Kouba Blake Accounting Pty Ltd v Tanflex Pty Ltd
[2010] QCAT 81
•24 March 2010
DECISION
CITATION: | Kouba Blake Accounting Pty Ltd v Tanflex Pty Ltd & Anor [2010] QCAT 81 |
PARTIES: | Kouba Blake Accounting Pty Ltd (ABN 76 113 984 991) V |
First Respondent Second Respondent | Tanflex Pty Ltd (ABN 66 078 329 503) Stoney Camp Pty Ltd (ABN 38 073 661 784) |
Third Respondent Cairconditioning Pty Ltd (ABN 99 010 878 547)
Fourth Respondent Rockair Pty Ltd (ABN 15 103 515 386)
Fifth RespondentWillowell Pty Ltd (ABN 83 072 664 487)
APPLICATION NUMBERS: 1601/09, 1602/09, 1603/09, 1604/09, 1605/09
MATTER TYPE: Other minor civil disputes matters
HEARING DATE: 3 March 2010
| HEARD AT: DECISION OF: DELIVERED ON: | Beenleigh Tammy Williams, Sessional Member 24 March 2010 |
DELIVERED AT: ORDERS MADE: | Brisbane |
The respondents are not required to pay the applicant the sum of $2780.30 for work invoiced by the applicant; and
The applicant is to return forthwith to the respondents all records, documents and materials, originals and/or copies thereof, in its possession or control which are necessary for the respondents’ transition to a different accounting firm.
REASONS FOR DECISION
Introduction
At the core of this dispute is whether the five respondent companies are required to pay the applicant for the provision of accounting services.
Ms Karen Blake on behalf of Kouba Blake Accounting Pty Ltd filed five applications on 2 December 2009 with the Queensland Civil and Administrative Tribunal (QCAT), naming five different respondents in each application.
· In application number 1601/09 Tanflex Pty Ltd was named as the respondent;
· In application number 1602/09 Stoney Camp Pty Ltd was named as the respondent;
· In application number 1603/09 Cairconditioning Pty Ltd was named as the respondent;
· In application number 1604/09 Rockair Pty Ltd was named as the respondent;
· In application number 1605/09 Willowell Pty Ltd was named as the respondent.
Mr Paul Tucker, the Director of the five respondent companies, filed a response to each of the applications on 24 December 2009.
Hearing
The Tribunal held a hearing on 3 March 2009 at the Beenleigh Magistrates Court and heard the five applications concurrently. Although the applications involve different respondents, they rely on the same facts - Mr Tucker engaged Kouba Blake Accounting Pty Ltd to prepare financial statements and tax returns for each of his companies. On 12 October 2009 Ms Blake sent a letter to Mr Tucker enclosing five invoices and charged a total of $2780.30 “for work done by my office to date”.
· Tax Invoice 2010-000391 for Cairconditioning Pty Ltd is $1, 496.60
· Tax Invoice 2010-000392 for Rockair Pty Ltd is $359.70
· Tax Invoice 2010-000393 for Stoneycamp (sic) Pty Ltd is $237.60
· Tax Invoice 2010-000394 for Tanflex Pty Ltd is $448.80
· Tax Invoice 2010-000395 for Willowell Pty Ltd is $237.60
Whether the respondents are required to pay these invoices was disputed at hearing. The respondents argued the applicant is claiming for work not done.
[6] The Tribunal received written material from both the applicant and respondents. Both Ms Blake and Mr Tucker gave evidence under Oath. Mr Michael Little was called as a witness for the respondents.
[7] At the end of the hearing, the Tribunal reserved its decision.
Relevant Legislation
[8] The Tribunal has jurisdiction to hear and decide these matters pursuant to sections 11 and 12 of the Queensland Civil and Administrative Tribunal Act 2009 (the ‘Act’).
[9] In matters involving a minor civil dispute, the Tribunal must make orders it considers fair and equitable to the parties in order to resolve the dispute. But if it is considered appropriate, the Tribunal may make an order dismissing the application pursuant to section 13(1).
