Pethybridge v Stedikas Holdings Pty Ltd

[2007] NSWCA 154

Reported Decision: (2007) Aust Contract Reports 90-263

New South Wales

Court of Appeal

CITATION:	DENNIS PETHYBRIDGE v STEDIKAS HOLDINGS PTY LTD [2007] NSWCA 154
HEARING DATE(S):	23 April 2007
JUDGMENT DATE:	27 June 2007
JUDGMENT OF:	Beazley JA at 1; Basten JA at 2; Campbell JA at 3
DECISION:	(1) Appeal allowed.; (2) Set aside the judgment and orders made on 24 March 2006 in matter 9804 of 2001 in the District Court of New South Wales.; (3) Order that the said District Court proceedings be dismissed with costs.; (4) Respondent to pay costs of the Appellant of the appeal.; (5) Respondent to have a certificate under the Suitors Fund Act 1951, if qualified.
CATCHWORDS:	CONTRACTS – general contractual principles – parties – identification of parties – where contract made with a business – where registered proprietor of business name not carrying on business under that business name – where company owned by registered proprietor of business name carried on business under that business name – whether contract made with registered proprietor of business name or with company that carried on business under that business name – where statute provides prima facie presumption that business is carried on by registered proprietor of business name – statutory presumption that business is carried on by registered proprietor of business name rebuttable by evidence – identification of parties to a contract to be determined in accordance with the objective theory of contract – Business Names Act 1962 (NSW) - CONTRACTS – general contractual principles – parties – identification of parties – whether subsequent communications relevant to determining identity of parties
LEGISLATION CITED:	Business Names Act 1962 (NSW) Partnership Act 1915 (Vic) Suitors Fund Act 1951
CASES CITED:	Re ABC Plastik Pty Ltd (1975) 1 ACLR 446 Aikman v Brown (Trading as Capital Travel Service) (1973) 1 ACTR 121 Aitkin Transport Pty Ltd v Voysey [1990] 1 Qd R 510 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153; [2001] NSWCA 61 Bridges & Salmon Ltd v The Swan (Owner); Marine Diesel Service (Grimsby) Ltd v The Swan (Owner) (The Swan) [1968] 1 Lloyd’s Rep 5 El-Mir v Risk [2005] NSWCA 215 H J Lyons & Sando Limited [1963] SASR 29 Independent Timber Importers v Mercantile Mutual Insurance (2002) 12 ANZ Ins Cas 61-543; [2002] NSWCA 304 Ingram v Little [1961] 1 QB 31 Re Johnson & Anor; Ex parte Greendale Engineering and Cables Pty Ltd (1968) 11 FLR 335 Lewis v Averay [1972] 1 QB 198 Magill v National Australia Bank Ltd (2001) Aust Contract R 90-131; [2001] NSWCA 221 Parsons and Rochella v Vance (App. 7/1984; unreported) Press v Mathers [1927] VLR 326 Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 Ryledar Pty Ltd & Anor v Euphoric Pty Ltd [2007] NSWCA 65 Walker v Andrew (2002) 20 ACLC 1476; [2002] NSWCA 214
PARTIES:	Dennis Pethybridge - Appellant Stedikas Holdings Pty Limited - Respondent
FILE NUMBER(S):	CA 40219/06
COUNSEL:	B A Coles QC; A F Fernon - Appellant A C Bridge SC; M Fordham - Respondent
SOLICITORS:	Low Doherty & Stratford, Blacktown - Appellant Coleman & Greig, Parramatta - Respondent
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	9804/01
LOWER COURT JUDICIAL OFFICER:	Truss DCJ
LOWER COURT DATE OF DECISION:	24 March 2006

CA 40219/06
DC 9804/01

BEAZLEY JA
BASTEN JA
CAMPBELL JA

27 JUNE 2007

DENNIS PETHYBRIDGE v STEDIKAS HOLDINGS PTY LIMITED

Judgment

1 BEAZLEY JA: I agree with Campbell JA.

2 BASTEN JA: I agree with the orders proposed by Campbell JA and with his Honour's reasons. In relation to [59] I too would not wish to form a concluded view as to whether it is "permissible to look at" subsequent communications and conduct, in order to determine whether a contract with a particular party existed. To answer that question it is necessary to determine the precise issue, which may depend upon the nature of the relief sought. Once the issue is identified, it is then necessary to consider the relevance and admissibility of evidence of subsequent conduct in relation to that issue.

3 CAMPBELL JA: There is just one point in this judgment. It concerns whether a building contract was made with a company, or with the man who stands behind the company. In a judgment given in the District Court on 16 December 2005 the trial judge held that the contract in question was made with the man who stands behind the company, the Appellant.

4 The Respondent is the owner of some land located at Rouse Hill on which a shopping centre is constructed. It engaged Metro West Pty Ltd (“Metro”) to act as construction manager for various building works at the shopping centre. Among those works was construction of a new carpark at the shopping centre, and extension of an existing carpark. Mr John Watton is the General Manager of Metro. He is a carpenter by trade, and had day-to-day conduct of the construction management contract on Metro’s behalf. He was, for the purpose of the contract now in dispute, the only person whose actions or knowledge count as actions or knowledge of the Respondent.

