Halse as trustee for P and M Halse Family Trust v JG and MV Blythe (A Firm)
[2013] WADC 124
•2 AUGUST 2013
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: HALSE AS TRUSTEE FOR P & M HALSE FAMILY TRUST -v- JG & MV BLYTHE (A FIRM) [2013] WADC 124
CORAM: STAVRIANOU DCJ
HEARD: 16, 17, 18 JANUARY 2013 & 9 JULY 2013
DELIVERED : 2 AUGUST 2013
FILE NO/S: CIV 2010 of 2010
BETWEEN: PAUL JAMES HALSE AS TRUSTEE FOR P & M HALSE FAMILY TRUST
Plaintiff
AND
JG & MV BLYTHE (A FIRM)
Defendant
Catchwords:
Contracts - General contractual principles as to termination - Construction and interpretation of contracts - Contractual terms - Conditions, warranties and intermediate terms - Breach of contract - Classification of term for the purpose of determining the consequences of breach - Whether case was one of breach of a condition or sufficiently serious breach of an intermediate term - Whether breach went to root of contract - Breach of essential term, serious breach of a nonessential term - Termination
Contracts - Repudiation - Acceptance of repudiation
Trade practices - Misleading or deceptive conduct - Oral representation - Whether representation of future matter made on reasonable grounds - Turns on own facts
Legislation:
Fair Trading Act 1987 (WA) s 5, s 9, s 10, s 77
Trade Practices Act 1974 (Cth) s 52, s 82
Result:
Judgment for the plaintiff
Representation:
Counsel:
Plaintiff: Mr T Lethbridge
Defendant: In person
Solicitors:
Plaintiff: Kott Gunning
Defendant: Not applicable
Case(s) referred to in judgment(s):
Ankar Pty Ltd & Arnick Holdings Ltd v National Westminster Finance (Australia) Ltd [1987] HCA 15; (1987) 162 CLR 549
Associated Newspapers Ltd v Bancks [1951] HCA 24; (1951) 83 CLR 322
Campbell v Backoffice Investments Pty Ltd [2009] HCA 25; (2009) 238 CLR 304
Coles Supermarkets Australia Pty Ltd v FKP Ltd [2008] FCA 1915
Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64
DTR Nominees Pty Ltd v Mona Homes Pty Ltd [1978] HCA 12; (1978) 138 CLR 423
Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217
Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1
Gould v Vaggelas [1985] HCA 75; (1985) 157 CLR 215
Henville v Walker [2001] HCA 52; (2001) 206 CLR 459
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115
Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623
Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451
Robinson v Harman [1848] Eng R 135; (1848) 1 Exch 850; [1848] 154 ER 363
Ross T Smyth & Co Ltd v T D Bailey, Son & Co [1940] 3 All ER 60
Serrata Investments Pty Limited v Rajane Pty Limited (1991) 6 WAR 419
Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620
Shone v Davies [2012] WASCA 83
The Progressive Mailing House Pty Limited v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165
Tramways Advertising Pty Ltd v Luna Park (NSW) Ltd (1938) 38 SR (NSW) 632
Universal Cargo Carriers Corporation v Citati [1957] 2 QB 410
Wardley Australia Ltd v The State of Western Australia (1992) 175 CLR 514
STAVRIANOU DCJ:
Introduction
This action arises out of the purchase in December 2008 by the plaintiff, Paul James Halse as trustee for the P & M Halse Family Trust, of a brick carting unit known as QB7 from the defendants, John George Blythe and Michelle Vanetta Blythe.
The agreement for purchase included a term that the Blythes were to guarantee Mr Halse full‑time work that would amount to a minimum of $5,000 per week including GST for a period of five years from the date of the agreement. The Blythes were required to pay Mr Halse's invoices rendered in relation to the work performed two weeks in arrears. For convenience I will in these reasons describe the term as the guarantee.
Mr Halse's claim is, in essence, that in May 2009 the Blythes repudiated the agreement by not making payment of his invoices for work done and by attempting to vary its terms. It is further asserted that breaches of the agreement by the Blythes entitled Mr Halse to terminate the agreement and recover damages.
The Blythes deny they repudiated the agreement and contend that Mr Halse was at all material times in breach and therefore could not lawfully terminate. They further contend that Mr Halse repudiated the agreement, that they accepted the repudiation and terminated the agreement.
Mr Halse claims damages for repudiation and breach of the agreement. He also claims damages under the Fair Trading Act 1987 (WA) (the FTA) for misleading or deceptive conduct.
Mr Halse's claim under the FTA is that he entered into the agreement because of a representation made to him that the Blythes had the ability to provide full‑time work to a minimum of $5,000 per week. The making of the representation is the conduct relied upon as a contravention of the FTA. It is asserted that the representation was as to a future matter and that there were no reasonable grounds for the making of it.
The Blythes deny that there was any representation made. They further plead there were reasonable grounds for the making of any representation.
Overview
In September 2008 Mr Halse was working as a sales manager in secure employment and reasonably well remunerated. However, his position did involve some travel. He therefore began looking for his own business. Whilst he had some experience in differing forms of employment, he had never worked in brick carting and did not have a truck licence.
The Blythes had for a number of years carried on business in partnership as brick cartage contractors under the style or firm name of 'Quick Brick Cartage'. The operation of the business involved the use of what is described as a unit comprising a truck, trailer and tractor. The tractor, operating as a forklift, is used to unload the bricks. The unit is operated by one person who acts as the driver, collects the bricks from the brickyard and then transports them to site where they are unloaded.
By about 2008 the Blythes had gradually built the business up to the stage where it comprised two units one of which was QB7. Mr Blythe operated as the driver of one unit and an employee operated QB7. At all times he acted on his own and Mrs Blythes' behalf.
The two most significant clients of the business were BGC Transport Pty Ltd (BGC) and Atlas Group Pty Ltd (Atlas). There were other private clients but the bulk of the work came from BGC and Atlas. Problems developed in securing what Mr Blythe described as 'decent operators' and for that reason a decision was made by him to sell the items of machinery comprising QB7. However because of the clients which had been established Mr Blythe decided to 'sell it with the work'.
In September 2008 the Blythes advertised QB7 for sale. Mr Halse saw the advertisement, contacted Mr Blythe and negotiations commenced. The first meeting to discuss the purchase was in late September 2008 at the Blythes' yard. Mr Halse saw QB7 and Mr Blythe told him of its approximate earnings.
When Mr Halse first spoke to Mr Blythe about QB7 they discussed income and hours. Mr Blythe told Mr Halse that he 'was sick of people – you know, having people that worked for him that break it or don't show up, so it would be less – less stress for him, unload it'. Mr Blythe told Mr Halse that there 'was plenty of work out there' and that he could make good money as an owner‑operator.
At the time of the purchase negotiations Mrs Blythe was finalising the acquisition of a café. Some of the money from the sale of QB7 was to be used for the new business. The Blythes were in the circumstances keen to complete the negotiations and the sale of QB7.
In the course of negotiations Mr Halse spoke to his finance broker who requested financial information be obtained. Some documents were provided by the Blythes.
Mr Halse's evidence was that he had been on tractors on a farm and had driven four‑wheel drive vehicles. Whilst his experience was minimal, he considered that the operation of QB7 would not be that difficult for him.
Mr Halse's evidence as to what was said concerning the earning capacity of the unit was essentially not in issue. It was his evidence that Mr Blythe had said that the earning capacity was an 'average of $5,000'. He had also said to Mr Halse that Mr Blythe's truck could 'do seven and a half plus' but that it was a different set up.
Mr Halse, when asked about conversations with Mr Blythe, said there were 'lots of phone calls going back and forth'. He was unable to be precise as to the dates of calls or meetings with Mr Blythe.
