had to prove performance of the work in accordance with the contract and breach of the contract. CGP could not resist disputation of earlier invoices when seeking payment of later invoices. Counsel for Ms Stevens described CGP’s claim as disorganised and a shambles with non-existent timesheets and invoices created after the event.
Ms Stevens contended that there was an overlap in the periods covered by the second and third invoices, being the period between February and July 2010 ie that both invoices related to that period.[18] The third invoice did not record the time period to which it related, but the MYOB timesheets show that amounts claimed in the third invoice commence in February 2010 and extended to 31 March 2011.[19] The Magistrate noted the existence of the overlap.
[18]T 71.
[19]T 63.
The Magistrate also said in relation to an item of work claimed for Ms Turnbull, the office administrator, that:
It is most unusual to find, as I have said in relation to Mr Parkes, that you have a period of time being covered by two invoices which are very, very distant, one from the other.[20]
[20]MCT 62.
Thus there were claims for Ms Turnbull’s work on 18 February 2010 in the second invoice, as detailed in the MYOB timesheet, and a further claim for work on 19 February 2010 in the third invoice, as detailed in the MYOB timesheet. There was a potential for doubling up of the claims for payment.[21]
[21]MCT 62–63.
Any such overlap would have entitled the Magistrate to deduct amounts from the sum awarded in respect of the third invoice if Ms Stevens had proved that those amounts had been included in the payment made in respect of the second invoice.
The Magistrate identified the issues that were before him for determination as follows:
So we come to the dispute. What is the dispute here? Well, the defendant has never disputed that the plaintiff did work for [Poly]mould. The dispute here is not about the guarantee, as I have said. The dispute here is about the amount of work that was done and I have already covered it, but it was, of course, whether or not it was to be a lump sum of $20,000 or for a sum of money not to exceed $20,000.
...
So the dispute in this case really comes down to identifying what those services were, how much they were worth, and whether, indeed, they were paid for. Or whether they were only partly paid for.[22]
[22]MCT 16.
I do not consider that the debt claimed under the second invoice and previously paid was before the Magistrate for determination. I have reached that conclusion for the following reasons. First, the amount claimed in the second invoice was not the subject of any claim in CGP’s complaint or statement of claim. Secondly, it had already been paid and there was no claim for its refund. Thirdly, CGP’s submissions made it clear that there was no express or implied extension of the proceedings, such that the contract claim included work referred to in the second invoice as well as in the third invoice. There was no affidavit contradicting the affidavit of CGP’s solicitor. Fourthly, CGP’s reliance in the alternative on a quantum meruit, and the concession that that cause of action might involve consideration of a claim in restitution, was not applicable to the claim in contract, which was the basis on which the Magistrate made findings against CGP. The consequence is that the Magistrate erred in requiring CGP to prove the debt claimed, and previously paid, under the second invoice.
I accept CGP’s submission that the Magistrate did impose an onus on it to prove that moneys previously paid by Polymould or Ms Stevens under the second invoice were due under the contract between CGP and Polymould or Ms Stevens. I accept that the Magistrate should not have deducted moneys that CGP had claimed under the second invoice. The Magistrate wrongly decided that CGP’s claim for payment for work described in the second invoice was before him for determination. I consider that there was no basis for such an assessment of the issues for determination and that the Magistrate did not have the second invoice before him for determination. CGP had made no express or implied concession that the amounts claimed in the second invoice were to be determined in the proceeding if the case was being determined on the basis of the claim in contract.
I would add some observations about CGP’s alternative quantum meruit claim. It is not clear why, on CGP’s case, the work to which the second invoice related had any bearing on its claims in this proceeding, either under its claim in contract or on a quantum meruit claim. The Magistrate considered that there was little distinction between a contract claim and a claim in quantum meruit because the rate for the work would be the same in both instances. Under both causes of action, CGP had to prove that the work for which a claim was made had been performed.