5 The Appellant is a director of Torpoint Investments Pty Ltd (“Torpoint”). Torpoint has twenty non-voting shares of $1.00 each, that are held equally between the Appellant and Debra Pethybridge. It also has five hundred ordinary shares, all of which are held by the Appellant. There are two directors – the Appellant and Debra Pethybridge. The Appellant has been a director of Torpoint since 1979. The address of both the Appellant and Debra Pethybridge is given, in a recent corporate search of Torpoint, as 47 Hynds Road, Box Hill, NSW.

6 The Appellant has also been, at all relevant times, registered as proprietor of the business name “C & D Asphalt Service”. That registration was under the provisions of the now-repealed Business Names Act 1962.

Relevant Provisions of the Business Names Act1962

7 Section 5(1) of the Business Names Act 1962 prohibited a person from carrying on business under a business name unless that business name was his or her own name without any addition, or the business name was registered under the Act. Section 5(5) provided:

“Notwithstanding anything in this Act a contravention of or failure to comply with any provision thereof shall not operate to avoid any agreement transaction act or matter.”

8 There was provision in section 6 for the Commissioner of Consumer Affairs to keep a register of business names. Under section 11, once a business name was registered, it remained in force for a period of three years, but that registration was able to be renewed from time-to-time.

9 Section 24 provided that a document purporting to be a copy of or extract from the register shall in all courts be prima facie evidence of any matter contained or set out therein.

Evidence Relating to Contract Formation

10 On 5 February 1999 Mr Watton wrote to C & D Asphalt Service. That letter was on a printed letterhead headed:

“Metro West Pty Ltd
Project Services
ACN 059 953 990 Gold Licence No. 45749C”

11 The totality of C & D’s address, as appearing on the letter, was

“C & D Asphalt Service
47 Hynds Road
BOX HILL 2765”

12 The salutation with which the letter opened was “Dear Sir”. The opening paragraph was:

“We act as Construction Managers on this project and cordially invite you to submit your lump sum fixed price tender to carry out the construction of a new car parking area and the reworking of the existing front car park all in accordance with Drawing No. 948 BA 02 Issue L and information as attached herewith.”

13 That letter was replied to by a letter dated 27 February 1999. That response was a typed document, on a page with a letterhead that read:

“ C & D ASPHALT SERVICE
47 HYNDS ROAD, BOX HILL NSW 2765
Specialising in
Car Parks & School Playgrounds, Red Asphalt, Hot-Mix, Two Coat Seal
Red Gravel Driveways”

14 The only indication of an addressee on the letter was:

“ATTN: JOHN WATTON
METRO WEST Pty Ltd”

15 There was no opening salutation. The first line of the letter read “Thank you for inviting us to quote and we are pleased to submit the following.” The letter then went on to identify the work that would be done, and offered a price of $96,600. The letter closed by saying:

“Thanking you.
Yours sincerely,
CHRIS PETHYBRIDGE”

16 The words “CHRIS PETHYBRIDGE” were typed, and no handwriting appeared anywhere on the letter. The trial judge found that Chris Pethybridge is the Appellant’s son, and was an employee of Torpoint. There was no evidence that the identity of Chris Pethybridge was known to Mr Watton, nor that the fact that Chris Pethybridge is the Appellant’s son was known to Mr Watton, nor that the fact that Chris Pethybridge was an employee of Torpoint was known to Mr Watton. Indeed at that time Mr Watton had not heard of Torpoint. So far as the evidence shows, neither had he heard of the Appellant or Chris Pethybridge.

17 The letter dated 27 February 1999 had, at its bottom right-hand corner, at a place well separated by white space from the other printing on the letter, the expression “A.C.N. 001 773 315”. That expression accurately states the Australian Company Number of Torpoint.

18 It appears that that letter was sent by fax. The copy of it annexed to an affidavit sworn by Mr Watton bears a fax header dated 01 March 1999 that identifies the sender as “C & D Asphalt Service”.

19 There was a discussion between Mr Watton and the Appellant on 11 March 1999. The trial judge made no finding about it, but the account of it given in the affidavit of Mr Watton is:

WATTON: “Your quote is higher than the budget allowed for in figures given to our client. Is there any way of saving any money on the job?
PETHYBRIDGE: “We could use a fifty fifty blend of recycled concrete and twenty millimetre fine crushed rock instead. I used it on the Winston Hills Shopping Centre carpark. It’s quite acceptable, gives the same performance and is acceptable to Council. There is a saving of around $8.00 m3 if this material is used.”

20 The Appellant filed an affidavit in which he said that that account of the discussion was correct, except that he did not say that the blend had been used by him on the Winston Hills Shopping Centre – rather, he said that it had been used by another contractor whom he named. It is not necessary to resolve that minor difference in the evidence. What matters for present purposes is that the discussion included nothing that cast any additional light, beyond that contained in the correspondence and surrounding circumstances, on who the contracting parties might be. I mention it only because the discussion is referred to in an order dated 16 March 1999 that (as is common ground) is part of the contractual documentation.

