Eagle Sea Pty Ltd v Radford and Dick t/as Radford Cartage Contractor
[2012] TASSC 41
•29 June 2012
[2012] TASSC 41
COURT: SUPREME COURT OF TASMANIA
CITATION:Eagle Sea Pty Ltd v Radford and Dick t/as Radford Cartage Contractor [2012] TASSC 41
PARTIES: EAGLE SEA PTY LTD
v
RADFORD, Norman
DICK, Melissa, trading as Radford Cartage Contractor
FILE NO/S: 990/2011
JUDGMENT
APPEALED FROM: Radford Contractor v Eagle Sea Pty Ltd and McGrath [2011] TASMC, 24 October 2011
DELIVERED ON: 29 June 2012
HEARING DATE: 22 March 2012
JUDGMENT OF: Porter J
CATCHWORDS:
Contracts – Building, engineering and related contracts – Remuneration – Amount – Need for plaintiff contractor to prove value of work done – Means or method by which object of contract to be achieved not the subject of agreement – Proof of value of work includes proof that reasonably cost effective means used.
Cooper v Australian Electric Company (1922) Ltd (1922) 25 WALR 66; Riverside Motors Pty Ltd v Abrahams [1945] VLR 45, considered.
Aust Dig Contracts [270]
REPRESENTATION:
Counsel:
Appellant: B R McTaggart
Respondents: P L Jackson
Solicitors:
Appellant: Temple-Smith Partners
Respondents: Zeeman Kable & Page
Judgment Number: [2012] TASSC 41
Number of paragraphs: 79
Serial No 41/2012
File No 990/2011
EAGLE SEA PTY LTD v NORMAN RADFORD and MELISSA DICK
trading as RADFORD CARTAGE CONTRACTOR
REASONS FOR JUDGMENT PORTER J
29 June 2012
Introduction
The appellant (Eagle Sea) is a company which was formed to acquire and develop a parcel of land at Heybridge. In about February 2009 it engaged the respondent firm (Radford) to do some land clearing work for the development. The work was done in February and April, and Radford sent four separate invoices to Eagle Sea for a total of $39,132.50. The invoices were dated 28 February, 31 March (2), and 20 April 2009. Of the total amount, only $5,000 was paid.
Radford sued Eagle Sea in the Magistrates Court for the balance. Eagle Sea counterclaimed damages on the basis that some of the work was not completed to a reasonable workmanlike standard. Although the whole of the amount claimed was in dispute for one reason or another, the major areas of contention were the work which was the subject of one of the invoices of 31 March 2009 ($13,200), and that which was charged for in the invoice of 20 April 2009 ($23,017.50). On 24 October 2011 Magistrate Brett gave judgment for Radford against Eagle Sea for the total sum of $25,585 on its claim, and for Eagle Sea against Radford for $2,000 on its counterclaim.
The notice of appeal does not make it clear but the issues in this appeal relate only to the work represented in the last invoice of 20 April 2009. Of that amount, the magistrate allowed $18,017.50. The sole ground of appeal, as amended without objection at the commencement of the hearing (italicising the amendment) is that:
"The learned Trial Magistrate erred in fact and in law in determining that the Respondent performed 'the Second Agreement' in a reasonable and workmanlike manner and/or for a reasonable price."
The essential facts
Part of the overall development of the land was known as Hamlet 5. That was nine hectares in size and it was that part which had been advanced furthest towards sale. The marketing of Hamlet 5 was to commence with an open day which took place on 4 April 2009. Radford was engaged to do earthmoving work in respect of Hamlet 5, initially for the purposes of the forthcoming open day. The first lot of work done was the clearing of the boundary to Hamlet 5, with subsequent excavator work done assisting a surveyor to mark out boundaries.[1]
[1] All of that work was represented in invoices dated 28 February 2009 ($2,365) and 31 March 2009 ($550). The magistrate disallowed the claim in respect of the first invoice on the basis of an argument about the identity of the party with whom Radford had contracted. The claim for the second invoiced amount was allowed.
The work which was the subject of the two more contentious invoices made up the bulk of the work which Radford was engaged to do in respect of Hamlet 5. It was common ground that it was the subject of two separate agreements. The first involved a quotation of $12,000 for clearing the understorey. At the hearing, this work was referred to as "slashing" or "under-clearing", and the intention was to give the land a "park like" appearance with the trees in place but the vegetation cleared from underneath. The invoice of 31 March 2009 for $13,200 related to this work, the subject of the first agreement.
The second agreement was entered into some time after Radford had commenced the clearing work. The extra work was significant and involved the clearing of timber from and near road lines within Hamlet 5, including the removal of the material to a landfill site. It was common ground that the work would be charged on a "do and charge" basis (in addition to the quoted fee for the under-clearing). The dispute as to this particular work, the subject of the last invoice, related to Eagle Sea's purported reliance on Mr Radford to advise as to, or adopt, the most efficient and cost effective means of clearing the trees and removing the material, and the assertion that he chose a method which was inefficient and excessively expensive. As is evident from the ground of the appeal, it is the work the subject of the second agreement which remains in dispute.
The pleadings
It is necessary to set out the relevant parts of the pleadings. Unfortunately, these proved to be inadequate in properly defining what were the real issues between the parties.
The particulars provided by Radford in the claim document are as follows:
"5The Second Defendant with on his own behalf [sic] and/or in the alternative on behalf of the First named Defendant contacted the First named Claimant in or about February 2009 and engaged him to carry out earth moving works on the property on a 'do and charge' basis, such works involved the use of a dozer to clear a track on the property.
6The First named Claimant commenced the works and upon completion was engaged by the Second named Defendant and/or by the Second named Defendant on the behalf of the First named Defendant to carry out further earth moving works on the property.
7The Claimant completed the work and invoiced the Defendants by sending Invoices attached for the work [sic] to the Second named Defendant's address on the 20 April 2009 and the 5 May 2009."