[10] Section 13(2)(a) further provides that the Tribunal may only make the following final decisions to resolve the dispute:
(i) An order requiring a party to the proceeding to pay a stated amount to a stated person; or
(ii) An order that a stated amount is not due or owing by the applicant to a stated person, or by any party to the proceedings to the applicant; or
(iii)An order requiring a party to the proceeding, other than the applicant, to perform work to rectify a defect in goods or services to which the claim relates; or
(iv)An order requiring a party to the proceeding to return goods that relate to the claim and are in the party’s possession or control to a stated person; or
(v) An order combining 2 or more orders mentioned in subparagraphs (i) to (iv).
Summary of Evidence
[11] For several years the applicant provided accounting services to the respondents, which included the preparation and lodgement of company tax returns. If further information relating to all five respondents was required, the applicant would sometimes liaise with Maree Phipps (‘Maree’), the Administration Manager for one of the respondent companies.
[12] On 27 July 2009 the applicant received financial information from Maree, relating to the five respondent companies to be used in the preparation of their 2009 accounts and income tax returns.
[13] The applicant states that work on these accounts commenced on 6 August 2009.
The applicant requested additional financial information from the respondents
[14] On 10 and 12 August 2009, Julia Kouba (‘Julia’) an employee of the applicant, emailed Maree with queries relating to the financial affairs of two respondents – Tanflex & Cairconditioning. Maree provided the applicant with responses.
[15] On 4 September 2009, Julia on behalf of the applicant, emailed Marie with a list of 14 questions and requested additional information on each of the five respondent companies. Maree replied on 16 September 2009 with answers to every question. However the applicant submitted Maree failed to provide copies of General Ledgers and gave insufficient responses to the questions.
[16]In the afternoon of 16 September 2009, Ms Karen Blake emailed Mr Paul Tucker complaining that:
“[e]ach year I have the same battle getting sufficient information from Maree (sic) for me to do my job.... If you want me to exercise my professional expertise in the preparation and lodgement of your company tax returns, then I need the information I ask for, that is, the general ledger printouts and then, any explanations requested once I see those printouts.”
Ms Blake then gave Mr Tucker an ultimatum. “I can send you an invoice for work done to date and you can find someone else to lodged (sic) your 2009 returns. Alternatively, Maree (sic) can give me the information I have requested and I will complete this year and you can make arrangements to move to a new accountant for 2010.” (Emphasis added)
[17] During the hearing, Ms Blake admitted she did not receive the information she requested from Mr Tucker, as per the ultimatum.
Multiple requests were made by the respondents to the applicant for the return of relevant materials and/or work completed
[18] On 12 October 2009 Ms Blake, on behalf of the applicant sent invoices to Mr Tucker for work completed to date. In the covering letter she wrote “I await your reply to my email of 16 September 2009 wherein I advised you that I was not prepared to complete your 2009 financials and company tax returns without the additional information...”
[19] Mr Tucker replied to Ms Blake’s letter on 16 October 2009. As a result of the recent correspondence he engaged a new accounting firm, Affinity Accounting Plus and “instructs you [Ms Blake] to forward all necessary/appropriate information, including copies of your work to date.” This is the first request made to the applicant to forward relevant information to the respondents and/or their agents. There is no evidence of a response from the applicant.
[20] The respondent’s new accountant, Mr Andrew Malins of Affinity Accounting Plus, formally wrote to the applicant on 16 October 2010 and requested “a copy of the last Income Tax Returns prepared, Notices of Assessment and any other relevant information be forwarded.” This is the second request made to the applicant to provide relevant information to the respondents and/or their agents. There is no evidence of a response from the applicant.
[21] On 22 October 2009 Andrew Malins sent a fax to the applicant requesting all of the respondents’ Company Registers and original documentation such as Constitutions, Memorandum and Articles of Association be made available for collection. This is the third request made to the applicant to forward relevant information to the respondents and/or their agents. There is no evidence of a response from the applicant.