21 On 11 March 1999 a revised quotation was provided to Mr Watton. It had exactly the same format as the quotation of 27 February 1999, including in particular the letterhead, the wording used to conclude the letter, and the ACN appearing in the bottom right-hand corner. On this occasion, above where Chris Pethybridge’s name was printed, there was handwriting saying, “pp DP”.

22 On 16 March 1999 Mr Watton issued a written order. It was on stationery with the same letterhead as Mr Watton’s letter of 5 February 1999. It was addressed as follows:

“ To : C & D Asphalt Service
47 Hynds Road
BOX HILL 2765
Attention: Dennis Pethybridge ”

23 The opening paragraph of the order read:

“Please carry out the construction of a new car parking area and the reconstruction of the front car park in accordance with our tender documentation, your revised quotation dated 11th March and our site discussion same date for the sum of $92,000 .”


It went on to identify the work, and some other practical matters relating to performance of the work.

Post-Contractual Communications

24 It was common ground on the appeal that, at least by the date that asphalting work commenced to be carried out at the Rouse Hill Shopping Centre, a contract had been formed. There was some evidence of post-contractual communication, arising from alleged defects in the work, that in Mr Watton’s view needed to be rectified. Some of those communications from Mr Watton were addressed to “C & D Asphalt”, and marked either “Attention: Dennis”, or “Attention: Mr D Pethybridge”.

25 On 22 June 1999 an invoice was sent to Mr Watton, claiming payment for work that had been done on the carpark. It was on stationery that had the same format as the tender dated 27 February 1999, so far as the letterhead and appearance of the ACN at the bottom right-hand corner were concerned. The invoice also bore, at its foot, a stamp that read:

“This company Torpoint Investments Pty Ltd
T/A C & D Asphalt Service Hold(s)
approval, in force from 2nd June, 1997 to
Double Deduction Exemption Certificate
Number E 1800021U.”

It was on receipt of that invoice that Mr Watton first heard of the company Torpoint Investments Pty Ltd.

26 Thereafter, communications from Mr Watton were sometimes addressed to “C & D Asphalt P/L” and marked “Attention: Dennis”, or were sometimes addressed simply “C & D Asphalt”, and likewise marked “Attention: Dennis”.

27 Metro paid for the work (minus a retention sum) by cheque drawn on 26 July 1999. The cheque butt identified the payee as “C & D Asphalt P/L”. While the original cheque was not in evidence, I infer it identified the payee in the same way.

28 There was no evidence of any dealings prior to 5 February 1999 between either the Respondent or Mr Watton or Metro West on the one hand, and either the Appellant or Torpoint on the other. One piece of factual information known to both parties at the time the contract was entered emerged, however, when Mr Watton said, in cross-examination (speaking in relation to a letter he wrote on 12 March 1999),

“… C & D had been a local company within the area and had advertised pretty well and they were – we gave preference to all local contractors.”

29 Mr Watton at no time made any searches or enquiries in relation to the ownership of the name C & D Asphalt Service.

The Appellant’s Evidence About Who Carried on Business Under the Business Name

30 The evidence included a Certificate of Registration of the business name “C & D Asphalt Service”, dated 10 June 1999. It showed the Appellant as being the proprietor of the business name, and the principal place of business as being 47 Hynds Road, Box Hill, NSW. It stated that the registration remained in force until 1 July 2002.

31 The Appellant gave affidavit evidence as follows:

“4. I have been in the business road making since I was 19 years of age (in about 1967). I commenced my own business of making roads in the mid 1970’s. Torpoint is my company that I use to operate that road making business. I have used it for that purpose for the last 25 years ...
5. The trading name “C&D Asphalt Service” (“ C&D ”) was registered in my name in 1993 ...
6. Prior to 1993, the name was registered in both my name and my then partner, Chris Barker. I acquired Chris Barker’s interest in the business in about 1993.
7. However, the business name has always been used by Torpoint to carry on its road making business.”

32 Even though the pleadings had clearly raised an issue about whether it was the Appellant personally, or Torpoint, that had entered the contract, there was no cross-examination of the Appellant that dealt directly with this evidence. There was some cross-examination of the Appellant directed to his expertise in the paving business, where he assented to propositions including “you have held yourself out to members of the public as someone who could construct asphalt carparks” and “did you advertise in the Yellow Pages at that stage?” and “… you received the letter from Metro-West you were asked to provide a tender price for the Rouse Hill job”. As the cross-examination did not put squarely to the Appellant that “you” referred to him personally and not to his company Torpoint, I do not regard that cross-examination as challenging the substance of the affidavit evidence I have quoted above. The proper conclusion to draw from the evidence is that, notwithstanding that the Appellant was registered as proprietor of the business name C & D Asphalt Service, in fact it was Torpoint that carried on business under that name.

The Trial Judge’s Factual Findings

33 The trial judge made factual findings that:

(1) “… the business name C & D Asphalt has always been used by Torpoint to carry on its road making business”, and
(2) Mr Watton believed he was contracting with C & D Asphalt.

The Judge’s Reasoning

34 The reasoning of the trial judge concerning the identity of the party to the contract was as follows:

16. The defendant submitted that objectively the registration of C & D Asphalt is irrelevant as it was not considered by Mr Watton or alternatively if it were considered relevant, the effect of registration should also be considered.
17. The defendant relied upon a number of authorities including:

· Re ABC Plastik Pty Ltd (1975) 1 ACLR 446 where Justice Needham held that although registration of a business name is prima facie evidence of ownership, registration under the Act does not vest ownership of the business in the name of the party registered and that it was open to parties to prove otherwise.

