Pazand P/L v Bowers
[2014] QMC 17
•9 May 2014
MAGISTRATES COURTS OF QUEENSLAND
CITATION:
Pazand P/L v Bowers [2014] QMC 17
PARTIES:
PAZAND PTY LIMITED TRADING AS VALLEY STEEL AND FENCING
(Plaintiff)
v
STEVEN BOWERS TRADING AS STEVE’S FENCING
(Defendant)
FILE NO/S:
M39/12
DIVISION:
Magistrates Courts
PROCEEDING:
Claim
ORIGINATING COURT:
Magistrates Court at Gatton
DELIVERED ON:
9 May 2014
DELIVERED AT:
Ipswich
HEARING DATES:
28 March 2014; 2 April 2014
MAGISTRATE:
Simpson AP
ORDER:
Judgment for the Plaintiff in the sum of $11,560.15 together with interest and costs
CATCHWORDS:
CONTRACTS – BREACH OF CONTRACT - whether defendant made payment
COUNSEL:
MC Long for the Plaintiff
The Defendant appeared on his own behalf
SOLICITORS:
Roberts Legal for the Plaintiff
The Defendant appeared on his own behalf
The plaintiff is in the business of supplying steel and fencing products to persons such as the defendant. The defendant carries on a business as a fencing contractor. Both businesses are conducted in the Laidley area. The parties have been known to each other and traded for many years.
The plaintiff’s claim is for monies due and owing for fencing materials supplied to the defendant. The total sum sued for on the face of the Claim is $11,595.95 plus costs and interest. The defendant says the extent of his indebtedness is $1,077.95.
The plaintiff says the debt arose in September 2010. At the material time, the plaintiff says it delivered materials to the defendant at properties at Lockrose, Plainland and Thagoona. In submissions, Mr Long, counsel for the plaintiff, produced a table setting out the deliveries and corresponding price amounts for the goods. I reproduce that below:
Job Amount
(a) Lockrose 1 $1,991.80 (b) Plainland $3,972.40 (c) Lockrose 2 $8,622.70 (d) Thagoona $3,073.25 Total $17,660.15
The evidence and pleadings set out that the Plainland and Thagoona deliveries and corresponding amounts are not in dispute. Equally the price for what is described as Lockrose 1 above is not in dispute. Further, it is common ground that the defendant has made various payments to the plaintiff at the material time and following months. These payments total $6,100.00. Therefore the amount outstanding is $11,560.15. What is in dispute is:
(a) whether the defendant paid for the Lockrose 1 delivery on 7 September 2010, or only later on 16 December 2010;
(b) whether the defendant accepted the plaintiff’s quote and order for the Lockrose 2 delivery on or about 23 September 2010;
(c) whether the plaintiff delivered the goods the subject of the Lockrose 2 order to the defendant at 46 Zabel Road, Lockrose on or about 6 October 2010;
(d) whether the payments made by the defendant to the plaintiff were in respect of the orders in dispute or other materials supplied on other dates.
The plaintiff called Mrs Carol Tattum, a director of the plaintiff and manager of the business to establish the trading terms between the plaintiff and the defendant. Through her a number of documents were tendered including tax invoices, purchase orders and order confirmations. Mrs Tattum gave evidence of the system used by the plaintiff at the material time relating to sales and purchases of fencing and other materials. She said a lot of her customers were on credit terms, subject to a credit contract in the form of Exhibit 1. At one time the defendant was the subject of a credit contract that allowed him to purchase materials on account. At the material time the credit contract had ceased and the defendant was a cash customer.
Her evidence was that credit customers could place an order with the plaintiff and receive delivery of the goods in the absence of payment for the goods at the time of delivery. This type of customer would then have 21 days to settle their account. These terms did not extend to those who were cash customers. A cash customer would need to pay for the goods prior to delivery.
