Kingston Plant Hire Victoria Pty Ltd v Eltrax Pty Ltd
[2014] VCC 136
•5 March 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised |
COMMERCIAL LIST
EXPEDITED CASES DIVISION
Case No. CI-12-03329
| KINGSTON PLANT HIRE VICTORIA PTY LTD (ACN 007 424 124) | Plaintiff |
| V | |
| ELTRAX PTY LTD (ACN 070 051 955) | Defendant |
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JUDGE: | HER HONOUR JUDGE KENNEDY | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 17, 18, 19 and 20 February 2014 | |
DATE OF JUDGMENT: | 5 March 2014 | |
CASE MAY BE CITED AS: | Kingston Plant Hire Victoria Pty Ltd v Eltrax Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 136 | |
REASONS FOR JUDGMENT
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Catchwords: Contract – claim for monies owed pursuant to agreement for cartage of Coode Island Silt – whether agreed rate was initially $30 per tonne or $45 per tonne – whether agreed rate was orally varied to rely on cubic metre measurement instead of tonnes – whether evidence established quantum sought
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | T Bourke | Russell Kennedy Lawyers |
| For the Defendant | J Forrest | Giannakopoulos Solicitors |
HER HONOUR:
1 In this matter the plaintiff seeks the amount of $149,747.40 for the cartage of contaminated acid sulphate, or Coode Island silt, from a site known as “the Prima Pearl building site” in Southbank. The plaintiff relies upon an agreement evidenced by an email of 7 September 2011 and alleges that a rate was agreed upon of $45 per tonne which was orally varied to $45 per cubic metre in a conversation of the same month.
2 The defendant admits that the parties made an agreement, but alleges that the agreed rate was $30 per tonne, as evidenced by an email of 16 August 2011, and such that some $102,739.45 was in fact overpaid.
3 The defendant further says that the quantum calculation on a cubic metre basis is unreliable, even if the plaintiff’s alleged rate is correct.
4 There are therefore two main issues:
(a)what agreement was made as to the appropriate rate; and
(b)whether, even if the plaintiff establishes that the parties agreed to a rate of $45 per cubic metre, the plaintiff has established an entitlement to the quantum sought.
5 An alternative submission based on a quantum meruit was not strictly abandoned, but was not supported. Both parties accepted that an agreement had been reached between the parties, the real issue being what the terms of the agreement were.
Background
6 The plaintiff company provided an earthmoving service to the construction industry in Melbourne. The plaintiff’s main witness was a Mr David Grgat, sales manager, with some twelve years’ experience with the plaintiff. Mr Grgat was accounts manager in 2011 but spent some 50% of his time on site.
7 The defendant’s main witness was Mr Frank Cicerale. He was a director of the defendant which was involved in excavation work, and had been operating in the building industry for some 43 years.
8 The plaintiff enjoyed an ongoing strong relationship with the defendant, and was their sole provider for earthworks. During 2011, the plaintiff had engaged the defendant in relation to two projects: a project at Coventry Street (from 6 April to 15 September); and at Sturt Street (from 1 April to 24 November). There was also a third project at Maribyrnong but this involved cartage of “clean fill” uncontaminated soil.
9 The subject of this dispute concerned the cartage of contaminated Coode Island silt from a building site in Southbank called Prima Pearl. The parties are in dispute, in particular, as to the emails which form the basis for the agreed cartage rates for this particular site.
10 Firstly, there are a series of emails of 16 August 2011. This series commenced with a request from a Mr Yanni Lloga of L.U. Simon who asked Mr Joe Kasalo, an administrator of the defendant, for rates for disposal of various soils from stockpiles on an unknown site at South Melbourne/South Bank. This email was then forwarded to Mr Grgat by Mr Kasalo who requested these rates on a cubic metre rate. By email later that day Mr Grgat provided rates for various categories without specification as to whether they were for a truck only or truck and trailer rate. The rate given for Coode Island silt was $30 per tonne.