· Re Johnson and Anor; Ex parte Greendale Engineering and Cables Pty Limited (1967) 11 FLR 335 where Justice Gibbs relied upon Press v Mathers [1927] VLR 326 which concerned registration under the Real Estate Agents Act, 1922 and said:

I cannot find anything in the Business Names Act , 1962 (NSW) that discloses an intention to impose liability for transactions carried out under a business name, upon the persons registered as carrying on business under that name, in cases where no estoppel arises. [(1967) 11 FLR 335 at 343]
18. Applying these authorities the defendant says that as the evidence clearly established that there was a company, Torpoint, carrying on business under the business name, registration of the name is meaningless. These authorities involved situations where there was a holding out as proprietors of a business by parties other than those in whose name it was registered. Re ABC Plastik Pty Ltd concerned a company carrying on business formerly conducted by a partnership without express assignment of the right to use the various business names. The issue in that case was whether payments in respect of the sale of the business were capable of constituting dividends in the hands of the members of the partnership who were shareholders in the company.
19. In Re Johnson the relevant business was carried on by a third person and the persons registered did not carry on or share in the business but there was no evidence that the creditor knew, when dealing with the business, of the existence of registered persons and so no estoppel arose out of their conduct. I reject the submission by the defendant that the factual situation in Re Johnson is analogous to this present case because the defendant was not carrying on the business and I reject the assertion by the defendant that Mr Watton knew that he was dealing [with] a company operating under the business name.
20 The plaintiff relied upon s24 which provides that a certificate of registration issued under the Act is prima facie evidence of any matter contained therein and further relied upon the fact that it was C & D Asphalt who were invited to tender and who accepted the offer, not Torpoint and that on the facts of this case there was a holding out of the defendant as C & D Asphalt Services.

21. As part of the plaintiff’s submissions there was reliance upon Aitkin Transport Pty Ltd v Voysey [1990] 1 Qd R 510 and in particular to the authorities and passages referred to at p515 which dealt with the presumption that a person is intending to contract with the person to whom he is addressing the words of the contract. The onus to displace any such presumption clearly lies on the defendant in this case.
22. I am not persuaded that the inclusion of an unidentified ACN at the foot of the two quotations and the other matters relied upon by the defendant are sufficient to displace the prima facie presumption that as C & D is the registered business name of which the defendant is the proprietor, that is the party with whom the plaintiff contracted particularly in view of the fact that the existence of Torpoint was not brought to Mr Watton’s attention until after the formation of the contract.
23. For these reasons I consider the proper conclusion to be that the plaintiff contracted with the defendant, not Torpoint. …”

Press v Mathers and Cases Following It

35 Press v Mathers [1927] VLR 326 is a decision of Dixon AJ (as Sir Owen then was) delivered on behalf of himself and Irvine CJ and Schutt J. The Partnership Act 1915 (Vic) contained, in Part II, provisions requiring the registration of the “firm-name” under which either a partnership, or an individual, proposed to carry on business. Section 63(3) of that Act contained a “prima facie evidence” provision, analogous to that found in section 24 Business Names Act 1962 (NSW). Press v Mathers concerned an action brought by a plaintiff who was entitled to receive money that had been paid to the defendant’s brother. That money had been paid in connection with the business of a real estate agency that the brother conducted under a firm name. Although it was the defendant who was registered as carrying on business under that name, the trial judge found that she was not in fact carrying on that business nor was she a partner in the agency, but she was merely a dummy for her brother. The plaintiff in that case did not know that the defendant was registered as one of the proprietors of the firm name. Dixon AJ held that the defendant was not liable. He said, at 333:

“A general view of the objects of Part II of the Partnership Act 1915 might suggest that it was the intention of that enactment to provide a means for the conclusive ascertainment of the identity of undisclosed principals to transactions carried out in some firm name, so that for all legal purposes the person whose name appears upon the register is to be considered the party referred to under the registered designation. But this is not borne out by an examination in detail of the provisions of the Statute. Whilst those who in fact trade under styles other than their names are required to make a public record of their identity, there is nothing to make the meaning and application of a registered style exclusively dependent upon the register.”

36 Re Johnson & Anor; Ex parte Greendale Engineering and Cables Pty Ltd (1968) 11 FLR 335 concerned a petition for sequestration brought against two judgment debtors. Those judgment debtors and another man were registered under the Business Names Act 1962 as the proprietors of a particular business name. The two judgment debtors did not, however, carry on business under that name, nor had they authorised the other man to act as their agent in carrying on business under the business name. Rather, they had agreed to become registered to assist the other man in complying with regulations governing the manner in which an electrician’s trade was required to be conducted. The judgment that had been obtained against the two judgment debtors was a default judgment, and related to the price of goods sold and delivered to the business. Gibbs J went behind the judgment debt. He held that, when the judgment debtors did not actually carry on the business, and had not authorised the other man to act as their agent in carrying on the business, they were not personally liable on the contract pursuant to which the goods had been supplied. By signing the form to become registered under the Business Names Act 1962, the debtors had represented that they were members of the firm, but such a representation could give rise to a liability on their part, by way of estoppel, only if someone had acted in reliance upon the representation. Thus, in circumstances where the petitioning creditor did not know of their registration as proprietors of the business name, there could be no estoppel that they were carrying on business under that name. His Honour then, at 343, said:

“I cannot find anything in the Business Names Act 1962 (NSW) that discloses an intention to impose liability for transactions carried out under a business name, upon the persons registered as carrying on business under that name, in cases where no estoppel arises. In argument before me particular reliance was placed on s. 5(1) of the Act, and it was submitted that since a person is forbidden to carry on business under a business name unless the business name is registered in relation to that person and each other person in association with whom that person is so carrying on business, the fact of registration involves a representation to the whole world that the persons whose names are registered are carrying on the business under the business name. It may be true that such a representation is made to the world by a person whose name is registered under s. 5, or, pursuant to a notification of change in persons in relation to whom a business name is registered, under s. 12. However in the present case the petitioning creditor did not learn of the representation or alter its position on the faith of it. The Business Names Act does not provide that such a representation is to be conclusively taken as true; indeed, the register is only prima facie evidence of matters contained in it – s. 24. The doctrine of estoppel does not apply, and there is nothing in the Business Names Act that imposes liability upon the debtors for transactions carried out under the business name, but with which the debtors had nothing to do.”

37 Re ABC Plastik Pty Ltd (1975) 1 ACLR 446 concerned a situation where Mr Godeschalk and his wife had at one time carried on a business in partnership under a particular business name. Later, they incorporated a company, which purchased certain assets of the partnership business, and which thereafter used the business name in the course of carrying on business. More than two years later, Mr Godeschalk purported to sell the business, and received payment of the purchase price himself. When the company subsequently went into liquidation, the liquidator succeeded in recovering from Mr Godeschalk the part of the purchase price attributable to ownership of goodwill or business names. Needham J said, at 449-450:

“… the business names continued to be registered as the names under which the respondent was carrying on business. Such registration is prima facie evidence of the facts — s. 24, Business Names Act1962 , and Re Johnson; Ex parte Greendale Engineering and Cables Pty. Ltd. (1967), 11 F.L.R. 335, at p. 343 — but the facts proved in this case show that the respondent was not carrying on business under the business names and that the company was. In such circumstances, a certificate of registration showing that the respondent was carrying on business under the business names would prove nothing. …
There is nothing in that Act which vests ownership of a business name in a person who is not carrying on business – indeed the Act provides that a business name is a name, style, title or designation under which a business is carried on - s 4(1). The company was the entity entitled to registration under the Act – it committed an offence in carrying on business without registration – s 5(1). In these circumstances, I do not think that registration under the Business Names Act 1962 invested the Respondent with ownership of the business names.”

38 In Aikman v Brown (Trading as Capital Travel Service) (1973) 1 ACTR 121 the plaintiff had attended a travel agency business conducted under the name of Capital Travel Service, and paid for some air tickets. That business was in fact conducted by a company that, by the time of the trial, had gone into liquidation. The registered proprietor of the business name was the defendant, who was an employee of that company, but did not carry on the business in his own right. The defendant was one of the employees with whom the plaintiff had dealt, and to whom she had paid part of the price of the air tickets. The plaintiff did not receive any air tickets, and sued the defendant to recover the money she had paid. The plaintiff gave no evidence of knowing about, or relying upon, the registration of the defendant as proprietor of the business name. Fox J, following Press v Mathers and Re Johnson & Anor held, that the action failed. He said, at 123:

“There is no provision which says that the person in whose name a business name is registered shall be deemed to be carrying on the business registered under that name or may be sued in respect of dealings of the business. Doubtless his application for registration will be strong evidence against him that he was an owner of the business at the time of the application, and the Certificate of Registration is prima facie evidence against him, but proof may be given that the fact was otherwise.”

39 These cases establish that, in circumstances where the registered proprietor of a business name is not in fact carrying on the business that is carried on under that name, and has not conferred an actual or ostensible authority on the person who is actually conducting the business to act on his behalf, a person who enters a contract with whoever it might be that is carrying on business under the business name does not contract with the registered proprietor of the business name. In the present case, it is established that the Appellant was not carrying on business under the registered business name. Nor is there evidence that he conferred any actual authority on Torpoint to act on his behalf in connection with the business. Nor did he represent to Mr Watton that C & D Asphalt Service was a name under which he carried on business. Both quotations from C & D were made on stationery that bore the business name, and the ACN, of Torpoint, and purported to be signed by Chris Pethybridge. None of those attributes of the quotation suggest that it is the Appellant who was carrying on business under the business name. Though the second quotation was probably initialled by the Appellant, it was initialled in what was expressly stated to be a “p p" capacity – something which usually conveys that the person who so initials is acting on behalf of someone else, not on his own behalf. (The initials stand for per procurationem, Latin for “by proxy” or “by the agency of”.) Though it was the Appellant who saw Mr Watton on 11 March, nothing transpired on that occasion in which it was expressly said, or from which the inference could properly be drawn, that it was the Appellant who was carrying on the business of C & D Asphalt Service, rather than in some fashion working for it. In those circumstances, the proper conclusion is that it was not the Appellant who entered the contract with the Respondent.

