Go for Your Life Pty Ltd v Charas Constructions Pty Ltd

[2022] NSWDC 328

District Court

New South Wales

Medium Neutral Citation:

Go For Your Life Pty Ltd v Charas Constructions Pty Ltd [2022] NSWDC 328

Hearing dates:

14, 15, 16 and 23 June 2022

Date of orders:

24 June 2022

Decision date:

24 June 2022

Jurisdiction:

Civil

Before:

P Taylor SC DCJ

Decision:

(1)   Judgment for the plaintiff in the sum of $130,894.53.

(2)   Questions of costs reserved.

Catchwords:

CONTRACTS – Formation – Uncertainty - Express terms - Collateral contracts – Parties – Privity – Remedies - Liquidated damages - Debt

Legislation Cited:

Building and Construction Industry Security of Payment Act 1999, s 13

Corporations Act 2001 (Cth), s 131

Cases Cited:

Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99

Aztech Science v Atlanta Aerospace (Woy Woy) [2005] NSWCA 319; (2005) 55 ACSR 1

Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640

F. Goldsmith (Sicklesmere) Ltd. v. Baxter (1970) 1 Ch 85

FloMin Inc v Australian Raw Materials Corp Pty Ltd [2011] NSWSC 585

Giliberto v Kenny (1983) 48 ALR 620

Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503; 43 Ll L Rep 359

Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181; [2001] HCA 70

Meehan v Jones (1982) 149 CLR 571

Motor Yacht Sales Australia Pty Ltd v Blann [2020] NSWCA 349

Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104

New South Wales Land and Housing Corporation v Australia and New Zealand Banking Group Limited [2015] NSWSC 176

Prenn v Simmonds [1971] 1 WLR 1381

Re Anglican Development Fund Diocese of Bathurst (2015) 336 ALR 372

Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514; [2019] HCA 13

Tomko v Palasty [2007] NSWCA 258

Waltons Stores (interstate) Ltd v Maher (1988) 164 CLR 387

Watson v Foxman (1995) 49 NSWLR 315

Texts Cited:

J W Carter, LexisNexis Australia, Carter on Contract (online at 17 June 2022)

Category:

Principal judgment

Parties:

Go For Your Life Pty Ltd (plaintiff)
Charas Constructions Pty Ltd (defendant)

Representation:

Counsel:
Mr A Gruzman with Mr N Y H Li (plaintiff)
Mr J O’Sullivan (defendant)

Solicitors:
Boskovitz Lawyers (plaintiff)
& Legal (defendant)

File Number(s):

2020/00249425

Publication restriction:

None

Judgment

Introduction

1. Go For Your Life Pty Ltd sued Charas Constructions Pty Ltd for unpaid commissions or “Introduction Fees” in respect of two building projects known as the “Tamarama Project” and the “Clovelly Project”. Charas Constructions resists payment on the basis of uncertainty in the relevant agreement, unfulfilled preconditions to payment, and an oral collateral agreement and representations.

Issues

2. The issues can be listed as:

1. Was there a binding agreement between Charas Constructions and Go For Your Life.

2. Was payment of the Introduction Fee conditional on the provision of a payment schedule by Go for Your Life, which it did not provide.

3. Was payment of the Introduction Fee conditional on payment in full for the building project by the owner of the property, which did not occur.

Background

3. Christopher Gray, Chief Executive Officer of Go For Your Life, ^[1] and Constantinos Charalambous, sole director and secretary of Charas Constructions, ^[2] had a history of involvement together in building projects. From about 2010, Mr Gray or companies in which he had an interest referred building and renovation projects to Charas Constructions in return for commission payments; ^[3] so Mr Charalambous said, although Charas Constructions was not incorporated until 2014. ^[4] Mr Charalambous acknowledged in evidence that he identified with Charas Constructions and drew little or no distinction between himself and his company.

