Lethal Industries Trust v Media Heroes

[2013] QCAT 383

CITATION: Lethal Industries Trust v Media Heroes [2013] QCAT 383

PARTIES:	Lethal Industries Trust (Applicant)
v
Media Heroes, formerly Mojo Media Group (Respondent)

APPLICATION NUMBER: MCD398/13

MATTER TYPE: Other minor civil dispute matters

HEARING DATE: 6 June 2013

HEARD AT: Brisbane

DECISION OF: Louise McDonald,  Member

DELIVERED ON: 12 July 2013

DELIVERED AT: Brisbane

ORDERS MADE: 1.    The application is dismissed.

CATCHWORDS: MINOR CIVIL DISPUTE - Refund of monies paid - Breach of agreement

APPEARANCES and REPRESENTATION (if any):

APPLICANT: Fleur Brazier, representing Lethal Industries

RESPONDENT: Allistair Roberts, Anna Green, Tom Williams

REASONS FOR DECISION

1. The Applicant operates an online store selling clothes, shoes, homeware and imported items. She contracted with the Respondent to deliver an Ecommerce site through the Magento platform to expand her capacity to sell her online clothing store to include a wider range of products.

2. In this matter the Applicant seeks a refund of the cost of the development of the webstore which was the subject of a contract between the parties. Through Ms Brazier, the Applicant claims that she was provided an incomplete site, significantly outside of agreed timeframes, which has resulted in the loss of sales, and the need to expend money on subsequent ecommerce platforms. She submits that she entered the contract relying on the representations of the Respondents that they were competent to deliver a working Magento ecommerce site. She claims that the product she received was incomplete and did not perform the functions for which she contracted. She claims a refund of $10,340 paid plus filing fee of $275.

3. The Respondent strongly denies that the have provided an incomplete product. Pointing to clause 11.2 of the agreement of 5 April 2011, they submit they were not contractually bound to deliver the product in the 8-12 week timeframe, and the delays experienced were as a result of the Applicant’s delays in making payment, non compliance with Training programs, and the high level of changes Ms Brazier requested beyond the scope of the agreed terms of the project.

4. On 4 March 2011 Alistair Roberts of Mojo Media attended the Applicant’s offices and demonstrated a “concept site”. Ms Brazier, in her submissions to the Tribunal states that she assumed this was a concept to be built upon, rather than the final design. Mr Roberts contended this was the product that was purchased, and formed the basis of the agreement.

5. The parties entered an agreement on 5 April 2011. The Briefing and Invoice number 0189, together with the attached terms and conditions constitutes the contract between the parties. The work to be performed was identified in this document as including a primary site, being design, E commerce, RSS, and EBay integration, as well as a wholesale site, including design and integration. The timeline for delivery of this product was 8-12 weeks at a cost of $9,400 plus GST of $940.

6. The Applicant argued the contract required delivery of the complete site by 31 May 2011 or 28 June 2011, but was eventually handed over the site after 32 weeks, on 18 November 2011. She considered that Mojo Media did not have the expertise to deliver this product, and that this was the real source of delay.

7. Ms Brazier’s application seeks a refund on the basis an incomplete product has been handed over to her, which she claims never worked effectively. She claimed in her submissions, “I was never told about the Magento store that I was being sold and exactly what features it would have”. She was disappointed that it did not have the functionality that she had anticipated. In particular, she had expressed that she wanted all the functions of her current store, and more, and had communicated this in her initial meetings with Mojo Media, whom she said confirmed this would occur.

8. Ms Brazier claimed that at the preliminary meetings she gave verbal instructions to Mojo Media that she wanted the site to do all the things that her existing site could do and more. She told the Tribunal that that she informed Mojo Media at this meeting that she wanted to move products across from the current store to the new site with ease, but that in fact there was much frustration with the difficulties in importing across. She stated that the difficulties in importing across included such as deleting and moving columns, changing information, changing entire structure of products, and that this had been unexpectedly and significantly time consuming for her. She stated that there were several errors in the instructions provided by Mojo Media, and incorrect information given, with a need to seek guidance from external support in the United Kingdom office. She had ultimately come to doubt the competence of Mojo Media to provide the product for which they were engaged. The significant delay in the provision of the site outside of the agreed timeframes contributed to her concerns about their competence.

9. Ultimately, over the 7 months, the relationship between the parties soured, and what had been intended to be an ongoing relationship into the hosting phase of the project was severed by Ms Brazier shortly after the webstore was handed over. 