Any Assistance from Aitkin Transport Pty Ltd v Voysey ?

40 Another case relied on by the trial judge is Aitkin Transport Pty Ltd v Voysey [1990] 1 Qd R 510. It involved a factual situation where the defendant had, when he first began dealing with the plaintiff, carried on business on his own account, and had applied to be given credit by a credit application in which he personally promised to pay the amount of any indebtedness together with legal costs and collection fees. At a later time, the defendant incorporated a company. The trial judge found (as recorded at 513) that from November 1982:

“… the defendant operated his business in that name and that material such as business cards, correspondence and cheques bearing the name of that company was routinely sent to the plaintiff and this practice persisted over a period of years from late 1982 to the end of 1985.”

41 The appeal in question concerned whether it was the defendant, or his company, that was liable for certain hiring charges incurred in 1985. The trial judge had held that it was the defendant who was liable. Unlike the present appeal, the appeal was not by way of rehearing (514) – thus the reasons of the Full Court were cast in terms of whether the trial judge had misdirected himself.

42 Concerning the facts, Kelly SPJ, at 516, held, in effect, that the trial judge had not misdirected himself by placing weight on the credit application form, in concluding that the contract in question was with the defendant personally, even though had it not been for that credit application form,

“it could well be that what had occurred in the period between November 1982 and the transactions in 1985 on which the plaintiff sued could properly have been regarded as indicating that by the time of those transactions the plaintiff knew that it was not dealing with the defendant personally.”

43 There is a difficulty in identifying any precise proposition of law that was adopted by the Full Court in Aitkin. At 514-516 Kelly SPJ said:

“As to the law to be applied, the court was referred to the judgment of this Court in Parsons and Rochella v Vance (App. 7/1984 — unreported). Separate judgments were delivered by the Chief Justice (Sir Walter Campbell) and by McPherson J., who also agreed with the reasons of the Chief Justice, while the third member of the court, Sheahan J, agreed with the reasons of both the Chief Justice and McPherson J. The Chief [page 515 starts] Justice referred to the judgment of Brandon J in The “Swan” [ Bridges & Salmon Ltd v The Swan (Owner); Marine Diesel Service (Grimsby) Ltd v The Swan (Owner) (The Swan) [1968] 1 Lloyd’s Rep 5] , at 12, which included the following passage:
“The intention for which the Court looks is an objective intention of both parties, based on what two reasonable businessmen making a contract of that nature, in those terms and in those surrounding circumstances, must be taken to have intended.”
The Chief Justice also referred to the judgment of Chamberlain J in H J Lyons & Sando Limited v Houlson [[1963] SASR 29] which contained the passage to which the learned trial judge had also referred and is to this effect:
“The prima facie position is that when a man orders work to be done he impliedly undertakes to pay for it, and if he desires to avoid the liability so undertaken by setting up that he was acting purely as agent for another person, he must have made that position clear to the other contracting party.”
McPherson J relying on Ingram v Little [1961] 1 Q.B. 31, 66, and Lewis v Averay [1972] 1 Q.B. 199, 207, 208, referred to the presumption that a person is intending to contract with the person to whom he is addressing the words of the contract and went on to say:
“The presumption is one of fact and so may be displaced by evidence of a contrary intention. Such an intention must be ascertained by an objective assessment of the words and deeds of the parties in the light of all the evidence, as well as the actual knowledge of the party seeking to enforce the promise against the individual. He cannot of course insist upon a contract with the individual if he in fact knows that that individual was acting as the representative of another, whether or not that other is a corporate entity or natural person or firm. But it lies with the person seeking to avoid that liability to show that there are circumstances, including such knowledge, sufficient to displace the prima facie inference that he is the one liable on the contract.”
We are also referred to the judgment of the Court of Appeal in The “Santa Carina” [1977] 1 Lloyd’s Rep 478. Roskill LJ (as he then was) at 483, referred to a passage in the speech of Lord Reid in McCutcheon v David MacBrayne Ltd [1964] 1 WLR 125 in which Lord Reid quoted from the Scottish textbook, Gloag on Contract :
“… The judicial task is not to discover the actual intentions of each party; it is to decide what each was reasonably entitled to conclude from the attitude of the other.”
At 484 the learned Lord Justice dealing with the case of an oral contract said:
“The question is always, what did these parties agree? There cannot in these circumstances be any question of presumption that would put the onus of proof upon defendants to prove that they were not personally liable. It is for plaintiffs to prove those facts from which an inference must be drawn on a balance of probabilities that the defendants are personally liable notwithstanding that the plaintiffs knew that the defendants were contracting as agents.”
The statements made in these two authorities to which I have referred do not appear to me to be altogether easy to reconcile and it is somewhat difficult to determine ultimately what is the correct test to be applied. The judgment of the Court of Appeal is not referred to in the Full Court judgment and it may be that that court was not referred to it. As I would [page 515 ends] read these passages what was said by the members of the Full Court would suggest that the onus would in this case be on the defendant to displace the presumption that he was the person liable on the contract, whereas what was said by Roskill LJ indicates that there is no such presumption as this would place an onus on the defendant which should properly be borne by the plaintiff. However, on the law as stated by this Court in Parsons and Rochella v Vance it could not in my opinion be said that the learned trial judge misdirected himself as to the law to be applied.”