[22] On 6 November 2009, Andrew Malins emailed Ms Blake and requested “an electronic copy of the work prepared so far in order that it may be utilised in the completion of this year’s financial statements. We are happy to collect this and the Company Register or other records from you.” This is the fourth request made to the applicant to forward relevant information to the respondents and/or their agents. Andrew Malins also advises Mr Paul Tucker is prepared to pay for the work which has been completed “provided that it is made available to him for his use.”
[23] Ms Blake replied to Andrew Malins’ email on 16 November 2009 and explained she had recently returned to the office from holidays. She undertook to “make arrangements for the information and records you have requested to be made available for you to collect and I will email to you the draft financial statements prepared.” Ms Blake also requested Mr Tucker to settle his accounts while she is organising the transfer of the records.
[24] By 23 November 2009 it is clear from the evidence:
a. The applicant had failed to forward the requested information and records to the respondents and/or their agents; and
b. The respondents still had not paid the invoices for work which the applicant says it has done to date.
[25] At 12.56pm on 23 November 2009, Ms Blake emailed Mr Tucker and explained that despite the limited financial information made available to her, she had commenced preparation of the 2009 financials and tax returns. Ms Blake further requests prompt payment of the five (5) unpaid invoices for work done by her office. If payment is not received she will commence legal proceedings.
[26] At 1.54pm on 23 November 2009, Andrew Malins emailed Ms Blake and is frustrated with her apparent unresponsiveness “to requests for information which is vital to this client.” He argues Mr Tucker (on behalf of the respondents) is entitled to access and enjoy the applicant’s partially completed work, for which has been invoiced. Ms Blake is then directed to “answer our queries in full by 5.00pm today or we shall have no alternative but to replicate the work you have performed and seek recovery of any costs incurred, from you.” This appears to be the fifth request made to the applicant to provide relevant information to the respondents and/or their agents.
[26] Later that same day at 2.09pm, Ms Blake replied to Andrew Malins email concerning her failure to return relevant materials, records, information and/or work completed to the respondents. She informs him that she is “not aware of any list of queries which remains outstanding. How and when did you send them to me? Email, fax, post? Please forward to me.” Ms Blake concludes her email by saying “If Paul wants access to work I have done, he should pay for it and I will email it to you immediately.”
[27] Mr Andrew Malins responded to Ms Blake’s email at 4.13pm. He argues that “you can hardly expect the client to pay for something for which he has no evidence has been performed and prior to it being provided.” Andrew Malins reminded Ms Blake of her undertaking on 16 November 2009 to provide the requested information; which she has failed to do.
[28] At the time of the hearing the applicant had still not provided the respondents with the requested information, records and materials and/or a copy of the work claimed in the invoices. Furthermore, the five (5) invoices submitted by the applicant to the respondents remain outstanding.
Applicant’s Submissions
[29] The applicant is seeking an order from the Tribunal requiring the respondents to pay the amount as per the invoices. Kouba Blake Accounting Pty Ltd’s final submissions can be summarised as follows.
[30] The respondents engaged the applicant to prepare financial statements and tax returns. Mr Paul Tucker does not dispute that the applicant was retained on 27 July 2009.
[31] The respondents have a history of not supplying all of the financial documentation and information necessary for the applicant to provide accounting services. Previously the applicant has had to “qualify” its work.
[32] The applicant commenced work on 6 August 2009 after seeking further information from the respondents. Kouba Blake Accounting continued to provide accounting services to the respondents in good faith, as they “had not been advised otherwise.”
[33] During the hearing Ms Blake sought to explain why copies of the invoiced work had not been made available to the respondents. She explained the applicant’s work “wasn’t in a format which could be provided to the respondents.” Ms Blake argued it never advised the respondents and/or their agents that the work was in a transferable format.
The Respondents’ Submissions
[34] The respondents are seeking an order from the Tribunal dismissing the applications. Their final submissions can be summarised as follows.