Paragraph 8 pleads the non-payment of the total amount, less the amount of $5,000 paid on 3 April 2009. It can be seen that Radford did not plead any term, express or implied, as to its entitlement to payment or Eagle Sea's obligations. (The references to the "Second Defendant" and the "Second named Defendant" are references to Mr Paul McGrath who became a director of Eagle Sea. He was joined in the proceedings because there was an issue, not presently relevant, about the incorporation date of the company and the identity of the party contracting with Radford.)
The defence commences with a non-admission that Eagle Sea owes Radford monies for work performed between March and April 2009, and a denial that it owes the amount claimed. In paragraphs 5 and 6, it is pleaded that "the second clearing work" was commenced without Eagle Sea's consent, and that the "Claimants then estimated to the First Named Defendant that the second clearing work would involve 80 Loads". Paragraphs 7 and 8 are in the following terms:
"7On the basis of that estimate The [sic] First Named Defendant agreed that the Claimants could carry on the second clearing work but does not admit that the Claimants did the hours claimed or are entitled to charge the sums in the invoice.
8The First Named Defendant maintains that the second clearing work performed by the Claimants, was not done in a reasonable or proper workmanlike manner."
The relevant paragraphs of the counterclaim are as follows:
"13by oral agreement on or about mid March 2009 the First Named Defendant agreed to engage the Claimants to carry out the second clearing work ('the second agreement').
14At all material times the Claimants were operating a business known as Radford Cartage Contractor and held themselves out to be skilled in the area of forest and bush clearing and having the knowledge, machinery, personnel and expertise to undertake the clearing work and the second clearing work.
15At all materials times the Claimants were aware that the First Named Defendant relied on the Claimants' skill, expertise and knowledge in contracting with them to carry out the clearing work and the second clearing work.
16In breach of the first agreement and second agreement the Claimants have failed to complete or to complete to a reasonable and proper workman like standard the clearing work and the second clearing work.
Particulars of Breach
16.1 The claimants did not use a methodology suitable for purpose;
16.2 The Claimants did not use machinery suitable for purpose;
16.3 Further particulars to be supplied."
Damages totalling approximately $55,000 were counterclaimed as a result of the claimants' "failure to complete or to complete to a reasonable and proper workman like standard" both lots of clearing work. The damage attributable to the two separate aspects of work done was not specified.
As it began to emerge in particulars provided by Eagle Sea, and as it became clear at the hearing before the magistrate, what was pleaded in both the defence and counterclaim as a failure to do the work in a reasonable and workmanlike manner, was pursued as a failure to do the work in a more efficient and less expensive manner, although the use of the expression was not abandoned. With the exception of a minor issue to do with the removal of topsoil, the issue which was agitated had very little, if anything, to do with the standard of work, as that term is commonly understood.
It can be seen that Eagle Sea did not, at least clearly, plead that the total amount claimed or any part of it was excessive or unreasonable. There is a pleading in paragraph 7 of the defence that in respect of the second clearing work, Radford was "not entitled to charge the sums in the invoice", but otherwise only the pleading, repeated in the counterclaim in slightly different terms, that the "second clearing work" was not done in a reasonable or proper workmanlike manner.
Furthermore, the reliance pleaded in paragraph 15 of the counterclaim is left undeveloped. There is no pleading of the existence of any duty arising from this, nor of any breach. There is no pleading of any misrepresentation whether by statement or omission, and no plea of misleading or deceptive conduct under the Fair Trading Act 1990. Because of this, the proper treatment of the issue of reliance ultimately proved to be elusive. As will be seen, the magistrate was prepared to assume an allegation of a breach of a duty in negligence, but found in favour of Radford on the issue.
In this appeal, Eagle Sea seems to have chosen to have its pleadings in part read differently, and in part treated as largely irrelevant. Counsel for Eagle Sea, Mr McTaggart, said that Radford's claim for the amount of the last invoice could properly have been resolved by reference to an implied term as to reasonable payment, and without reference to the counterclaim. That is essentially how I am asked to approach this appeal, which is by way of rehearing: State of Tasmania v Boyd [2010] TASSC 13 at [27]. The evidence of course, must remain as it is. Mr McTaggart also took the position that I am not concerned with the issue of reliance, except to the extent that the evidence is part of the background to the relevant discussions. I will later detail the parties' arguments.
Before moving on, I should point out that at the hearing, rather than adopt the terms "first clearing work" and "second clearing work" as used in the defence, the parties referred to first and second "agreements" for clearing work. It seems that the two different references are synonymous in that, relevantly, there was a second agreement for further clearing work. As is necessary, I will now set out the evidence which was the subject of scrutiny in this hearing, and other evidence which I see to be relevant.
The evidence
Norman Radford
Mr Radford said that about two to three weeks into the job, he discovered that a tree had fallen onto one of his pieces of equipment. As a result he rang Mr McGrath and explained the situation. He pointed out there was a danger to prospective buyers from timber along the road lines in the hamlet. Many of the trees were infested by white ants. He told Mr McGrath that the timber on the road lines "needed to go". As a result of the telephone call there was a meeting onsite with Mr McGrath, Dr Messieh (the other director of the company), and a Mr Khalil who was a friend and adviser to the company principals. The danger from the trees along the road lines was pointed out to the group. He was asked what "the best way" was, and he said that they would have to obtain a price for the removed timber to go to a nearby landfill site. He said that they were "just happy for us to take it away, I mean it had to be taken away."
He was later contacted by Mr McGrath who told him he had spoken to the person in charge of the landfill site and that he, Mr Radford, was to remove the trees and the stumps and cart them to the site. Mr Radford said that there was no logging plan, and without one he could not have taken trees and sold them. His evidence was that he told Mr McGrath that it was a do and charge hourly hire basis using an excavator and two ten yard trucks. He was made aware that the landfill site charges were $80 for a ten yard load. He said he went ahead and removed trees "from where they had to be removed", and the material was put into landfill with the topsoil being scraped back into the holes made by the removal of the stumps.
