Rendermeister Pty Ltd v Macol Pty Ltd
[2013] QCAT 91
| CITATION: | Rendermeister Pty Ltd v Macol Pty Ltd & Anor [2013] QCAT 91 |
| PARTIES: | Rendermeister Pty Ltd (Applicant) |
| V | |
| Macol Pty Ltd Macol Transport Equipment Pty Ltd (Respondents) |
| APPLICATION NUMBER: | BDL345-11 |
| MATTER TYPE: | Building matters |
| HEARING DATE: | 31 January 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | Jeremy Gordon, Member |
| DELIVERED ON: | 25 February 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Macol Pty Ltd is ordered to pay Rendermeister Pty Ltd the sum of $5,087.51. 2. The counterclaim is dismissed upon withdrawal. |
| CATCHWORDS: | BUILDING DISPUTE – who are correct parties – the wrong party bringing the claim – whether the claim is a nullity - whether post-claim assignment can cure the defect - whether the parties compromised their dispute Property Law Act 1974 (Qld) s199 |
APPEARANCES and REPRESENTATION (if any):
APPLICANT: Alexander Kammerlocher director, assisted by Martin Orr.
RESPONDENTS: Marion Willich, director of the First Respondent. Christopher Willich director of Second Respondent. John Willich. Both Respondents assisted in the first part of the hearing by Peter Wilson, a barrister.
REASONS FOR DECISION
Background and issues
Back in 2008, the parties were in dispute about rendering work carried out by Rendermeister. They both thought they had agreed terms to settle the dispute but now disagree on what those terms were.
The issues in this case are whether a binding agreement to settle the dispute had been reached, and if so what were its terms. If not, whether the work was defective or incomplete and if so, whether Rendermeister can recover the value of the work done.
There are also discrete issues about who were the parties to the contract and whether, if the proceedings were commenced by the wrong party, this was cured by a subsequent assignment of the cause in action by the correct party to that wrong party.
The Respondent had a counterclaim but this was withdrawn during the hearing.
The parties to the contract
There are two uncertainties here. The first is whether Rendermeister Pty Ltd contracted to carry out the work on site or whether it was Alexander Kammerlocher who contracted to carry out this work. Mr Kammerlocher is a director of Rendermeister Pty Ltd. He also trades on his own account under the trading name of Rendermeister. Mr Kammerlocher argues that he was the contracting party since he personally was the contractor holding the QBSA licence. The Respondents are uncertain with whom the contract was made.
The second uncertainty is who is on the other side of the contract. Both Respondents argue that Macol Transport Equipment Pty Ltd was the contracting party and that Macol Pty Ltd should be discharged from the proceedings. Mr Kammerlocher argues that it was probably Macol Pty Ltd who was the other contracting party. If not it was Macol Transport Equipment Pty Ltd. They are sued in the alternative.
The work to be done was rendering to a house being built on a site in Thornlands.
The contract was made when on 10 November 2008 John Willich, who was supervising the tradesmen building the house, telephoned Mr Kammerlocher and gave him instructions to proceed in accordance with a written quotation. This was a telephone conversation between the two individuals and there is no insight from this conversation alone, as to who were the contracting parties.
Prior to that telephone conversation, the first significant contact between the two sides was when Mr Kammerlocher attended the site on 4 November 2008 with a view to preparing a quotation for the rendering work on the house. He spoke to John Willich on site. John Willich explained to Mr Kammerlocher that he owned the land and that the work was to be done for a company which built trailers, and the house being built was for his son to occupy. Mr Willich did not give the name of the company.
[10] When as a result of that visit and later that day Mr Kammerlocher created a quotation, it was not addressed to anyone but was sent to “John”. There was a second meeting on site. Both John Willich and his son Christopher Willich attended this meeting. There was a discussion between the three men about the required finish. As a result of this discussion Mr Kammerlocher prepared another quotation. Again this was not addressed to anyone but was sent to “John”.
[11] The site was owned by Macol Pty Ltd as registered owner.
[12] The identity of the parties to the contract is answered by the objective facts. That is to say, the answer to that question is not with whom the parties themselves thought they were contracting, but who appears on the facts to be the contracting parties.