   1. Affidavit, Christopher Gray, 28 January 2021, at [1]; CB 111.

   2. Affidavit, Constantinos Charalambous, 12 March 2021, at [1]; CB 571

   3. Affidavit, Constantinos Charalambous, 12 March 2021, at [6]; CB 571.

   4. Exhibit 1, p 2; CB 581.

4. In 2013, perhaps due to some uncertainty as to whether commissions had been fully paid in the past, the parties reduced their agreement to writing. On 3 December 2013 Mr Gray and Mr Charalambous executed a services agreement, ostensibly on behalf of Go For Your Life and Charas Constructions in the following terms:

“SERVICES AGREEMENT

Instrument of Agreement

Go For Your Life P/L t/a Empire Property Portfolio (ACN 107 756 954) of Level 14, 209 Kent St, Sydney NSW 2000 (“Empire”)

and

Charas Constructions P/L ATF Charas Trust of 58 Portland St, Dover Heights NSW 2030 (ACN 821 753 492) (“Builder”)

agree to carry out their respective obligations in accordance with this Services Agreement (“Services Agreement”) for a period of 3 years from the date of execution of the Services Agreement.

This Services Agreement consists of:

a) this Instrument of agreement;

b) this Schedule (attached);

c) the Conditions of Introduction (attached); and

d) any Documents referenced in the Schedule.

EXECUTED as an agreement on 3/12/13

Signed for an on behalf of:

Empire by:

Chris Gray

Print name

[signature]

Signature

Executed by Costa Charalambous of Charas Constructions P/L in accordance with s 127(1) of the Corporations Act in the presence of:

[signature]	[signature]
Signature of Director/Secretary	Signature of Director
Costantinos Charalambous	[illegible]
Name of Director/Secretary	Name of Director”. [5]

5. Exhibit A; CB 138.

5. Attached to the Services Agreement in the evidence was a one-page “Conditions of Introduction” containing 16 clauses. ^[6] Clauses 2 and 12 referred to a “Confirmation of Introduction”, a form of document which, when completed, identified a specific project and payments due in respect of it. The Confirmation of Introduction document was dated 24 August 2015, and accompanied the Services Agreement and Conditions of Introduction documents. ^[7] There was no dispute that these three documents comprised the Tamarama Agreement. ^[8] Another document was also alleged to be part of that agreement, ^[9] but it was common ground that, at least in the form it bore in the evidence, it was not part of the Tamarama Agreement in August 2015.

   6. Exhibit A; CB 140.

   7. Exhibit A; CB 139.

   8. Affidavit, Christopher Gray, 28 January 2021, at [14a], affidavit, Constantinos Charalambous, 12 March 2021, at [7].

   9. At Exhibit A, CB 141.

6. The apparent construction of these documents is that the Services Agreement, with the Conditions of Introduction, operated as an umbrella agreement under which the parties regulated their business relationship, but a contract in respect of any particular project occurred when the relevant “Confirmation of Introduction” Form in respect of the proposed project was completed. In the case of the Tamarama Project, the Confirmation of Introduction Form was completed and dated 24 August 2015. ^[10] In the case of the Clovelly Project, the three-year period for the Services Agreement had elapsed, a new Services Agreement was entered, dated 25 September 2016, ^[11] and a Confirmation of Introduction Agreement was completed, dated 28 October 2017. ^[12]

   10. Exhibit A; CB 139.

   11. Exhibit A, CB 142.

   12. Exhibit A; CB 143.

7. The Confirmation of Introduction document in respect of the Tamarama Project contemplated payment to Go For Your Life in the sum of $425,482.50 inclusive of GST, and in respect of the Clovelly Project, payment of $259,123.89.

8. Mr Charalambous did not dispute the obligation identified in the respective Confirmation of Introduction documents. Indeed, on 2 December 2016 he wrote to Mr Gray stating in respect of the Tamarama Project, “Amount you need to bill me for is $425482.50c inclusive of GST over 16 payments will be $26592.65c per month”. ^[13]

   13. Exhibit A; CB 204.

9. Similarly, in respect of the Clovelly Project, in response to being provided with the “fee schedule”, Mr Charalambous confirmed by email on 6 November 2017 “this is fine agreed to fee”. ^[14]

   14. Exhibit A; CB 218.

10. Further, Charas Constructions made payment in accordance with these agreements. All but the final two invoices issued in respect of the Tamarama Project, each of $26,592.65, were paid, and likewise, all but the final two invoices in respect of the Clovelly Project, one of $45,652.17 and the other of $16,690.28, were paid.

