Inter Pro Australia v Toll Holdings
[2005] FMCA 901
•6 July 2005
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| INTER PRO AUSTRALIA v TOLL HOLDINGS | [2005] FMCA 901 |
| TRADE PRACTICES – Claim for damages under section 82 of the Trade Practices Act for a breach of section 52 of the Trade Practices Act – whether the respondent engaged in misleading and deceptive conduct when advising the applicant that it did not wish to proceed with consideration of employment of a client of the applicant – where the applicant is an employment agency. CONTRACT – Where the applicant seeks recovery against the respondent pursuant to an alleged contract or otherwise under a quantum meruit – whether emails sending CV attachments indicating that use binds the user to standard terms and conditions could be considered to create terms imported into contract – whether the contract was a unilateral contract. |
| Trade Practices Act 1974 Federal Magistrates Court Rules 2001 |
| Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357 Ricochet Pty Ltd v Equity Trustees Executor & Agency Company Ltd (1993) 41 FCR 229 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Laurel Race Course Inc v Regal Construction Co Inc 333 A 2d 319 (1975) Toll (FGCT) Pty Ltd v Alphapharm (2004) 211 ALR 342 Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 |
| Applicant: | INTER PRO AUSTRALIA PTY LTD |
| Respondent: | TOLL HOLDINGS LIMITED |
| File Number: | SYG 3312 of 2004 |
| Judgment of: | Raphael FM |
| Hearing date: | 20 June 2005 |
| Date of Last Submission: | 20 June 2005 |
| Delivered at: | Sydney |
| Delivered on: | 6 July 2005 |
REPRESENTATION
| Counsel for the Applicant: | Mr M Condon |
| Solicitors for the Applicant: | AAT Legal |
| Solicitors for the Respondent: | Norton White |
ORDERS
Application dismissed.
Applicant to pay the respondent’s costs to be assessed pursuant to the provisions of Part 21.02(2)(b) and Schedule 1 of the Federal Magistrates Court Rules.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 3312 of 2004
| INTER PRO HOLDINGS AUSTRALIA PTY LTD |
Applicant
And
| TOLL HOLDINGS LIMITED |
Respondent
REASONS FOR JUDGMENT
These proceedings were commenced in this court on 11 November 2004 by the applicant company which is in the personnel recruitment business, against the respondent company, which is in the logistics business. The applicant claimed the sum of $16,500 being the introduction fee for one Pei Ling Hoh who it introduced to the respondent as a prospective employee. Proceedings were commenced claiming damages under section 82 of the Trade Practices Act 1974 (Cth) for a breach of section 52 of the Trade Practices Act1974 (Cth) alleging that the respondent engaged in misleading and deceptive conduct when advising the applicant that it did not wish to proceed with consideration of the employment of Ms Hoh on 27 February 2003. The applicant also sought recovery against the respondent pursuant to an alleged contract between itself and the respondent or alternatively on a quantum meruit. The respondent denied any liability to the applicant.
History
On 19 November 2003, after a number of telephone calls attempting to solicit business, Mr Bruce Hara of the applicant met with Mr Peter Weller, General Manager-Technical Services, Toll Technologies Pty Ltd, a subsidiary of the first respondent at Mr Weller’s office. The parties had not had a previous business association. Mr Hara introduced his company to Mr Weller and gave him a description of the services which it provided. Mr Weller provided Mr Hara with a description of his business and the skills required of personnel within the IT group. Mr Weller said to Mr Hara that many of the people Toll took on where taken on as contractors to provide services for specific projects. Mr Weller told Mr Hara that he had no need for any new employees or contractors at this time but that the company was tendering for a big project and if it was successful there may be need for some contractors. Mr Weller made it clear to Mr Hara that the provision of contractors would be done under the terms of a master deed prepared by Toll. He suggested to Mr Hara that Mr Hara agree to terms of such a deed with the company as a prerequisite to offering potential contractors to Toll in the future. The conversation was concluded on the basis that Mr Hara would stay in communication with Mr Weller to see how the tender progressed.