During November 2008 Mr Halse left his then current employment. At that stage he did not have finance to enable the purchase of QB7 to proceed and negotiations were continuing. When Mr Halse left his employment he had a continuing need for income and, accordingly, in about mid‑November the Blythes engaged Mr Halse to act as a driver at a remuneration of $1,500 per week until the purchase was complete. During the period of approximately six weeks when he was so employed he had an opportunity to observe the operation conducted by Mr Blythe.
The discussions concerning the purchase were protracted. However eventually in December 2008 an agreement for sale of QB7 was concluded. The terms of the agreement are in issue. More specifically, there was a controversy as to the documents said to constitute the agreement and the price to be paid. The Blythes contend the agreed price was $250,000. Mr Halse maintained it was $240,000.
There was some work required to be done on QB7 and an agreement in that respect was also entered into.
On or about 15 December 2008 a payment of $150,000, being part of the purchase price, was made by Mr Halse to the Blythes. Before that transaction was able to be processed Mr Halse's financier required payment of the first loan repayment in advance. Mr Halse did not have the money for that payment and at his request Mr Blythe made the payment for him of $3,070.
From in or about mid‑December 2008 Mr Halse commenced to operate QB7 in his own right. QB7 was parked in the Blythes' yard and each morning Mr Halse would attend to collect details of the day's work which he then carried out.
On or about 2 January 2009, the Blythes received $86,688.45 from Mr Halse. The amount then due on Mr Halse's case was $90,000. However the financier had deducted fees of $3,313.55. Notwithstanding the shortfall the sale proceeded.
In or about early May 2009 Mr Blythe and Mr Halse met at the Blythes' yard. There was discussion as to monies outstanding by Mr Halse to the Blythes and how the repayment was to be made. Mr Blythe in effect asserted a set off and an entitlement to deduct from invoices for work done by Mr Halse. Mr Halse disputed his entitlement to do so.
Following the May 2009 meeting Mr Halse continued to attend the yard and Mr Blythe provided work.
On 28 May 2009 Mr Halse's solicitors wrote to the Blythes alleging a breach of the agreement in that there had been non‑payment of invoices. Mr Halse's pleaded case is that the letter constituted an acceptance of a repudiation by the Blythes and, accordingly, the agreement was terminated.
From 28 May 2009 Mr Halse ceased attending at the Blythes' yard to collect work and on 2 June 2009 Mr Halse removed QB7 from the yard and thereafter did not return.
On 14 July 2009 Cahill Billington, the solicitors for the Blythes, wrote to Mr Halse requesting the return of the keys he retained to the Blythes' yards and for him to make arrangements to collect his property from the yard.
In about February 2010 Mr Halse sold the trailer component of QB7 at auction for $25,000. In March 2010 he sold the brick tractor for $15,796.50. On or about 12 October 2010, he sold the truck for $37,600.00.
The proceedings and hearing
On 22 June 2011 the solicitors for the Blythes ceased to act. At trial the Blythes were unrepresented.
At the commencement of the hearing counsel for Mr Halse handed up three files of documents comprising 946 pages. The majority of the documents were tendered as exhibits without objection.
Each party filed written closing submissions after the hearing. The written submissions required clarification at a further hearing. The Blythes' submission was prolix and raised matters beyond the scope of the pleadings. It also raised matters for which no proper legal or factual basis existed. As an example, the submission included a claim for an order for summary judgment.
The pleadings in the action were voluminous. Given the way the issues developed in the case a more than usually detailed discussion of the pleadings follows.
As outlined, there was considerable controversy at trial as to the documents said to constitute the agreement for sale between the parties. Whilst a bundle of documents had been prepared, the Blythes sought at trial to adduce documents not contained within the bundle. I accept in this respect that the Blythes were clearly unfamiliar with legal proceedings. Three affidavits of discovery prepared by the Blythes' former solicitors had been served prior to trial. Documents were being provided by the Blythes and there were continuing issues as to discovery at late stages of the trial.
The evidence
The documents do provide context for the oral evidence.
Mr Halse was cross‑examined by Mr Blythe extensively concerning the finance application he made to fund the purchase. Mr Halse's evidence was that at about that time he expected to obtain finance of $250,000 to enable the purchase to proceed at that price. It was his evidence that he was advised by his finance broker that he could only obtain finance to a maximum of $240,000. The thrust of the proposition put to Mr Halse was that he had never intended to obtain a facility of $100,000 which would have been required to enable the purchase to proceed at a price of $250,000. It is the case that Mr Halse made written application for a loan of $90,000 on 11 November 2008 and that no loan application for $100,000 was produced. However I am not satisfied that Mr Halse sought to mislead or deceive the Blythes when the negotiations were being conducted. I do accept Mr Halse's evidence that he did at some stage seek finance of $100,000 but that eventually only a facility of $90,000 was approved.
Mr Blythe was subjected to intense cross‑examination and it was submitted his evidence should be rejected. In those same submissions reference was made to Mr Halse 'misremembering' details of conversations. There are some inconsistencies and variations between the evidence of Mr Halse and Mr Blythe. The evidence of each was in parts unreliable. Mr Blythe did produce diaries for each of the calendar years 2008 and 2009 and which were used by him to refresh his memory of events and identify dates. The cross‑examination did not affect my view as to Mr Blythe's evidence. Generally I am prepared to accept his evidence as to the events. He seemed to be genuinely attempting to give his evidence without embellishment. Mr Blythe impressed as someone concerned about the business and very conscious of the need to service his clients and, as he said in evidence, 'he didn't want to let them down'.
Mr Halse similarly was trying to give an accurate account of the events. However, his memory did not generally appear to be as good as that of Mr Blythe.
However, in many respects there was agreement between Mr Blythe and Mr Halse as to the sequence of events.
Negotiations for sale of QB7
The negotiations and discussions in relation to the sale of QB7 were protracted. There were a number of telephone calls going back and forth in August and September 2008.
Mr Halse's evidence was that in order to secure finance for the purchase supporting documents were required. Two letters dated 2 October 2008 were prepared. One was signed by Mr Halse and the other by Mr Blythe.
Mr Halse's letter reads:
07.10.08
I Paul Halse have agreed to purchase from JG & MV Blythe trading as Quick Brick Cartage a Brick Carting unit with indefinite full time work for $250000.00.
The unit includes:
A)1999 Freightliner Argosy.
B)1998 Vawdrey Triaxle Brick Trailer.
C)1995 Landini Brick Tractor.
Yours Sincerely
Paul Halse
Mr Blythe's letter reads:
JG & MV Blythe
Trading as Quick Brick Cartage
07.10.08
PO Box 415
Midland WA 6936
TEL: (08) 29553477
FAX: (08) 92553488
MOB: 0418 910 558
To whom it concerns,
My name is John Blythe from JG & MV Blythe trading as Quick Brick Cartage.
Paul Halse is purchasing one of our brick carting units, which includes Prime Mover, Triaxle Trailer and Brick Tractor. In doing so we will supply indefinite guaranteed full time work.
We have supplied supporting income of this unit and I believe that Paul will be able to increase the over all turnover, because he will be an owner/operator.
Yours Sincerely
John Blythe
Managing Director:
It is sufficient to note at this stage that Mr Blythe's letter referred to the 'supply of indefinite full‑time work' and that there was no reference to the value of that work being $5,000 per week or any sum.
Following signature the letters were given by Mr Halse to his finance broker to support the application for finance.
As part of obtaining finance for the purchase Mr Halse was required to obtain a valuation of the unit. By letter dated 23 October 2008 Gregsons Auctioneers & Valuers provided a gross auction valuation and market valuation to Westpac Banking Corporation for the truck, trailer and tractor of $123,000 and $188,000 respectively. The Blythes admit that the market valuation of the unit was $188,000.
