Itag Media Pty Ltd v Heaps of Deals Pty Ltd
[2013] QCATA 5
•11 January 2013
| CITATION: | Itag Media Pty Ltd v Heaps of Deals Pty Ltd [2013] QCATA 5 |
| PARTIES: | Itag Media Pty Ltd (Appellant) |
| v | |
| Heaps of Deals Pty Ltd (Respondent) |
| APPLICATION NUMBER: | APL464-11 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Dr J R Forbes, Member |
| DELIVERED ON: | 11 January 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Leave to appeal is refused. |
| CATCHWORDS: | CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSIDERATION – FAILURE OF CONSIDERATION – where the Respondent sought repayment of contract price for Appellant’s failure to create a functioning website – where Appellant claimed website was functioning and initiated a counterclaim for additional works performed – where Tribunal found that the website was not functional – where Tribunal found consideration had wholly failed – where Tribunal found contract could not be enforced and moneys had and received by the non-performing party were hence refundable – whether leave to appeal should be granted Queensland Civil and Administrative Tribunal Act 2009, ss 3(b), 32, 142(3)(a)(i), 142(3)(b) Fox v Percy (2003) 214 CLR 11 Robinson v Corr [2011] QCATA 302 Minister for Immigration and Citizenship v SZMDS & Another (2010) 240 CLR 611 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (‘QCAT Act’.
REASONS FOR DECISION
Computer systems are a marvel when they work and an exasperating conundrum when they do not. In July 2010 the Appellant (“Itag”) agreed to create a “Groupon” website for the Respondent (“Deals”). Deals says that it never functioned properly; Itag claims that, give or take a few minor faults, easily remedied or remediable, it undoubtedly came up to warranty.
Deals sued for repayment of so much of the contract price as it had already paid. Itag denied liability and counterclaimed an additional $5,105.37 for “out of scope work” as well as website and email marketing fees for the period 10 December 2010 to 10 December 2011.
The matter was decided by a QCAT Adjudicator on 6 December 2011. The learned Adjudicator dismissed Itag’s counterclaim, and, finding a total failure of consideration, awarded Deals a refund of $9,546.28.
The Case for Deals
Mr Desmond (for Deals) explained that the website was required for an online business where “you can purchase either products or vouchers, but a certain amount of people have to buy before they get charged”[1].According to the contract the system was to be ready approximately six weeks after 8 July 2010, but in the following December it was still not functioning properly. At that time Deals received “emails almost daily with excuses why the website wasn’t live ... [Businesses] that we had already signed up were asking why ... some had actually cancelled.”[2]
[1] Transcript of proceedings on 8 November 2011, pages 3-4.
[2] Transcript of proceedings on 8 November 2011, page 8 (Desmond).
From 18 to 31 December 2010:
…the site went live but people could not purchase vouchers properly ... you logged in and then an error message would come up ... even if [a customer had] already registered there’s no chance [he] could buy ... [it] still wasn’t working.[3]
[3] Transcript of proceedings on 8 November 2011, page 9 (Desmond).
After further failures Deals set a deadline for satisfactory performance – 18 February 2011, some six months after completion was promised. By that time Deals had paid 80% of the contract price to the Appellant. In early March 2011 the website was still not working. In November 2011 Deals was still “desperate for the site”[4], “as long as it’s [one] that works”[5].By then, however, it had “absolutely no faith that that website can work”[6]. The trouble, Desmond suggested, was that Itag “chose to do a project that was out of scope of what they could do”[7].
[4] Transcript of proceedings on 8 November 2011, page 19 (Milde).
[5] Transcript of proceedings on 8 November 2011, page 19 (Desmond).
[6] Transcript of proceedings on 8 November 2011, page 19 (Desmond).
[7] Transcript of proceedings on 8 November 2011, page 19 (Desmond).
The Case for Itag
Itag was represented by David Lichtenberg. He claimed that Deals “approved all stages of their job” and suggested that the real reason for Deals’ application was inability to make a profit in a “very competitive” environment.[8] He conceded that “there were some errors on the site” but insisted that it was workable.[9] In Lichtenberg’s opinion, Deals had hired staff prematurely, rashly counting upon completion of the website in six weeks or so. But as the Adjudicator pointed out, in response to that diversion, “they’re not claiming the cost of that staff against you”[10].
[8] Transcript of proceedings on 8 November 2011, page 15 (Lichtenberg).
[9] Transcript of proceedings on 8 November 2011, page 16 (Lichtenberg).
[10] Transcript of proceedings on 8 November 2011, page 20.
In relation to Itag’s response, the Adjudicator observed: “[W]hilst you may have been trying, you have failed dismally ... you haven’t delivered a website that works”[11]. That was denied, but Lichtenberg admitted that his company had never built “one of these [group buying] sites before”[12].
[11] Transcript of proceedings on 8 November 2011, page 21.
[12] Transcript of proceedings on 8 November 2011, page 22, in answer to the Adjudicator.
The Adjudicator noted:
…a legion of this material[13] saying `We’re getting onto it’ until finally on 16 September [2010] they say `[t]hat’s it ... we just want our money back. ... They’ve now come to a point where they now think, well, they’re not going to work another six months with you to see if you can get it right.[14]
[13] Email files tendered on behalf of Deals.