A curious aspect of the plaintiff’s system was that a tax invoice would not be raised until after payment was received. This did not strike me as prudent business practice. I questioned this process because it occurred to me that a customer would not know what to pay unless it was issued with a tax invoice. Mrs Tattum gave evidence that the purchase order would be used as the basis for the price in the system. She was concerned that if a tax invoice was generated and given to a customer prior to payment it could be said the customer was no longer indebted because it held the tax invoice. That, to me, does not make sense. That is particularly so when an examination of the tax invoices tendered show the following words printed thereon:
DIRECT DEPOSIT DETAILS AS FOLLOWS :- BSB 014589 A/C: 4832 01025 – PLEASE FAX OR EMAIL REMITTANCE
*** NO REFUNDS OR EXCHANGES WILL BE ACCEPTED WITHOUT THIS INVOICE AS PROOF OF PURCHASE – NO EXCEPTIONS!!!***
TRADING TERMS – STRICTLY 21 DAYS
Title to the goods herein remain with VALLEY STEEL & FENCING until full payment has been received and cheques cleared.
INTEREST WILL BE CHARGED ON OVERDUE ACCOUNTS @ 2% MONTHLY
As can be seen, the tax invoice calls for payment and sets out how to pay. It says nothing about it being a receipt for payment. What begs the question is why you would print details of how to pay for goods on a document that is not issued until after payment is received.
Despite my concerns about this system of invoicing customers, the defendant did not challenge the fact that it was the system in place when he had been trading with the plaintiff at the material times. He had always placed orders and paid in accordance with it.
Mrs Tattum gave evidence that she put this system in place to avoid disputes about payments that are due. However, it is because of this system, in my view, that the defendant has argued that he does not owe the amount of $1,991.80 for the Lockrose 1 contract.
The defendant’s principle argument to challenge his indebtedness for Lockrose 1 is that he says he paid for those materials before they were delivered to him on 7 September 2010. Exhibit 28 shows that the defendant made an electronic funds transfer of $1,991.80 from his Bendigo Bank account to the plaintiff’s bank account at 7:04am on 7 September 2010. He has marked on that exhibit words indicating the payment related to a delivery to 46 Zabels Road, Lockrose. It cannot be determined from the face of that document when the words were written on it. If the defendant’s evidence is accepted then a tax invoice for Lockrose 1 should have been generated following payment for that contract on 7 September 2010.
Mrs Tattum accepted that a payment was received on 7 September 2010 for materials ordered by the defendant, but says the payment related to other materials ordered. She said the payment of $1,991.80 related to sales order 2722 taken by Mr Michael Brown on 2 June 2010. Mr Brown is a salesman for the plaintiff. A tax invoice numbered 44626 was generated using the system on 7 September 2010 after payment was received for that order. This sales order and tax invoice is found in exhibit 20. This tax invoice shows the materials purchased are of a general hardware nature and not similar to the materials that are the subject of the dispute.
Mrs Tattum said it is no more than a mere coincidence that the amount found in the tax invoice generated on 7 September 2010 and the amount of the disputed sum for Lockrose 1 are the same, i.e. $1,991.80. She could not say when those goods were delivered or picked up. Further during cross-examination on the first day of trial she said she had never seen invoice 44626 before. Mrs Tattum said any evidence about the invoice and sales order would need to come from Mr Brown. Ultimately, she said Lockrose 1 was not paid for until 16 December 2010 when the defendant sent an electronic funds transfer for $2,000.00. This is shown in exhibit 9.
The defendant said Lockrose 1 was paid for on 7 September 2010 and that exhibit 20 amounts to a fraud. Further, he says the payment of $2,000.00 was for the Thagoona contract. The defendant’s case was that I should accept that Lockrose 1 was paid for on 7 September 2010 because that was the day of delivery and following from the evidence of Mrs Tattum delivery of materials would not be made without payment first.