Mr Halse prepared a letter dated 23 November 2008 addressed to the Blythes. By that stage he had received advice from his finance broker that he needed to obtain confirmation of 'guaranteed work that will amount to $5,000 to $7,000 per week'. The letter (23 November 2008) which Mr Halse gave to his finance broker contained a list of Mr Halse's requirements in relation to the 'truck, trailer and brick tractor we are purchasing'. The letter also referred to a request for a 'minimum of $1,600 net per week until settlement.'
The letter of 23 November 2008 contained the following reference to work to be supplied:
There is to be Full time guaranteed work that will amount to a minimum of $5,000 excluding GST per week for the next 5 years. This is to include annual CPI increases over the 5 year period.
There is no reference in the letter to the purchase price for QB7.
The letter contained provision for the signatures of Mr Halse and Mr Blythe but was never signed. When asked about the letter Mr Halse gave evidence that it was a draft and could not remember what had happened to it. The reference to the amount of minimum work was $5,000 excluding GST.
Mr Halse in his evidence produced an unsigned document dated 25 November 2008 entitled 'Service and Maintenance Agreement' which he had prepared. It referred to work to be done on QB7 before and after settlement and reads:
Service and Maintenance Agreement
To JG & MV Blythe
Trading as Quick Brick Cartage
ABN: 58 577 239 463 Date: 25 November 2008
I John George Blythe agree to rectify all of the below mentioned items concerning the truck, trailer and tractor for Paul and Marcalee Halse ABN 53 668 405 259, as discussed at the group meeting on Sunday the 23rd of November 2008.
The part 'A' items are to be fixed prior to settlement and the part 'B' items within 2 weeks of settlement.
If the part 'A' items work is not completed by settlement then Paul Halse has the option to hold back a total of $10,000 dollars until such time the work is completed.
A loan truck of equivalent standard will be supplied at no charge to Paul Halse for the duration of how long it takes to rectify the concerns mentioned as to not interrupt the income for Paul Halse.
PART 'A' TRUCK
•Oil leak. Sump gasket needs replacing.
•Oil leak. All 3 gaskets on the timing cover area need replacing i.e.
1.Timing covers plate to block needs replacing.
2.Timing covers to plate needs replacing.
3.Front timing cover gasket needs replacing.
(NB: Are these 3 items still covered by warranty to you from who ever installed the new head?)
•Both PTO covers (bottom and top) on gear box are leaking and needs replacing.
•Front diff input shaft seal is leaking and the bearing has excessive play needs to be repaired or replaced.
•Repair gear box linkages. Also need to have Freightliner do assessment after installation regarding gear selection – Reason for this is, it is often difficult to select 1st and 5th and often isn't smooth into 6th. 3rd, 7th and 8th seem fine.
•Replace tyres when due including steer tyres (steer and rear drives due now).
•Right hand rear brake's drums and shoes need replacing it is very glazed and has a huge lip unable to be machined. (If it gets much worse it could crack).
•Right hand rear FRONT brakes just needs the shoes replaced.
•Air conditioner to be fixed.
Error Message 'AC Controller No Response 190s 254 07'
•Registration to be in date.
PART 'A'
•Replace front tyres only.
•Registration to be in date.
PART 'B' TRUCK
•Rear diff cover has a crack in the casing and need to be repaired/welded.
•Cab over electric motor not switching and pump to be checked and repaired if required – very hard to operate pump. It took 2 men to open.
•All external lights and all dash lights to be in working order.
•Spot lights wiring is damaged. Fix or replace.
•Cigarette lighter not working. Fix or replace.
•Heater linkage under the hood not working. Fix or replace.
•Check for primary air dump valves – can only see secondary.
•Passenger electric window is slow and stiff – check and service.
•Passenger side facing down mirror glass loose.
•Driver's indicator intermittent – lose [sic] wire.
•Pyrometer plus front diff temp gauge to be fixed.
•Small horn not working. Needs to be fixed.
•Registration in date.
PART 'B' TRAILER
•Replace with new tyres where required. (some due now)
•Supply all wheel nuts.
•All lights to be fixed and re-attached where required.
•Ramps to be repaired as required.
•Side gates to be repaired as required.
•Registration to be in date.
PART 'B' BRICK TRACTOR
•All lights and wiring to be fixed.
•Hand brake not working correctly – Possible adjustment needed.
•Hydraulics to be checked for leaks repair or rectify.
•Registration to be in date.
•Cooling system requires attention.
•Fuse cover still missing.
Purchaser Vendor
Full Name: Paul James Halse Full name: John George Blythe
Sign: Sign:
_____________________ ______________________
Date: Date:
_____________________ _______________________
Witness Witness
Full Name: Full name:
Sign: Sign:
_______________________ _________________________
Date: Date:
_______________________ _________________________
It was the evidence of Mr Halse that he gave a copy of the 25 November 2008 letter to Mr Blythe and to his finance broker. It was never signed and it was Mr Halse's evidence that there was an amended agreement prepared and entered into.
The letter of 25 November 2008 refers to a meeting held on 23 November 2008. Apart from referring to there having been such a meeting, Mr Halse was unable to give any precise or detailed evidence as to what had occurred. Mr Blythe in his evidence said that there were 'discrepancies in a lot of that stuff' referring to the many drafts of documents. Mr Blythe by reference to his diary said there had been a meeting on 29 November 2008 at which there had been 'no talk of 240', being a reference to a purchase price reduction from $250,000 to $240,000.
It was the evidence of Mr Halse that he had spoken to Mr Blythe and there had been an agreement to reduce the price to $240,000 with a reduced number of items that were to be rectified as part of the agreement.
The agreement
Mr Halse's case is framed around the allegation that there was an oral agreement for sale of the unit which was recorded in the 'Sub Contractor Guaranteed Work Agreement' dated 10 December 2008.
The pleaded terms of the agreement are that:
3(a)The Plaintiff agreed to purchase from the Defendant and the Defendant agreed to sell to the Plaintiff:
(i)a 1999 Freightliner Argosy truck registration number 1CRK 997
(ii)a 1998 Vawdry trailer, registration number 1THV 801;
(iii)a 1995 brick tractor, registration number 1ATS 004
('the Equipment');
(b)The Plaintiff agreed to pay the sum of $240,000 ('the Purchase Price');
(c)The Defendant agreed to provide:
(A)assistance and training on how to secure loads, quote on jobs and work out delivery structures; and
(B)full time work that would amount to a minimum of $5000 including GST ('the Minimum Sum') per 5 day week (excluding holidays, sick days and public holidays)
for the five years following the date of the Subcontractor Agreement ('the Work and Assistance').
The Blythes deny Mr Halse's allegations in relation to the subcontractor guaranteed work agreement. An affirmative case is pleaded; that there was a partly written and partly oral agreement for the sale of equipment. The Blythes specifically plead that there were material express terms of what is defined as the sale contract that:
(a)Mr Halse would pay the Defendant the sum of $250,000 for the Equipment ('the Sale Contract Purchase Price').
(b)Mr Halse would pay $10,000 of the Sale Contract Purchase Price only if the Defendant had complied with the obligations of the Defendant as set out in the Service Document ('the Service Obligations').
(c)The sale of the Equipment by the Defendant would be the sale of a going concern for the purposes of the GST legislation such that the Defendant would not be required to remit GST based on the Sale Contract Purchase Price.
(d)Mr Halse would provide brick delivery services for the Defendant ('the Services').
(e)There was to be full time guaranteed work that would amount to a minimum of $5,000 inclusive of GST per 5 day week Monday to Friday ('Work Week') except where during the relevant week Mr Halse was on holidays or sick or there was a public holiday or were public holidays ('the Halse Minimum Work Term').