11 The defendant relied on these emails and suggested that there were no further conversations about rates relating to the Prima Pearl site. However, the evidence of Mr Grgat was that the rates referred to in the August email were not the rates he charged Mr Cicerale at the Prima Pearl site.
12 During June - August, some preliminary works were conduced by the plaintiff at the Prima Pearl Site. Two invoices rendered of 28 July and 5 August show a charge out rate of $45.00 per metre which Mr Grgat accepted was for Coode Island Silt.
13 Subsequent to the undertaking of the preliminary works at the Prima Pearl site, Mr Grgat’s evidence was that he was asked to provide rates for dirt removal jobs at that site for the main works by Mr Cicerale in early September.
14 There are two emails dated 6 and 7 September 2011.
15 Firstly, there is an email of 6 September 2011 entitled “cartage rates” from Mr Kasalo to Mr Grgat which stated: “Please copy the attached and email it back to me when you get the chance”. It then provides a form of email for Mr Grgat to effectively “cut and paste” which commenced with the words: “Apologies for the time taken to get back to you, please find the following rates as requested.” A series of rates follow, including a rate for a truck only for Coode Island silt of $45.00 per tonne.
16 There is then an email from Mr Grgat to Mr Kasalo dated 7 September 2011 at 3.02pm entitled “Rates revised”. It is effectively a copy of the contents of the email from Mr Kasalo of the day before, including the rate of $45.00 per tonne for a truck only for Coode Island silt.
17 The evidence of Mr Grgat was that these emails related to the Prima Pearl site. However, this was rejected by the defendant with Mr Cicerale stating that the first time he had seen the email of 7 September was during the court hearing.
18 The uncontested evidence was that the plaintiff was requested to attend the site with its trucks (without trailers) at 7am on 6 September 2011.
19 The evidence of Mr Grgat was that there was a further conversation between himself and Mr Cicerale within one week of the commencement of the project. In this conversation, he agreed to provide a metre rate which was also $45.00 at Mr Cicerale’s request. This was disputed by the defendant.
20 However, by invoices dated from 27 September 2011 to 16 April 2012, the plaintiff invoiced the defendant at a rate of $45.00 per metre. No relevant complaint was made about these invoices until June 2012; instead, the defendant actually paid the sum of $597,762 (inc GST).[1]
[1]Third Further Amended Defence paragraph 4H
21 There was then evidence of two further emails of 14 and 19 June 2012 from the defendant’s Accounts Payable Officer, Ms Samantha Brigante.
22 In the email of 14 June, she advised Mr Grgat that Mr Cicerale “disagrees” with the rates they had been charged on the invoices and had “advised” her the rate was $35.00 not $45.00. She annexed a reconciliation sheet and acknowledged a balance owing of $105,903.61, suggesting a cheque would be ready by 25 June.
23 However, in a further email of 19 June, Ms Brigante invites Mr Grgat to disregard the earlier email and annexes a revised reconciliation sheet as well as a copy of the email of 16 August 2011. This reconciliation sheet provides “Franks Rate per M3” at $36.00 (with a “bulk factor” at 1.2) although it also contains a reference to a rate “quoted at $30 per tonne by KPH”.
24 The calculations in these emails are not clear, nor is there any explanation as to why the alleged rates altered between 14 and 19 June. However it appears that by 19 June the defendant had found the August email and was therefore seeking to make reference to the rates contained therein (as the defendant continues to do now). In any event, as will be seen below, Mr Cicerale did not provide any satisfactory explanation, nor was Ms Brigante called.
25 It remains to consider the two main issues in the case.
Witnesses
26 The plaintiff called one witness, Mr Grgat.
27 The defendant made various challenges to the credit of Mr Grgat. In particular, it was submitted that the allegation of a variation was not made until three days prior to trial. Mr Grgat’s explanation for this was that the dispute, as he understood it, was essentially about the relevant number (45 or 30) rather than the relevant unit measurement (tonne versus cubic metres). Although not entirely satisfactory, this explanation was consistent with the main lines of dispute as shown in the original pleadings.[2]
[2]Defence dated 21 August 2012 paragraph 4A pleads that the rate was $30 per tonne which converted to a rate of $36.00 per cubic metre.