[13] Dealing first who was the contracting party on the Rendermeister side, the quotations made by Mr Kammerlocher do not name Rendermeister Pty Ltd, nor hint that a company is giving the quotations. The quotations themselves contain a message signed “Alex”, are on headed paper of “Rendermeister” and do not contain an ABN. They were sent by email from an email address used by “Rendermeister”, with no mention of a company. The quotations did give a QBSA licence number. Had a search been carried out for the owner of that licence, Mr Kammerlocher’s name would have appeared.
[14] It is quite clear to me from these facts that it was Mr Kammerlocher trading as Rendermeister who was the contracting party agreeing to carry out the rendering work. Largely my reasoning is that objectively the employer would wish to engage a licensed contractor to do this work and it was Mr Kammerlocher who held this licence. Also there is nothing on the face of the quotations or the emails which suggest that there was any other legal entity involved.
[15] As for the other contracting party, it is clear to me that because Mr Willich had explained that there was a company involved, he was not making the contract personally. At the time the contract was made, the identity of the company was not known. Later this was clarified. This happened when on 2 December 2008, a cheque was drawn for $10,000 on the account of Macol Pty Ltd and was given to Mr Kammerlocher. There was no explanation at that time of something which emerged some time later, that the $10,000 was treated between the two companies as a loan by Macol Pty Ltd to Macol Transport Equipment Pty Ltd.
[16] Had a search been made of the titles register at any material time during these events, Macol Pty Ltd would have appeared as owner of the site. Nothing was said to Mr Kammerlocher about a dealing with the property, nor was anything mentioned on the titles register about it. The dealing was something which emerged at the hearing. On 1 January 2006 Macol Pty Ltd had granted Macol Transport Equipment Pty Ltd in writing a licence to build upon part of the site and to occupy that part of the site “for as long as it desires”. In that document there was also an option to purchase that part of the site if subdivision of the site was approved. At the hearing, this document was described by the Respondents as a “lease”. It is unnecessary for me to ascertain the legal effect of this document since Mr Kammerlocher was not aware of it at all until the hearing.
[17] I would not expect a reasonable person to investigate whether a named company did in fact make trailers as had been mentioned on 4 November 2008. So from the information available on 2 December 2008, any reasonable person would have concluded that the contracting party was Macol Pty Ltd.
[18] There is no difficulty here about authority. John Willich was a director of Macol Pty Ltd at that time. Therefore he either had actual authority to bind the company or at common law had ostensible authority to do so. In any case Mr Kammerlocher would be entitled under section 129(2) of the Corporations Act 2001, to assume that Mr Willich had authority to bind the company, since he was a registered director of the company until his resignation on 28 July 2009.
[19] On my findings therefore the contracting parties were Mr Kammerlocher trading as Rendermeister on the one side and Macol Pty Ltd on the other.
Does the subsequent assignment of the cause in action by the correct party to that wrong party correct the defect in the proceedings?
[20] It follows from my finding as to the correct contracting parties that Rendermeister Pty Ltd should not have been the Applicant in this case – instead Mr Kammerlocher trading as Rendermeister should have been.
[21] On 18 April 2012 Mr Kammerlocher made an attempt to correct this defect by executing a deed of assignment in favour of Rendermeister Pty Ltd. The deed stated that he assigned the debt owed to him by Macol Pty Ltd and also assigned “the QCAT proceeding”. I do not think it is possible to assign a QCAT proceeding and in any case this failed because any rights as a party in the proceeding were held by Rendermeister Pty Ltd and not by Mr Kammerlocher. Some other parts of the deed were in error, but the relevant part of it which assigned the debt itself to Rendermeister Pty Ltd was valid and effective to assign that debt subject to the requirements of notice.
[22] Mr Kammerlocher made a further attempt to correct this defect by an application received by QCAT on 21 December 2012 for him to be added as a second Applicant. On 24 December 2012 this application was refused.