11. Go For Your Life claims the sum of the four unpaid invoices, namely $115,527.75. Charas Constructions does not dispute the amount sought if it is found to be contractually liable.

12. The primary issue raised by Mr Charalambous was that Charas Constructions was not obliged to pay any amount, or the outstanding amount, if some amount on the building project remained unpaid. He conceded that Charas Constructions was paid in full in respect of the Clovelly Project, but gave evidence that because the residual sum of $47,762.15 was not paid by the owner in respect of the Tamarama Project, Charas Constructions was not obliged to pay any of the amount of $115,527.75 outstanding for Introduction Fees.

Pleading point

13. In final submissions, Charas Constructions raised a pleading point: that in respect of the Tamarama Project, only a 2013 Services Agreement and not a 2015 contract encompassing the Confirmation of Introduction was pleaded. However, the later 2015 document was referred to in the Amended Statement of Claim^[15] and was identified in particulars as a contractual document. ^[16] The contracts in respect of the projects were alleged to be finalised with the Confirmation of Introduction documents, dated subsequent to the Service Agreements and no objection was taken to evidence that asserted an agreement that included the later Confirmations of Introduction. In my view, the pleading sufficiently alleges the contract or contracts relied upon.

    15. At [9].

    16. Exhibit E.

Preliminary matters

14. Some matters raised by the evidence can be dealt with briefly at the outset.

15. Mr Charalambous and his brother were part owners, to the extent of 26% together, of the property at Tamarama. Although Charas Constructions claimed to have been owed $47,762.15, the evidence indicated (and neither party disputed) that the majority (74%) owner, one Naomi Simson, had alone not paid this amount. Whether there was some proper basis for that apparent non-payment is not a matter that needs to be determined.

16. The relative significance of the fee charged by Go For Your Life, effectively 10% of the renovation costs of Tamarama and 15% of the renovation costs of Clovelly, was not a relevant factor in the legal dispute between the parties. Neither was the possibly substantial profit that Mr Charalambous made on the building work and sale of Tamarama, or the building work at Clovelly.

17. Charas Constructions referred to cl 6 of the Conditions of Introduction, which identified a term to be included in quotes by Charas Constructions. Whether the term was included in the relevant quotes, or not, is of no significance. Go For Your Life did not assert a breach by Charas Constructions in not including the term in quotes, nor did it claim any related damages. Any failure to include the term was not relevant to whether the contract was uncertain.

18. I turn to the issues in the proceedings.

Binding agreement and the question of uncertainty

19. As indicated earlier, the absence of a binding agreement was not a matter pressed by Mr Charalambous in his evidence. But Charas Constructions argued that the agreement was too uncertain to constitute a valid agreement. It relied on four matters:

1. The payments that were made by Charas Constructions were to an entity named Gray Property Holdings, rather than to Go For Your Life;

2. The original agreement was dated 3 December 2013, some months before the incorporation of Charas Constructions;

3. Charas Constructions was described in one part of the Services Agreement as “ATF Charas Trust”, and there was no evidence that it ever had that role as trustee; and

4. The Australian Company Number (ACN) for Charas Constructions was wrongly stated on the 2013 Services Agreement.

20. In determining whether an agreement is void for uncertainty, the “traditional doctrine” is that “courts should be astute to adopt a construction which will preserve the validity of the contract”. ^[17] The court is to uphold the reasonable expectations of parties who believed that they had made an effective contract and avoid the reproach of being the destroyer of bargains. ^[18] The courts give primacy to the need to uphold agreements, especially executed and commercial agreements. As expressed in Carter on Contract:

“In the modern law of contract, arguments based on uncertainty have minimal attraction, and a court should strive to give effect to expressed arrangements and expectations. Generally, therefore, an uncertainty argument is a counsel of despair.” ^[19]