28 The evidence of Mr Grgat was otherwise generally cohesive and credible. To the extent there was any inconsistency, I am satisfied that this is explicable by the passage of time. I generally found Mr Grgat to be an honest and straightforward witness.
29 The main witness for the defendant was Mr Cicerale.
30 Mr Cicerale, by way of contrast, was not an impressive witness. Having had an opportunity to observe his demeanour, I am unable to be satisfied that his evidence may be relied upon.
31 Although a director of the defendant with 43 years in the construction industry, he purported to present as a person ignorant of the workings of his own business.
32 Some of his evidence also lacked credibility.
33 For example, he was taken to the emails Ms Brigante, of 14 June and 19 June 2012, which purport to relay positions taken by Mr Cicerale (e.g. matters with which “Frank disagrees” and matters he had “advised” Ms Brigante about). Despite these references, Mr Cicerale initially suggested that he had never spoken to Ms Brigante about these matters and had never seen the email of 14 June. Further, that he had never seen the reconciliation sent on 19 June notwithstanding that Ms Brigante refers to Frank having “asked” for the reconciliation to be revised. This not only lacked credibility but was inconsistent with other references in his evidence that Ms Brigante had “misunderstood” him.
34 The inclusion of “Franks rate per M3” in the attached schedule also weighs against his evidence that he had never agreed to a metre rate.
35 By way of further example, Mr Cicerale suggested that the conversion rate between tonnes and cubic metres had always been, in his mind, 1.5 to 1.6. This, however, appears inconsistent with the stance taken in the earliest form of the defence wherein a rate of 1.2 was utilised.[3] I also found his explanation to the effect that his solicitors “misunderstood” him or else it “come out wrong out of [his] mouth” to be unsatisfactory.
[3]Defence dated 21 August 2012 paragraph 4A.
36 There are other matters that were also improbable. Thus, his suggestion that he never saw the 7 September email until the first day of the trial and that Mr Kasalo did not show it to him were inherently improbable, particularly given he was clear that Mr Kasalo had shown him the email of August. Further his suggestion that the rate for Coode Island silt was “always by tonne or by the hour” is inconsistent with the fact that Mr Kasalo actually sought a cubic metre rate in the August email. As someone operating a business (Eltrax) for some 21 years it is also improbable that he “never checked invoices” as he suggested, given the significant amounts involved
37 Overall, then, I prefer the evidence of Mr Grgat to that of Mr Cicerale, although it remains to consider that evidence in the light of all the objective evidence in the case.
38 The defendant also called a Mr Binh Quoc Nguyen (who will be referred to, below) and a civil engineer expert, Mr Jackson Clark.
39 Mr Clark gave opinion evidence that the appropriate conversion rate for cubic metres to tonnes was such that 1 cubic metre was equivalent to 1.5 – 1.6 tonnes.[4] He further sought to opine that a cartage contractor would not charge the same rate on a tonnage or cubic metre basis.[5]
[4]Expert report of Mr Clark dated 12 August 2013 paragraph 21.
[5]Ibid, paragraph 31.
40 Leaving aside whether Mr Clark’s evidence extended beyond his specialised knowledge, he had not worked with Coode Island silt and had been in a managerial role since 1972. In any event, I found his evidence to be of little relevance, as it was the bargain struck between the parties at the time that was the central issue in this particular case.
41 It remains to consider the two main issues.
Appropriate rate
Plaintiff’s evidence
42 Subsequent to the undertaking of some preliminary works at the Prima Pearl site, Mr Grgat’s evidence was that he was asked to provide rates for dirt removal jobs at that site for the main works by Mr Cicerale in early September.
43 His evidence was that he sent an email in response to this request, directing it to Mr Kasalo, to pass it to Mr Cicerale so as to put him in the running for the project if he was the cheapest. He then provided the email of 7 September as described earlier which set out a price of $45.00 on a truck only basis and $35.00 on a truck and trailer basis for the “Coode Island silt/Acid Sulphate contaminated” varieties (which were accepted to be the same thing).