[23] The need for notice of the assignment arises from section 199 of the Property Law Act 1974 (Qld) which states:-
199 Statutory assignments of things in action
(1) Any absolute assignment by writing under the hand of the assignor (not purporting to be by way of charge only) of any debt or other legal thing in action, of which express notice in writing has been given to the debtor, trustee or other person from whom the assignor would have been entitled to claim such debt or thing in action, is effectual in law (subject to equities having priority over the right of the assignee) to pass and transfer from the date of such notice—
(a) the legal right to such debt or thing in action; and
(b) all legal and other remedies for the same; and
(c) the power to give a good discharge for the same without the concurrence of the assignor.
[24] There are two potential problems here and the Respondents submit that they are fatal to the claim. The first is that the deed of assignment executed on 18 April 2012 was well after commencement of the claim, which was 15 December 2009. Secondly, there was no notice of the assignment as required under this section prior to the hearing.
[25] An attempt was made by Mr Kammerlocher to serve notice of the assignment. A notice in proper form was prepared and sent to Macol Pty Ltd on 23 May 2012, but it was sent to an address which had ceased to be the registered office of the company on 25 October 2009. The address to which the notice was sent was, however, still the registered principle place of business of the company but the company had left those premises some time before. By section 109X of the Corporations Act 2001 notices to a company can be sent to the registered office. Sending it to the registered principle place of business does not work unless the business is still there. This means that notice was not affected.
[26] At the hearing and soon after its start, sufficient notice of the assignment was given. This was when Marion Willich as director of Macol Pty Ltd was given a photocopy of the deed of assignment itself and a photocopy of the notice of the assignment dated 23 May 2012. It follows that by the operation of section 199 the debt of Macol Pty Ltd owed to Mr Kammerlocher was assigned to Rendermeister Pty Ltd on the day of the hearing. In equity, the assignment could have been effective earlier. However neither the parties nor the Tribunal needs to have recourse to equity since section 199 was satisfied. So I concentrate on the effect of the assignment under section 199.
[27] The question is whether the assignment can validate the proceedings so that Rendermeister Pty Ltd could pursue the case to judgment. To my mind this turns on the question whether proceedings in QCAT brought by the wrong party are a nullity or merely procedurally defective. If they are a nullity the defect clearly cannot be corrected. If merely procedurally defective then the assignment would correct that defect.
[28] In Stone v ACE-IRM Insurance Broking P/L [2003] QCA 218 a claim was commenced by a party who had no right to sue. After the claim was started there was a valid assignment of the debt to the plaintiff who then sought to amend the pleadings to rely on the assignment. McMurdo J giving a judgment on this matter in the Court of Appeal with which the other justices agreed, decided that the proceedings were not a nullity because the court had power to cure the defect by allowing the amendment[1].
[1] see paragraphs [26], [29] and [30].
[29] In QCAT there are usually no formal pleadings requiring amendment so such defects can be cured informally and if necessary by the joinder of a party under section 42 of the QCAT Act.
[30] The point was also made by McMurdo J In Phipps v Australian Leisure and Hospitality Group Limited [2007] 2 Qd R 555 that in Queensland it is not necessary that the plaintiff’s cause of action should have accrued at the commencement of the proceedings; a plaintiff may obtain judgment upon a cause of action arising subsequently. This principle also applies to QCAT.
[31] It must follow therefore that the claim brought by Rendermeister Pty Ltd was not a nullity. The assignment of the debt of Macol Pty Ltd by Mr Kammerlocher to Rendermeister Pty Ltd effected by the giving of notice to Macol Pty Ltd on the day of the hearing was sufficient to permit Rendermeister Pty Ltd to proceed with the claim.
The contracted works and its progress
[32] The contracted works, based on the quotation sent by email on 9 November 2008, was for preparatory work on the house, then for two coats of Polymer Masonry Render to external walls and to those walls on the house on the verandas (called “internal walls” in the quotation), followed by an acrylic pre-tinted texture to the walls. The tint was supposed to provide a colour finish so that there was no need to apply paint. The total quote was for $25,000 plus GST.
[33] John Willich became anxious about progress of the work. Rendermeister was using workers from Germany on working holiday visas, but they were also engaged on other houses at the same time as the house in Thornlands. This caused delays. On 25 November 2008 Mr Willich warned Rendermeister that the job would have to be finished by Friday 28th because the scaffolding would be coming down. In fact the scaffolding was due to be removed on the 29th.