The defendant cross-examined Mrs Tattum about the former sales manager of the plaintiff Mr Mike Holland and the circumstances of his dismissal. This evidence showed he was dismissed for a number of reasons including removing a welder from the plaintiff’s premises to his private residence, issuing false credit notices and authorising the delivery of the goods the subject of this litigation before payment was received by the plaintiff. The defendant asserted that exhibit 20 was created by Mr Holland and not Mr Brown. This theory was rejected by Mr Brown when he gave his evidence. The bare allegations of the defendant were not supported by the evidence given or tendered.
The cross-examination of Mrs Tattum revealed that deliveries were made before payments were received contrary to usual process for cash customers. There were other departures from the system during this dispute; invoices were created before any payments were received as a means of tracking the alleged debts of the defendant after he began disputing his indebtedness. Those invoices are exhibits 10 and 11. The process of producing exhibits 10 and 11 seem reasonable in the circumstances.
In my opinion the system and the departures from it created a rod for the plaintiff’s back in this litigation. If tax invoices were issued prior to payment as a demand for payment followed by a receipt once payment is received then there could be no argument about what has been paid for and what is outstanding. Further, the plaintiff should have always adhered to not providing a cash customer with goods in the absence of payment. These observations do not resolve whether the defendant is indebted to the plaintiff. They merely highlight the fact that the plaintiff has exposed itself to a weakness that became the central plank of the defendant’s case.
Despite the weakness in the system I am satisfied on the balance of probabilities that the defendant paid $1,991.80 for sales order 2722 on 7 September 2010 and $2,000.00 for Lockrose 1 on 16 December 2010. It follows that the payment of $2,000.00 cannot be applied against the Thagoona contract. In making this finding I have accepted the evidence of Mr Brown that he created the sales order 2722 and invoice 44626 and it does not amount to a fraud. I reject the evidence and submissions of the defendant in this respect. This finding is bolstered by the fact that despite the allegations of fraud, the defendant failed to raise any issue about exhibit 20 until the trial and had been in possession of tax invoice 44626 at all material times.
The issues surrounding the ordering of goods and second delivery to Lockrose can be resolved by reference to the evidence of Mr Brown, Mrs Kathleen Clouting and Mr Norman Bushell. Mrs Clouting is the owner of the Lockrose property at which the defendant was constructing a fence. It was alleged by the plaintiff that the materials for this fence came from the plaintiff. Mr Bushell is an employee of the plaintiff who said he delivered goods to Lockrose.
In respect of this issue Mr Brown gave evidence that he received an order for fencing materials from the defendant and an order confirmation was generated on 23 September 2010. This document became exhibit 5. Mr Brown went on to confirm the defendant approved the order by telephone and that he then place the orders with the supplier, Stramit Building Products (“Stramit”). The plaintiff received the materials from Stramit for the eventual supply to the defendant. The oral evidence about this process was supported by documents showing the transaction with Stramit in exhibits 6 and 7. I am persuaded by the submission of Mr Long that it does not make sense that the plaintiff would expose itself to the costs involved with the order from Stramit unless the defendant had requested the order.
Mrs Clouting was a reliable and truthful witness. She gave evidence that the defendant had given her three quotes for three stages of work to erect a fence around her property at Lockrose. Those quotes became exhibits 15, 16 and 17 and came to a total price of $19,275.00. She accepted the quotes and the defendant carried out the job of erecting the fence. Her evidence is of importance because she says she was present during the delivery of materials for the invoice associated without Lockrose 2. She gave evidence with some particularity that the delivery of the materials came on the back of a large white truck with a red crane. She said “I remember the truck”.
Mrs Clouting’s evidence was in complete contrast to the evidence of the defendant because he said he bought the materials and had them delivered from another supplier using a trailer towed behind a car. He gave evidence that the materials came from Tru Value Hardware in Laidley and not from the plaintiff. The defendant challenged Mrs Clouting’s truthfulness because she had complained about his workmanship to the Building Services Authority. She had also complained because she believed the quotes were “rather high”. Her complaints were dismissed by the authority. She and the defendant also involved the police at one point during the final stages of their transactions because Mrs Clouting refused to pay for part of the works.
