ECS Services Pty Ltd v DGA Holdings Pty Ltd

[2012] NSWSC 1058

Supreme Court

New South Wales

Medium Neutral Citation:

ECS Services Pty Ltd v DGA Holdings Pty Ltd [2012] NSWSC 1058

Hearing dates:

23/8/2012

Decision date:

10 September 2012

Before:

Harrison AsJ

Decision:

(1) The appeal is upheld.

(2) The decision of his Honour Magistrate Coombs dated 9 December 2011 is set aside.

(3) The matter is remitted to the Local Court, Fairfield to be determined according to law.

(4) The defendant is to pay the plaintiff's costs as agreed or assessed.

Catchwords:

APPEAL FROM LOCAL COURT - claim for damages for breach of contract or, in the alternative, claim of quantum meruit - conflicting evidence - failure of Magistrate to provide adequate reasons - error of law - appeal allowed and matter remitted to Local Court

Legislation Cited:

Local Court Act 2007

Cases Cited:

Jung v Son [1998] NSWCA 120
Swain v Waverley Municipal Council [2005] HCA 4; (2005) 220 CLR 517
Young v Cesta-Incani [2007] NSWCA 229

Category:

Principal judgment

Parties:

ECS Services Pty Limited (Plaintiff)
DGA Holdings Pty Limited (Defendant)

Representation:

M Southwick (Plaintiff)
H Woods (Defendant)
James Legal (Plaintiff)
Kazi Portolesi Lawyers (Defendant)

File Number(s):

2012/66242

 Decision under appeal 

Date of Decision:

2011-12-09 00:00:00

Before:

Coombs LCM

File Number(s):

2011/149130

Judgment

1. HER HONOUR: The plaintiff seeks orders firstly, that leave to appeal from the whole of the decision of his Honour Magistrate Coombs dated 9 December 2011 be granted; secondly, that the appeal be allowed; thirdly, that the Local Court judgment in proceedings 2011/149130 be set aside; fourthly, that judgment and costs be entered for the plaintiff in Local Court proceedings 2011/49130; and fifthly, an order that the time for appeal against the orders of his Honour Magistrate Coombs be extended.

1. The plaintiff in this Court is ECS Services Pty Limited (ECS) who was the defendant in the Local Court proceedings. The defendant in this Court is DGA Holdings Pty Limited (DGA) who was the plaintiff in the Local Court proceedings. For convenience, I shall refer to the parties by name.

1. Leave has been granted for an extension for ECS to file the appeal out of time. Likewise, leave has been granted for DGA to file its notice of contention out of time.

The appeal

1. Section 39 of the Local Court Act 2007 provides that a party who is dissatisfied with a judgment or order of the Local Court may appeal to the Supreme Court, but only on a question of law. The onus is on the plaintiff to demonstrate that there is an error on a question of law.

1. Section 41 of the Local Court Act provides that the Supreme Court may determine an appeal either (a) by varying the terms of the judgment or order, or (b) by setting aside the judgment or order, or (c) by setting aside the judgment or order and remitting the matter to the Local Court for determination in accordance with the Supreme Court's directions, or (d) by dismissing the appeal.

1. In Swain v Waverley Municipal Council [2005] HCA 4; (2005) 220 CLR 517, Gleeson CJ at [2] reiterated that in the common law system of civil justice, the trial process determines the issues between the parties. The system does not regard the trial as merely the first round in a contest destined to work its way through the judicial hierarchy until the litigants have exhausted either their resources or their possibilities of further appeal.

Grounds of appeal

1. ECS appeals from the whole of the decision of his Honour Magistrate Coombs on the grounds that firstly, the Magistrate erred in law in failing to give reasons or adequate reasons for the judgment; and secondly, the Magistrate erred in law for failing to give reasons on the following: for disregarding the evidence of a 14 January 2010 quote issued by DGA to Cornish prior to commencement of the works, for disregarding the evidence of the payment of that quote by Cornish to DGA on 15 January 2010, for apparently relying (it is unstated in his reasons) on invoices issued to ECS after complete of the works as evidence of the alleged contract between ECS and DGA, for disregarding the affidavit of debt sworn by DGA in support of an application for judgment by DGA against Cornish sworn in September 2011 and for disregarding the evidence of inconsistencies in the evidence of DGA as to the alleged issue of the invoice 765 to ECS on 1 June 2010.

The notice of contention

1. DGA contends that the Local Court decision should be affirmed on the ground that the Court ought to have found that DGA was or would have been entitled in any event, to the sum of $78,694.64 as against ECS, on a quantum meruit basis as a reasonable fee for the work it had been requested by the plaintiff perform.