Mr Hara told the court that he had tried to contact Mr Llwyd Jones, the gentlemen Mr Weller had referred him to on a couple of occasions but had not been able to reach him. He had not signed the master agreement. Another matter discussed between Mr Hara and Mr Weller was the question of fees. Mr Hara deposes to being asked by Mr Weller about his terms and conditions of business including the fees. Mr Weller states that he asks “what are you rates”. I prefer Mr Weller’s evidence on this aspect of the matter. I saw him in the witness box and judged that he was a fairly direct person and likely to have put the matter in this way. I doubted he was particularly interested in the other terms and conditions from a recruitment agency. Mr Hara’s response indicated a fee structure that was higher that that being paid by Mr Weller. Mr Weller told Mr Hara that he would have to meet the competition’s fee structure which ranged from 10 to 12.5%. Mr Hara said words to the effect that if sufficient business was done he would be prepared to reduce the fees to 12.5%. However, upon his return to the office at lunchtime that day Mr Hara appears to have taken the view that he would get no work from Toll unless he reduced his fees immediately and so he sent Mr Weller an email to which was attached a copy of his company’s profile and adjusted terms and conditions indicating a 12.5% of total salary package. He also indicated he would contact Mr Llwyd Jones to arrange a master contract agreement and would call Mr Weller again in December.
Mr Weller’s evidence is that he took very little interest in the agreement. His real interest was in the rate. He noted that the agreement was required to be signed by both parties and he did not sign it. The agreement commenced with the following words:
“The following terms and conditions shall apply between Inter Pro Australia Pty Ltd (Inter Pro) and the above stated prospective employer (the client) in respect to the engagement of any candidate introduced to the client by Inter Pro. An introduction includes a personal or verbal introduction of a candidate to the client or the client’s acceptance of a candidate resume from Inter Pro.”
It was Mr Hara’s evidence that he contacted Mr Weller twice after the first meeting but on neither occasion did Mr Weller have any information for him as to the company’s needs.
On 25 February 2004 Ms Hoh arrived in Australia from Malaysia where she had been working. Her fiancée had been dealing with Mr Hara in respect of a position for himself and had told Mr Hara about her webMethods qualifications. She telephoned Mr Hara on that day and he said that he thought he had some clients who might be interested in her and asked her to send him a CV. He then sent her an email telling her that he looked forward to receiving the CV and listed some of his key clients who might be interested in speaking with her. The five clients listed were Toll Solutions, Deloites, Alinta Gas, Object Consulting and Super Partners. Mr Hara admitted in cross examination that neither Toll nor Super Partners were in fact clients of his. Ms Hoh sent her CV to Mr Hara at about 4pm on 25 February. Four minutes later she sent the same CV to Mr Hadi Thahar at another recruitment organisation known as Greythorn. On 26 February 2004 Mr Hara wrote to Ms Hoh confirming that he would represent her to three companies of which Toll was one. By this time Mr Hara had heard through another client of his that Toll were looking for a number of people for a contract they were entering into, including persons with experience in the webMethods area. He also knew that the person responsible for hiring at this level was a Mr McDonald. He telephoned Mr McDonald on 25 February 2004. There is some dispute about the conversation. Both Mr McDonald and Mr Hara gave evidence. I prefer Mr McDonald’s evidence of the conversation. I do this because of the clear way in which he gave his evidence, his firmness under cross examination and his relative independence from the dispute. Although he is still employed by Toll he does not appear to be in the contentious area of staff recruitment. Furthermore, Mr Hara’s evidence was affected by his being required to make admissions as to the untruth of some statements in his emails and in his conversation with Mr McDonald. I also think that Mr Hara was well aware that his prospects of success in this case would be considerably enhanced if he could establish that the people at Toll were well aware of his terms and conditions, in particular, as to what constituted an introduction. If Mr Hara could persuade me that Mr McDonald knew about his terms and conditions then it could be argued that by the time Mr McDonald received an email with Ms Hoh’s CV in it he was aware that by dealing with it he would be accepting those conditions because of a notation in every email sent by Mr Hara in the following terms:
“By using any information in, or attached to this email, or by employing or by arranging employment for any candidate supplied in this document, you agree to be bound by the standard terms and conditions of Inter Pro Australia Pty Ltd.”