A right to claim payment on a quantum meruit exists where there is no contract, but the law recognises a right to recover fair and reasonable remuneration for work which has been actually done and accepted.[23] A plaintiff claiming payment on the basis of a quantum meruit has to prove that the work that is the subject of the claim was actually performed and accepted.
[23]Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, 262.
I do not accept CGP’s contention that, although the work for which payment was claimed under the second invoice was not relevant to its claim in contract, it might have been relevant to its alternative claim based on a quantum meruit. I do not see that the issue of the amount owing for the work described in the second invoice was relevant to either cause of action.
I have considered whether CGP’s conduct in calling evidence about the work that was the subject of the second invoice as part of its alternative quantum meruit claim impliedly widened the scope of the issues that were before the Magistrate for determination in respect of both the contract and quantum meruit claims. I have concluded that it did not have that effect. To restate matters that I have previously mentioned, CGP made clear that the only amounts that it was claiming under the contract were sums owing in respect of work described in the third invoice and identified in the MYOB document produced in the hearing. There was no counterclaim filed or set-off pleaded seeking to recover amounts that Polymould or Ms Stevens had paid under the second invoice. Importantly, the Magistrate did not decide the case on the alternative claim based on a quantum meruit. Accordingly, it was not part of the Magistrate’s task to revisit the liability of Ms Stevens, or Polymould, to make the payments that CGP had claimed in the second invoice and which had been paid.
The effect of my conclusion is that the Magistrate wrongly deducted sums owing to CGP under the second invoice from sums that he found to be owing under the third invoice. Counsel for CGP contended that if those deductions were reversed, CGP was entitled to have re-credited the sum of $13,307, less any amount that the Magistrate found that Ms Stevens or Polymould had overpaid CGP.
The first question of law has been established. For the reasons I have given, I consider that all of the three grounds of appeal alleged as part of the first question of law have been established. They are interconnected grounds. The appeal should be allowed on that basis. I will hear the parties about the orders that should be made as a result.
The second question of law
Question 2 states:
Did natural justice require the Magistrate to put to the witness Colin Parkes the adverse inferences that the Magistrate drew from Mr Parkes’ correction of the time that he visited Blairgowrie on 16 February 2010, in the absence of any examination or cross-examination upon the issue?
The grounds of appeal relating to this question are:
1.His Honour failed to provide Mr Parkes with natural justice, by failing to put the adverse inferences he had drawn from Mr Parkes’ correction of the time that he visited Blairgowrie, to Mr Parkes.
2.His Honour based his conclusion that Mr Parkes was an unreliable witness on these inferences and Mr Parkes was not provided with an opportunity to rebut those inferences.
3.His Honour should have put these inferences to Mr Parkes during his questioning of Mr Parkes to allow him to be heard in relation to those inferences.
The Magistrate noted that when Mr Parkes visited Ms Stevens on 16 February 2010 at Blairgowrie, Mr Parkes gave evidence that the meeting occurred in mid-afternoon, but “to his credit” the next day rectified that by saying that “it must have occurred after 8.30 pm”. [24] The Magistrate stated:
He explained the mistake as being due to daylight saving, which of course, can cause confusion, certainly when it starts and when it ends. But not usually in the middle of it, being the control of our lives. And in any event, even with daylight saving, there is a huge difference between mid-afternoon and after 8 p.m. in the evening. Because by that time of day in February, the light is starting to wane.
So clearly, his recollection is questionable. His powers of recollection and his memory have suffered a certain dent as a result of that piece of evidence in terms of how the court sees it.[25]
[24]MCT 8-9.
[25]MCT 9.
In her affidavit, Ms N. Zwier, after she had listened to the Court recording, set out an account of the evidence that Mr Parkes gave on the second day of hearing correcting his evidence of the previous day. By reference to a telephone bill showing the time when he made a call to Ms Stevens, Mr Parkes said:
I think that I may have said I went to visit her in the mid to late afternoon so this was more towards the early evening.
He then said that he “went down there later in the day at this time.”