17. Meehan v Jones (1982) 149 CLR 571 at 589 per Mason J.

18. Hillas & Co Ltd v Arcos Ltd (1932) 147 LT 503 at 512; 43 Ll L Rep 359 per Lord Tomlin, HL.

19. J W Carter, LexisNexis Australia, Carter on Contract (online at 17 June 2022) at [04-010].

21. The Agreement purports to be a commercial agreement between two corporations and thus is to be construed according to the principles of construction of commercial contracts. The Court is to adopt an objective approach, ascertaining the meaning conveyed to a reasonable person having the background knowledge common to the parties, including as to matters of law. ^[20] Reference is to be made to the contractual language, the surrounding circumstances and the purposes and objects secured by the contract. ^[21] This includes the background and context of the contract. ^[22] The contract is construed as a whole,^[23] and generally the Court approaches the task of construction on the assumption that the parties intended to produce a commercial result. ^[24]

    20. Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at [11]; [2001] HCA 70 at [11].

    21. Rinehart v Hancock Prospecting Pty Ltd (2019) 267 CLR 514 at [44]; [2019] HCA 13.

    22. Electricity Generation Corporation t/as Verve Energy v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 at [35].

    23. Australian Broadcasting Commission v Australasian Performing Right Association Ltd [1973] HCA 36; (1973) 129 CLR 99 at 109.

    24. Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd [2015] HCA 37; (2015) 256 CLR 104 at [15], see also Motor Yacht Sales Australia Pty Ltd v Blann [2020] NSWCA 349 at [35]-[36].

22. The contract here was in writing, signed, and almost fully performed. Upon analysis, the matters asserted to render the agreement void for uncertainty are not persuasive.

The pre-incorporation Services Agreement

23. Although the Services Agreement for the Tamarama Project was dated prior to the incorporation of Charas Constructions, s 131 of the Corporations Act 2001 (Cth) operates to make Charas Constructions bound by it.

24. Section 131(1) provides:

“Contracts before registration

(1)  If a person enters into, or purports to enter into, a contract on behalf of, or for the benefit of, a company before it is registered, the company becomes bound by the contract and entitled to its benefit if the company, or a company that is reasonably identifiable with it, is registered and ratifies the contract:

(a)  within the time agreed to by the parties to the contract; or

(b)  if there is no agreed time--within a reasonable time after the contract is entered into.”

25. To apply to Charas Constructions, s 131(1) requires:

1. a contract purportedly entered on behalf of a company not yet incorporated;

2. Charas Constructions must become registered;

3. Charas Construction must ratify the contract within a reasonable time; and

4. Charas Constructions is reasonably identifiable with the company.

26. The 2013 contract was purportedly entered into on behalf of “Charas Constructions P/L” (as the execution clause makes plain) and thus Charas Constructions was “reasonably identifiable” with the company within the meaning of s 131. Charas Constructions became registered within some months after the Services Agreement and it was not argued that this was other than a reasonable period. The reasonableness of the time is informed by the timing of when the contract was enlivened in relation to a particular project, which here was well after Charas Constructions was incorporated.

27. Charas Constructions has also ratified the agreement. Ratification may be express or implied, including by acting in a way which can only be explained on the basis that it has accepted the contract as its own, and thus manifests an intention to be bound. ^[25]

    25. Aztech Science v Atlanta Aerospace (Woy Woy) [2005] NSWCA 319; (2005) 55 ACSR 1 at [81]-[82].

28. In this case, Charas Constructions adopted the Confirmation of Introduction by expressly acknowledging and agreeing to its terms; ^[26] by entering into a building contract in the precise amount identified in the Confirmation of Introduction; and in making 14 equal payments as instalments of the Introduction Fee, as it had earlier indicated. Both the first and last of these items of conduct involve communication to Go For Your Life. ^[27]

    26. Exhibit A, p 204.

    27. See Aztech at [82].

29. Charas Constructions submitted that there needed to be (and could not be) a pre-incorporation contract. Of course there cannot be at common law. But to provide otherwise is the very purpose of s 131. The plain words of s 131 show that it applies not just to where contracts are entered, but also where contracts are purported to be entered. The need for a pre-existing contract is thus not a requirement for the applicability of s 131.