Mr Radford said that he was aware of the suggestion that the removed trees should have been windrowed and burnt, but he said that he was not asked to do that. He was instructed to put the material in the landfill site. He suggested in evidence that burning would not have been possible because a fire permit would be needed and that there "was too much danger" given the dry undergrowth at that time of the year. He did some tidying up work for a few days after the open day, and heard nothing about any issues concerning payment after sending the invoices until he had instructed solicitors to take action.
Mr Radford finished his evidence-in-chief just before the lunch break. The transcript records the following as having occurred on the resumption:
"HIS HONOUR: Just before you start Mr McTaggart, Mr Grey I assume it's – maybe your client's said it and I missed it, it's implicit in his evidence, I assume that the invoices accurately reflect the work that he did?
MR GREY (Resuming): Yes indeed, sir, that's – well I can certainly ask that question of him.
HIS HONOUR: I think you have to.
…
MR GREY: Yeah, I think I do, yes. Mr Radford, the invoices which have been submitted … are you able to say whether they reflect the work that you have done? … Yes.
And the price that you've charged, that is fair and reasonable? … Yes.
And you base that upon your experience as a contractor? … Yes."
In cross-examination, Mr Radford agreed that he had said to Mr McGrath and the others that he had appropriate equipment and experience. He explained that the job was not confined to clearing along the road lines, but was to remove "excess material" within Hamlet 5. His evidence is a little unclear but it seems that he was suggesting that he was to remove dangerous trees along and adjacent to the road lines; that is, over a wider area. He described the area as "where it was unsafe", and said that "they came on site and it was agreed that the material had to go to a landfill".
He agreed that he had estimated some 80 to 100 truck loads were to be removed and agreed that possibly there was a much higher number actually removed. He said that he had two buckets for the excavator; "a digging bucket and a skimming bucket". He did not have a "grab" fitting which might be used to grab and pull a tree out of the ground, or one which could grab the tree and saw it off near the base. He disagreed with the propositions that he needed a grab type of fitting or a "grab and saw" fitting to the excavator to do the job properly, and that it was "standard in industry" that the tree clearing work he did, is done with such equipment. He disagreed that it was standard in the industry to pull the stumps rather than dig them out.
In response to the proposition that if he had used an excavator with a grab fitting, chopped down the trees, pulled out the roots, taken the cut logs away, and burnt the roots, there would be no tipping costs, he disagreed and said that he was not asked to burn the roots. When asked who he thought they were relying on for advice about how to do the operation, Mr Radford replied, "They came to me and that was the cheapest way of doing the job". He confirmed that he had been asked about the best way to go about the job, and he had said that it was the best way to do it; "they wanted it done to keep it eco friendly, there's no other way it could have been done." He also confirmed that he was not asked to windrow and burn the trees, but agreed that he did not suggest it. He said that he did not suggest that the clearing of trees wait until a fire permit could be obtained, because the launch date was 4 April 2009.
Paul McGrath
Mr McGrath gave evidence about the onsite meeting giving rise to the second agreement. There was a dispute about the reason for that meeting, but that presently is of no consequence. He said that Mr Radford was asked to clear along two road lines "so that we could get the true sense of this hamlet". His evidence was as follows:
"I specifically asked him if he had the right equipment, whether he had the right experience, 'cause I had no knowledge, I had no understanding whatsoever of what to do in regards to clearing of land. He asked us what we would do with the stumps, particularly the stumps, not the other things, but, 'What'll I do with these stumps, will I chuck them in the gully', he said, and we said, 'Oh you can't put them in the gully'. This is a standard that was meant to be applied to the reserve around this, it's the same as a national park, it had that sense about it so that was obviously not something we could do. He said, 'Well then, well we could take it over to the Heybridge landfill', and he told us that we could get this at perhaps a good deal and it might cost us, you know, eighty dollars and he said that, you know, it'd be a do and charge job. We … took him at his word that he'd do it in the right fashion and that he had the right skills and right gear …".
Mr McGrath said he obtained a quotation from Gary Spicer of Heybridge Landfill of $80 a load, and then gave Mr Radford the go ahead. Mr McGrath explained that Mr Radford's response to his inquiry about the latter's experience was that Mr Radford had said that, "he had the right equipment and the right man". Mr McGrath said that Radford was not to take all of the trees from Hamlet 5. The arrangement was to clear the road line and any tree near or around the line which would be dangerous, with viable trees to be left.
Mr McGrath described how Mr Housego was subsequently engaged to clear Hamlets 3, 4, 5 and 6, and all of the roads through those hamlets; "that was clearing completely to the ground". The method Mr Housego used was not that adopted by Mr Radford. Mr Housego had logging equipment and there was "an excavator with a grabber". He described the process he saw as follows:
"With smallish trees that grabber can just grab the tree and just pluck it out of the soil, with very large trees he had another machine which was – had the same grabber but a chainsaw attached to the bottom of it so it could grab quite a large tree and just chop – chainsaw through it and then put it down. He also had a log skidder, which is a very large wheeled … four big wheels and a big blade on the front … and he basically plucked things out and chopped them and pulled and cleaned up the entire property, all that area for us.
Was there carting of tree butts and bigger rubbish to the tip?……No.
What happened to those? …… They were burnt in piles on the property, but some of those are still there, some of it is still piled up right now waiting to be burnt when the conditions are right."
The questioning then turned to what his attitude would have been had he been given advice by Mr Radford about this methodology. The relevant passage of evidence is as follows:
"If you'd been given the advice that these trees could have been chopped, the roots pulled out by an excavator, the rubbish piled up and burnt at sometime when a permit could be obtained -……Yep.
- what would you have done?……I would've done that because the relative price difference is enormous.