44 I have inserted into the quotation indicators of where page 515 begins and ends, to make clear the outer limits of the "authorities and passages referred to at p 515" to which the trial judge in the present case refers in the passage of her judgment that I have quoted at para [34] above.

45 Of the authorities quoted by Kelly SPJ, Parsons and Rochella v Vance (App. 7/1984 — unreported) was a case in which an issue concerned whether a contract was formed with a couple or with their company, Atlantis Inventions Limited. The trial judge had made a finding, quoted by Sir Walter Campbell CJ at 6, that:

"… reference to Atlantis Inventions, or Atlantis Inventions Ltd or Atlantis Inventions Pty Ltd was in the context of that being the plaintiffs’ [sic defendants’] trading or business name, that the dealings were to go through in that name as a matter of choice by the defendants, not that some legal person or body of such a name was the contracting party with the plaintiffs.”

46 The Chief Justice, at 6-7, also quoted evidence given by the plaintiff:

"We were trading with the Vances and drawing the cheques on Atlantis Inventions, their tin side of their business. They never ever said they were a company. They just said, 'We wanted the cheque made out to Atlantis Inventions so we can keep it separate from our private – private business and keep the tin – and keep the tin side separate from our personal business’."

47 McPherson J, at 2, pointed out that:

"… there was evidence that suggested that the contract may have been made not by the individuals to or by whom the promissory words were uttered but by a company Atlantis Inventions Limited. There was documentary material tending to support the latter conclusion. But the learned trial Judge accepted oral evidence given by one of the plaintiffs that explain the use of that corporate name as a device that was not intended to affect or alter the legal relations to be established between the plaintiffs and the individual defendants …"

Parsons is thus readily distinguishable on the facts from the present case.

48 Of the authorities quoted in Aitkin from Parsons, the quotation from Brandon J in The “Swan” is totally orthodox.

49 H J Lyons & Sando Limited [1963] SASR 29 was a case where the issue was whether the respondent had contracted as a principal or as agent for a company of which he was managing director. The contract in question was for repair to a motor vehicle. The motor vehicle was being acquired by the company on hire purchase. On the version of the facts that the Magistrate accepted, the respondent gave the appellant the name of the insurer of the vehicle, and also gave him a card with the company’s name and address on it. A few days later, when the repairs were complete, the appellant sent an invoice to the insurer, headed “Accident Holden A/C EG Houlson & Co Ltd”. The insurer repudiated liability, the company became insolvent, and thereupon the appellant sought recovery from the respondent. The reported case is the decision of Chamberlain J on appeal from a Magistrate who dismissed the appellant’s claim against the respondent. The Magistrate had dismissed the claim upon the basis of the principle obtained from Halsbury’s Laws of England, 3rd edition, volume 1 par 518 that:

“where a person in making a contract discloses both the existence and the name of a principal on whose behalf he purports to make it, he is not, as a general rule, liable on the contract to the other contracting party.”

50 Chamberlain J reversed the Magistrate’s decision. At 31, he said of the principle that the Magistrate had relied on:

“… properly understood, it is, of course, correct. But what must be borne in mind is that in order to escape personal liability the agent must do more than disclose the identity of the principal, he must make it clear that he is contracting on the principal’s behalf and not on his own. “No rule of law is better ascertained, or stands upon a stronger foundation, than this; that, where an agent names his principal, the principal is responsible; not the agent: but for the application of that rule, the agent must name his principal as the person to be responsible” : per Erskine LC in Ex parte Hartop (1806) 12 Ves Jun 349, at p. 352 (33 ER 132, at p. 133) (italics supplied). The prima facie position is that when a man orders work to be done he impliedly undertakes to pay for it, and if he desires to avoid the liability so undertaken by setting up that he was acting purely as agent for another person, he must have made that position clear to the other contacting party.”

51 In my view Lyons is distinguishable from the present case. In my view it was quite clear, from the totality of the communications, that the person who was to be responsible for carrying out the work was the person who carried on business as C & D Asphalt Service, whoever that might be.

52 Ingram v Little [1961] 1 QB 31 and Lewis v Averay [1972] 1 QB 198 were both cases in which the plaintiffs had parted with goods to a fraudster, in the false belief that the fraudster was an identified person, who the plaintiffs believed was likely to be creditworthy. It was in that context that it was stated there was a presumption that a person is intending to contract with the person to whom he is addressing the words of the contract. That feature of the cases mattered, because the issue was whether the intention of the plaintiffs was to contract with the person who stood in front of them (in which case there was a valid contract, under which title to goods could pass) or with an identified person with whom the plaintiffs believed they were contracting (in which case no title to the goods would pass to the fraudster.)