The pleading framework

1. It is necessary to briefly examine the pleading framework.

1. By amended statement of claim (Tab 11) DGA as plaintiff claimed as against ECS as first defendant and Cornish as second defendant the sum of $78,649.64 for damages for breach of contract, or alternatively, the sum of $78,649.64 on a quantum meruit claim.

1. DGA Holdings pleaded:

"4 On or about December 2009, the plaintiff and ECS (either on its behalf, or as agent for Cornish as an undisclosed principal) entered into an express oral contract for the plaintiff to provide certain tiling services in respect of a number of schools (the Contract).

PARTICULARS

(b) The Contract was constituted by conversations between George Azzi on behalf of the plaintiff and Anthony Luck of ECS, firstly over the telephone and then at a warehouse located on Bryans Avenue, Westmead sometime in the week commencing 21 December 2009.

5. There were express terms of the Contract, namely that

(a) The plaintiff would provide labour services and materials (but not including the tiles) for floor and wall tiling in the toilet blocks at schools located at Gundagai, Junee, Nangus and Condobolin (the Services);

(b) The defendants would pay the plaintiff for the provision of the labour services, identified in paragraph 5(a) above, at a rate of $55 00 per hour plus a 15% mark up;

(c) The defendants would pay the plaintiff for any materials used at cost plus a 15% mark up;

(d) The defendants would provide the plaintiff's employees accommodation;

(e) The defendants would pay for the plaintiff's employees travel and pay a food allowance.

Breach of Contract

6 Between 5 January 2010 and 3 February 2010 in performance of its obligations under the Contract, the plaintiff provided to the defendants the Services.

7a. On or about 14 January 2010, the plaintiff issued an invoice to ECS for the sum of $6,600.

b. Mr Azzi on behalf of DGA was however informed by Mr Luck on behalf of ECS to re-do the invoice and issue it to Cornish.

8. On or about 2 April 2010, the plaintiff rendered the following invoice to ECS (the invoices).

[This date was amended to 2 May 2010 at the hearing in the Local Court]

PARTICULARS

Invoice Number	Description	Amount
00785	Labour and material for the Floor and wall tiling of schools located at Gundagai and Nangus for the period 5 January 2010 to 24 January 2010	$63,172.64
00786	Labour and material for the floor and wall tiling of a school located at Condobolin for the period 31 January 2010 to 3 February 2010	$15,477
Total	$78,649.64

1. The main issue raised in the amended defence is that ECS denied that it was indebted to DGA and to the best of its knowledge it says that the agreement was entered into between DGA and Cornish, the second defendant. By the time the hearing took place in the Local Court, Cornish had been placed in liquidation.

1. The parties also filed a statement of agreed facts and issues. It relevantly reads:

"The following facts are agreed between the plaintiff and first defendant:

...

2 [Cornish] entered into building contracts with New South Wales Public Works Department for the refurbishment of toilet blocks at Gundagai South, Gundagai, Junee, Nangus and Condobolin Public School ("works").

3 [Cornish] subcontracted part of the works to the first defendant and first defendant undertook building works on all five sites from 15 December 2009 until 5 March 2010.

4 In or about 15 December 2010 Anthony Luck on behalf of [ECS] spoke with George Azzi on behalf of [DGA] concerning prospect of [DGA] providing tiling services in relation to various schools.

5 [DGA] undertook the tiling part of the works at Gundagai, Junee, Nangus and Condobolin Public Schools on or after 5 January 2010 to on or about 3 February 2010.

6 [DGA] forwarded Progress claim reference "Quote 00000769" and dated 14 January 2010 to [Cornish].

7 On 15 January 2010 [Cornish] paid to the plaintiff the said Progress claim of $6,600."

1. The main issues for determination were stated to be:

(1)   Whether ECS, or as ECS asserts, Cornish requested DGA to perform the tiling work;

(2)   Whether ECS contracted with DGA (whether in its own capacity or as agent for an undisclosed principal) for DGA to attend to the performance of the tiling work;

(3)   Whether ECS is liable to DGA for the cost of the work.