44 The evidence of Mr Grgat was that the “truck only” rate was more expensive because a bulk amount could be moved by a truck and trailer.
45 He determined the rates for Coode Island silt taking into account the extensive tipping fees that they incurred to tip it at commercial contaminated landfill facilities, as well as because of the transport costs involved to cart it away. The cost to remove in tip fees for either truck or truck/ trailer was the same, but the cartage rates for a truck were more expensive.
46 After sending the email of 7 September he had a further conversation with Mr Cicerale regarding his quote of $45 a tonne. Mr Cicerale asked him whether he could please change to a metre rate, whereupon he responded “Yes, I can”. This was for the Coode Island silt rate of $45 per tonne. They discussed what price this would be per metre, and Mr Grgat said “the price per metre, we’ll keep it at $45 per metre”. This was because Eltrax gave them a lot of work, and this was a significant project, and if he was to use the weight of Coode Island silt which was about “1 to 1.1” he was “not going to beg for another couple of dollars.” He “wanted his business”.
47 The evidence of Mr Grgat was that the invoices were then sent which show a rate of $45 per metre in the attached schedules.
Cross examination
48 Under cross-examination Mr Grgat stated that he believed the conversation with Mr Cicerale about the change to metres occurred within about 1 week of operating on the project. He maintained that the conversation occurred.
49 It was put to him that he had a conversation with Mr Cicerale wherein he gave a rate of $30 per tonne but he denied this.
50 He was also taken to the series of emails of 16 August 2011.
51 The evidence of Mr Grgat was that the rate in the email of 16 August was not the rate he charged Mr Cicerale at the Prima Pearl site. It instead looked like an indicative rate for a truck and trailer to remove various categories including Coode Island silt.
52 He also denied altering his rate from $45 per metre (as shown in the July/August invoices) to $30 per tonne (in August) because he applied an “industry conversion rate” of 1.5.
53 He was then taken to the email of 6 September 2011.
54 The evidence of Mr Grgat was that this email contained rates that he had given Mr Cicerale verbally on 6 September which Mr Cicerale must have told to Mr Kasalo, and Mr Kasalo has reiterated them, “and I have confirmed them”. Further, that 6 September was the same day for the commencement of the job, such that Mr Cicerale would have been asking him to rush the rates through, to get them through prior to the close of business for the start of the first day.
Mr Cicerale
55 The evidence of Mr Cicerale was that there was a conversation with Mr Grgat about doing the entire job at the Prima Pearl site following on from the preliminary work. He claimed that he wanted a price “by tonne”. Mr Grgat then requested a soil report, which was provided, and following which he sent the email of 16 August 2011. He initially denied that any conversation occurred but later suggested that Mr Grgat gave him the price “on the phone” and agreed that he asked that the price not be on a truck and trailer basis. After recept of the August email, he asked the office to get in touch with him and said that he accepted, which was “the end”.
56 He denied having any further conversation with Mr Grgat about rates, including the alleged conversation on about 14 September about a rate based on cubic metres.
Resolution
57 The defendant made extensive submissions as to why the court should reject that the parties agreed to a rate of $45 per cubic metre.
58 The significant submissions included:
· That the court should accept that the quote contained in the 16 August email contained an offer in relation to the Prima Pearl site (and no other site) which offer was accepted by attendance at the site on 6 September;
· That the email of 7 September was “nothing more than conveying information” and contained no reference to the Prima Pearl site;
· That no formal offer and acceptance was made out on the facts.
59 I am unable to determine whether the August email related to the Prima Pearl site and/or whether it was really an indicative quote on a truck and trailer basis as Mr Grgat suggested. The inclusion of Mr Lloga suggests the emails have a connection with that site given he was the project manager of the Prima Pearl site. However, the rate quoted ($30.00 per tonne) is in stark contrast to the rate given in the July/August invoices for a truck only ($45.00 per metre).