[34] By Monday 1 December 2008, the work was still not finished so the scaffold hire was going to have to be extended incurring greater expense. As a separate issue Mr Willich and more particularly his son Christopher Willich were unhappy with the appearance of that part of the final texture coating which had been done because they said it appeared to be “patchy”.
[35] There were emails, meetings on site on 1 and 2 December 2008, and telephone discussions between the two sides. The question arises whether there was a binding compromise agreement at that time to resolve the dispute. If so, then Rendermeister are only entitled in this claim to recover under the terms of that compromise.
Was there a binding compromise of the dispute?
[36] The discussions at that time concerned how much Rendermeister should be paid for the work done to date, who was to complete the work, whether there should be any compensation for the delay or reduction in the contract price, and what to do about the patchy colour.
[37] Each side says that this dispute between them was firmly resolved during these discussions so that the other side is bound by that agreement. However they disagree as to what that agreement was. Factually on this issue and on all issues, there is very little common ground between the two sides. The passage of time has not helped either side with their recollection of events. At the hearing I found the evidence from each side to be at times incredible and at other times merely inconsistent. This has not been helped by each side considering it necessary to take an extreme position and trying to maintain those positions at the hearing. For these reasons I have preferred to base my findings on the contemporaneous documents, in so far as possible.
[38] On my findings the following matters were firmly agreed between the two sides at that time:-
(a) it was agreed that Mr Willich would “take over the boys” that is to say the workers who had been directly engaged by Rendermeister on site would no longer be engaged by Rendermeister but instead would work on site to complete the job and be paid by Mr Willich;
(b) this meant that Rendermeister would no longer work on the site;
(c) Rendermeister would be paid a sum of money for its work on site so far;
(d) the question of the patchy colour to the final texture finish would be resolved by the application of a final coat of paint;
(e) Rendermeister would supply the materials necessary to complete the work including the paint now required, and would be paid for this at a reasonable price.
[39] This agreement was good for both sides. It gave Mr Willich direct control over the workers, the hours they worked and the methods they used. He would be better able to ensure that the job was completed as soon as possible. Further, the final finish on the job could be completed to his own satisfaction or more particularly to the satisfaction of his son who was to live in the house. Mr Willich also had the advantage of a source of supply of matching materials. For Rendermeister, the agreement resolved the dispute about the patchy finish, and settled any claim which might be made for the delay in completion because of the need to continue the scaffold hire (a cost which turned out to be an extra $2,156 including GST). It also ensured speedy payment for the work done to date, despite the job not having been finished. There was also some profit to be made on the further supply of materials.
[40] Given sufficient certainty the agreement reached at this time was capable of binding the parties as a compromise of the dispute. As such it was capable of replacing the contractual rights and duties under the original contract.
[41] Looking more closely at the question of certainty, whilst the extent of the further materials required was not known precisely at the time of the agreement, the reasonable cost of these materials could be ascertained. In my opinion there was sufficient certainty therefore in this part of the agreement.
[42] The only other part of the agreement which might be regarded as uncertain was the payment to Rendermeister for its work on site so far. I do believe that a figure was agreed between the two sides. I believe this because both sides did implement this agreement and I do not think it is likely that this would have happened without this important thing being agreed.
[43] Mr Willich says a figure for the work done so far of $10,000 including GST was agreed. Mr Kammerlocher says that it was agreed that on completion of the work he would be paid the whole contractual sum of $25,000 plus GST.
[44] Neither of these positions is tenable. I do not think this is one of those cases where the parties thought they were agreeing a figure but one or other of them, or both of them, are mistaken about that figure. I believe that they have both tried to mislead me about the agreement. At times both Mr Kammerlocher and John Willich prevaricated in their evidence, tried to divert attention elsewhere, or answered different questions than they were asked. At other times they both seemed to invent answers which turned out either to be wrong or were simply incredible. And John Willich was extremely vague in his evidence about some matters which I would have expected him to remember even after such a long time.