I am satisfied that Mr Hara did not discuss his terms and conditions with Mr McDonald. Mr Hara did say to Mr McDonald words to the effect that he had obtained Mr McDonald’s details from Mr Weller and that he understood that Mr McDonald was looking for people in the webMethods area. He offered the CV’s of two people which Mr McDonald agreed to accept. It is not correct that Mr Hara got Mr McDonald’s name from Mr Weller in connection with this recruitment, but it is possible that Mr McDonald was influenced to accept the CV because he thought Mr Weller had made a direct reference. Mr McDonald denied that he read the email or the attachments. He sent them straight onto Mr Weller because this email seems to have been the last of a large number that he had received from recruitment agencies concerning these positions. Mr McDonald did not consider himself to be in the recruitment business and he sent an email to Mr Weller telling him so. Mr Weller agreed to take over the responsibility for recruitment. In a conversation between Mr McDonald and Mr Weller, Mr McDonald thanked Mr Weller for agreeing to take on this responsibility and said (in regard to Ms Hoh’s application) “thanks Peter there is one CV I have not read and I will forward that to you”.
Mr Weller quickly decided that he was not going to deal with what by now had become a rush of employment agencies all seeking to foist staff upon him. He had an existing preferred contractor and two subsidiary contractors. The preferred contractor was Greythorn. He decided to limit the receipt of applications to these people. At approximately 5pm Mr Weller had a telephone conversation with Mr Hara in which he told him this. Mr Hara told Mr Weller that he would send him the CV of Ms Hoh which he had already sent to Mr McDonald. On 27 February 2003 Mr Weller sent out an email to all the companies who had approached Mr McDonald including Inter Pro. The email read as follows:
“I would like to inform you that as of today I have taken over recruiting of technical resources from Dion McDonald who is currently focused on software development activities.
I have changed the brief and the recruitment engagement model to a preferred supplier plus to second tier suppliers. Therefore please stop any further active recruitment on my behalf until I call to discuss next week.
I would like to thank you for your efforts to date and assure you that all candidates that have already been put forward will still be considered.
Please note that this notice does not affect any work you are doing with other departments within Toll Solutions”.
This email was send at approximately 1:09pm. At 1:41pm Mr Hara received a further email from Mr Weller which stated:
“Hi Bruce,
No I don’t want to proceed with this candidate.
Thanks Peter”
The candidate in question was Ms Hoh. Mr Hara told Ms Hoh that Toll were not interested in her. Ms Hoh states in her evidence states that she told Greythorn that Mr Inter Pro were representing her to Toll. After she heard from Mr Hara that she was not being considered for a job with Toll she remained in contact with him looking for other positions. Some time after 4 March 2004 she had a telephone conversation with a Marie Barry of Greythorn who told her that she would like to put Ms Hoh up for a position with Toll. Ms Hoh asked her why she would want to do that when she had already been refused a position with Toll and Ms Barrie remarked that this may have been because Toll had decided to restrict its area of recruitment to two agencies of which Greythorn was one. Ms Barry offered to make some enquiries as to what had happened to her CV at Toll. She later reported to Ms Hoh that he CV had never gone to Toll. This caused Ms Hoh to be very upset with Mr Hara and she decided not to continue with his agency but to continue with Greythorn. It is quite clear that whatever Ms Barry may have been told the CV did go to Toll, although I am satisfied from the evidence of Mr McDonald and Mr Weller that it was not looked at.
Greythorn represented Ms Hoh to Toll and on 19 March 2005 she signed a contract agreement with Greythorn by which Greythorn provided her services to Toll as a contractor. About 7 months later Ms Hoh became a permanent member of the Toll staff.
On 26 March 2004 Mr McDonald had a further conversation with Mr Hara. Mr Hara asked him who had been employed for the webMethod job. Mr McDonald told him that it was Ms Hoh. Mr Hara reminded Mr McDonald that he had sent Mr McDonald the CV of Ms Hoh and that he thought he ought to be paid for the introduction. Mr McDonald went immediately to Mr Weller. Mr Hara sent Mr Weller an email and shortly after receiving it at about 2:20pm Mr Weller received a phone call from Mr Hara. In the course of that phone call Mr Weller accepted that Inter Pro had sent Ms Hoh’s CV but stated:
“Toll solutions had no formal or informal association with Inter Pro and we engaged Ms Hoh as a contractor solely on the basis of her being out forward by Greythorn. Greythorn has confirmed to me that they offered Ms Hoh to us as a contractor after she got in touch with them directly.”
Mr Hara informed Mr Weller that he did not accept this and believed that he was entitled to commission from Toll. The parties attempted to negotiate a settlement without success.