60 In any event, even if the August emails related to the Prima Pearl site, the September “revised rates” email suggest that any earlier “quote” in August was withdrawn or lapsed, with no evidence that the August rate had been taken up or accepted at the site prior to 6 September, or at all. To the contrary, Mr Kasalo makes no reference whatsoever to a rate of $30.00 per tonne in the emails of 6 and 7 September (which would be expected if this lower rate had been agreed upon and accepted).
61 The emails of 6 and 7 September were very close in time to the commencement date of the main Prima Pearl site works. Although it may have been generally preferable for the plaintiff to send the truck driver only once an agreement was actually reached, the evidence of Mr Grgat was that Mr Cicerale would have been asking him to rush the rates to him so as to get them through prior to the close of business for the start of the first day. I found this evidence to be credible and accept it.
62 Further, although the September emails contain no explicit reference to the Prima Pearl site, there was nothing to suggest they related to any other project. As at September, the Coventry project had almost completed (it commenced on 6 April 2011 and ended on 15 September 2011). The Sturt project had also been operational for some time since 1 April (completing on 24 November) while Maribyrnong did not concern Coode Island silt.
63 As the defendant itself submitted (in relation to the August email), “it was improbable that the quotations were provided 4 months after the works had commenced at these two sites”.[6] This applies with even greater force in September.
[6]Ibid, paragraph 12(i).
64 I am therefore satisfied that the emails of 6 and 7 September relate to the Prima Pearl site.
65 In terms of legal analysis, if a formal offer and acceptance is necessary, the revised rates given orally (on 6 September) and confirmed in the 7 September email were clearly accepted by the conduct of the defendant in requesting that the plaintiff cart the contaminated soil from the site. In any event, as the defendant acknowledges, an agreement can be inferred or implied from the conduct of the parties;[7] with the formal offer and acceptance analysis not always being appropriate.[8] A reasonable observer would have concluded that an agreement had been reached in this case. The plaintiff’s evidence; the emails of September; the carting of the soil by the truck (only) from 6 September; and the payment of the invoices all support an agreement based on a rate of $45.00 a metre not $30.00 a tonne.
[7]Ibid, paragraph 22; see also particulars at 4A of the Further Amended Statement of Claim
[8]N Seddon et al, Cheshire & Fifoot Law of Contract, (LexisNexis Butterworths Australia 10e 2012) at 3.4-3.9
66 By way of summary, I also find the following facts which all support that an agreement was reached as alleged on about 6 September to remove the Coode Island silt material at (initially) $45 per tonne:
· I prefer the evidence of Mr Grgat for the reasons given already.
· The evidence was consistent with the emails of both 6 and 7 September which are also coincidental with the commencement of the project.
· There is no reason to believe that the emails of 6 and 7 September were attributable to any other project, particularly given the other projects were well under way;
· The defendant also did not call Mr Kasalo, who may have been in a position to lead evidence that the September rate was somehow attributable to a different project. The only explanation for not calling him was that he had left the company before Christmas in 2013. This is an inadequate explanation. In such circumstances, I draw the inference that his evidence would not have assisted the defendant’s case.[9]
[9]Jones v Dunkel [1959] 101 CLR 298
67 I also accept that the contract was varied orally as Mr Grgat stated. This was consistent with the fact that the defendant made no complaint about the invoices rendered on the basis of the rate of $45.00 per metre until June 2012 and in fact paid many of them.
68 Moreover, insofar as it was sought to suggest that Mr Grgat would be unlikely to agree on an equivalent rate, he gave an explanation for this based on commercial grounds. Notwithstanding the views of Mr Clark he also was of the view that the conversion rate was in the vicinity of 1-1.2, not 1.5. He was not successfully challenged on this position nor was it shown that he believed the rate was 1.5-1.6 (as Mr Clark now suggests). Moreover, his views were substantiated on the facts of this particular case, at least, since the calculations showed that the total number of tonnes (14,990) was close to the total number of metres invoiced (15,126).
69 The plaintiff has thereby satisfied me that an agreement (as varied) was reached to cart Coode Island silt at the rate of $45 per metre cubed as alleged.