10. Mojo Media argue that delays were ‘almost entirely” caused by Ms Brazier, who they say made extensive requests for changes outside the scope of the project. They contend she delayed payment, which delayed project prioritisation. They suggested that Ms Brazier failed to follow training instructions, and required higher levels of support than provided as part of the service. They further argue that regardless of the cause, the 8-12 weeks was a guideline, and refer to the contract to suggest they were not contractually bound to provide the completed product within that timeframe.

11. Ms Brazier disagreed that the requests or changes were beyond the scope of the agreement. She had assumed that the concept she was introduced to on 5 April 2011 was a starting point, not the final design. She stated that there was no mention in the initial meeting “of the amount of changes that could be made, or of the limitations of what Magento could do.”  She denies that she required a redesign but acknowledges requests for significant changes of the homepage around 15 June 2011.

12. She said that because of that she sent through lists of changes to the layout and design and was told this was fine. She also indicated that she had sought to establish her involvement in the project as she was a graphic designer and that this was clear from the commencement of the project.

13. Ms Brazier claimed that Mojo Media held out product importation from her current store to be any easy task, but proved to be enormously difficult, and time consuming. She indicated that she would not have purchased Magento if she had known of the extensive difficulties this would cause. She sought a quote for Mojo Media to undertake the importation of the products. Due to costs she opted to continue her own importation despite the time delay and frustration.  She expressed anger that she had not been informed that there was an alternative company available who could undertake this on her behalf at low cost and within 48 hours.  She argued that this is evidence of their incompetence and was a misrepresentation.  

14. In her submissions to the Tribunal, Ms Brazier stated, she referred to email correspondence between the parties and the suggested multiple exchanges between herself and Anna Green, the Web Designer, demonstrated that there were many difficulties in Ms Green performing changes requested, and asking questions and admitting to the need from help from the UK office. She refers also to errors in training documents, but provided no evidence of these to the Tribunal.  She argued that changes made by Anna were subject to lengthy delays because Ms Green did not have the experience in Magento.

15. Mojo Media claimed that Ms Brazier purchased the Standard installation of Magenta, which Ms Brazier referred to as the “community version”. Both parties indicate that additional plugin's are needed to expand its functionality from this standard version, and that these cost are additional. Ms Brazier indicates that she was not made aware of this at the point of contract. 

16. Further, Mojo Media pointed to Clause 4 and 6 of the terms and conditions. Clause 4 requires Mojo to build the design in accordance with the specifications, and requires the customer to provide information to Mojo in a timely manner to enable them to complete the design. They argued that multiple changes were requested throughout which they accommodated.

17. An email between the parties dated 7 November 2011 spelled out that multiple changes had been made at no charge outside the scope of the project, and that a definitive list of final changes outlined in the email of 3 November between the parties, would require payment for anything beyond this list.

18. Mojo Media claimed that a fully functioning site was handed over on 18 November 2011, and had exceeded the original scope of the project. They claimed that when the store was put live, the Applicant had all the access and training needed to populate the store and sell products. They claim they made all design changes requested and agreed functionality as well as some out of scope requests.

19. The Respondent provided evidence that Ms Brazier had agreed that the complete product had been provided. By email of 18 November 2011, Ms Brazier acknowledged that “… I understand the work commissioned to the Mojo Media Group Pty Ltd is now complete, I will void the 90 day remedy period and void all obligations of Mojo Media Group to continue working on this project.”“

20. Ms Brazier claimed that the site was handed over with missing elements and accordingly extra extensions had to be purchased. She stated that there were too many errors in the coding and additional purchases that were required that she decided to “cut her losses and start again with a brand new website.” She switched to another company for hosting of the site, which would mean severing the relationship between the parties. Prior to being handed over site access on 18 November Mojo Media required she waive the 90 day remedy period as per the aforementioned email on that date.  Ms Brazier has provided the Tribunal with no evidence that these errors existed to support her oral testimony.

21. She provided an email exchange between the parties dated 31 October 2011 to evidence the incomplete status upon handover. In this email an invalid invoice appears to have been created for the webstore, but Ms Brazier admits this was begrudgingly rectified by Mojo shortly after this.