30. However, the applicability of s 131 is ultimately unnecessary in the present case. A contract in respect of the Tamarama Project became binding when the agreement, containing the Confirmation of Introduction referring to the Tamarama Project, was accepted by Mr Charalambous. That occurred in 2015, well after the incorporation of Charas Constructions.

31. In these circumstances, although the requirements of s 131 were satisfied in respect of the adoption and ratification of the Services Agreement, this is unnecessary for the binding nature of the agreement in respect of the two projects here, both of which occurred after the incorporation of Charas Constructions when the relevant Confirmations of Introduction were adopted.

Payments to Gray Property Holdings

32. There is no significance to payments being made to the Gray Property Holdings’ bank account. On the contemporaneous evidence before the Court, ^[28] that entity appears merely to be a business name, presumably belonging to Go For Your Life. The argument that Gray Property Holdings was a separate legal entity was not established. Even if it were a separate company, ^[29] the circumstance that a related company invoiced and received payment of monies to which Go For Your Life was entitled does not disturb the terms of the Service Agreement and the Confirmation of Introduction that Go For Your Life and Charas Constructions were the contracting parties.

Error in initial ACN and reference to “ATF Charas Trust”

28. Exhibit A, pp 28-66; CB 149-187.

29. The affidavit of Christopher Gray of 28 January 2021 refers to “Gray Property Holdings Pty Limited” invoices, but this appears to be a mistake, as only the name “Gray Property Holdings” and an ABN (not an ACN) is on the invoices.

33. A misdescription does not prevent a contract being formed with the misdescribed legal person, whether a natural person or a company. ^[30] The contract is to be construed by reference to the surrounding circumstances and known facts, according to the rules of construction identified earlier. Whether a misnomer will be corrected on construction depends on whether the mistake is obvious. ^[31]

    30. F. Goldsmith (Sicklesmere) Ltd. v. Baxter (1970) 1 Ch 85.

    31. New South Wales Land and Housing Corporation v Australia and New Zealand Banking Group Limited [2015] NSWSC 176 at [49].

34. Evidence of surrounding circumstances is admissible to identify persons or things referred to or misdescribed in the written contract. ^[32] Even subsequent communications may be used as an admission of a subsisting contract, where an issue concerns whether a particular person was a party to that contract. ^[33]

    32. Giliberto v Kenny (1983) 48 ALR 620 at 623; Prenn v Simmonds [1971] 1 WLR 1381 at 1383–1384; FloMin Inc v Australian Raw Materials Corp Pty Ltd [2011] NSWSC 585 at [28] per Einstein J; Re Anglican Development Fund Diocese of Bathurst (2015) 336 ALR 372 at [192] per Hammerschalg J.

    33. Tomko v Palasty [2007] NSWCA 258 at [63]–[68].

33. Here Charas Constructions was alone named as the builder on the contractual documents; it paid the various instalments of the Introduction Fees for both the Tamarama Project and Clovelly Project from its own bank account; it was the builder on each project; and in all correspondence acted as if it were the party bound under the agreements with Go For Your Life.

34. The error in the initial ACN is insignificant. If there were other companies bearing the name, Charas Constructions, the difference could be important. But that was not the case. During the relevant period, Mr Charalambous conducted his business through Charas Constructions. The ACN on the 2013 Services Agreement is plainly an error, in part because Charas Constructions was not then incorporated and had no ACN. On the Clovelly agreement, the Australian Business Number (ABN) listed corresponded with the defendant’s ACN. ^[34] Even if there were a different company named Charas Constructions in 2013 (but not in 2015), having an ACN ending in 515, ^[35] it is immaterial, since such a company was not connected to the transaction culminating with the Confirmation of Introduction in 2015.

    34. Exhibit 1, p 2; CB 581.

    35. See Exhibit B; CB 231, 232.

35. The incorrect ACN included in the contractual documents referred to a non-existent entity in the case of the ACN ending 492. ^[36] Other ACNs appearing in correspondence were not established to exist at the time the two projects were entered or undertaken, such as in the case of the ACN ending 515. ^[37] There was no other company linked to the contract that could reasonably have been thought to be a contracting party.