What about the suggestion that you had to clear hamlet 5 for the launch, you wouldn't have wanted material piled up on hamlet 5?……Well there would've been areas that we could have deposited for – above and up on the – what would have been the road line going through to the north at that stage, there would've been places to put it where we could've piled it up and burnt it off later. I didn't get the opportunity at that point to make that consideration so it's never really been fully looked at of course."
The magistrate then had Mr McGrath confirm that they were advertising the launch on 27 March about a week before it was due to happen. His Honour asked Mr McGrath whether it seemed at that time that things would be ready for 4 April. The following exchange then occurred:
"I'm just wondering why you didn't put the launch off 'til later?
WITNESS: The size of the debt we had, the impetus we felt we had to bring to this project to move forward was more than I, I can't speak for my other partner, but more than I was used to. I felt pressure to move forward as fast as we possibly could with the size of it to see if we could get some sales. It wasn't – as we looked at the works that he'd done it wasn't terrible to us, it just wasn't finished, it wasn't – wasn't to the high standard that the first part had been, but it was still a lot better than trying to show people bush, so it was – you know, we thought there was still some prospect in it, we – there's no doubt."
In cross-examination Mr McGrath agreed that the intention was to have a park-like setting on all of the land except where the roads were, so that the only trees they wanted removed were those which actually interfered directly with the road line, and those dangerous trees which would have been around road lines. He confirmed that they wanted to leave all viable trees, so there was no intention for Mr Radford to take all of the trees from Hamlet 5.
Morgan Housego
Eagle Sea called Mr Housego, who was the logging contractor and was called in by Eagle Sea to do further clearing work on Hamlet 5, and to clear other hamlets. With respect to Hamlet 5 he said he noticed there had been some clearing done where the understorey had been flattened, and he estimated that about five acres in total of Hamlet 5 had been under-cleared. He described the manner of the clearing work which he carried out. In relation to the trees he used an excavator with "a falling head" attachment with which the trees could be pushed over and the butts cut off. He said they were allowed to take some of the timber, so they processed logs out of some of the trees and then mainly used the excavator to get dirt out of the stumps to burn better. They broke some of the bigger ones up and then put it all into windrows or piles using a log skidder and later a rake device set up on the excavator. These piles were burnt.
He was asked about Mr Radford's method of clearing road lines in Hamlet 5 by which "he had an excavator with a scoop". Mr Housego said he had not seen trees removed by that means. He was asked whether the method he used was the only method he had seen used in the industry, to which he replied, "Oh well pretty standard to my knowledge but I wouldn't say there's not other ways and means of doing it".
He said that in Hamlet 5 he had seen "a bit of a road line" cleared. Using the method he had adopted, Mr Housego estimated the cost would probably have been around $5,000 to $7,000. The total cost for all of the work he did was $77,000.
In cross-examination Mr Housego agreed that his total price reflected the fact that he could take timber. Ordinarily he would not have done it for around $70,000 if he could not have done so. He said that principally he was a logging contractor, not a land clearer. When looking at the job he thought there may be about $30,000 worth of timber which could be taken.
He agreed that the job that he was required to do was to have the areas "down to dirt … so there was nothing to be basically left on the deck". He agreed that he had to cart it all away or pile it up and burn it. He discussed with Mr McGrath the option of carting it away. He asked whether there were options to be able to cart some of it away because the dump was relatively close, but Mr McGrath was keen to have it all piled up and burnt. He said that for that reason carting it away was not really an option.
Alfonso Messieh and Nabil Khalil
Both Dr Messieh and Mr Khalil were called by Eagle Sea. Relevantly, Dr Messieh said that he did not remember any discussion about dangerous trees at the onsite meeting, but accepted that it was possible falling trees could cause a risk to potential customers. He later said that his understanding was that it was agreed Mr Radford clear a road or roadway and maybe remove some dangerous trees, but he could not be sure as to specific details. Mr Radford did not mention anything about burning the trees. "His only option he gave us was to shove everything in a gully, which would have been environmental vandalism." He went on to say that they asked Mr Radford what other option there was, his only reply being that the material would have to be carted to a dump site.
Mr Khalil also said that he had no recollection of a discussion about danger from trees falling, although he did remember Mr Radford pointing out a number of trees that were badly burnt and should be removed. He said there was no discussion about what to do with the removed trees as Mr Radford knew what to do. He agreed that Mr Radford had asked what should be done with the trees, the response being that they could be pushed in the gully. He said that either Mr McGrath or Dr Messieh protested at the unsightliness, after which there was a discussion as to what else could be done. Mr Radford suggested that the trees could be taken to the landfill site.
The magistrate's reasons
Relevantly, the magistrate was required to resolve disputes about the work the subject of the first and second agreements. As to the first, his Honour found that Radford was in breach of a term of the agreement in that it did not achieve the agreed standard of work by the open day, or indeed at all. His Honour went on to find that there had been however, substantial performance by Radford of these obligations despite the failure to achieve the standard of work. Radford was accordingly entitled to a quoted sum of $12,000, but Eagle Sea was entitled to recover a reasonable sum for damages for Radford's failure to achieve the agreed standard of work by the open day. Those damages were later assessed in the sum of $2,000, that being the whole of the amount allowed on the counterclaim.
As to the work which is the subject matter of this appeal, his Honour said that it was common ground that the parties orally entered into a second agreement. "It involved the clearing of some trees and the removal of that material to a landfill site." He continued as follows:
"44It seems to me also that there is no real dispute in respect of the following matters:
(a) That the work specified in the invoice ie excavator and truck hire for a specified number of hours, was actually performed.
(b) That the hourly rate charged in respect of such hire was reasonable.
(c) That Radford Cartage did clear the road lines in a satisfactory manner by the time of the open day, as requested by Mr McGrath.
45Eagle Sea's real argument in relation to these charges is that they relied on Mr Radford to advise as to the most efficient and cost effective means of clearing the trees and removing the material, and that he chose a method which was inefficient and excessively expensive. Eagle Sea points to the evidence of Mr Housego, particularly in the following respects:
(a) That Mr Housego's method of clearing trees by use of an excavator and an appropriate attachment was a method generally used in the industry.