(f)The Defendant would pay Mr Halse for work done by Mr Halse for the Defendant 2 weeks in arrears ('the Payment Term').
Paragraph 6 of the amended substituted statement of claim reads:
In or about December 2008, the plaintiff paid $236,688.45 of the purchase price to the defendant pursuant to subcontractor agreement.
The Blythes plead that the agreement for sale was varied. Paragraph 6 of the defence reads:
Save to admit that Mr Halse made the payments pleaded, the Defendant denies the allegations in paragraph 6 of the Statement of Claim. The Defendant says further that:
6.1In or about December 2008 Mr Halse and the Defendant varied the Sale Contract whereby in consideration of the Defendant accepting the sum of $240,000.00 for the Sale Contract Purchase Price ('the Varied Sale Contract Purchase Price') the Defendant would not have to fulfil the Service Obligations.
6.2In breach of the Sale Contract Mr Halse failed to pay to the Defendant the sum of $3,313.55 due for the Varied Sale Contract Purchase Price.
6.3In the alternative if, which is denied, the Plaintiff entered into the Subcontractor Agreement with the Defendant then in breach of the Subcontractor Agreement the Plaintiff failed to pay to the Defendant the sum of $3,313.55 due for the Purchase Price.
The document dated 10 December 2008 tendered in Mr Halse's case is as follows:
Sub Contractor Guaranteed Work Agreement
To JG & MV Blythe
Trading as Quick Brick Cartage
ABN: 58 577 239 463 Date: 10 December 2008
I John George Blythe agree and commit to the below mentioned items for Paul and Marcalee Halse AB. 53 668 405 259, as discussed at the group meeting on Sunday the 23rd of November 2008.
• The truck, trailer and brick tractor to be in full legal working order at hand over
• The amended purchase price is $240,000 inc GST (going concern)
• Quick Brick is not to retire or be sold off during the 5 year period (subject to unforeseen circumstances), but may be offered to Paul Halse as first option to purchase at a later date
• There is to be Full time guaranteed work that will amount to a minimum of $5000 including GST per 5 day week Monday to Friday paid
weekly2 weeks in arrears for the next 5 years. Any weekend work would be additional to this figure subject to availability. The full time work is to be split between standard loads and bulk loads between QB and Paul Halse. The loads will be based on what is suited to either truck i.e. quantities. This is to ensure that all the work gets completed in the required time frame.• The loads supplied are to conform with the load limits of the truck/trailer as well as OHS (OCC health and safety) and Main Roads regulations
• Exceptions to this guarantee will be holidays and sick days taken by Paul as well as short weeks due to public holidays. Paul will how ever have the option to work more hours on short weeks to make up the income short fall if he so decides.
• The truck, trailer and tractor are able to be parked at Quick Bricks (QB) yard during the 5 year period at no charge and Paul to have unrestricted access 24/7.
Paul requires training procedures on how to safely secure loads, quote on jobs and work out delivery structures.
Obligations to be committed to by Paul Halse are:
• Paul is to complete a full fluid and filter service within the first 4 week period from settlement and will also ensure all mechanical service intervals are met at his expense.
• Paul is to be well groomed at all times during work.
• Paul is to commit 100% to full filling client requirements and satisfaction.
• Paul is to commit to self improvement via ongoing on the job learning.
The document comprises two pages. The original was eventually produced in evidence. It has initials of the parties on the first page. The signatures of Mr Halse and Mr Blythe appear on the second page and are witnessed.
The service and maintenance agreement dated 10 December 2008 tendered in Mr Halse's case is in the following terms:
Service and Maintenance Agreement
To JG & MV Blythe
Trading as Quick Bricks Cartage
ABN: 58 577 239 463 Date: 10 December 2008
I John George Blythe agree to rectify all of the below mentioned items concerning the truck, trailer and tractor for Paul and Marcalee Halse ABN 53 668 405 259.
All items listed below are to be fixed prior to settlement.
TRUCK
• Worn tyres to be replaced.
• Registration to be in date. (1CRK997)
TRAILER
• Supply all wheel nuts.
• Ramps to be repaired as required.
• Side gates to be repaired as required.
• Registration to be in date. (1THV801)
BRICK TRACTOR
• Pulleys to be fixed.
• Fuse cover still missing. To be replaced.
• Replace front tyres only.
• Registration to be in date. (1ATS004)
The document comprises two pages. It has initials of the parties on the first page. The signatures of Mr Halse and Mr Blythe appear on the second page and are witnessed.
Several points arise concerning the documents dated 10 December 2008 which Mr Halse gave evidence he had signed on 22 December 2008.
First, each document is initialled on the first page.
Secondly, Mr Halse's signature appears on page 2 of each document. Beneath the typed words 'John George Blythe' appears a signature and a date of 11 December 2008. Mr Blythe gave evidence he signed the subcontractor guaranteed work agreement document dated 10 December 2008.
Thirdly, beneath each signature appears the handwritten name of a witness and beneath that a signature and a date. The named witnesses to each document are the same.
Fourthly, the subcontractor guaranteed work agreement bears a State Revenue Department date stamp of 12 November 2009.
Fifthly, the work required to be done by the Blythes pursuant to the service and maintenance agreement dated 10 December 2008 was significantly less than the work required to be done as outlined in the letter dated 25 November 2008.
The oral evidence in relation to the agreement between the parties was at times confusing and difficult to follow. That observation applies equally to the evidence of Mr Halse and Mr Blythe.
Mr Halse's memory of events was in parts incomplete.
On occasions during the trial and in closing submissions Mr Blythe asserted that the final agreed sale price was $250,000 and not $240,000. He was cross‑examined at length in relation to that assertion.
It was Mr Blythe's evidence that in late December 2008 he was told that Mr Halse could only raise $90,000 and not $100,000 to complete the purchase. It was his evidence that he told Mr Halse's broker that he (Mr Blythe) could not be held to the agreement and as far as he was concerned any obligation to perform service items disappeared. By that date however he had arranged for replacement tyres to be fitted, the cost of which ultimately formed part of his set off. It was his evidence that the agreement to effect repairs was cancelled when 'he (Mr Halse) didn't come up with the other $10,000'.
As part of his case Mr Blythe mentioned that documents may have been re‑typed. When asked in cross‑examination about the document entitled 'Sub Contractor Work Agreement' he said that when he signed 'the document said $250,000'. This issue was pursued at length in cross‑examination. When asked about whether his signature had been forged his evidence was 'possibly yes'. Mr Blythe was adamant he had not made things up in the course of his evidence. As I have said, the events occurred a number of years ago. The negotiations were extensive and there were many drafts. I am not satisfied that signatures have been forged on documents or documents re‑typed.
Mr Blythe's recollection as to the documents and what he had signed is unreliable. His evidence needs to be understood in the context of him attempting to explain what he perceived to be inconsistencies. As far as he was concerned the price was not reduced from $250,000 to $240,000 until late December 2008. On that basis he could not reconcile the date of execution of the document. I do not accept that he was trying to mislead in giving his evidence in this respect as was suggested in Mr Halse's submissions.
In the course of addressing the court Mr Blythe said that it was 'accepted that the 240 was the amount'. He also stated that the difference of $10,000 between the two prices was not claimed. That was said before he gave evidence. There was no document bearing the signatures of the parties evidencing a purchase price of $250,000.
The price to be paid was originally $250,000 as witnessed by Mr Halse's letter of 20 October 2009. At some time thereafter Mr Halse ascertained he was unable to obtain finance in that sum. The purchase price was then reduced to $240,000 on the basis that the Blythes were required to rectify a reduced number of defects in QB7.