    36. Exhibit 1, CB 736, 738.

    37. See Exhibit B; CB 231.

36. As to the implied reference that Charas Constructions was the trustee of Charas Trust, the argument remained under-developed. The existence of a Charas Trust, or who or what was its trustee, was not established. Mr Charalambous had the presumed knowledge about the trust, it being referred to in his correspondence, and he gave no evidence on these matters, or explanation for the absence of evidence. In accordance with Jones v Dunkel, I would draw no inference on that point in his favour.

37. Each of the errors is derived from apparent errors in Mr Charalambous’ correspondence. ^[38] None of these errors disturb the plain text in the contractual documents that Charas Constructions was the contracting party.

    38. See Exhibit 1, CB 599, 602-603.

38. For these reasons, there is no substance to the argument based upon uncertainty.

Payment schedule

41. Clause 12 of the Conditions of Introduction referred to an obligation on Charas Constructions to pay Go For Your Life the Introduction Fee inclusive of GST “by electronic funds transfer in accordance with the payment schedule included in the tax invoice”. ^[39]

    39. Exhibit A; CB 140, 144.

42. The nature and contents of the “payment schedule” were not defined, nor was it apparent that it was the same as “the Schedule” referred to in the Services Agreement. By final submissions, little was submitted about the absence of a payment schedule. If payment needed to be made in accordance with it, as cl 12 required, then it would naturally include the amount required to be paid. That is sufficiently disclosed by the invoice itself. Mr Charalambous, in oral evidence, eschewed any complaint about the absence of the Schedule. As the four unpaid invoices were all issued on the same date, each set of the final two invoices would constitute a schedule for each project, identifying the amount to be paid and when, for the whole residual amount of the Introduction Fee. Whether the earlier invoices needed to have a schedule embracing a list of payments for the whole of the Introduction Fee is of no significance, since those payments were made irrespective of the presence of an appropriate schedule.

43. Further, this legal proceeding itself provides further particulars of the payments made and those that remain owing. Thus, the contents of the schedule have long been provided.

“Pay when paid” and the collateral agreement that Go For Your Life would recover outstanding payments

44. Charas Constructions contended that its obligation to pay the Introduction Fee commission did not arise until it was paid in respect of the building project. There was no clause to this effect in this agreement, and the conditions contained an entire agreement clause. ^[40] However, the practice adopted by the parties in the past was for the Introduction Fee to be invoiced over the course of the project, perhaps in accordance with “the Schedule” accompanying the contract, ^[41] presumably, perhaps, to enable Charas Constructions to use cash flow received from the building works to meet the instalments comprising the Introduction Fee. The circumstance that cl 12 refers to a payment schedule comprising “one or more instalments” gives some additional support for a term to this effect. Further, Mr Charalambous’ email of 2 December 2016 in respect of the Tamarama Project indicated that the Introduction Fee was to be paid in 16 monthly payments ^[42] and states “attached is payment schedule”.

    40. See cl 15.

    41. See Exhibit A, CB 138.

    42. Exhibit A; CB 204.

45. So, as a matter of practice, payment of the Introduction Fee was made in instalments and I incline to the view that payment by instalments in a schedule was part of the contractual arrangement. But there is no evidence indicating that these instalments depended on payment by the owner to Charas Constructions, whether in accordance with the same timetable or otherwise. The chronology reflects the circumstance that payments of the instalments of the Introduction Fee appeared to follow the payments for the building works as shown in the schedules below. But this is not evidence that the absence of a payment would impact on the obligation for an Introduction Fee instalment:

Date of payment made for building works - Tamarama Project [43]	Date of payment of instalment of Introduction Fee - Tamarama Project [44]
11 September 2015
12 September 2015
Undated
24 November 2015
25 November 2015
26 November 2015
17 December 2015 x 2
18 December 2015
19 December 2015	24 December 2015
18 January 2016
19 January 2016
20 January 2016	21 January 2016
19 February 2016
24 February 2016
25 February 2016
26 February 2016
17 March 2016 x 2
18 March 2016	23 March 2016
11 April 2016
12 April 2016
13 April 2016
10 May 2016
11 May 2016
12 May 2016	17 May 2016
10 June 2016	8 June 2016
13 June 2016
14 June 2016
13 July 2016	1 July 2016
14 July 2016
15 July 2016	27 July 2016
11 August 2016
12 August 2016
16 August 2016	26 August 2016
10 September 2016
11 September 2016
12 September 2016	27 September 2016
21 October 2016
22 October 2016
23 October 2016	4 November 2016
7 December 2016 x 2
8 December 2016
9 December 2016
14 December 2016
16 January 2017
17 January 2017
18 January 2017
16 February 2017
17 February 2017	17 February 2017
19 February 2017
24 March 2017
25 March 2017
26 March 2017
6 May 2017
7 May 2017
8 May 2017
21 November 2017
22 November 2017
20 December 2017
9 January 2018
10 January 2018	10 January 2018 x 3
Date of payments made for building works - Clovelly Project [45]	Date of payments of instalments of Introduction Fee - Clovelly Project [46]
1 December 2017
19 March 2018
20 March 2018
25 May 2018
28 May 2018
12 July 2018	18 July 2018
13 July 2018	29 July 2018
13 September 2018	13 September 2018
8 October 2018
9 October 2018
8 November 2018
12 November 2018 x 2	22 November 2018 x 2
18 December 2018
21 December 2018
8 March 2019

43. Affidavit, Christopher Gray, 6 June 2022, Table 1; CB 269-280.

44. Exhibit A, CB 141.

45. Affidavit, Christopher Gray, 6 June 2022, Table 2; CB 282-285.

46. Exhibit A, CB 145.

46. Mr Charalambous’ email ^[47] did not suggest that the Introduction Fee instalments depended on building payments. Even if it did, questions would arise as to how the Introduction Fee would be structured against payments. It could, for example, have been provided that the Introduction Fee was to be paid in the same proportion as the builder had received payment for building works, an argument belatedly raised by Charas Constructions at the close of submissions. But this was not the position taken by Charas Constructions in defending the proceedings: the absence of payment of $47,762.15 would then only entitle the builder to reduce the Introduction Fee by $4,776 (since the Introduction Fee was 10% of the building quote), ^[48] rather than an amount in excess of $100,000 as claimed here.

    47. Exhibit A; CB 204.

    48. Exhibit A; CB 143.

47. Further, the building works here involved variations or works additional to the price of the building works on which the Introduction Fee was calculated. No amount was payable to Go For Your Life in respect of those additional payments. It would seem odd that the Introduction Fee should be dependent on monies owing on works unrelated to that Fee, at least without an express term to that effect.

48. In my view, the proper construction of the agreement is for payment in accordance with the instalment schedule. In respect of Tamarama, Mr Charalambous’ email ^[49] indicates that the payment of instalments would conclude on 15 March 2017, 15 months after the first of the 16 monthly payments to commence on 15 December 2015. Perhaps the project advanced more quickly as a number of paid invoices were dated June 2016. Some variation work continued into 2017. But the unpaid invoices are dated 25 May 2019, well after the completion of the works.

    49. Exhibit A; CB 204.

49. Mr Charalambous accepted that Charas Constructions had been paid in full for the Clovelly Project, and that the remaining amount of $62,342.45 in respect of that project was payable for the Introduction Fee. But he asserted that since moneys were still payable on the Tamarama Project, he would be “out of pocket” if he paid any outstanding fees. In fact, Mr Charalambous retained “in Charas Construction’s pocket” some $115,000 of unpaid fees payable to Go For Your Life, so he was about $70,000 better off by not recovering his payments for building works if he could thereby avoid the unpaid part of the Introduction Fee. To so read the contract would be arbitrary and capricious, allowing non-payment of any amount owing on the Introduction Fee if any amount was owing on any project. There was no text or practice supporting such a construction. I do not accept this to be a reasonable construction of either agreement, it having no textual or other support identified in argument.

50. Charas Constructions had one further argument, that Go For Your Life had represented, undertaken or promised that the Introduction Fee would not be payable until all the building works money was paid. Whether this was maintained as an estoppel, or a collateral contract is of no moment because the evidence did not support it.