53 In both Ingram and Lewis, the dealings were conducted face-to-face. The factual situation in those cases was significantly different to the present, where the only face-to-face contact (that on 11 March 1999) was of no contractual significance. Further, in the present case there really was an entity that carried on business under the name C & D Asphalt Service, Mr Watton had sought out and communicated with the entity that carried on business under that name, and the written communications from C & D Asphalt Service all expressly bore an indication that it was a corporation, and bore no indication that it was the Appellant.

Conclusion

54 At the risk of some repetition, I will seek to draw the threads together. Identification of the parties to the contract must be made in accordance with the objective theory of contract: Ryledar Pty Ltd & Anor v Euphoric Pty Ltd [2007] NSWCA 65 at [262]-[266] and cases there cited. It was the Respondent who bore the legal onus of proving that the Appellant was the other party to the contract that had undoubtedly been entered for the performance of the work on the two carparks. It was relevant, for that purpose, to establish who was carrying on business under the name C & D Asphalt Service. That is because the correct conclusion to draw from the objective evidence is that a reasonable observer of the communications that led to the entering of the contract, together with the background facts known to the parties, would conclude that the parties intended that the contract would be with whomever it was that was carrying on business under the name C & D Asphalt Service.

55 It is the effect of section 24 Business Names Act 1962 that, if there had been no other evidence on the topic, tender of the extract from the Business Names Register would have been sufficient to establish that it was the Appellant who was carrying on business under the name C & D Asphalt Service. A principle that can be drawn from Press v Mathers, Re Johnson, Re ABC Plastik and Aikman v Brown is that, once it has been proved who is carrying on business under a particular business name, the evidence leading to that conclusion may overcome the merely prima facie evidence that arises from section 24 Business Names Act 1962.

56 In the present case, as well as there being clear (indeed, undisputed) evidence that it was Torpoint that carried on business under the business name, there were objective indications, in the statement of the ACN numbers on each of the quotations, that the contract was one with a corporation. Whether Mr Watton actually observed the ACNs stated on the two quotations is irrelevant to whether those ACNs are matters properly to be taken into account in deciding who were the parties to the contract. What matters is that the ACNs were part of the communications that led to the contract, and hence are properly to be taken into consideration as one of the matters relevant to identification of the identity of the contracting parties.

57 Other evidentiary material appropriate to be taken into account in that respect is that all of the communications were addressed to, or came from, “C & D Asphalt Service”. Such a business name is equally consistent with the entity that carries on business under that name being a corporation, or being a natural person. It is also relevant that both parties knew that C & D Asphalt Service was a local organisation (I do not place weight on the word “company” that Mr Watton used while giving this evidence) that had advertised “pretty well”, and I infer from the evidence that Torpoint was the only entity that had so advertised.

58 In my view, in the present case the trial judge was in error in giving insufficient weight to these matters.

59 There was some argument about whether it was permissible to have regard to subsequent communications for the purpose of deciding with whom the contract was entered. The present state of the law throughout Australia on whether and if so when it is possible to use post-contractual conduct as an aid to construction of the contract is not yet settled: see the authorities cited in Cheshire and Fifoot’s Law of Contract, 8th Australian edition, p 392-393; Cross on Evidence, 7th Australian edition, para [39290]; Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 at 318 [109], per Kirby J. The more restrictive view, favoured in this Court, is that subsequent communications cannot be looked to as an aid to construction of a contract, but can be looked to as an aid to deciding whether a contract has been entered into at all: Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163-164, [2001] NSWCA 61 at [25]-[26]; Magill v National Australia Bank Ltd (2001) Aust Contract R 90-131 at 91,609-91,610, [2001] NSWCA 221 at [50]-[53] per Ipp AJA (with whom Meagher and Heydon JJA agreed); Walker v Andrew (2002) 20 ACLC 1476 at 1483-1484, 116 IR 380 at 388, [2002] NSWCA 214 at [39]; Independent Timber Importers v Mercantile Mutual Insurance (2002) 12 ANZ Ins Cas 61-543 at 76,367, [2002] NSWCA 304 at [17]; El-Mir v Risk [2005] NSWCA 215 at [66]. It was argued that, in the present case, even on that more restrictive view, it is permissible to look to the subsequent communications, because the question of whether the contract was entered into with the Appellant, or with Torpoint, is, in substance, no different to a question of whether there was a contract entered into with the Appellant at all. It is not necessary to form a view about the correctness of the argument I have just mentioned. That is because, even if one did look to the subsequent communications, they would not lead to any different conclusion.

60 The trial judge's finding about whom Mr Watton believed he was contracting with is of no significance to the result. Mr Watton’s belief is a subjective matter, and cannot be taken into account, in accordance with the objective theory of contract, save to the extent that that belief has been manifested in his words and actions that are known to the other contracting party. Likewise, any beliefs that were manifested by Mr Watton in his communications with the Respondent cannot enter into any consideration of who the contracting parties were, when those communications with the Respondent were not themselves known to the other contracting party.

Orders

61 I propose the following orders:

1. Appeal allowed.

2. Set aside the judgment and orders made on 24 March 2006 in matter 9804 of 2001 in the District Court of New South Wales.

3. Order that the said District Court proceedings be dismissed with costs.

4. Respondent to pay costs of the Appellant of the appeal.

5. Respondent to have a certificate under the Suitors Fund Act 195 1 , if qualified.

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