[45] The best evidence I have about the figure that was agreed is a contemporaneous document. This was an invoice from Rendermeister which on the balance of probabilities was created after the compromise agreement was made and was dated 1 December 2008. In this invoice a charge of made of $12,000 plus GST for the preparatory work, for the first and second coats of render and for the supply of materials so far. There was also a charge on this invoice of $3,000 for the supply of further specified materials to the site. This is what appeared to both sides to be the extent of the materials needed for the workers to complete the job.
[46] I believe this was the figure agreed between the parties because what is stated on this invoice accords with my other findings about the state of the job at that time. In particular, there is no charge in the invoice in respect of the finishing coat of texture. As both sides agree, there was a complaint about the colour finish on this finishing coat being patchy. On my findings, the finishing coat had only been applied to a small area at that time. Hence there was no charge for the application of the finishing coat.
[47] The state of the job at the time of the agreement is demonstrated by the contemporaneous emails and the invoices for materials required to complete the job. There is also some assistance from the evidence of one of the German workers and from Mr Aspden who inspected the work. Mr Kammerlocher’s suggestion that the work was finished or largely finished is belied by several contemporaneous documents. There is the email sent by Mr Willich in the evening of the same day the invoice was prepared, which shows clearly that is not the case. Then there is an email sent later that day where Mr Kammerlocher’s says he can have “all materials necessary to finish external render delivered on site by Wednesday morning”. Further, the invoices for materials subsequently delivered show that not all the second coat had been applied, and that most of the texture finish had not yet been applied. I do not accept that the delivery of additional render was so that other areas could be rendered.
[48] On my findings therefore the preparatory work had been done, the first coat of render had been applied, and most of the second coat of render had been applied. A small part of the final coat had been applied (sufficient for it to appear patchy). I find that 75% of the job in terms of work and materials had been carried out by the time the agreement was made. Of the quoted price of $25,000 plus GST therefore, the value of the work to the date of the agreement (ignoring problems of patchiness and delay) was probably about $18,750 plus GST. To ensure early payment, and to avoid disputes about patchiness and delay, Mr Kammerlocher was willing to accept $12,000 plus GST for this work. And he expected some additional profit on the materials to be supplied. This explains the invoice dated 1 December 2008.
[49] Mr Kammerlocher tried to argue that the invoice of 1 December 2008 was for a progress payment only, but this is clearly incorrect. It does not say as would be expected, that it was for a progress payment. And in any case there was no need for a progress payment at this time: both sides agree that the plan was that Rendermeister would no longer attend the site.
[50] My finding means that I have not accepted all the evidence given by Roger Shearer on the telephone in the hearing. At the time he was a representative of the render suppliers. He gave evidence in accordance with his statutory declaration of 27 April 2010. Mr Shearer refers there to being called in to inspect the texture finish coating because it was alleged it was drying “patchy”, and he inspected the site on 1 December 2008 when he saw that the texture coating had been applied “covering all external walls of the building, and that the overall look was of a high standard on the entire project”. At the hearing he said that the majority of the texture coating had been completed by this visit. However he also said that he returned to the site in January 2009. His evidence that the majority of the texture coating was complete on 1 December 2008 cannot be reconciled with other evidence in the case. I do not accept it. I believe he is referring to what he saw on his later visit. Mr Shearer’s statutory declaration was made some time after the event and this would reduce its reliability. Also I accept the Respondents’ evidence that Mr Shearer would have had difficulty accessing the site when he said he did, and this casts some further doubt on the reliability of his evidence.
[51] Further I do not accept Mr Kammerlocher’s submission that the continuation of the scaffolding was required not because the work he was supposed to do was not completed, but because the house was being painted. The Respondents deny the house was painted. To my mind it does not matter whether or not the house was painted. There is an abundance of evidence to show that the work was incomplete when Rendermeister left the site and it would not help me to resolve the issue of how far the work had been completed, to decide whether or not the house was painted.
[52] On my findings, upon the agreement being reached between the parties the invoice of 1 December 2008 was prepared by Mr Kammerlocher and was sent immediately to Mr Willich. Mr Kammerlocher rightly expected that part of his invoice which related to the job already done to be paid immediately, that is $12,000 plus GST = $13,200. Instead, the next day when he attended on site and asked for this money, he was given a cheque only for $10,000. The evidence from the Respondent is that Mr Kammerlocher was “fuming” that day, and he agrees he was very unhappy. On my findings, he was unhappy with only being paid $10,000 when the agreement was that he would immediately receive more for the work done to date.