[35] On 16 September 2009 Mr Paul Tucker (on behalf of the respondents) was given a choice – provide Ms Karen Blake with the information requested and she will complete the 2009 financial statements and tax returns; or she will send an invoice for work done to date and the respondents can retain a new accountant. The respondents did not provide the requested information to the applicant and advised on 16 October 2009 they had engaged a new firm, Affinity Accounting Plus.
[36] The respondents submitted they were always prepared to pay for the work completed by the applicant (namely the preparation of financial statements and company tax returns); but they wanted to be able to use this work for which they were being invoiced for.
[37] As a result of the applicant’s failure to provide a copy of this work, in addition to retaining records and other materials relating to the five respondent companies (for example the original Constitutions, Memorandum and Articles of Associations); the respondents were forced to retain another accounting firm so they could comply with their taxation obligations. The respondents argued they incurred an unnecessary cost because of the applicant’s failure to provide the requested information - Affinity Accounting Plus had to duplicate this work.
The Tribunal’s View
[38] The Tribunal carefully considered the evidence and submissions of both parties. In doing so the Tribunal identified a number of inconsistencies between the applicant’s oral evidence and submissions, with that of the documentary evidence.
[39] Mr Paul Tucker and Mr Andrew Malins had written to Ms Blake on several occasions and requested her to forward a copy of the invoiced work. This request was in addition to Ms Blake being asked to forward the original and/or copies of records, documents and materials relating to the respondent companies which were in the applicant’s possession. There was no explanation from Ms Blake as to why this request should not be complied with, other than “if Paul wants access to work I have done, he should pay for it.” However it was not until the hearing that Ms Blake sought to explain her failure to forward a copy of the invoice work – it “wasn’t in a format which could be provided to the respondents.” This explanation is inconsistent with her email to Andrew Malins dated 16 November 2009, whereby she agreed to “make arrangements for the information and records you have requested to be made available for you to collect and I will email to you the draft financial statements prepared.”
[40] The Tribunal also found part of the applicant’s evidence to be unreliable. Attached to the five invoices was a corresponding ‘jobs description report’ for each respondent company (client). Almost every report had handwritten amendments and incorrectly referred to a job item undertaken for a different client for which the invoice related to. For example the report detailing a job undertaken by “Karen” for Rockair Pty Ltd charged the client $216 for the “Preparation of Annual Financial Statements – Review Cair, Email Queries” on 12 August 2009. It appears from the evidence the only email sent on this date by Ms Blake was to Maree Phipps, requesting the final page of the Balance Sheet for Cairconditioning to be provided to the applicant. Maree complied with this request on 19 August 2009. Ms Blake did not provide an explanation to the Tribunal as to how this job (“Review Cair, Email Queries”) related to Rockair Pty Ltd and justified the charge.
[41] The evidence contains further examples of anomalies relating to the invoices. For example the jobs report attached to the Cairconditioning Pty Ltd invoice, describes a job undertaken by “Karen” on 4 September 2009 as “Annual Financial Statement – review Cair Email Re Queries” for which the applicant charged $364. The only email sent on this date was a two page letter from Julia Kouba to Maree Phipps and requested additional information on each of the five respondent companies. This email was merely copied to Ms Blake; and Maree Phipps did not reply to this email until 16 September 2009. It is unclear what other work (or email queries requiring review) was undertaken by the applicant to justify the charge. In the absence of evidence from Kouba Blake Accounting about these specific matters, the accuracy of the five invoices is questionable.
[42] The Tribunal is not satisfied there are sufficient grounds to dismiss or strike out the five applications brought by Kouba Blake Accounting Pty Ltd pursuant to section 47 of the Queensland Civil and Administrative Tribunal Act. The section only applies if the Tribunal considers a proceeding or a part of a proceeding is-
a. Frivolous, vexatious or misconceived; or
b. Lacking in substance; or
c. Otherwise an abuse of process.
[43] However for the reasons outlined in this decision, the Tribunal is of the view it would not be fair and equitable if the respondents were required to pay for questionable job items charged in the invoices; or for work which it had not sighted or cannot be used for their own purposes (and then later incur a cost to duplicate).
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