The hearing in the Local Court, Fairfield

1. In the Local Court, Fairfield, the hearing took place over two days, namely 8 and 9 December 2011. At the hearing the parties relied upon affidavit evidence. DGA relied upon the evidence of Sung Sub Kim, the principal of a business known as Double S Tiling Services, whom DGA subcontracted to perform the tiling work and George Azzi, a director of DGA. ECS relied on the evidence of Anthony Luck, an employee of ECS and John Jacob Morrison, a (then) employee of Cornish. A Notice of Motion for default judgment against Cornish together with an affidavit of debt sworn by George Azzi on 29 September 2011 was also in evidence as was a letter by James Legal to Glass Conveyancing dated 15 June 2010. All deponents were cross examined.

The Magistrate's reasons

1. The Magistrate in his short extempore reasons stated (T59):

"In this matter DGA Holdings, essentially in the form of Mr Azzi, seek a determination that there was a contract between him and ECS Services as opposed to Cornish Properties. Given no formal written document of any contractual significance the course of conduct between the parties ultimately has to be the guide that the court has to follow. It is undoubtedly the case that anything approaching justice in this case has been avoided in this case by the fact that the parties have not compromised.

The court is then left with having to decide who Mr Azzi had a contract with, and the only evidence of that is in the exchange of invoices and emails, however ineffective they may have been for various statutory purposes. Those are the only evidence that the court can consider.

I THEREFORE MUST, AS I SAID BEFORE, WITH SOME MISGIVINGS, FIND FOR THE PLAINTIFF IN RESPECT OF ECS SERVICES. SO THE ORDER WILL BE FOR THE AMOUNT CLAIMED. AGAIN, THE USUAL INTEREST AND TIME WILL APPLY."

Duty to give sufficient reasons

1. The judicial obligation to provide reasons was considered in Young v Cesta-Incani [2007] NSWCA 229 where Tobias JA (with whom Hoeben and Ipp JJA agreed) stated at [54]:

"The relevant principles are not in issue. They were relevantly summarised by Ipp JA, with whom Bryson JA and Stein AJA agreed, in Wiki v Atlantis Relocations (NSW) Pty Ltd (2004) 60 NSWLR 127 at 135-136; [2004] NSWCA 174:

"56 A miscarriage of justice can arise where what is and is not disclosed in a judge's reasons is a breach of the principle that justice must not only be done but must be seen to be done: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 431, per Mason P

57 As McHugh JA explained in Soulemezis v Dudley (Holdings) PtyLtd (1987) 10 NSWLR 247 at 279, one of the purposes served by a judicial decision is that:

'[I]t enables the parties to see the extent to which their arguments have been understood and accepted as well as the basis of the judge's decision.'

Accordingly, as McHugh JA said (at 278-279):

'...[A] judicial decision must be a reasoned decision arrived at by finding the relevant facts and then applying the relevant rules or principles. A decision which is made arbitrarily can not be a judicial decision; for the hallmark of a judicial decision is the quality of rationality...'.

58 In Flannery v Halifax Estate Agencies Ltd [2000] 1 WLR 377; [2000] 1AIIER 373, which was followed in Moylan v Nutrasweet Co [2000] NSWCA 337, Henry LJ said (at 381-382; 377-378) in regard to the general duty of a judge to give reasons for his or her decision (particularly in relation to expert evidence):

'(1) The duty is a function of due process, and therefore of justice. Its rationale has two principal aspects. The first is that fairness surely requires that the parties especially the losing party should be left in no doubt why they have won or lost. This is especially so since without reasons the losing party will not know ... whether the court has misdirected itself, and thus whether he may have an available appeal on the substance of the case. The second is that a requirement to give reasons concentrates the mind; if it is fulfilled, the resulting decision is much more likely to be soundly based on the evidence than if it is not.'

59 It is, of course, well settled that a judge does not need to refer to all the evidence in the proceedings or to indicate which of the evidence is accepted or rejected. The extent of the duty to give reasons depends upon the circumstances of the individual case: Mifsud vCampbell (1991) 21 NSWLR 725 at 728 (per Samuels JA, with whom Clarke JA and Hope AJA agreed). But it is not for nothing that in some bilingual countries the judgment of the court is given in the language of the unsuccessful party. The proper administration of justice requires reasons to be given in a form, firstly, that will enable the losing party to understand properly the grounds upon which the case was lost, and, secondly, that will not, effectively, frustrate the losing party's right of appeal: Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 666-667."

1. In Jung v Son [1998] NSWCA 120, Stein JA concluded:

"...While a judge does not have to state reasons for every aspect of the case, his reasons must be sufficient to satisfy the requirements of Pettit v Dunkley [1971] 1 NSWLR 376. The reasons must be sufficient to enable an appellate tribunal to gain a proper understanding of the basis of the verdict. Not to do so is an error of law (Asprey JA at 382 and Moffitt JA at 388). Failure to give reasons also makes it impossible for an appellate tribunal to give effect to a plaintiff's right of appeal. Issues critical to the case, as these were, must be dealt with by reasons (Samuels JA in Mifsud v Campbell (1991) 21 NSWLR 725 at 728)."

