Rockwall Homes Pty Ltd v Khoury t/as Sungary Services

[2019] NSWCATCD 76

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Rockwall Homes Pty Ltd V Khoury t/as Sungary Services [2019] NSWCATCD 76

Hearing dates:

19 July 2019 and 26 September 2019

Date of orders:

10 October 2019

Decision date:

10 October 2019

Jurisdiction:

Consumer and Commercial Division

Before:

M Eftimiou, Member

Decision:

The application is dismissed.

Legislation Cited:

Fair Trading Act 1987

Civil and Administrative Tribunal Rules 2014

Civil and Administrative Tribunal Act 2013.

Cases Cited:

Hadley v Baxendale (1854) 9 Exch 341.

Marcourt v Clark[2012]NSWCA 367

Briginshaw v Briginshaw (1938) 60 CLR

Shevill v Builders Licensing Board (1982) 149CLR 620).

Laurinda Pty Ltd (1989) v Capalaba Park Shopping Centre Pty Ltd ( 1989)166 CLR at 657

Category:

Principal judgment

Parties:

Applicant: Rockwall Homes Pty Ltd
Respondent M Khoury t/as Sundary Services

Representation:

Mr Ayache Solicitor for the applicant.
Mr Hickey of Counsel for the respondent.

File Number(s):

GEN 19/18013

Publication restriction:

Nil

REASONS FOR DECISION

1. This is an application filed by Rockwall Homes Pty Ltd (the applicant) on 15 April 2019, for an order pursuant to section 79N of the Fair Trading Act 1987(FT Act) that would require Minerva Khoury t/as Sungary Services (the respondent) to pay it a total of $39,580.19 in compensation for damage and loss it alleges it has incurred due to the respondent’s breach of performance obligations under contract.

2. For the reasons set out following, the Tribunal is not satisfied that the applicant is entitled to be compensated $39,580.19. The Tribunal is not satisfied that the respondent has breached the terms of the agreement.

3. The applicant is legally represented by Mr Ayache. The respondent is legally represented by Mr Hickey.

Procedural History

4. The application was first listed before the Tribunal for conciliation and hearing in a Group List on 6 May 2019. In accordance with the Tribunal’s usual practice where both parties are present in person, the parties were offered the opportunity to attempt to resolve the dispute through conciliation with the assistance of a Tribunal conciliator. Those efforts were not successful.

5. The matter was adjourned for a formal hearing and directions given for the filing and serving of documents for the formal hearing. The applicant was directed to file and serve its documents by 3 June 2019 with the respondent to file and serve by 1 July 2019.

6. On 14 June 2019 the respondent wrote to the Tribunal and advised that there had been non-compliance of the Tribunal procedural directions by the applicant.

7. On 21 June 2019 the applicant wrote to the Tribunal seeking an extension of time for the filing and serving of documents and explaining that its solicitor had gone “AWOL”. The applicant sought an extension until 21 June 2019 and consent to the respondent filing and serving until 17 July 2019.

8. The Tribunal received a folder of documents from the applicant on 24 June 2019. On the morning of the hearing, the applicant forwarded to the Tribunal and the respondent by email an additional 40 folios of documents that it sought to rely upon at the hearing. The applicant explained that at the time that its documents were served on 22 June 2019 there was “a misunderstanding” with its solicitor as to what documents needed to be included as attachments to Mr Mehcur’s Affidavit.

9. The respondent opposed the additional documents being accepted into evidence. The respondent argued that the evidence had clearly been in the hands of the applicant as at 24 June 2019 and it would be prejudicial to the respondent to now allow the documents into evidence.

10. The Tribunal refused the applicant’s request to file and serve additional documents on the day of the hearing. No reasonable explanation had been provided for the lateness in serving the documents. The applicant has failed to comply with procedural directions made by the Tribunal on two occasions. The applicant is legally represented. The Tribunal was satisfied that there is a prejudice to the respondents in the filing and serving of documents at such a late stage in the proceedings.

11. The applicant was given an opportunity to seek an adjournment. The applicant advised the Tribunal that it wished to proceed to hearing.

12. On 19 July 2019 the Tribunal allocated three hours to hear the matter and the hearing was not finalized in the allocated time. The matter was adjourned part heard at the end of the time allocated for the hearing.

13. As a result of the matter being part heard, the Tribunal then allowed the applicant the additional documents to be submitted into evidence. Directions were made to give to the respondent an opportunity to reply to the documents.