Ms Zwier in her affidavit stated that to the best of her recollection, Mr Parkes was not cross-examined on the daylight savings issue by counsel for Ms Stevens “nor questioned by his Honour, despite extensive questioning by his Honour on many other issues.”
The Magistrate provided a number of reasons, which I have previously referred to, explaining why he did not place great weight on Mr Parkes’ recollection. In addition, he considered that Mr Parkes’ evidence that he showed Ms Stevens a sheet with hourly rates was not reliable, but he did find that he did tell her what the hourly rates were.[26]
[26]MCT 14.
The incident relating to Mr Parkes’ mistake as to time because of daylight savings has to be viewed in the context that the Magistrate placed little weight on much of Mr Parkes’ evidence.
The Magistrate was under no obligation to reveal his reasons for not placing great weight on the reliability of Mr Parkes’ evidence. As has been said, procedural fairness does not normally require decision-makers to disclose their thinking processes or proposed conclusions.[27] The credibility of the recollection of Mr Parkes was clearly in issue. He had revealed an uncertain recollection of the time of events by correcting his evidence after he had consulted the phone bill. That fact by itself meant that he had inadvertently given incorrect evidence because of an erroneous recollection of events.
[27]See the authorities referred to in M. Aronson and M. Groves, Judicial Review of Administrative Action, 5th ed, p 542.
I do not accept that the Magistrate made any error of law as alleged in the second question of law.
The third question of law
The third question of law states:
Was the Magistrate’s finding that the expert ‘could not have seen’ any documents for certain timesheet entries, based on any evidence?
The grounds of appeal attached to question 3 are:
1.It was not open to his Honour to find that the expert ‘could not have seen’ any documents supporting certain timesheet entries, because there was no evidence that the expert could not have seen any documents to support those timesheet entries.
2.His Honour should have found that the expert could have seen documents supporting those timesheet entries or not made any finding on this issue at all.
This ground was said to be based on a “no evidence” argument. A jurisdictional error can occur where a fact is found without supporting probative evidence.[28]
[28]Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321, 355-356 and Minister for Immigration and Citizenship v SZMDS (2010) 240 CLR 611 [124].
The expert concerned was a forensic accountant, Mr Bill O’Shea. This ground concerns, in particular, the following statement of the Magistrate:
It is for this particular reason that a greater emphasis has been placed on his entries and to ensure that they correspond to the relevant correspondence. It is there, is it not? Mr O’Shea is saying, ‘I’ve looked at the entries, I’ve looked at the relevant correspondence to ensure that the entries are right.’
At Paragraph 7.6, he says, ‘I am able to say that on the date specified with the timesheets,’ I think he means in the time entries, there are no timesheets, a small slip, perhaps, but nonetheless an important one for a forensic accountant who is here to verify the very detailed, complicated set of circumstances. ‘I am able to say that on the date specified with the timesheets, there are corresponding dates on various items of correspondence from the defendant between the principal and various indices connected in engagement with CGP. It can only be assumed that all meetings referred to were actually attended by the principal.’
I found this piece of evidence to be singularly unhelpful, and I must say of concern. Given that his job was to scrutinise thoroughly the claim and provide the court with an independent unbiased assessment of this claim, I find this evidence very disappointing. It goes without saying, he could not have possibly seen any documents an entry for $5000, 20 hours work on the 31 March 2011.[29]
[29]MCT 31.
Ms Zwier’s account of Mr O’Shea’s evidence includes that in cross-examination he gave evidence that he could not verify whether particular appointments were in fact kept or how long meetings took.
The Magistrate took into account that Mr Parkes made the relevant entry in the timesheet 72 days after the work was done and recorded 20 hours of work performed for Polymould or Ms Stevens on the one day. He said that this event cast “huge doubt on Mr Parkes’ capacity to enter appropriate times on appropriate occasions”.[30]
[30]MCT 30.