Having carefully reviewed the documents and the evidence of Mr Blythe and Mr Halse, I am satisfied that there was an agreement between the parties as asserted by Mr Halse. The purchase price was varied from $250,000 to $240,000. The agreement is evidenced by the executed 'Sub Contractor Guaranteed Work Agreement' dated 10 December 2008 (the agreement).
The handover of QB7
To complete the purchase for the price of $240,000 Mr Halse obtained two loans.
The first loan of $150,000 required the provision of security over equipment. Mr Halse provided his home as security for the second loan of $90,000.
Prior to payment of the balance of $90,000 by Mr Halse to Mr Blyth, there was a discussion between them as to the shortfall in the payment caused by the financier's deduction of fees. This was at a time when Mr Halse had commenced operating QB7. It was Mr Halse's evidence that Mr Blythe had agreed to defer the payment until he was earning a good income. It was his evidence that that conversation was the last he heard of the shortfall until what he described as the 'flare up in May'. There was no evidence of any demand for that shortfall until the meeting in May 2009. I am satisfied on the basis of the evidence of Mr Blythe that he did not ask for any of the money outstanding to him until the May meeting.
Monies owing by Mr Halse to the Blythes
The Blythes claim that Mr Halse is indebted to them in the sum of $10,981.21 and seek to set that sum off from any damages awarded. Relevantly, par 22 of the defence reads:
22.1In the period November 2008 to February 2009 the Defendant lent to Mr Halse sums totalling $4,260.52 ('the Halse Loans').
Particulars of the Halse Loans
(a)The sum of $3,070.00 on or about 11 December 2008 for a payment due to National Westminster for finance.
(b)The sum of $800.02 on or about 14 December 2008 for fuel.
(c)The sum of $390.50 on or about 5 February 2009 for ramp repairs.
22.2In the alternative, if, which is denied, the Plaintiff entered into the Subcontractor Agreement with the Defendant then the Defendant lent to the Plaintiff the sum of $4,260.52 ('the Plaintiff Loans').
Particulars of the Plaintiff Loans
The Defendant repeats the particulars to paragraph 22.1.
22.3In the period November to December 2008, prior to the variation of the Sale Contract pleaded in paragraph 6.2 herein, the Firm performed some of the Service Obligations to the value of $3,407.14.
Particulars
(a)The sum of $740.00 on or about 27 November 2008 for 2 steer tyres for the truck.
(b)The sum of $1,400.04 on or about 16 December 2008 for 4 drive tyres for the truck.
(c)The sum of $36.00 on or about 17 December 2008 for disposal of 3 worn drive tyres for the truck.
(d)The sum of $1,231.10 on or about 22 December 2008 for 2 steer tyres for the tractor.
22.4By reason of the matters pleaded in paragraph 23.3 herein Mr Halse has received a benefit at the Defendant's expense.
22.5In the alternative, if, which is denied, the Plaintiff entered into the Subcontractor Agreement with the Defendant then by reason of the matters pleaded in paragraph 22.3 herein the Plaintiff has received a benefit at the Defendant's expenses.
22.6By reason of the variation of the Sale Contract pleaded in paragraph 6.1 herein it would be unjust for Mr Halse to retain the benefit pleaded in paragraph 22.4 herein or, in the alternative, for the Plaintiff to retain the benefit pleaded in paragraph 22.5 herein.
22.7The sums of $4,260.52 and $3,407.14 totalling $7,667.66 have not been paid by Mr Halse or the Plaintiff to the Defendant.
22.8If, which is denied, the Defendant is liable to the Plaintiff for any of the sums claimed, then the Defendant sets off against that sum so much of:
22.8.1the sum of $3,313.55 owing for the Sales Contract Purchase Price; or
22.8.2in the alternative, if, which is denied, the Plaintiff entered into the Subcontractor Agreement with the Defendant, the sum of $3,313.55 owing for the Purchase Price;
22.8.3the sum of $4,260.52 pleaded in paragraphs 22.1 or 22.2 herein; and
22.8.4the sum of $3,407.14 pleaded in paragraphs 22.3 herein
which together do not exceed that sum.
The sum of $10,983.21 comprises $4,260.52 (par 22.2), $3,407.14 (par 22.3) and $3,313.55 (par 22.8).
Mr Halse admits that he is indebted to the Blythes in the sum of $7,180.98 comprising:
(a)$3,067.41 (not $3,070 as pleaded), being the first payment on Mr Halse's equipment loan which was made by Mr Blythe;
(b)$800.02 for fuel; and
(c)$3,313.55, being bank fees deducted in relation to the $90,000 loan.
Mr Halse's case is that the sum of $3,407.14 (par 22.3) relates to items which formed part of the work required to be done pursuant to the service and maintenance agreement dated 10 December 2008.
The service and maintenance agreement does make reference to items claimed as part of the Blythes' set‑off. Specifically, tyres (pars 22.3(a), (b), (c) and (d)) and ramp repairs (par 22.1(c)) are referred to.
Paragraphs 22.4 ‑ 22.6 of the amended defence assert an unjust enrichment claim as the basis for the Blythes' entitlement to payment.
Mr Blythe maintained that Mr Halse was indebted to him in the sum of $390.90 in relation to repairs to a ramp. The repairs carried out pursuant to the service and maintenance agreement were agreed to be performed by the Blythes.
The ramp repairs and tyre replacements are covered by the service and maintenance agreement and, accordingly, there can be no claim in unjust enrichment. Accordingly, the sum of $3,407.14 is not recoverable by the Blythes from Mr Halse.
In the circumstances the Blythes are entitled to a set off of $7,180.98 against any damages to which Mr Halse may be entitled.
Mr Halse's non‑payment of the balance of the purchase price of $3,313.55 is relied upon by the Blythes as a repudiation of the agreement. In submissions each party referred to the effect of the non‑payment. The breach constituted by non‑payment occurred in December 2008 or January 2009. The Blythes did not seek to terminate the agreement because of the non‑payment. In the period between January 2009 and May 2009 Mr Halse was doing the work provided by the Blythes pursuant to the agreement. The Blythes were making payment as required by the agreement. The agreement proceeded notwithstanding the non‑payment of $3,313.55. The conduct of the Blythes subsequent to the non‑payment was consistent only with an affirmation of the agreement and an election not to terminate because of the breach by non‑payment by Mr Halse.
The conduct of the parties post‑agreement
Operation of the unit by Mr Halse
Between December 2008 and May 2009 Mr Halse operated QB7. Each morning Mr Halse would attend the Blythes' yard. Prior to the arrival of Mr Halse, Mr Blythe would leave written delivery instructions for him in the truck. Mr Halse would then do the deliveries. When the work was completed Mr Halse would return QB7 to the Blythes' yard where it would remain overnight.
Between December 2008 and May 2009 Mr Halse gave invoices to the Blythes for the work he had done. Apart from what were described as the invoices in issue, Mr Halse was paid for the work he did.
Complaints by Mr Halse in relation to the Blythes' conduct
Mr Halse in his evidence referred to a number of issues which he contended arose during the course of his operation of QB7.
First, the level of training he had received. Secondly, the volume of work he was receiving and, thirdly, payment of invoices. It is necessary to consider each of these matters in turn.
The evidence of Mr Halse in relation to the level of training he received was generally unconvincing. Mr Halse gave evidence that he had communications with Mr Blythe because he did not know what he was doing. He explained in his evidence that he had never delivered bricks before and that he did not know how to properly load the truck. He gave evidence he would have to look and watch the way other drivers secured their loads.
Mr Halse's evidence as to lack of training needs to be considered in the context that he did have a period prior to the purchase when he was an employee in receipt of $1,500 per week. He also had had an opportunity to observe Mr Blythe perform the duties required for a short time during the course of negotiations. He had been able to obtain a licence and operate QB7 without incident. For example, there was no evidence of loads falling from the truck because of being inadequately secured. Between December 2008 and June 2009 Mr Halse had performed a number of deliveries using QB7.