(b) That on the basis of this method, he was able to clear not just Hamlet 5 but Hamlet 3, 4 and 6 as well, for a total cost of $77,000.00.
(c) That he had not seen before Mr Radford's method of using an excavator with a scoop to knock a tree over and then remove it.
(d) That his estimate of the cost to clear the road lines within Hamlet 5 on the basis of his method would have been between $5,000.00 and $7,000.00.
(e) That his method included windrowing and burning the felled material. This avoided the cost of transporting the material to a landfill site and the fees charged by the landfill site to accept the material
46I accept Mr Housego's evidence as honest and reliable, as far as it went. However, in my view, the evidence does not support the arguments made by Eagle Sea in relation to the charges in question. In particular:
(a) I cannot conclude, on the basis of the evidence presented to me that the methods chosen by Mr Radford, or his failure to advise an alternative method, resulted from negligent advice. Mr Housego's evidence did not go beyond the comment that he had not seen tree felling done in the way that Mr Radford did it before, nor that doing it by his method, at least in relation to the road clearing, would incur a charge of between $5,000.00 and $7,000.00. He did not give any detailed evidence in relation to industry standards, nor did his evidence go as far as suggesting that Mr Radford's methods were unreasonable or unduly expensive.
(b) I cannot conclude that Radford Cartage's charges were unduly excessive simply by comparing them with Mr Housego's charges. I do not have detailed evidence as to the amount of timber and clearing work relevant to the other hamlets, nor as to the amount of material left on Hamlet 5 for Mr Housego to remove. Furthermore, I need to take into account that, as part of his agreement with Eagle Sea, Mr Housego was entitled to harvest and sell, for his own profit, timber which he acquired from his work, in addition to the fee paid to him by Eagle Sea. The extra value of this timber was estimated at $30,000.00. This was not a benefit that was available to Radford Cartage under its agreement with Eagle Sea.
(c) As to the issue as to whether it was more efficient and cheaper to dispose of the excess material by windrow and burning, again, this was not an option which was necessarily applicable in the circumstances. Mr Radford indicated that it would have been impossible, particularly at that time of year, to have disposed of the material in this way by the open day. Mr McGrath agrees that when Mr Radford suggested that one option might be to push the material into gullies, he indicated that this option was not acceptable. In submissions, Mr McTaggart responded to my query about the applicability of this option by saying that had Mr Radford advised as to this method, that his clients would have delayed the open day. However, there was no evidence to support that submission and given the complex nature of the financial obligations of Eagle Sea in respect of the allotments and their desire and possibly need, to have the blocks marketed as quickly as possible, it does not seem to me that I can simply infer that this would have been the case."
The magistrate found that Radford had performed the second agreement in a reasonable and workmanlike manner, and that as to the assertion that Radford ought to have advised an alternative method of doing the work, he was not satisfied that Radford breached any duty which was owed to Eagle Sea. His Honour then went on to deal with one matter which he said does seem to impact on the reasonableness of the charges made for this work. His Honour said that he was satisfied that some of the work to which the invoice related involved transporting away material which had been produced as a result of the first agreement; ie the under-clearing. His Honour noted that he had, earlier in the reasons, found that the removal of that material was part of the lump sum quotation, and said that he was satisfied that the removal of this material was also included in the charges made in the last invoice.
As to the portion of the invoice relating to such material, his Honour said that it seemed only the truck hire was relevant, and thought it appropriate, having regard to his overall impression of the finished result, to reduce the final invoice by approximately 50% of the truck hire fees, ie $5,000. His Honour allowed the balance of the charges in this invoice because the work was done and there was no dispute that the hourly rate was other than reasonable, and having regard to his earlier findings. The sum of $18,017.50 was allowed for this invoice.
The issue of the work the subject of the second agreement was also dealt with by his Honour in the reasons relating to the counterclaim. Having found that there was "little, if any, evidence to support the assertion that the clearing of road lines and removal of timber was not performed to a proper and reasonable standard", his Honour went on to deal with the issue of unreasonably expensive methods:
"54
(a) …
(b) …
It seems to me that Eagle Sea's real argument in relation to the work performed in relation to the second agreement is that the work could have been done in a less expensive way by firstly using different equipment, and secondly by windrowing and burning the fallen material. The defendant's pleaded case is that the failure to adopt these methods amounts to a breach of the implied term to perform the work in a good and workmanlike way. I have already found, however, that the evidence does not support this claim. Even if it was proved that the method adopted by Radford Cartage was a more expensive method than, for example, the method adopted by Mr Housego, and I have already noted that this has not been proved to my satisfaction, this would not necessarily amount to a breach of the said implied term. At the end of the day, the methodology adopted by Radford Cartage achieved the desired goal in a satisfactory manner and within a satisfactory time. The roads were cleared and some timber removed by the open day. It seems to me, therefore, that there is no basis on which it can be said that there was a breach of the term to perform this work in a proper and reasonably workmanlike manner."
The magistrate went on to note Eagle Sea's argument that Radford was liable to Eagle Sea for not advising it that the work should be performed in an alternative, less expensive manner. His Honour noted that it was not pleaded that such a duty arose by way of an express or implied term of the contract, nor that a duty of care arose in tort. His Honour found that in any event, he could not be satisfied on the basis of Mr Housego's evidence that any failure to give such advice was negligent, nor that had such advice been given, it would have been accepted. His Honour accepted the evidence of both Mr Radford and Mr McGrath that Mr Radford suggested the possibility of pushing the material into gullies, but that this was rejected outright by Mr McGrath. He also accepted Mr Radford's evidence that given the time constraints and the time of the year, burning the material was not a reasonable possibility.