The defendant submitted that Mrs Clouting had reasons to be hostile in giving her evidence and should not be accepted. He said she was an untruthful witness. I do not accept that submission. She made concessions where appropriate regarding her falling out with the defendant. She gave a clear account of the delivery of materials and the truck that brought it. I accept her evidence as a whole.
The plaintiff’s last witness on the question of Lockrose 2 was Mr Bushell. He was presently working as a stump grinder and did work from time to time for the plaintiff. In 2010 he was, amongst other things, carrying out work as a delivery driver for the plaintiff. He remembered doing one delivery to the defendant in 2010. He refreshed his memory of the delivery from a time card that was exhibit 26. The exhibit showed that a delivery was made to a property at Lockrose on 6 October 2010. It does not show to whom it was made nor what the delivery was made up of. That evidence came from Mr Bushell.
The driver gave a detailed account of the delivery. He referred to the wet weather and how that effected where he could drive on the day. He remembered the paint markings on the ground at Zabel Road, Lockrose. These markings had been put there by the defendant. He remembered Mrs Clouting and how she had erected a temporary fence so as to keep her dogs in. He remembered the truck as depicted in exhibit 18 as the truck he drove on the day to deliver the materials. This was the same truck as identified by Mrs Clouting. I am satisfied that I can act upon his evidence as being accurate regarding this delivery.
The defendant’s evidence on this matter is not reliable. He claimed he had bought the materials from Tru Value Hardware in Laidley. His evidence was that he had asked a number of suppliers for quotes regarding the materials needed for part of Mrs Clouting’s fence. He said that his conversations with Mr Brown for this part of the dispute were only for the purpose in getting a quote. He rejected the idea that he approved the purchase of materials for Lockrose 2. He claimed that he ordered the materials from Tru Value Hardware because they were the cheapest quote. He produced a tax invoice and delivery note from Tru Value Hardware to support his evidence. These documents are exhibit 29.
In cross-examination the defendant accepted that the owner of Tru Value Hardware, Mr John Storr, was a friend and drinking companion. He also accepted that this was the only order that was placed with Tru Value Hardware at the material time and that he had otherwise always placed orders with the plaintiff for his fencing needs. Mr Storr did not give evidence at the trial and Mr Long invited me to make appropriate findings about his absence with respect to the defendant’s case. There was no proper explanation as to why Mr Storr did not give evidence. At different times during the trial the defendant claimed that Mr Storr would be a witness; however, no evidence was called from him. The inference I draw is that the evidence of Mr Storr, if called, would not have helped the defendant’s case.
Ultimately, it is for the plaintiff to prove its claim to the requisite standard based on the evidence heard and produced. As I have noted above, the evidence is reliable and consistent with the plaintiff’s case for indebtedness. I reject the defendant’s evidence on the material issues.
It follows from the findings I have made above that I am satisfied on the balance of probabilities that the defendant ordered the materials the subject of Lockrose 2 and that they were delivered to Zabel Road, Lockrose. The defendant is therefore liable to pay for that part of the claim being $8,622.70.
The last issue to determine is what interest rate should apply to any amount owed by the defendant. The plaintiff originally claimed interest pursuant to the credit terms of exhibit 1. The evidence of Mrs Tattum was that the credit terms ceased well before this dispute arose. The interest rate referred to on the face of the invoices, as shown above, has a direct correlation to the terms for credit customers. The order confirmation documents do not make reference to any interest rates. I have come to the conclusion that the interest terms of exhibit 1 do not have application to this dispute. Therefore, the plaintiff is entitled to interest pursuant to statute flowing from the filing of proceedings.
In conclusion I order judgment for the plaintiff in the sum of $11,560.15 together with interest pursuant to the Civil Proceedings Act 2011.
I will hear the parties as to costs.
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