Summary of matter

14. The applicant is the owner and developer of a building site in Condell Park NSW. Sometime in or around May 2016 the applicant requested its site supervisor Mr Sleiman to find an alternate plumber to carry out building works on the site. A plumber had been previously engaged to complete works, however, the applicant wanted to dismiss that particular plumber.

15. Mr Sleiman contacted Mr Ayoub (the respondent’s manager) and asked him if he was interested in undertaking the plumbing work.

16. Mr Sleiman met on site with Mr Ayoub in or around May 2016 and walked through the site. Mr Ayoub requested a copy of the plans. Mr Sleiman forwarded to Mr Ayoub a copy of the plans that had been provided to him by the applicant.

17. Around one week later the respondent provided an oral quotation for the works. There was some negotiation of the contract sum with the applicant and it was agreed on a sum of $45,000.00.

18. In or around September 2016 the respondent commenced work on the site.

19. In or around November 2016 the applicant requested the respondent to provide a written quotation for the works. This quotation was provided to the applicant on 26 November 2016.

20. Work continued on the site between September 2016 and June 2017.

21. On or around 31 August 2017 the applicant forwarded to the respondent an email that contained part of hydraulic plans for external gully pit work.

22. The applicant and the respondent then engaged in discussion in relation to the correct set of plans that formed part of the agreement. The respondent arguing that he had never been given a set of the hydraulic plans and the quotation that he provided orally in May 2016 and in writing in September 2016 was based on architectural plans that had been forwarded to him by Mr Sleiman in May 2016.

23. On or around 13 October 2017 there was a site meeting between the applicant and the respondent. A dispute then arose about the terms of the agreement between the parties and the costs of the works.

24. The parties were unable to agree on the scope of works or the cost of any variations to the Contract. The respondent refused to return to site and complete any works until payment was made in accordance with the Contract.

Jurisdiction

25. The applicant has been filed in the Consumer list of the Consumer and Commercial Division of the Tribunal.

26. The application has been brought as a consumer claim under Part 6A of the Fair Trading Act 1987. The Tribunal is satisfied that the applicant is a consumer and the respondent is a supplier of services within the meaning of that Part. The services in dispute were to be supplied in the course of trade and commerce and they were to be supplied in New South Wales. The applicant has applied to the Tribunal within the limitation period applicable for a consumer claim and the claim is within the prescribed monetary limit that applies to such claims.

27. The applicant’s cause of action is in contract. The applicant contends that the respondent has failed to complete the contract. The applicant contends that the respondent has repudiated the contract by not returning on site to complete the works. The applicant has accepted the repudiation and has engaged another plumber to complete the works. The applicant seeks the damages that flow from the alleged breach of the contract

28. The Tribunal’s order making power under Part 6A of the F T Act is found, relevantly in section 79N of the F T Act. The Tribunal has the power to make an order that requires the respondent to pay to the claimant a specified amount of money.

29. In order to succeed in a claim in contract the applicant must establish that the respondent failed to perform an obligation under the contract and that the applicant suffered damage and loss as a result. Such damage and loss must be reasonably foreseeable consequence of the breach alleged. In this respect, it must have been in the contemplation of the parties at the time the contract was made, or it must be a natural consequence of the breach: Hadley v Baxendale (1854) 9 Exch 341.

30. The purpose of an award of damages in contract is compensatory. It is designed to put the injured party in the position in which it would have been in had the breach or contravention not occurred, so far as money is capable of doing so: Marcourt v Clark[2012]NSWCA 367 [at 98-99]

31. The applicant bears the onus of proving its case on the civil standard of proof, which is the balance of probabilities: Briginshaw v Briginshaw (1938) 60 CLR 336. This standard of proof was described by Lord Denning in Miller v Minister for Pensions [1947] 2 All ER 372 [at 374] as requiring the Tribunal to be satisfied that an alleged fact was “more probable than not”. However, the Tribunal must “feel an actual persuasion of [the alleged fact’s] occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality”…[ the occurrence or existence of the fact must be established]… to the reasonable satisfaction of the Tribunal.” Briginshaw [at 361-2].