The parties' submissions
In this appeal, the parties are agreed that the evidence shows a concluded agreement to do the second lot of clearing work. They agree that a term to be implied into that agreement was that Eagle Sea would pay to Radford a fair and reasonable price for the work done. In this respect they refer to Steven v Bromley & Son [1919] 2 KB 722 at 728 and Horton v Jones (No 2) (1939) 39 SR (NSW) 305 at 319.
To the extent that it might now be relevant, the parties are also agreed that a term that the work would be carried out in a reasonable and workmanlike manner would also be implied: Smith v Eric S Bush [1989] 2 All ER 514 at 519; Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd (1998) 155 ALR 714 at 720. Of course, on the basis of how the issue was mostly argued before the magistrate and how it is argued in this appeal, relevant references in the magistrate's reasons to failing to carry out the work in a reasonable and workmanlike manner are to be read as references to failing to do the work in a reasonably cost efficient manner.
Eagle Sea filed written submissions before the hearing of the appeal. In those submissions it was noted that the defence and counterclaim pleaded a breach of the second agreement. This breach was that "the clearing work was not done in a reasonable manner in that Radford should have cut the trees down, pulled out the stumps and burnt them, and used a log falling machine and harvesting machine as per industry standards".
The only error alleged in those submissions was one of fact. The error was in finding, as expressed in paragraphs [47] and [54(b)] of the magistrate's reasons, that Radford completed the second agreement in a reasonable manner. The submission was "that the magistrate should have found that Radford chose a method which was inefficient and excessively expensive (carting the stumps etc to the landfill) and should have used the method used by Mr Housego to complete the clearing of Hamlet 5 … (to pile up the stumps etc on the property for disposal by burning when the weather permitted)".
As I have already noted, the ground of appeal was amended without objection at the commencement of the hearing, to extend the alleged error to the magistrate's determination that Radford performed the second agreement for a reasonable price. This is implicit in what the magistrate said in paragraphs [46] and [48] of his reasons, subject to the reduction his Honour made. With the licence available as a result of the breadth of the amended ground of appeal, counsel for Eagle Sea in oral submissions complained that the magistrate erred in law by placing the onus on Eagle Sea to show that the price was unreasonable, rather than proceeding on the basis that it was for the plaintiff to prove the reasonableness of the sum charged. This point was argued first.
The acceptance by the parties that the second agreement would have contained an implied condition that Radford was entitled to reasonable remuneration for work done, and the issue about where the onus lay, raises the question of what it was that Radford was required to establish to prove its claim. There is a debate about that.
Eagle Sea submits that a plaintiff in such a situation has to prove the reasonableness of the amount in all respects. They include such things as hourly rates and that the work was done in a reasonably cost effective way. Mr McTaggart used the analogy of a taxi trip from point A to point B, the final fare being unreasonable if the route taken was an unreasonably long one in the circumstances. The submissions are based on the premise that Radford was contracted to achieve an end result, with the methodology being completely left in its discretion.
Eagle Sea says that the error in the placing of the onus on the defendant is apparent from parts of the magistrate's reasons in which he deals with Mr Housego's evidence. The particular parts seem to be as follows:
· "However, in my view, [Mr Housego's] evidence does not support the arguments made by Eagle Sea in relation to the charges in question"; – paragraph [46] of the magistrate's reasons.
· "[Mr Housego] did not give any detailed evidence in relation to industry standards, nor did his evidence go as far as suggesting that Mr Radford's methods were unreasonable or unduly expensive."; – paragraph [46(a)].
· "I cannot conclude that Radford Cartage's charges were unduly excessive simply by comparing them with Mr Housego's charges."; – paragraph [46(b)].
· "Even if it was proved that the method adopted by Radford Cartage was a more expensive method than, for example, the method adopted by Mr Housego, and I have already noted that this has not been proved to my satisfaction, this would not necessarily amount to a breach of the … implied term [to perform the work in a good and workmanlike way.]"; – paragraph [54(b)].
For Radford, it is submitted that the reasons show that the magistrate was conscious that the appellant bore an onus of proof as to the work done the price. Mr Jackson refers to paragraph [44] of the magistrate's reasons. Added to that perhaps, can be his Honour's intervention at the conclusion of Mr Radford's evidence-in-chief, which I have set out in paragraph [21] above.
As I understand it, Radford's further submission is that the work which Radford contracted to do was the clearing of trees and the removal of the resulting debris to a landfill site. The agreement did not require that this work be completed in any particular way. Having left the manner in which the work was done to Radford, once it was established that the number of hours and the hourly rates were reasonable, it was for Eagle Sea to establish that the total amount charged was unreasonable and to what extent.
As an alternative submission, Radford says that if it was required to prove the reasonableness of the amount of the charges as suggested by Eagle Sea, then what is shown by the magistrate's reasons is not a reversal of the onus of proof, but a reflection of the evidential burden.
The issues
The argument about whether the burden of proof was erroneously placed, raises the question of what it was that Radford was required to prove. That, in turn, raises a further question about the terms and scope of the agreement. As that issue impacts on the question of what Radford was required to prove, and the alleged error of fact, it should be addressed first. In summary then, the issues raised by Eagle Sea in this appeal are:
· the terms of the second agreement and whether there was any agreement as to the means by which Radford was to achieve the end result;
· whether Radford was required to prove as part of its claim, the value of work done and what such proof requires;
· whether the magistrate erred in law in placing the burden on Eagle Sea in respect of Radford's claim, to prove that the work was not done in a reasonably cost efficient manner; and
· whether the magistrate erred in fact in finding that the relevant manner in which Radford carried out the work was not "inefficient and excessively expensive".
The terms of the agreement
I suspect that because of the way in which the case was pleaded and conducted, little attention seems to have been given to the precise terms of the agreement in the context of the reasonable cost of Radford's methods. It will be recalled that the methods to be used was the subject of the argument about reliance as pleaded. That is not now an issue. In this appeal, Eagle Sea says that the agreement was one for the clearing of trees along and near the road lines. Radford, in its written submissions, suggests that the contract was for the clearing of trees and the removal of the resulting debris to a landfill site – "The contract did not require that anything be done other than to complete that work and it did not stipulate that the work be done according to any particular method or by reference to any particular standard".