Discussion
I am satisfied that the applicant’s claim under the Trade Practices Act is not well founded. Putting it at its highest there could have been a misrepresentation by Toll that they would look at Ms Hoh’s CV and consider Ms Hoh upon her merits. We know that they did not do this. Mr McDonald simply rejected her. He says this was because he wasn’t really looking for webMethods people at that time, he was looking for systems administrators. This may be the case or it may be that Mr McDonald did not wish to receive CV’s from anyone other than his chosen suppliers. But whatever the reason may be, it would not effect whether or not Inter Pro relied upon the misrepresentation in a way that caused it to suffer loss and damage. In Hanave Pty Ltd v LFOT Pty Ltd [1999] FCA 357, Wilcox, Kiefel and Emmett JJ determined that it is open for the court to determine the effect that a misrepresentation is taken to have had. In what way did this representation hinder Inter Pro in its pursuit of commission for the employment of Ms Hoh? I cannot see that it did. The representation came after the sending of the CV to Inter Pro. It did not influence Inter Pro to send the CV. It was the sending of the CV which was the required action of the applicant to benefit from the agreement. The applicant did nothing as a result of any representation to read and consider it. No evidence has been produced that if Mr Weller had read Ms Hoh’s CV he would have employed her at that time. I am asked to infer that from the fact that she was later employed. But even if this was the case it was the failure to look at the CV that caused the potential loss and not the misrepresentation. In Ricochet Pty Ltd v Equity Trustees Executor & Agency Company Ltd (1993) 41 FCR 229 at 235 the court held that “the mere possibility that a misrepresentation might have induced a course of action by the representee can never itself attach liability under s82 to the making of it”.
In fairness to the applicant it did not trumpet the Section 52 claim. It relied more upon its claim under contract or quantum meruit. The applicant argued that the contract came into existence in the following way. The terms and conditions of the 19 November email were referred to by Mr Hara in his conversation with Mr McDonald and formed the basis upon which the CV of Ms Hoh was sent to Mr McDonald. Alternatively emails sending the CV’s incorporated the terms by reference. The respondent accepted the terms by accepting the benefit of the services provided by Inter Pro, namely the introduction of Ms Hoh. The applicants point to Mr Weller’s evidence that he had glanced through the terms after they had come in. It is said that Inter Pro satisfied the terms of the agreement when they introduced Ms Hoh, her name was submitted and her CV was submitted. Upon submission Toll had the opportunity to advise that they would not be looking at it but they did not do that. They said they would consider the CV. They represented that they had read it and rejected her. That bound them to the contract which required payment upon engagement. Other terms of the contract which are relevant are the following:
Acceptance of terms and conditions
If the client engages the candidate within 6 months of that candidate being introduced to it by Inter Pro the client will be deemed to accept these terms and conditions unless a variation has been agreed in writing between the parties.
Confidentiality
The client agrees to keep all introduction [s] made by Inter Pro confidential. If the client passes an introduction to another employer who consequently employs that candidate within 6 months of the initial introduction by Inter Pro then the client is liable to pay the placement fee.
Contracting Staff
Fees for contracting staff vary depending on their skill and expertise. Inter Pro and the client shall agree on the fee structure in writing before commencing a contract placement. If the client directly engages the candidate on a contract basis within 6 months of the introduction of the candidate to the client by Inter Pro the client shall pay Inter Pro a fee of 25% plus GST of the fee paid to the candidate under the contract for the duration of the contract. The fee is payable monthly in advance.
I am quite satisfied that no contract came into existence between these parties in November 2003. Mr Hara submitted a form of contract to Mr Weller intended to govern their future relations. The contract was not specific to any one employee. It was the sort of thing that would be signed by the parties and which the employment agent would like to see signed before any candidates were put up. The signing of the contract would relieve any doubts about what would happen in a situation such as the one we have here. But Mr Weller did not sign it. And he went further. He made it quite clear that most of the engagements undertaken by Toll were undertaken on a contract basis and the contract was to be a Toll contract with the agency on Toll’s terms. Mr Hara was offered the opportunity of signing the agreement but he did not do so. Ms Hoh was later employed under such an agreement.