[53] From that point both sides agree that when Mr Kammerlocher chased for his money the words he used was that he asked for the “balance”. This can only mean the balance of the invoice of 1 December 2008. This was the only invoice in existence at the time. So this supports the finding that I have made.
[54] However, no more money was paid despite Mr Kammerlocher organising the supply of materials to the site and paying for them. He did this because he was hoping he would receive the balance of the amount agreed for his work to date plus payment for these materials once the job was finished. As it turned out, the attitude of the Williches hardened, and they decided to make no further payment.
[55] This seems to have incensed Mr Kammerlocher so much that he decided to create an invoice claiming $33,737 from Macol Pty Ltd. This is dated 2 February 2009 but may have been created after that date. On my findings this invoice was created by Mr Kammerlocher only in order to improve his bargaining position. He offered no good reason at the hearing why it was presented so late if it was a genuine statement of what was due. In it he claims payment for all the quoted work despite it not being finished, and despite the compromise reached on 1 December 2008. He also added a charge of $1,920 in respect of repair to a slab edge on the veranda on the top floor. On the evidence there was some repair work done to the slab edge but it was not chargeable work and there was no hint prior to this invoice that it would be charged for. He also claimed $3,750 plus GST for materials supplied to the site and some other work on site. This claim is also inflated. The invoices now produced by Mr Kammerlocher show that only a total of $2,187.51 plus GST was paid for materials to be delivered to site. He claims more materials were supplied for which invoices were issued which he has not produced. I do not believe this because his documentation is otherwise complete, and this case has regrettably been prepared now for more than two hearings and one appeal.
[56] If instead the correct legal approach to this case is that there was no contractual agreement on about 1 December 2008 finally settling the dispute between the parties, then it seems to me that Rendermeister are entitled to be paid for the value of the work actually done as reduced by the patchiness and delay, and for the additional materials supplied after leaving the site. If the original contract was “entire” (that is to say it had to be completed before any payment was due), this must have been waived by Macol Pty Ltd when it agreed that Rendermeister would leave the site, and upon payment of the $10,000. The value of the work at that time is properly evidenced by the invoice dated 1 December 2008, and on my analysis set out above, the value was $12,000 plus GST, taking into account the problems which had arisen. A reasonable price should be paid for the materials. On this approach therefore, the final calculation is the same, as set out below.
Conclusion
[57] Immediately before the assignment to Rendermeister Pty Ltd, Mr Kammerlocher trading as Rendermeister was entitled to be paid the unpaid part of the amount agreed on 1 December 2008 for the work done to that date, plus a reasonable price for the materials which were supplied after that date. In assessing a reasonable price for the materials supplied, I shall take it as reasonable for a contractor to mark up the trade price by 20%, in a case where the contractor does not have to deliver them to site himself. From the invoices, the trade price of the materials delivered to site after the agreement come to $2,187.51 plus GST. So the calculation is as follows:-
Agreed price for work to date: $12,000
Less amount paid: $10,000 $2,000Cost of materials $2,187.51
Plus mark up of 20% $437.50 $2,625.01Total $4,625.01
GST $462.50Total award $5,087.51
[58] Because Mr Kammerlocher trading as Rendermeister assigned this debt to Rendermeister Pty Ltd which is the Applicant in this claim, I shall make an award in this amount in favour of the Applicant.
[59] As for interest, there was no claim made originally. Mr Kammerlocher says he claimed it at a hearing of this matter on 12 August 2010 (the decision made at that hearing was later reversed on appeal and remitted for a fresh hearing). He says therefore that there was an entitlement to interest. I am not going to award any interest for two reasons. Firstly there was no written notice that a claim for interest would be made which means that it could be unfair to award it. Secondly I think that one of the things which caused this litigation in the first place was Mr Kammerlocher’s inflated invoice dated 2 February 2009. That invoice did not assist the parties to settle this matter and resulted in polarisation of each side’s position. As for costs, no claim is made beyond the filing fee. However I decline to award even those costs for this second reason.
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