If it be correct that the agreement was to remove the trees and take the debris to the landfill site, the only remaining part of the means by which the job was done which has been raised as an issue, is the means by which the trees were removed. That is, the difference between knocking them over or digging them out with the excavator, or using the more sophisticated machinery to grab the trees and cut them off at the base.
In my view, the evidence makes it unequivocally clear that it was a term of the agreement that Radford was to take the material to the landfill site. That seems to have been the finding of the magistrate. That means, as I have said, in the absence of any consequences flowing from the reliance argument, the only thing left in Radford's discretion was how to cut the trees down. Eagle Sea's real argument relates to the taking of the timber debris to the landfill rather than putting it in piles and burning it. This is the only factual error alleged. Eagle Sea argues that the cost of the job should have been between $5,000 and $7,000 based on Mr Housego's estimate. Mr McTaggart says that a figure in the same order is reached by taking away the landfill charges of $16,000 from the approximate charge of $23,000 which is the subject of dispute.
There is no argument that the end result contemplated by the agreement was not achieved. What all of this means is that Radford, assuming it had to prove a reasonable way of doing the work as part of proof of value, was only required to establish the reasonableness of the tree removal method. As to that, there was no evidence as to the difference in time which the two different methods would have taken, if any. There was no evidence that taking out the trees Radford's way involved any greater expense than Mr Housego's method.
Assuming that Radford bore an onus to prove value, and assuming "value" includes the reasonableness of means adopted in terms of cost, the only factual issue in the hearing about that issue related to the methodology of tree removal. I turn to the validity of those assumptions.
What Radford was required to prove
I now turn to what was involved in the proof of Radford's claim. Eagle Sea submits that in addition to proving the contract and its performance, Radford was required to prove the value of the work. The submission is that proof of the "value" includes reasonableness of the means adopted in terms of ultimate cost. Mr McTaggart relied on Cooper v Australian Electric Company (1922) Ltd (1922) 25 WALR 66. That case involved the overhaul and repairs of a cell starter to a generator. No price was agreed. The repairer sued for an amount, the defence being that the work was done negligently and was of no value. At 67, Burnside J (McMillan CJ agreeing) said:
"The law is clear that in a claim for work done and material supplied the plaintiff must prove, firstly, the contract, and secondly, its performance, and, thirdly, the value."
As noted by Mr McTaggart, this statement was adopted by Angel J in Zorba Structural Steel Company Pty Ltd v Watco Pty Ltd (1993) 115 FLR 206 at 209. In Cooper, the performance of the contract was denied. Burnside J said that there was an onus thus cast on the plaintiff for getting some prima facie evidence to establish the fact. If such evidence be given, the defendant is then called upon to give evidence in support of any defence of negligent performance. At 67 – 68 his Honour went on to say that "Where a person undertakes as and is employed to perform a work of skill and labour and fails in the performance so that the employer derives no benefit from the work, the former is not entitled to recover anything, …".
However, beyond the statement that proof of value is required, and the point about the evidential burden, these cases are of little assistance in resolving the present debate. Counsel for Radford, Mr Jackson, submits that the "value" which needs to be proved is the worth of the work in the sense of, for instance, the number of hours at a reasonable hourly rate. I will need to resolve what proof of value means in the context of this case.
In the case of an implied term as to reasonable remuneration, or a claim in restitution based on a quantum meruit, the contractor has an entitlement to recover the fair and reasonable value of the work performed. Although the two types of case often require different considerations because of the existence of a contract in the first and the nature of the remedy in the second, the assessment of this value remains a question of fact to be determined in regard to all of the relevant circumstances. The remuneration will be that calculated at a reasonable work rate for the work done. Alternatively, the value might be assessed by reference to the cost to the contractor, plus a reasonable mark-up for overheads and profit: see generally Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221, per Deane J at 263; Brenner v First Artists' Management Pty Ltd [1993] 2 VR 221 at 257 – 259; Sopov v Kane Constructions (No 2) (2009) 24 VR 510 at 519 [29] – [30]; Bolot v Capper (1957) 75 WN (NSW) 316 at 317.
Most of the discussion in the cases concerning proof of value relates to the situation in which there is a claim based on a quantum meruit, with the defendant raising the issue of negligent workmanship. In such cases it is clear that the plaintiff has to establish that the work was done, that it was done skilfully and without such negligence as renders it worthless, and an entitlement to the amount claimed. It also seems clear that the quality of the work performed is something which needs to be taken into account when assessing value. There is nothing to suggest the same does not apply to a contractual entitlement to reasonable remuneration. In the case of a concluded contract, depending on its type, entitlement may depend on substantial completion.
Where some evidence is given that the work was completed with due skill, the burden of adducing evidence may shift, but the burden of proof as to value remains on the plaintiff: Riverside Motors Pty Ltd v Abrahams [1945] VLR 45 per O'Bryan and Martin JJ (Macfarlan J agreeing) at 53 – 55; Eddy Lau Constructions Pty Ltd v Transdevelopment Enterprise Pty Ltd [2004] NSWSC 273 at [81] – [82]; Pool Data Systems Pty Ltd v Bayliss [2011] NSWSC 224 at [147].
I am not able to find any case where the point about reasonable method or means has been specifically addressed. However, acting on first principles, it seems to me that in a case in which the plaintiff is required to prove the value of work done, where the method or way of doing the work was not the subject of specific agreement, that would involve proof that the method adopted or the way in which the work was done was reasonable in terms of cost to the other party.
In cases in which the plaintiff is entitled to reasonable remuneration, that remuneration would not be reasonable if it were done by means which are unreasonably time consuming or lengthy, thereby increasing the overall cost. However, as I have indicated, that would only apply where the means of carrying out the work or of achieving the end result is not the subject of agreement. In the absence of anything to do with an agreed method, which would impact on the enforceability of the agreement, then the recipient of the benefit of the work would not be able to raise the issue of reasonableness.