I have already said that I do not believe that Mr Hara said the words he deposed to Mr McDonald concerning the terms and conditions on which Inter Pro put forward candidates. This court is therefore left with the name and CV of the candidate being sent together with an accompanying email indicating that use binds the user to the standard terms and conditions of Inter Pro. In Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at [534] McHugh JA, as he then was, considered the common law theory of contract, noted that silent acceptance of an offer is generally insufficient to create acceptance of a contract:
“The objective theory of contract requires an external manifestation of assent to an offer. Convenience, and especially commercial convenience, has given rise to the rule that the acceptance of the offer should be communicated to the offeror. After a reasonable period has elapsed, silence is seen as a rejection and not an acceptance of the offer. Nevertheless, communication of acceptance is not always necessary. The offeror will be bound if her dispenses with the need to communicate the acceptance to his offer: Carlill v Carbolic Smoke Ball Co [1983] 1 QB 256 AT 259. However, an offeror cannot erect a contract between himself and the offeree by the device of stating that unless he hears from the offeree he will consider the offeree bound…. The common law’s concern with the protection of freedom’s opposed to the notion that a person must take action to reject an uninvited offer or be bound by contractual obligations.”
But after considering these matters His Honour went on to approve of the view of Judge Levine of the Court of Appeals for Maryland in Laurel Race Course Inc v Regal Construction Co Inc 333 A 2d 319 (1975):
“Where the offeree with reasonable opportunity to reject offered services takes the benefit of them under circumstances which indicate to a reasonable person that they were offered with the expectation of compensation, he assents to the terms proposed and thus accepts the offer.”
The court must look at the actions of parties objectively as the unanimous High Court said in Toll (FGCT) Pty Ltd v Alphapharm (2004) 211 ALR 342 at [351]:
“This court, in Pacific Carriers Ltd v BNP Paribas, has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”
Mr Hara told Mr McDonald that he had a candidate for a position. He offered to provide Mr McDonald with that candidates name and CV. Mr McDonald accepted that offer. A reasonable person would assume that Mr Hara expected to be paid for this introduction. Mr McDonald passed the introduction to Mr Weller. Mr Weller had an opportunity to inform Mr Hara that he did not intend to accept any introductions from Inter Pro. He did not do that. He made a specific statement that introductions which had already been made would be considered. A reasonable person would assume that the objective intention of the parties was that if a candidate who had been offered before the embargo on agencies outside the favoured three was considered suitable for a post the agency would be paid. It matters not what Mr Weller’s intentions were; Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, nor that he had only glanced at the terms and conditions sent to him in November which were intended to be incorporated via the email, Toll supra at [39]. I am prepared to conclude that the clause indicating that commission would be payable if an introduced applicant was employed within a period of 6 months from the introduction was a reasonable and common term of such agreements and therefore it did not matter that Ms Hoh was first rejected by Mr Weller and then later employed through the services of another agent.
But Ms Hoh was not employed by Toll. She was employed by Greythorn at Toll’s request. The respondents argue that this removes the “employment” of Ms Hoh from the contractual terms imported by the email. The reason is that Mr Weller had made it quite clear that the only terms upon which Toll would enter into arrangements with a company such as Inter Pro for contract labour was through the master agreement. Mr Weller’s evidence was that he had told Mr Hara that the contract they were tendering for might result in the need for contract labour as opposed to a permanent hiring. I do not think it was enough for Mr Hara to offer the services for Ms Hoh on the basis of the contract which he had submitted to Mr Weller in November and which Mr Weller had clearly rejected for the form of employment that was going to be offered. In these circumstances the agreement to consider candidates put forward by person outside the three preferred suppliers could be seen objectively as an offer to do so on the basis of Toll’s clear requirement that Inter Pro must have signed the master agreement. Inter Pro had not signed the master agreement and therefore its candidate was rightly rejected. Unless a contract existed Inter Pro would have no right to any commission arising from subsequent employment. I find that no such contract did exist because Inter Pro had not accepted Toll’s terms.
The final claim is under a quantum meruit. Inter Pro claims it should be paid because it did all that was required of it to obtain payment if a contract had existed, namely the provision of a name and a CV. Toll argues that there is simply no evidence that Ms Hoh was “employed” as a result of anything done by Inter Pro. She was rejected by Toll but she was later employed under a contract with Greythorn purely as a result of the efforts of Greythorn and not as a result of the efforts of Inter Pro. I think this submission is correct.
The applicant has failed to establish a claim under the Trade Practices Act, in contract or for quantum meruit. I must dismiss the application and order that the applicant pay the respondents costs to be assessed pursuant to the provisions of Part 21.02(2)(b) and Schedule 1 of the Federal Magistrates Court Rules.
I certify that the preceding seventeen (17) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date:
0
4
2