1. In short, the judicial officer should make it clear what he or she is deciding and why.

Did the Magistrate give adequate reasons?

1. The Magistrate correctly identified the main issue that he had to determine. It was whether the contract was between DGA and ECS, or alternatively, whether the contract was between DGA and Cornish. The contract was alleged to have been made orally by conversations that took place between George Azzi on behalf of DGA and Anthony Luck of ECS during the week commencing 21 December 2009.

1. The Magistrate's decision does not make any reference to any of the alleged oral conversations that occurred about 21 December 2009 that formed the contract, by conduct or otherwise. While the Magistrate states that the course of conduct is a guide he does not elaborate as to what was the course of conduct. His Honour does not identify what were the terms of that contract. His Honour did not record his assessment of the credibility of the witnesses. Hence his Honour bases his decision solely upon "the exchange of invoices and emails" but these are not identified nor are they discussed or analysed in his reasons for judgment.

1. I shall briefly refer to the witnesses' affidavit evidence. As previously stated they are Mr Morrison, Mr Anthony Luck of ECS, George Azzi of DGA and Mr Kim.

The version according to Mr Morrison

1. Mr Morrison was Cornish's general manager. He says that Cornish had engaged ECS to undertake the non-plumbing work for the schools.

1. On or about 15 December 2009 Cornish commenced work on this project. In the course of that work being undertaken ECS introduced George Azzi, DGA's director, to Mr Morrison, suggesting DGA were suitable tilers to undertake the tiling work on the five schools.

1. During the first week of January 2010 Mr Morrison had a conversation with Anthony Luck of ECS to the following effect:

"Anthony: The tilers will not commence work until they get paid a deposit. Raj [managing director of ECS] is not going to pay them. Cornish will have to make arrangements with them.

Morrison: I will speak to Allan Raad. We need them to start now."

1. Mr Morrison then spoke to Allan Raad (a director of Cornish) later that same day.

"Morrison: ECS will not pay for the tilers. The tilers will not work unless they receive a deposit and we need them to start immediately.

Raad: Leave it to me I will make arrangement with them."

1. It is Mr Morrison's belief that Allan Raad then spoke with Mr Azzi of DGA. Prior to 14 January 2010 Cornish paid $6,600 to DGA in order for DGA to commence the tiling work on the schools. That payment was described as a progress claim in DGA quote number 769 dated 14 January 2011. In the second week after the tilers commenced work Allan Raad telephoned Mr Morrison and said words to the effect, "I have paid the tilers $6,000."

Mr Luck's (ECS's) version of events

1. Anthony Luck is the project manager of ECS. On 29 November 2009, John Morrison of Cornish asked him to inspect the bathrooms at the schools that Cornish had secured the contract to upgrade. On 8 December 2009, Mr Luck visited the sites again to undertake measurements in order to prepare a quote.

1. Also on about 8 December 2009, Mr Luck says that he had a conversation with Mr Azzi who wanted to know who to charge for the work. Mr Luck informed him that he had not worked out the contract terms with the head contractor Cornish but when they had been agreed he would get back to Mr Azzi.

1. On 15 December 2009, before Mr Luck had completed the quotes for each school, he had a conversation with Allan Raad from Cornish. Mr Raad asked if they could get the jobs started straight away. Mr Luck agreed to do so. Mr Luck says that no agreement was reached concerning Cornish's payment to DGA.

1. On 17 December 2009, Mr Luck spoke to Allan Raad in words to the following effect: "... We need you to pay the deposit on the bathroom partitions, as Raj does not agree to funding them with the current debt." Mr Raad said he would speak to Raj.

1. On 20 December 2009, Mr Raad telephoned Mr Luck and said, "We will pay you $15,000 immediately. Go ahead and order the partitions." Mr Luck ordered the partitions but received no moneys and the manufacturer would not commence the work until a deposit was paid.

1. On 27 December 2009, they again spoke by telephone. Mr Raad said that they needed to have the tilers onsite over the Christmas/New Year break. Mr Luck told him that the tilers were "ready to go we just need to give them some money." Mr Raad said he would get the money sorted and it was safe.