The Blythes' case was that Mr Halse had been supplied with sufficient training. Mr Blythe's evidence in relation to training provided to Mr Halse was that Mr Halse had been learning the job when he had been employed by him. It was Mr Blythe's evidence that he demonstrated to Mr Halse how the work was to be done. He explained in evidence that in view of the cost of the equipment which had not been paid for by Mr Halse he would not have allowed him to 'hop into your equipment'.
Mr Blythe was clearly concerned about the protection of the business and the clients it had developed. Contained in the agreement are what are described as 'obligations to be committed to by Paul Halse'. These included a requirement that he was well groomed, committed to 'fulfilling client requests and satisfaction' and committed to 'self improvement'.
In the circumstances I am satisfied that adequate and reasonable training was provided by the Blythes to Mr Halse. In any event it is not suggested in the pleading that there was by a failure to train a breach of the agreement which would sound in damages.
Mr Halse gave evidence that on several occasions he had complained to Mr Blythe about the volume of work he was receiving. His evidence was that Mr Blythe did not deal with his complaints in any meaningful way. The evidence is clear that as well as work through BGC and Atlas, the Blythes were providing work from private clients. The invoice value of the work done is referred to subsequently in these reasons. The Blythes were patient with Mr Halse in relation to the repayment of monies by him to them. There was never any dispute that the Blythes were owed money for the fees deducted, the first instalment made by Mr Blythe and fuel placed in the truck yet there was never a proposal made by Mr Halse to repay the money or any part of it to the Blythes.
I am satisfied that the Blythes' responses to complaints as to lack of work by Mr Halse were reasonable. Mr Blythe was an experienced trucking operator and regarded his business as an important asset. He was prepared to assist Mr Halse so far as possible. He provided some finance and agreed to defer registration of the transfer of QB7 to assist Mr Halse with his cash flow. Mr Blythe gave evidence that his obligation was to provide sufficient work to meet the $5,000 per week obligation. As he explained in his evidence, if he only provided $4,300 worth of work to Mr Halse he would need to pay him '$700 for doing nothing'. I accept his evidence that he would arrange the loads between himself and Mr Halse in the best way possible to ensure costs were minimized. I do not accept that the Blythes were not responsive to Mr Halse's complaints in relation to work level. In this regard, Mr Halse made no claim that Mr Blythe breached the agreement by not providing him with a minimum amount of work that would amount to $5,000 inclusive of GST per week for the period between January 2009 and April 2009.
The third matter concerns the payment of invoices. It is important to observe that save for the invoices in issue, there was no evidence of complaints as to delays in payment or non‑compliance by the Blythes with payment obligations imposed by the agreement. I accept Mr Blythe's evidence that there were no complaints made to him by Mr Halse in the period he was operating QB7 about a lack of money.
The Blythes plead that there was a term of the sale contract (as defined in the amended defence) that they would pay Mr Halse two weeks in arrears. That particular term is defined in the amended defence as the 'Payment Term'.
The defence thereafter pleads the following in relation to the 'Payment Term':
3.6Mr Halse and the Defendant varied the Payment Term to the effect that the Defendant would pay Mr Halse for work done by Mr Halse for BGC upon receipt of payment by the Defendant from BGC and, in any event, after Mr Halse had provided to the Defendant an invoice detailing the BGC work for which Mr Halse was seeking payment ('the Halse Payment Term').
Particulars of Variation
The term is to be inferred from the course of dealings between Mr Halse and the Defendant.
There then follows a second par 3.6 which reads:
If, which is denied, the Plaintiff entered into the Subcontractor Agreement with the Defendant then the parties varied the Subcontractor Agreement to the effect that the Defendant would pay the Plaintiff for work done by the Plaintiff upon receipt of payment by the Defendant from BGC and, in any event, after the Plaintiff had provided to the Defendant an invoice detailing the BGC work for which the Plaintiff was seeking payment ('the Plaintiff Payment Term').
At trial neither party attempted to reconcile the conflicting particulars. Mr Halse's case was that he was to be paid, his invoices 14 days in arrears.
Between January 2009 and May 2009 the Blythes paid Mr Halse for the work he had done. This was notwithstanding that Mr Halse had borrowed money from them. It was not until the May meeting that payment issues arose. However, as at the date of the May meeting, there was nothing outstanding by the Blythes to Mr Halse.
Meetings and communications between the parties in May 2009
Mr Halse gave evidence that on a date in early May 2009 he attended the Blythes' yard in accordance with his usual practice to collect QB7 and commence work. It was about 4.00 am and Mr Blythe was already at the yard. There was a conversation between them and Mr Blythe had said it was about time he started paying money back and then told him that he intended to 'just take $500 a week out of your – out of the invoices that I'm going to pay you and for 20 weeks'. I accept there was a meeting in early May 2009 at the Blythes' yard.
Mr Halse's evidence continued:
I said, 'You can't do that. It's not in the agreement. I don't owe you for all these other things you're trying to tell me'. And then he just burst into a big rage, yelling, he's fucking kicking at me like in the dirt cos it's all gravel. He's yelling, his voice is yelling, fucking, 'You're not going to do it you can fuck off'. And carried on, jumped in his truck and moved that one out the way, jumped in his truck and out.
Mr Halse left the yard and picked up his first load from one of the brickyards. Pausing there, Mr Halse did not assert that at any stage Mr Blythe had said the agreement was not to remain in force. There was no proposal by Mr Halse to make repayment of any of the monies Mr Blythe asserted were due.
Notwithstanding what had been discussed at the meeting at the yard, the Blythes continued to supply work to Mr Halse, which Mr Halse carried out. In the week ending 17 May 2009 the invoice value of work done by QB7 for Atlas and BGC totalled $4,398.96 exclusive of GST.
It was Mr Halse's evidence that he subsequently received a telephone call on a Saturday night. He did not answer the call but described the message left as abusive. The voice recording of the message was received in evidence. There is no issue that it is Mr Blythe. Whilst the tone of the message is not entirely conciliatory, it could not be described as abusive in the circumstances. There is no abusive content to the message. The message included a request 'to arrange a meeting tomorrow'. In the message there is a reference by Mr Blythe to payment of outstanding monies by Mr Halse. Again, there is no suggestion from Mr Blythe that the agreement would not remain in force.
Mr Halse did not return any of Mr Blythe's calls. It was his evidence that after the incident at the yard he did not 'need to put myself or – or anyone close to me at any more harm. I just – I couldn't take it any more'. He said he was not getting paid and did not feel he needed to be abused any more. He then referred in his evidence to getting to the point where he 'couldn't fund it. I'd run out of all – and I was about to go under'. This evidence, in my view, needs to be considered in the light of there being no evidence of any amount outstanding as at the date of the May meeting. Further, no sum became due until later in May 2009. Up until the time of the meeting I accept that the communication between the parties was reasonable. I accept Mr Blythe's evidence that there had been 'no confrontations, no aggro'. Mr Blythe gave evidence that he 'could get uptight'. However there had always been an ability to communicate with Mr Halse.
Mr Blythe was concerned that he could not communicate with Mr Halse. Not making payment of the $2,176.61 due on 18 May 2009 was in his view the only way to deal with the matter in the sense of it being a way to re‑establish communication.
In his evidence Mr Halse refers to not getting paid and that 'it was around the 20, 19, 20 thousand I think it was'. The evidence establishes that of the $19,464.47 claimed to be due only $11,415.88 was due as at 28 May 2009 when Mr Halse purported to terminate.