[14] Transcript of proceedings on 8 November 2011, pages 23-24.
An Independent Opinion Sought
However, in conspicuous fairness to Itag, the Adjudicator adjourned the hearing for two weeks to test his provisional view that consideration had completely failed. For that purpose he directed Deals to appoint an independent website developer to examine the subject system to see if it could “develop a website for you using the existing source code” and to assess the value of Itag’s work.[15] In effect, Itag was given a late opportunity to seek, with the Tribunal’s indulgence, and Deals’ co-operation, evidence that it could have sought much earlier in support of its claim of work well done.
[15] Transcript of proceedings on 8 November 2011, page 29.
The hearing was resumed on 6 December 2011. Deal’s representative reported that “no one wants to look into our website without being paid ... upfront”[16].One technician wanted $1,500 “just to look into it”. Another reported “a lot more functionality errors ... this is not a quick job ... I sincerely hope you are able to find a Magenta developer with spare time to fix your site”[17].Deals approached three other developers without “getting anywhere”.So far as Desmond knew – and on this point he was not contradicted – those people did not contact Itag, but let the matter lapse. “Well,” said the Adjudicator, “that’s a pretty good shot, I think”.
[16] Transcript of Adjourned Hearing on 6 December 2011, page 2.
[17] Transcript of Adjourned Hearing on 6 December 2011, pages 2-3.
The Decision
Having satisfied himself that there was no reasonable prospect of an independent remedy, the Adjudicator proceeded to judgment:
[W]ell, Mr Lichtenberg, I advised you last time that I considered that the contract had failed for a total lack of consideration. ... You won’t agree with me. ... I tried to adjourn it for two weeks in order to find out what value there was in that contract. I can now tell that Mr Desmond ... had a pretty reasonable attempt at that and all that turns up is that [it] doesn’t appear that anybody wants to be involved with someone else’s programme that might need to be fixed. ... [O]n any view, if the job was to be finished within a period of less than two months, for it [to proceed] for some seven months is just out of the question. ... The contract can’t be saved. ... It now appears that those persons who work in the industry are unlikely to take on a project that has problems rather than start again. So having made that finding, I then must order that [Itag] refund ... $9,546.28.
Itag’s Submissions on Appeal
Itag relies upon the fact that Deals made progress payments to the amount for which repayment was sought. Itag does not deal with the Adjudicator’s comment that Deals, once committed to the protracted process, was “held to ransom”[18] while Itag made repeated and ineffectual attempts to produce the website it undertook to provide. It acknowledges that Deals “disputed the website functionality and the time in which [it] was delivered”, but in answer to that comprehensive complaint, Itag says that “no other services were disputed”.Itag repeats the argument made to the Adjudicator, that “the first release of the website was functional and [the Respondent] was able to post deals, complete sales transactions and collect customer data”.While “some technical problems” remained, Itag was prepared to fix them. Itag maintains its original counterclaim for $5,105.37, now increased to $5,441.80.[19]
[18] Transcript of Proceedings on 8 November 2011, page 25.
[19] Submission in support of the appeal dated 20 January 2012.
Conclusions and Order
No error of law affecting the primary decision is alleged. This is precisely the kind of dispute that the legislature wishes to see resolved speedily, informally, economically, and finally.[20] It is simply a decision on the facts as found. It does not raise any point that calls for a judgment on appeal.[21] There is no question of law. Itag’s submissions simply seek to re-run the case below. The learned Adjudicator’s decision is based on elementary principles of the law of contract and quasi contract, namely that, where consideration wholly fails, a contract cannot be enforced, and moneys already paid to the non-performing party are moneys had and received to the use of the other, and hence refundable.[22]
[20] Queensland Civil and Administrative Tribunal Act 2009, s 3(b).
[21]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 at 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 at 578, 580.
[22]Kevin Lindegren, David Harland and John Cater, Contract Law in Australia (1986) 761 [2303].
There is no appeal as of right in this case.[23] If leave were given, it would not entitle Itag to a retrial de novo. Leave is not to be given simply because a party desires to re-argue a case rejected at first instance. It is not nearly enough to express disappointment at the original decision, or a subjective feeling that justice has not been done.[24] The Adjudicator was the appointed judge of fact, and it is not for this Appeal Tribunal to disturb findings that were clearly open to him. The primary decision is an eminently reasonable conclusion from findings of fact that the Adjudicator was entitled to make, and which find ample support in documentary and other evidence. It is not appellable error to prefer one version of the facts to another, or to attribute more weight to the submissions of witness “A” than to those of witness “B”. Findings of fact will not be disturbed if they have rational support in the evidence.[25] Where reasonable minds may differ, a decision cannot properly be called erroneous, simply because one conclusion has been preferred to another possible view.[26]
[23]See Queensland Civil and Administrative Tribunal Act 2009, ss 142(3)(a)(i) and 142(3)(b).
[24] Robinson v Corr [2011] QCATA 302, [7].
[25] Fox v Percy (2003) 214 CLR 118, 125-126.
[26]Minister for Immigration and Citizenship v SZMDS & Another [2010] HCA 16 at [131].
I can find no appellable error in the primary decision. Leave must be refused. There will be no order as to costs.
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