Did the magistrate err in relation to the burden of proof?
Before going on, I would note that counsel for Radford did not oppose the amendment of the notice of appeal extending the challenge to the determination as to reasonable price, nor sought to prevent Eagle Sea arguing this point about the burden of proof. I merely point out that there was no discussion before the magistrate about what it was that Radford was required to prove in terms of its legal burden, and no point was taken that it had failed to make out its case in relation to the value of the work done. Had that occurred, Radford might have sought, if it is was thought necessary, to lead further evidence and been allowed to do so.
In any event, my view is that an analysis of what occurred at the hearing and of the magistrate's reasons does not support Eagle Sea's contention. As I have already discussed, the value of the work was something which Radford had to prove as something asserted in its claim. To the extent that it was raised in the defence, the issue of excessive price by way of unreasonable method (unreasonable and non-workmanlike manner of work) was something which amounted to a denial of part of Radford's cause of action for the amount claimed. It was not a defence in the true sense of being an avoidance of prima facie liability: see Currie v Dempsey (1967) 69 SR (NSW) 116 per Walsh JA at 125; Stewart v Dillingham Constructions Pty Ltd [1974] VR 24 at 28.
The magistrate was able to see the need for something more to be produced in Radford's case than had been led. His Honour's interruption led to evidence confirming the hours done and evidence that the "price" charged was reasonable. The price referred to was the total of all of the invoices. On its face, that evidence would include all of the necessary aspects of value, such as the rates charged and the methods adopted. That being so, and although no other evidence was led by Radford, it is far from clear that in Radford's case, the magistrate placed any legal burden on Eagle Sea to prove the manner of doing the work was unreasonable. His Honour's comments and findings were made within the context of the pleaded case and the way in which the case was conducted by both sides.
Further, given the effect of the evidence about price to which I have just referred there arose an evidential burden on the defendant to show or adduce evidence as to that issue. Additionally, the failure to carry out the work in a reasonable and workmanlike manner, as argued, was the basis of the counterclaim. The counterclaim was for about $28,400 for damages for interest and costs due to delay, and for the landfill site fees of about $16,500. It might have been pleaded otherwise, at least in part, but the counterclaim was of course, a separate claim, and one in respect of which it bore the legal burden of proof.
In summary then, I have regard to the way in which the case was conducted and argued, to the legal and evidential burdens on Radford, the evidential burden on Eagle Sea in relation to its defence, and to Eagle Sea's legal and evidential burdens in relation to the counterclaim. I am simply not persuaded by anything that appears in the magistrate's reasons that he erred in any material way. I use the word "material" deliberately. If I am wrong, and it is correct that his Honour approached the claim on the basis that Eagle Sea had to prove unreasonable methods, I am not satisfied that that the outcome would have, or might have, been different. As this appeal is by way of rehearing, more correctly I should say that I am not satisfied that a different outcome ought to have resulted were the correct approach to be taken.. I base this on the evidence as a whole and my view that there is no substance in the arguments about errors of fact. I now turn to that issue.
Errors of fact?
In this appeal my duty is to re-hear the case and reconsider the evidence before the magistrate. I must make up my own mind, not disregarding the judgment appealed from and giving it due consideration, but not being at all hesitant in overruling it if on a full appraisal I come to the view that the findings are wrong. In this case it is really only the evidence of Mr Housego which relates to the suggested errors of fact. No question of his credibility seems to have arisen. The impugned findings are not credibility based, and so that consideration does not arise.
It will be recalled that Eagle Sea submits that the magistrate erred in finding the agreement was performed in a reasonable and workmanlike manner, and ought to have found that Radford chose a method which was inefficient and unreasonably expensive (carting the stumps to the landfill) as distinct from Mr Housego's method of piling up the stumps for disposal by burning when the weather permitted. I have assumed, perhaps generously, that the submission is intended to include the method of actual tree removal.
For the reasons which I have given in relation to the terms of the agreement, the argument about excessively expensive methods can only relate to the latter. This follows from my conclusion that the agreement quite clearly was for the stumps and other debris from the trees to be taken to the landfill site and not left on the property. Eagle Sea's present argument, and indeed the one which was put to the magistrate, focuses on the taking of the tree debris to the landfill site, rather than piling and burning, or at least hiding in an appropriate place for later burning when the weather permitted. For that reason alone, Eagle Sea's argument fails for the reasons I have given. That is, the evidence simply did not permit the magistrate to make a finding that there was any significant difference in time or expense between the two methods of taking the trees out of the ground.
If I am wrong about the terms of the agreement, and all that was agreed was the end result to be achieved, then I would simply say that having considered all of the evidence, and Eagle Sea's submissions, I am not persuaded that his Honour's comments which were the subject of scrutiny; that is those set out in paragraphs [46] and [47], are wrong. In particular, an examination of Mr Housego's evidence shows that it is correct to say that he did not give any detailed evidence in relation to industry standards. What he said was that the method of removing trees was "pretty well standard to my knowledge but I wouldn't say there's not other ways and means of doing it". It is also correct to say that his evidence did not suggest that Mr Radford's methods were unreasonable or unduly expensive.
In my view the inability to conclude that Radford's charges were unduly excessive simply by comparing Mr Housego's charges, was a reasonable position to take on the evidence. I can see no error in what the magistrate said in paragraph [46(b)] of his reasons as to the lack of detailed evidence concerning the amount of timber and clearing work relevant to the other hamlets, nor as to what was left on Hamlet 5. To the extent that it is necessary to deal with the suggested more efficient and cheaper way of disposing of the material by piling it and burning it as dealt with in paragraph [46(c)] of the magistrate's reasons, I simply say that I see no error at all in the way his Honour has dealt with it.
Outcome
For those reasons, the appeal is dismissed.
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