Mr Halse, as he stated in his evidence, was having trouble discharging his financial obligations as at May 2009. He had not paid the Blythes and Mr Blythe's suggestion of a set-off of $500 per week would have placed added pressure upon his financial position.
Whilst the date of Mr Blythe's telephone message is not precisely identified, it is clear that it was made subsequent to the letter dated 22 May 2009 which Mr Blythe received from Mr Halse's lawyers. That was Mr Blythe's evidence, which I accept. He made the telephone call after he received the first letter from Mr Halse's solicitors.
When asked to identify specifically the date of the meeting at the Blythes' yard, Mr Halse's evidence was that it took place in early May. It was his evidence that following the meeting he had continued to attend the Blythes' yard in the same way as he had done before the call. Both parties regarded themselves as bound by the agreement notwithstanding what had been discussed. Load documents were left in QB7 by Mr Blythe and Mr Halse had done the work required.
Correspondence between the solicitors in May 2009
The letter from the solicitors acting for Mr Halse of 22 May 2009 was in the following terms:
BD:KH:2842
22 nd May 2009
The Proprietor
Quick Brick Cartage
PO Box 415
MIDLAND WA 6936
By facsimile: 9255 3488
Dear Sirs
RePAUL HALSE – CONTRACT TO PURCHASE TRUCK WITH GUARANTEED WORK SUPPLIED
We act for Mr Paul Halse with respect to the above contract which we have sighted. The agreement clearly was as evidenced in the Contractual documents that you supplied a truck and guaranteed work of $5,000.00 per week which you have not met. You are therefore in breach of the Contract and our client reserves all his rights in Law and in Equity. You will be hearing more from us on this.
However, we understand there is an immediate problem in that as of the 18th of May you owed him $2,176.61 inclusive of GST. You have no right in Law or Equity to hold that money and if you do not pay it to him by next Monday we have advised him to simply issue a Writ for its recovery.
Hopefully this will not be necessary, as it will have deleterious effects upon your credit reference.
There is also a further problem in that you tend to be somewhat abusive and this must stop. If it does not we have advised our client to seek a Restraining Order against you immediately. Again, hopefully this will not be necessary as it borders on childish.
Yours faithfully,
ALEXANDERS
Blair Doncon
The letter of 22 May 2009 (a Friday) was transmitted by facsimile to Mr Blythe at 15.45 am on that date. It does not assert that any conduct of the Blythes constituted a repudiation. Importantly, what is foreshadowed is the issue of a writ of summons seeking recovery of $2,176.61 inclusive of GST. Whilst the letter refers to Mr Blythe not having 'supplied … guaranteed work of $5,000 per week', there has, as I have said, never been a claim made in that respect. There is no reference to any election, notice of termination of or intention to terminate the agreement. Reference is made to Mr Blythe's alleged abusive conduct which is described as bordering on childish.
Subsequent to receipt of the letter of 22 May 2009 Mr Blythe did, as outlined, leave a message on Mr Halse's answering machine. There was no response by Mr Halse to Mr Blythe's request for a meeting and, as noted, he did not return his telephone calls.
The Blythes consulted solicitors who responded to Mr Halse's solicitors by letter dated 26 May 2009 (a Tuesday) as follows:
26 May 2009
Alexanders
Lawyers
1st Floor
Irwin Chambers
16 Irwin Street
PERTH WA 6000
Dear Sirs
PAUL HALSE
We act for John and Michelle Blythe.
Our clients have provided to us a copy of your letter of 22 May 2009.
Our clients have also provided to us a variety of material from which it would appear that the contract(s) between our respective clients are partly in writing and partly oral.
Our client's position is that your client is in breach of its obligations pursuant to the sale agreement and as at 12 May 2009 your client owed our client in a sum in excess of $20,000.
Until we are able to take full instructions from our clients, we request that your client not take any precipitous action in relation to this matter.
In the meantime, we request that you particularise your assertion that our clients are in breach of the contract.
Yours faithfully
CAHILL BILLINGTON
[Signature]
On 28 May 2009 Mr Halse's solicitors wrote to the Blythes' solicitors as follows:
Our Ref: BD:KH:2842
Your Ref
28th May 2009
Cahill Billington Lawyers
PO Box 8362
Perth Business Centre
PERTH WA 6849
By facsimile: 9228 4253
URGENT
Dear Sirs
Re PAUL HALSE
Thank you for your letter of the 26th of May.
We are seeking our client's further instructions.
However it is quite clear that in breaching the contract by not paying our client for the work he has done pursuant to the agreement it has led to the stage where our client must of necessity to survive get work elsewhere.
Your client is in breach of the agreement simply holding funds that are owed to our client. He can't continue running a truck with all the attendant expenses and not be paid.
Yours faithfully,
ALEXANDERS
Blair Doncon
CC: Paul Halse
The letter made no reference to any conduct said to constitute a repudiation. It made no demand for payment and did not identify what amount was said to be outstanding. There was no indication that Mr Halse would cease to attend the Blythes' yard to obtain work. There was no specific acceptance of any alleged repudiatory conduct of the Blythes or that Mr Halse was in the circumstances entitled to terminate or had terminated the agreement.
Mr Halse ceases operating QB7
It was Mr Halse's evidence that he continued to operate QB7 notwithstanding that he was not being paid by the Blythes. He had continued to operate QB7 with work provided by the Blythes until on or about 2 June 2009.
Mr Halse gave evidence that Mr Blythe did not ever deduct the $500 that was referred to.
Following his solicitors' letter of 28 May 2009 Mr Halse contacted a number of loading yards in an endeavour to obtain work. He did obtain some work from BGC during June 2009 and July 2009. Mr Halse gave evidence that in June/July he was 'going backwards too fast. I don't – I didn't want to go bankrupt'. He thereafter began to apply for jobs and by about July 2009 he had secured a position with Osiris.
The position of the parties after May 2009
On or about 2 June 2009 QB7 was removed by Mr Halse from the Blythes' yard. It was his evidence he did this because he was not being paid.
Mr Blythe's evidence was that subsequent to receipt of the first letter from Mr Halse's solicitors he had tried to arrange a meeting with Mr Halse. His evidence continued:
Right? - As I said, I tried to organise a meeting, and I didn't - -
Yes, I've been through all those dates? - Yeah. So - -
So during - - ? - So basically I withheld the money still, because I still - I was trying to get him to communicate with - him, and he still wouldn't communicate. So in the - and that's when it went – that's when it went to lawyers, and so basically I basically felt, 'Well, blow you, Charlie. You owe me the money, so I'll with – I'll withhold it', and - and then, you know - - -
That's where it is? - Sort it now, and basically that's where it is. Sort it out between - the lawyers can sort it out. And - and then it to-ed and fro-ed for about six months till about - I think it was about September '09, and then that was it. Never heard another thing. And then all of a sudden in March, I think it was, of '010, that's when Kott Gunning came onboard and hit us with the litigation of 265, and - -
With the writ?‑‑‑Yeah. Obviously - - -
That's when you were served with the writ? - Yeah, yeah, with a writ, yeah.
All right. Yes, I understand? - So we - we obviously thought, well, obviously the case had been dismissed, so obviously the other lawyers obviously thought, 'Yeah, we don't – don't have a case', and so, yeah, never heard another thing from it, and that was it.
On 14 July 2009 the Blythes' solicitors wrote to Mr Halse's solicitors as follows:
14 July 2009
Alexanders Lawyers
1st Floor
Irwin Chambers
16 Irwin Street
PERTH WA 6000
Attention: Blair Doncon
BY FACSIMILE TRANSMISSION
Dear Sirs
PAUL HALSE
We refer to our fax of 19 June 2009.
We note that we have not to date received any response to our client's proposal.
When can we expect to receive a response?