According to Ms Zwier’s affidavit, Mr Parkes gave evidence that not all the time recorded in his MYOB timesheets was recorded contemporaneously and sometimes the recording was delayed and occurred at a later time. On occasion, it was recorded at the end of the work and Mr Parkes said that sometimes he would “go back and re-do the billing, have to go back over the file”.[31]
[31]Ibid.
There was no evidence before me to establish what documents Mr O’Shea had before him, let alone that he had seen documents recording 20 hours of work performed on the one day. No error has been established in the Magistrate’s reasoning. It was open to him to reach the conclusion that he did.
The third question of law has not been established.
The fifth question of law[32]
[32]The fourth question of law was not pursued by the appellant.
The fifth question of law states:
Did the Magistrate fail to take into account a relevant consideration when he decided that he could not ensure that there was no double up of timesheet entries, without considering the evidence of Joe Moleta that once entries are cleared to an invoice MYOB does not allow that same entry to be invoiced again.
The grounds of appeal relating to question of law 5 are:
1.His Honour failed to take into account a relevant consideration when he decided he could not ensure that there was no double up of timesheet entries without considering the evidence of Joe Moleta that once entries are cleared to an invoice MYOB does not allow that same entry to be invoiced again.
2.Having found that Joe Moleta was an honest and reliable witness, his Honour ought to have found that it was not possible within the MYOB system to invoice a single timesheet entry twice.
The passages of the Magistrate’s reasons relied on by CGP in relation to this issue stated:
Ms Turnbull’s time entries cross over two invoices. They are referred to by 6881 and Invoice 7111. And the crossover of hers in time is between 18 February and the 13 May 2010.
…
Although the description of work for these various items is different. It is not particular enough to enable any precise identification of the work. And therefore, I cannot analyse to ensure that there is no doubling up. It is most unusual as I have said in relation to Mr Parkes, that you have a period of time being covered by two different invoices which are very, very distant, one from the other.
…
I therefore will not allow the sum of $2290 being for the period of 16 February to 10 May 2010.[33]
[33]MCT 61–62.
Mr Moleta gave evidence that once a person nominated a batch of timesheet entries to be cleared to a certain invoice, it was not technically possible for MYOB to then allocate those entries on a second invoice.[34]
[34]T 42.
Mr Moleta’s evidence on this issue as recorded in Ms Zwier’s affidavit was:
that at any given time, when an invoice is raised, MYOB will not include in that invoice hours or time spent which have been the subject of a previous bill or invoice, so that anything in the invoice will be unbilled hours since the last invoice or since the beginning of the work.
Ms Zwier in her affidavit stated that it was not put to Mr Moleta that his employees had entered timesheet entries twice, or “doubled up” on purpose. CGP also relied on the fact that the Magistrate had accepted Mr Moleta as an honest witness.
I do not consider that the Magistrate erred in law in his conclusions about the work in issue. He took into account that the descriptions of work in the two invoices were not particular enough to enable any precise identification of the work performed. He stated that the “period of crossover is too grey to enable it to be verified. And I cannot be satisfied on the balance of probabilities that the entries totalling $2290 have, in fact, been properly recorded. They will be deducted”.[35] The Magistrate was entitled to take into account that Ms Turnbull had not been called as a witness.
[35]MCT 63.
The Magistrate did not fail to take into account the relevant consideration alleged. He decided that the work described in the invoice had not been proved. The error alleged in the fifth question of law has not been established.
The sixth question of law
The sixth question of law states:
Did the Magistrate apply the correct standard of proof when he disallowed certain timesheet entries on the basis that he could not ‘ensure’ that there was no double up of timesheet entries? In particular, if the finding was one of intentional wrongdoing, were the principles in Briginshaw required to be applied when making his finding.
The grounds of appeal that relate to this question are as follows:
1.His Honour erred in applying a standard of proof higher than the ordinary civil standard to the requirement to prove that the work represented by certain timesheet entries of Anny Yang and Lin Turnbull was in fact done.