51. The fallibility of the human memory of conversations is a matter of ordinary human experience and increases with the passage of time, especially when the interests of litigation are present. ^[50] The safer course is to rely in contemporaneous documents. Here the documentary evidence gives no support to the principle Mr Charalambous sought to evidence from conversations.

    50. Watson v Foxman (1995) 49 NSWLR 315 at 319.

52. However, a conversation between Mr Charalambous and one Luis Lequerica did occur. Mr Lequerica indicated that it would be best if he spoke to Ms Simson about the unpaid amount. He did, and he reported to Mr Charalambous that she resisted payment because of defects. Those exchanges between Mr Charalambous and Mr Lequerica give rise to no contract or estoppel. Mr Lequerica was sometimes contracted as a buyer’s agent working for Go For Your Life, but played no role in the Clovelly or Tamarama Projects and no evidence supported him having authority, actual or ostensible, to bind Go For Your Life contractually or by estoppel. He knew Ms Simson and offered to contact her. There was no basis for Charas Constructions to assert that Go For Your Life had waived payment of the residue of its Introduction Fee on Tamarama, less still on the Fee for Clovelly, until it recovered a claimed amount owing from Ms Simson, especially where the Fee related to some unpaid variations unconnected to the Fee. In respect of the difference between Mr Lequerica’s account and that of Mr Charalambous, I would accept the former as it seemed more reasonable and likely, and he had no financial interest in the conversation.

53. Further, Mr Charalambous’ sworn conversations years ago are unconvincing. As an example, Mr Charalambous swore that when a new project was mentioned, he commonly responded, “Great…we will stop all payments to you if a client doesn’t pay…” ^[51] In any event, those words do not enliven an entitlement to pay nothing until everything has been paid to the defendant.

    51. Affidavit, Constantinos Charalambous, 12 March 2021, at [6]; CB 572.

54. Mr Charalambous claimed he lost the ability to recover the unpaid amount because of the expiration of a two-year limitation period. This was plainly wrong, and admitted by the defendant to be so. The funds were conceded to be still recoverable. However, Mr Charalambous asserted in re-examination, when led on the subject, that he had lost the opportunity to utilise the expedited procedures in the Building and Construction Industry Security of Payment Act 1999. There were a number of problems with this late raised point: the defendant conceded that the Act did not apply of its own force because the building project involved Ms Simson’s owner-occupied residence; even though cl 4.2 of the contract ^[52] referred to claims under the Security of Payment Act, that reference does not raise a limitation issue; the 12-month time period prescribed by the Act^[53] is the time in which a payment claim must be served, not the time proceedings needed to be commenced; and that 12-month period expired sometime in 2018, before the conversations with Mr Lequerica occurred.

    52. See Exhibit 1, CB 651, cl 4.2.

    53. Building and Construction Industry Security of Payment Act 1999, s 13(4).

55. There remains nothing to stop Mr Charalambous suing for the amount owed, if it was owed. His excuses given in evidence that it would be a costly process seemed less than genuine in circumstances where such a claim would, on his argument, be a straightforward claim in debt, unlike these costly proceedings resisted without a defence of real merit.

56. Accordingly, Go For Your Life did not induce an assumption in Charas Constructions, nor did Charas Constructions act upon any assumption arising from the conversation as it had refrained from relevantly acting for more than 12 months before the conversation occurred and no detriment has been suffered by it. The elements for an estoppel stated in Waltons Stores (interstate) Ltd v Maher ^[54] are not satisfied.

    54. (1988) 164 CLR 387 at 428-429.

Conclusion

57. Charas Constructions has paid the bulk of the agreed Introduction Fees for the Tamarama Project and the Clovelly Project. There is no reason why Go For Your Life should not receive judgment for the remaining unpaid amount of $115,527.75.

Interest

58. Interest calculated at court rates from 25 June 2019, one month after the date of the invoices, to date is $15,366.78.

Costs

59. Costs would ordinarily follow the event. The parties indicated they may wish to make submission on costs, so I will reserve judgment on that issue.

Orders

1. Judgment for the plaintiff in the sum of $130,894.53.

2. Questions of costs reserved.

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Endnotes

Decision last updated: 11 August 2022