In the meantime would you please make the necessary arrangements for your client to deliver to this office the keys in his possession to our client's yard/property and advise what arrangements your client wishes to make to collect those items stored in the container on our client's property.
Yours faithfully
CAHILL BILLINGTON
The breaches relied upon
Paragraph 10 of the amended substituted statement of claim pleads that in breach of the agreement the Blythes have not paid Mr Halse $19,464.47 for work done by him.
The details of the six unpaid invoices are as follows:
| Customer | Date work done as specified on invoice | Invoice Date | Amount | Specified Due Date |
| BGC | 1 May 2009 – 15 May 2009 | Undated | $9,239.27 | 25 May 2009 |
| BGC | 16 May 2009 – 31 May 2009 | Undated | $6,396.24 | 9 June 2009 |
| Atlas | 28, 29, 30 April 2009 – 1 May 2009 | 4 May 2009 | $2,176.61 | 18 May 2009 |
| Atlas | 12 May 2009 | 13 May 2009 | $317.34 | 29 May 2009 |
| Atlas | 21, 22 May 2009 | 22 May 2009 | $628.91 | 15 June 2009 |
| Atlas | 25, 26, 27 May 2009 | 29 May 2009 | $706.10 | 12 June 2009 |
| Total | $19,464.47 |
No part of the $19,464.47 has been paid.
On 22 May 2009, when Alexanders wrote to Mr Blythe, only the invoice for $2,176.61 which became due four days earlier on 18 May 2009 was outstanding. The invoice for $9,239.27 identified that the work had been done on 15 May 2009. On that basis the money would not have been due until a period of two weeks had expired, namely on or about 29 May 2009. The invoice as noted specified a due date of 25 May 2009.
Mr Blythe accepted that he had withheld payment of $2,176. By 22 May 2009 Mr Halse had instructed his solicitor who had written to the Blythes. Mr Blythe then made attempts to contact Mr Halse and left a message for him to ring to arrange a meeting. All attempts were unsuccessful. I accept Mr Halse did not return calls made to him by Mr Blythe.
Repudiation, terms and breach
The term 'repudiation' is used in different senses. First, it may refer to conduct which evinces an unwillingness or an inability to render substantial performance of the contract. This is sometimes described as conduct of a party which evinces an intention no longer to be bound by the contract or to fulfil it only in a manner substantially inconsistent with the party's obligations. It may be termed 'renunciation'. Secondly, it may refer to any breach of contract which justifies termination by the other party: Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd [2007] HCA 61; (2007) 233 CLR 115 [44].
Loss or damage is causally connected to a contravention of s 52 of the TPA if a misrepresentation was one of the causes of the loss or damage sustained by the claimant. The contravention need not be the only cause of the loss or damage: Henville v Walker [2001] HCA 52; (2001) 206 CLR 459, 469 [14] (Gleeson CJ), 494 [109] (Gummow J).
If a contravention of s 52 has materially contributed to the loss or damage suffered, it will be regarded as a cause of the loss or damage, despite other factors or conditions having played an even more significant role in producing the loss or damage. As long as the breach materially contributed to the damage, a causal connection will ordinarily exist even though the breach without more would not have brought about the damage. In exceptional cases, where an abnormal event intervenes between the breach and damage, it may be right as a matter of commonsense to hold that the breach was not a cause of damage. But such cases are exceptional: see Henville, 493 [106] (McHugh J).
Mr Halse's case is that he would not have entered into and completed the agreement if the representation had not been made to him. I do not accept that Mr Halse relied upon the pleaded representation and that without the representation he would not have entered the agreement. What was said about the minimum earnings of $5,000 needs to be considered in the context that the earnings had been described as an average. In the circumstances of this matter whether the reference to $5,000 was as Mr Halse said was described as an average or as Mr Blythe said was an approximation is not of significance. Either way the $5,000 minimum representation was quantified by what had been said. However, in the circumstances the conduct sought to be relied upon was not materially likely to induce Mr Halse to enter into the agreement. Mr Halse was not at all in the circumstances mislead or deceived by the Blythes.
References to a minimum of $5,000 could not have been reasonably understood as anything other than an average figure.
I am not satisfied the pleaded misleading or deceptive conduct was a cause of Mr Halse entering into the agreement and thereby suffering or likely to suffer loss or damage. In summary, I am not satisfied that Mr Halse was induced to enter into the agreement by reason of Mr Blythe's conduct.
I am not satisfied that in reliance on that conduct and induced thereby Mr Halse entered into the agreement. He, accordingly, would not be entitled to any damages.
Assessment of damages
In view of my findings, it is strictly unnecessary to assess the quantum of damages which would be recoverable by Mr Halse in either his contractual or statutory claims. However I consider that I should do so provisionally in case such an assessment is required.
The schedules of damages each premised upon an acceptance of the evidence of Mr Halse. In this respect his evidence and the consequent quantification of damages were essentially unchallenged.
The compensation principle in contract provides that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed: Robinson v Harman [1848] Eng R 135; (1848) 1 Exch 850, 855; [1848] 154 ER 363 (Parke B).
In Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54; (1991) 174 CLR 64 Mason CJ and Dawson J said (80):
The onus of proving damages sustained lies on a plaintiff and the amount of damages awarded will be commensurate with the plaintiff's expectation, objectively determined, rather than subjectively ascertained. That is to say, a plaintiff must prove, on the balance of probabilities, that his or her expectation of a certain outcome, as a result of performance of the contract, had a likelihood of attainment rather than being mere expectation.
In his evidence Mr Blythe gave details of the expenses relating to the operation of QB7 and his earnings subsequent to the date he purported to terminate the agreement. By reference to bank statements for the period between 1 January 2009 and 31 March 2009 Mr Halse calculated his business expenses to be $20,991.56. Mr Halse's unchallenged evidence was that there was no reason why that level of expenditure would not have continued.
I accept that the contractual damages should be assessed as submitted by Mr Halse, namely that had the Blythes complied with the agreement, he would have had an income of $5,000 per week (less expenses and taxation) until 10 December 2013. However no claim for damages is made for any period subsequent to 30 April 2012. Accordingly, the contractual damages would have been assessed to 30 April 2012 as the difference between $5,000 per week and what Mr Halse actually earned. There is no issue as to the calculations (as per schedule of loss and closing submissions) made on behalf of Mr Halse which would have resulted in an award of $203,286.75.
Mr Halse delivered a schedule of damages in relation to the claim pursuant to the FTA seeking $149,535.52 inclusive of interest.
The measure of damages under s 82 approximates the damages recoverable in tort and in most cases, especially those involving misleading or deceptive conduct and the making of false statements, the measure of damages in tort is appropriate (Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1).
It is appropriate, as submitted by counsel for Mr Halse, to assess the FTA damages on the basis of a comparison of the position Mr Halse would have been in had the misleading or deceptive conduct not occurred. This of course assumes findings being made in Mr Halse's favour as to causation and reliance (upon which I have found against him).
The claim as particularised in the schedule comprises components representing the shortfall on the loan to acquire the business following account being taken of the sale proceeds, interest and capital repayments on loans taken out to complete the purchase and loss of earnings.
If the FTA claim had succeeded it would have been appropriate to assess damages in relation to loss of earnings only up until 2 June 2009, being the date when Mr Halse ceased to attend the yard. Thereafter any loss arose because of his conduct. Subject to that qualification, damages would have been assessed in accordance with the broad heads contained within the schedule. Accordingly, I would not have allowed items 7, 8 and 9 of the schedule, being a claim for loss of earnings from 19 February 2010 totalling $28,821.95.
Conclusion
Mr Halse is entitled to judgment in the sum of $11,283.49 ($19,464.47 less set‑off of $7,180.98).
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