Quantum
70 The plaintiff’s case relied upon a simple addition of the amounts shown in the remaining outstanding invoices as derived from hire dockets showing the number of truck loads carted from the site. As will be seen below, this was calculated on the basis that each load was valued at 10 cubic metres (being the capacity of the truck).
71 The defendant made no challenge to the actual calculations derived from the outstanding invoices ($149,747.40). However, the defendant’s contention was that the trucks were not necessarily full such that the hire dockets were inherently unreliable. It followed that the appropriate measure was to apply a conversion rate to the total tonnage shown by the amounts weighed in at the destination (the tip). Various rates were suggested. However, the primary position was that the conversion rate should be 1.5, which would effectively equate to a rate of $30.00 per tonne.
72 In order to resolve this issue it is necessary to consider the evidence further.
73 The plaintiff’s invoices included a schedule which was produced from information contained in the truck hire dockets. The evidence of Mr Grgat was that these dockets were filled out by the truck driver who loaded the dirt into the truckat the site. They were signed by both the truck driver and the company they were working for – in this case Eltrax – at the end of the day. In fact at the bottom of each hire docket the following appears: “I confirm that all details listed on this Hire Docket are correct…” over the signature of both the customer and the truck driver operator.
74 Each of these dockets further contained a statement as to the number of loads and the equivalent volume of material. For example, if five loads were taken, the total amount given was 50 metres cubed.
75 This was to be compared with the process at the tip facility where the material was delivered. At this facility, the material delivered was weighed in tonnage which weights were recorded in various “weighbridge dockets”. Although not every weighbridge docket was in evidence, it was common ground that the information from these dockets had been transferred to a document which showed the total net tonnage delivered on particular dates.[10]
[10]Plaintiff’s transactions by order number appearing at court book pages 163 to 184, Exhibit 3.
76 The defendant highlighted that the net tonnages shown on this document included values below and above 10 which suggested that the plaintiff’s calculations were not reliable. In particular, that the inclusion of values below 10 suggested that the trucks were not always full.
77 However, the evidence of Mr Grgat was that there was not always a precise correlation between the cubic metres recorded and the tonnes recorded at the tip given the nature of the material. This was because there was an amount of airspace included with the silt thrown in the truck since it was “clumpy” and not “granular”. Further, that to the extent there were measurements above the 10, that some of the trucks had high aluminium side walls which could hold more than 10 cubic metres.
78 As indicated already, the calculations undertaken by the plaintiff indicate a close relationship between the total amount removed on the basis of the invoicing and the amount of tonnage recorded at the tip. This suggests that there is very little evidence of material under-filling.
79 The defendant placed some reliance on the evidence of a truck driver, Mr Nguyen, who suggested that he never filled the truck and that he was not familiar with trucks with siding boards. However, he did not present as a reliable witness. Under cross examination he conceded that he had no specific recollection of what happened at the site apart from what was in the hire dockets. He was also not an independent witness as he was married to Mr Cicerale’s niece.
80 In any event, the fact that the tonnage showed amounts over the 10 suggested that the trucks were often full. To the extent there was some concern as to under-filling, the defendant itself retained control over the amount filled. Although the evidence suggested there had to be care with over-filling (which could give rise to a penalty), there was a clear incentive for the defendant to fill the relevant trucks.
81 The defendant is effectively seeking to avoid the agreement reached which was that, on its own request, it would pay on the basis of a unit of volume, cubic metres, and not by way of tonnes. The truck provided a ready measurement of cubic metres given its known capacity (10 cubic metres). The defendant was also in a position to ensure the trucks were full, and was further given the opportunity to approve the information in the hire dockets confirming the volumes taken.
82 I accept the contemporaneous objective documents approved by the defendant itself, which suggest that each load was appropriately valued at 10 cubic metres.
83 I am therefore satisfied, on the balance of probabilities, that the plaintiff has substantiated the quantum sought of $149,747.40.
Conclusion
84 The plaintiff is entitled to judgment in the amount of $149,747.40.
85 I will hear from the parties on the precise form of final order.
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