22. Mojo Media denied the assertion that an incomplete product was provided.  They stated that scope of the project is identified at page 1 of the Briefing and invoice, and includes as web design: Retail store design and Contact page, Ecommerce functionality, RSS, (explained in their submissions as Wordpress integration with Magento, including full styling, category set up and feeds) and EBay integration; and also Wholesale store design and EBay integration. They contended these were the specifications agreed and  delivered, and that they provided considerable goodwill outside the scope of the project terms including an extensive homepage redesign requested in June 2011, resizing of images, social media functionality, custom coding, 8 hours training time beyond the 5 hours included, and extensive fault finding.

23. Mojo Media provided evidence of email of 3 November 2011 that they advised Ms Brazier of potential issues which may occur if hosting was changed, and issues posed by changing host. Specifically, this included the following comments by Alistair Roberts: 

    a)    “Please do listen to Anna and think of her as a highly valued consultant to your business…- if you don’t take her advice on key matters like this you will not have a functioning ecommerce store as I will explain in the following sections…”

    b)    “Magento is a very specific operating system, so can only be hosted by companies with very exact Magento compatibility, plus you need an expert team on the destination of the hosting company supporting you who has experience hosting Magento. If you do not do this the store will not work at all…”

    c)    Further, “Another consideration is that if you moved hosting companies all the custom coding and plug ins that we have built for you could need to be re-installed and re-tested, otherwise they will often stop working after the host transfer…”

    .

24. The Tribunal infers that these matters raised prior to changeover of hosting may have had bearing on the issue of the effectiveness of the webstore of which the Applicant complains.

25. The Applicant has raised assertions that the delays and multiple changes were a result of designer error but provides no evidence of this.

26. To counter this, provided evidence of a series of email exchanges wherein the Applicant is encouraged to refer to training documents. In the absence of any evidence that these training documents contained errors, I cannot make a finding against Mojo Media that they were the cause of the changes and delays.

27. The Respondent points to clause 5 of the contract which provides that charges shall apply where the customer seeks to depart from the agreed specifications. Despite this term, the Respondent offered a number of services out of the scope of the agreement as a sign of goodwill between the parties. They point to these changes as factors in the delay in going live.

28. The extensive and full history of email correspondence between the parties submitted by the Respondents does suggest that Ms Brazier has requested multiple changes beyond the scope of the contracted project. The Respondent contends these requests delayed the project. Despite Ms Brazier’s claims that she thought it was a staring point, it is clear to the Tribunal that it was in fact the product purchased. I can find nothing in the email correspondence submitted by the parties to suggest that Mojo Media failed to attend to requests of the Applicant, or be other than highly responsive. Further, nothing in the email correspondence suggests incompetence on the part of Ms Green, and her contact with the United Kingdom cannot be assumed to support these claims.

29. I note the email chain of 15 June 2011 in which Ms Brazier rejects the design of the homepage and seeks “creative control” resulted in extensive changes to the project and accept the submissions from the Respondent that this was a source of delay in the project which was exacerbated by the Applicant’s requests to delay payment for the purpose of facilitating a grant.  

30. The delivery of the site was significantly outside the agreed timeframes; however, Mojo Media had no contractual obligation to provide the finished product within that 8-12 week timeframe. Clause 11.2 of the agreement made this timeframe a guideline and not an essential term. Furthermore, the contract specifies that payment cannot be withheld where timeframes have not been met.

31. Further, they argued that the Applicant’s requests to delay payment meant the work that was being paid for had to be given priority over the Applicant’s project. While Ms Brazier argued that she was reluctant to pay because she had not seen any progress on the project, she was under a contractual obligation to make payments on time.  It is reasonable that such delay will cause her work to take a lower priority until payment is made.

32. While 7 months may appear unreasonable for what was initially identified as a 3 month project, the Respondent’s submission support a reasonable reason for the delay, and the email correspondence they have filed certainly supports that extensive work has been provided beyond of scope of the agreed terms.

33. Given the absence of evidence of the errors that are asserted by the Applicant and the written statement from Ms Brazier on the 18 November 2011 that she had received the completed product, the Tribunal is unable to conclude that she was delivered an incomplete and ineffective product or that the Respondent breached the contract in any way. The Tribunal acknowledges that evidence suggests that the project has been frustrating, time-consuming and uneconomical for both parties, but that Ms Brazier has not made out a case that Mojo Media are in breach of the agreement or misrepresented their ability to deliver the product for which she engaged them, or that she has any entitlement to a refund for monies paid.

34. The application is dismissed.