1. Mr Luck says that he telephoned George Azzi and said words to the effect:

"Luck: Cornish wants tilers to commence in the first week in the New Year. We still have not sorted the money and it is probably quicker and easier if you deal with Cornish direct.

Cornish will supply the tiles and accommodation has been booked by Cornish at Condobolin and Gundagai. Cornish will take care of all your site induction and OH&S compliance.

George: Okay I will send a team out but they will not start until I get a deposit.

Luck: That is understandable."

1. On about 4 January 2009, payment still had not been made by Cornish to DGA. Mr Luck understood that Cornish had not paid a deposit to the tilers to commence work but understood that discussions had taken place between Allan Raad and George Azzi concerning payment of the tilers by Cornish as Allan Raad said to him that, "We will pay the tilers and all you need to do is to manage and supply labour."

1. Mr Luck believes that DGA's first progress claim, described as quote 769 and dated 14 January 2010, was prepared by DGA and addressed to Cornish after Cornish had paid DGA $6,600.

Mr Azzi's (DGA's) version of events

1. Sometime in December 2009 Mr Luck offered Mr Azzi a job. A few days later Mr Azzi met with Anthony Luck at a factory on Briens Road Westmead. When he arrived at the premises he had a conversation with Anthony Luck in words to the following effect:

"Anthony Luck: The schools are going to be in Gundagai, Junee, Nangus and Condobolin. The job I want you to do is the tiling of the toilet blocks

[Mr Azzi]: How do you want to do this? Should I send the boys and do day charges.

Anthony Luck: Yeh, it has to be by the day. There's loose tiles coming off, so we can't do contract. We have accommodation there that your boys can stay in."

1. Mr Azzi took this to mean that a lump sum figure would not be paid for the work, but that DGA would be paid on a "do and charge" basis. Mr Azzi said, "Okay, I'll charge our usual rate" to which Mr Luck responded that that was fine. Mr Azzi asked, "When do you want us to start?" to which Mr Luck responded "You can start during the school holidays."

1. The standard rate charged by DGA at the time was $55 per person per hour plus GST, plus a 15% margin plus materials.

1. Then Mr Azzi spoke with Sung Sub Kim of Double S Tiling in relation to the job. DGA subcontracted some work to Sung Sub Kim trading as Double S Tiling. He told Sung Sub Kim that Mr Kim would need about five workers plus Mr Kim. On 5 January 2010 Sung Sub Kim and his employees commenced work at Gundagai South Public School.

1. On or about 6 January 2010 Mr Azzi called Mr Luck on his mobile phone and had a conversation with him in words to the effect of:

"Mr Azzi: Anthony I need to pay my boys, we need payment.

Mr Luck: Send me the invoice"

1. He then emailed Anthony Luck a tax invoice for $6,600.00.

1. A short time later he received a telephone call from Mr Luck. He said:

"Can you change the invoice from ECS Services to Cornish Property Services. If you can you won't have to wait, you can get paid straight away."

1. On about 14 January 2010 Mr Azzi amended the details on the tax invoice, that was stored on his computer, from ECS Services to Cornish Property Services. He sent the amended tax invoice to Anthony Luck at ECS.

1. On about 14 January 2010 Mr Azzi received a telephone call from Alan Raad of Cornish. Mr Raad said "What are your bank account details so I can transfer you the money?" He informed Alan Raad of his bank account details. This he says is the only conversation he had with Alan Raad during the course of the works being completed. On 15 January 2010 he received $6,600 from Cornish Property via internet transfer into his company bank account.

1. While Mr Morrison's evidence is that he had a conversation with Mr Azzi, Mr Azzi denies this and says that he has never met nor spoken to Mr Morrison. Mr Azzi also denies having any other conversations with Mr Raad, as outlined in Mr Morrison's evidence.

1. However Mr Azzi also swore an affidavit relevantly seeking default judgment against Cornish where he deposed:

"1. I am a director of DGA Holdings and am authorised to verify this notice of motion on its behalf.

2. The source of my knowledge of the matters contained in this affidavit concerning the debt is tax invoice dated 2 April 2010 in the sum of $15,477.00 and tax invoice dated 2 April 2010 in sum of $63,172.64.

...

4. The amount owing to me at the time of commencement of the proceedings in respect to the cause of action for which the proceedings were commenced was $78.649.60."

1. The Magistrate referred to this affidavit during the hearing (at T41.14-17). His Honour did not think this evidence suggesting that Mr Azzi is asserting that Cornish owed DGA this money was of any significance. The Magistrate stated:

"... the situation seems to have been that once Mr Azzi got a lawyer the lawyer could see this alternative line of attack and added in a second defendant is what seems to happen, isn't it."