2.His Honour should not have applied a standard higher than the balance of probabilities to those timesheet entries of Anny Yang and Lin Turnbull entered for dates covered by both invoices, and should have been satisfied on the balance of probabilities that the work on Anny Yang and Lin Turnbull’s timesheets was done.
3.If His Honour’s finding was one of intentional double billing for work done, his Honour failed to apply the Briginshaw standard to this finding, which is a finding of serious wrongdoing.
CGP relied on passages in the Magistrate’s reasons as indicating that he had accepted Mr Moleta’s and Ms Ly’s timesheet entries, but not Ms Turnbull’s entries in the MYOB system.
CGP’s argued that if the Magistrate’s finding was based on an implied finding that there had been intentional double billing for the work done, he should have, but did not, applied the Briginshaw[36] standard of proof in making that finding.
[36]Briginshaw v Briginshaw (1938) 60 CLR 336 and s 140 of the Evidence Act 2008.
His Honour’s judgment does not reveal that he applied the Briginshaw standard of proof. Rather, his Honour found that the particulars of work described in the timesheets, in respect of work done by Anny Yang and Lin Turnbull, were insufficient to establish proof of the work claimed. No error of law is involved in that conclusion.
The Magistrate expressly stated that he was applying the civil standard of proof[37] and made his findings by applying the standard of the balance of probabilities.
[37] MCT 38.
The Magistrate’s reasons contain no indication that he made the finding on which this sixth question is based. Ms Turnbull was not called as a witness and his Honour simply did not accept that her entries were sufficient to prove the performance of the work for which CGP claimed payment.
Seventh question of law
The seventh question of law states:
Was it open to the Magistrate to find that Anny Yang should be paid the bookkeeper/administration rate in the contract rather than the accountant rate in the contract when there was no evidence that her role was one of bookkeeper or administration and the only evidence was that she was a qualified accountant?
The grounds of appeal that relate to the seventh question of law are:
1.His Honour erred in holding that Anny Yang should be paid the bookkeeper/administration rate in the contract because there was no evidence that her role was one of bookkeeper or administration and the only evidence was that she was an accountant.
2.In deciding which hourly rate applied to Ms Yang his Honour failed to consider the evidence of Mr Parkes that Ms Yang was a qualified accountant.
3.His Honour should have held that Anny Yang should be paid at the accountant’s rate.
The passage in the Magistrate’s reasons relied on by CGP was:
She has claimed with a $113 a unit or $130 an hour. This contract does not provide for an agreed rate of $130 an hour. It provides for an agreed rate of $100 an hour for bookkeeping. Most of the work that Ms Yang describes in her time entries is bookkeeping work. She was not called to give any evidence. And therefore I cannot be satisfied that she would be entitled to anything more than an administration or bookkeeping rate.[38]
[38] MCT 63.
In her affidavit, Ms Zwier stated that Mr Parkes gave evidence “that Anny Yang may have been a CPA or not far off” and agreed with His Honour that “a person studying for CPA would have had to be qualified”.
The Magistrate stated that most of the work that Ms Yang described in her time entries was bookkeeping work.[39] She was not called to give evidence and he could not be satisfied that she was entitled to anything more than an administration or bookkeeping rate.
[39] Ibid.
On the evidence, his Honour was entitled to conclude that there was doubt about whether Ms Yang was a qualified accountant. The evidence was inconclusive on that point.
More importantly, it was open for his Honour to decide that the work attributed to Ms Yang had not been proved to be accountant’s work and as therefore attracting the accountant’s hourly rate. Even if Ms Yang was an accountant, his Honour was entitled to conclude that he was not persuaded that the work that she was performing was accountant’s work. His Honour applied a rate of $100 an hour rather than the accountant’s rate of $130 an hour for the work. No error of law is apparent in his Honour following that course.
Conclusion
The appeal is allowed as the grounds of appeal alleged as part of the first question of law have been established.
I will hear the parties as to the appropriate orders to give effect to my reasons.
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