Mr Kim's version of events

1. Mr Kim's evidence is that he started working with Mr Azzi (DGA) about 13 years ago and DGA currently provides him with 90% of his work. Mr Kim's evidence is that in late 2009 he had a conversation with Mr Azzi where Mr Azzi said "I've got a big job for you in Gundagai, Junee, Nangus and Condobolin". He says that a man named Steve and Anthony Luck (ECS) instructed him how they wanted the work done, he does not know who Cornish Services are and he provided handwritten notes of the work he performed and the amount claimed to Mr Azzi (DGA). Hence Mr Kim understood he had a job with DGA, although Mr Luck of ECS had control of the work site.

1. All of these witnesses were cross-examined. I have not detailed what occurred, as I do not think it necessary to decide this appeal.

1. Turning to the exchange of emails and invoices that the Magistrate seems to have based his decision upon, they are as follows:

6 January	Bill/Tax Invoice issued by DGA to ECS, and described as for $6600.00. Bill emailed to Anthony Luck at his email.
14 January	Bill/Tax invoice reissued to Cornish Property Services with description "progress Claim for item (Jo 5396, 5397, 5398 and 5399" for $6600.00 and emailed to Mr. Luck.
15 January	ECS receives payment of $6600.
16 February	Email from George Azzi to Anthony Luck with a breakdown of the number of tilers and days worked.
16 February	Email from George Azzi to Anthony Luck with a breakdown of cost of material used and enquiring about travel and away allowance.
2 May	DGA attaches invoices 786 for $15477.00 and 785 for $63172.64 to an email to Anthony Luck

1. On 6 January 2010 (wrongly stated as 1 June 2010) the first bill/invoice is issued by DGA from its address at Greystanes to ECS claiming money due for tiling work performed at schools at Gundagai and Junee. This invoice was described as a progress claim for the sum of $6,600 including GST.

1. On 14 January 2010 a document described as a quote was issued by DGA from an address at Seven Hills, this time to Cornish for the tiling work performed at schools at Gundagai, Junee and Nangus. This was described as a progress claim for the sum of $6,600 including GST.

1. Mr Azzi was cross examined about these invoices.

1. It is not clear which of these documents the Magistrate based his decision upon. The two more significant ones are those dated 6 January and 14 January 2010. They are inconsistent but the Magistrate made no reference to their inconsistencies and how he resolved these inconsistencies. One is addressed to ECS, the latter one to Cornish, both for the same work.

Conclusion

1. It is my view that the Magistrate failed to give adequate reasons and that this failure amounted to an error of law. In particular there was a failure to consider the oral evidence of the witnesses as to who DGA contracted with. If the Magistrate was unable to reconcile this evidence he should have explained why. His Honour bases his decision upon the exchange of invoices and emails. The two significant invoices are contradictory. The Magistrate did not explain why he came to the conclusion he did in the light of this inconsistent evidence. The result is that the appeal is upheld.

1. Counsel for DGA submitted that this Court should not intervene, because even if the Magistrate's reasons were inadequate, there was only one conclusion available. I do not think so. There was inconsistent oral evidence and the only evidence upon which the Magistrate stated he based his decision was also inconsistent.

1. The notice of contention seeks that the decision be affirmed on the basis that DGA would have been entitled to payment of the judgment sum on a quantum meruit basis. That is, DGA contends that as it performed the work and ECS would not have been entitled to be paid by Cornish until the job was complete, it is entitled to payment on a quantum meruit basis. This Court is not in a position to assess the merits of this claim. While it appears that the work was carried out by DGA, whether ECS would only be entitled to payment on completion is not clear. If this was the situation, it may be argued that ECS received a benefit and thus DGA should receive payment on a quantum meruit basis. As this matter is being remitted, the Magistrate may be required to determine this issue.

1. The appeal is upheld. The decision of his Honour Magistrate Coombs dated 9 December 2011 is set aside. The matter is remitted to the Local Court, Fairfield to be determined according to law.

1. Costs are discretionary. Costs usually follow the events. The defendant is to pay the plaintiff's costs as agreed or assessed.

The Court orders that:

(1) The appeal is upheld.

(2) The decision of his Honour Magistrate Coombs dated 9 December 2011 is set aside.

(3) The matter is remitted to the Local Court, Fairfield to be determined according to law.

(4) The defendant is to pay the plaintiff's costs as agreed or assessed.

**********

Decision last updated: 10 September 2012