Consideration

32. Having regard to the applicant’s cause of action, the material facts and contentions of the parties, and the applicable law, in order to determine outcome of this application, the questions the Tribunal must pose and determine are as follows:

1. Who are the correct parties to the agreement?

2. When was the Contract entered into?

3. What was the Contract Price?

4. What was the Scope of Works? (What were the terms and conditions of the contract?)

5. How and when did the Contract come to an end?

6. If it is found that the respondent repudiated the contract: What are the damages that flow from any breach of the Contract.

33. The applicant sought to rely on a folder of documents marked Exhibit A. The folder included the following:

1. Affidavit of Mr M Mehcur dated 19 July 2019.

2. Affidavit of Mr Sleiman dated 18 April 2019.

3. Affidavit of Mr A London dated June 2019.

34. The Tribunal allowed the applicant to rely on a second folder of documents marked Exhibit A(b) which included:

1. Email correspondence between the applicant and Mr Sleiman dated 5 May 2016.

2. Photographs; and

3. Tax Invoices.

35. The respondent sought to rely on a folder of documents marked Exhibit B. The folder included the following:

1. Affidavit of Mr Ayoub dated 17 July 2019.

2. Affidavit of Mr Sleiman dated 17 July 2019.

36. An affidavit was filed and served by Mr Ayoub in reply to the applicant’s documents. This document is marked Exhibit B2.

37. Mr Sleiman the site foreman of the applicant provided an affidavit for the applicant and an affidavit for the respondent. Mr Sleiman was not available for cross examination at either hearing. The Tribunal asked if he could be available to be cross examined by telephone and he was not available. The applicant argued that no weight at all should be given to the Affidavit evidence of Mr Sleiman. The Affidavit evidence of Mr Sleiman has not been tested. The Tribunal has however considered the conflicting evidence contained in the Affidavit’s of Mr Sleiman and in the absence of any other evidence has given the evidence little weight.

Contract

38. The Tribunal finds the following:

1. A Contract was entered into between the parties in May 2016.

2. The applicant through its site supervisor Mr Sleiman contacted Mr Ayoub and enquired whether he could complete the plumbing works that had been commenced by a previous plumber at the site.

3. Mr Ayoub then attended the site to determine what works were to be completed.

4. Mr Ayoub gave Mr Sleiman on site an estimate of the works and requested a copy of the plans so a proper quotation could be given.

5. A copy of the plans was then emailed to Mr Ayoub by Mr Sleiman (the plans provided did not include the Hydraulic Plans).

6. Following receipt of the plans negotiations commenced as to the contract price.

7. In late May/early June 2016 the parties agreed on a contract price of $45,000.00.

39. The Tribunal is satisfied that the parties entered into an oral agreement in late May /early June 2016 for the respondent to provide plumbing works to the applicant at a contract sum of $45,000.00 (excl GST). The Tribunal is satisfied that the quotation provided by the respondent to the applicant was based on a site visit, the plans forwarded by Mr Sleiman to the respondent and Mr Ayoub using his skills and experience as a plumber in quoting for the works.

40. In making this finding the Tribunal has had regard to the Affidavit evidence of Mr Sleiman contained in the applicant’s folder of documents, the Affidavit of Mr Ayoub and the evidence given at the hearing by Mr Ayoub and Mr Mehcur.

Scope of Works

41. The Tribunal is satisfied on the evidence before it that Mr Ayoub contracted on the basis of plans forwarded to him that did not include the Hydraulic Plans. The plans were a set of drawings that included architectural drawings , BASIX, Survey, Consent and structural plans. The Tribunal is satisfied based on the evidence of Mr Ayoub. Mr Mehcur and Mr Slieman that the plans that were sent to Mr Ayoub in May did not include the Hydraulic Plans.

42. The Tribunal is satisfied that the contract was made orally in about May or June 2016. The Contract was entered into after Mr Ayoub was invited to visit the site and provide an oral quotation. The oral quotation was provided after Mr Ayoub requested a copy of the plans. The plans that were forwarded to Mr Ayoub were not hydraulic plans, they were architectural plans. Mr Ayoub using his skills and experience as a plumber provided a quotation based on the information before him.

43. Mr Mehcur in his Affidavit stated that he met Mr Ayoub on site with Mr Sleiman on 14 September 2016 and provided to him a set of plans which he has annexed to his Affidavit and marked with the letter A. In cross examination Mr Mehcur conceded that the set of plans attached to his Affidavit did not include hydraulic plans.

44. The oral agreement between the parties was confirmed in November 2016 when Mr Ayoub provided to the applicant a written quotation which references the plans provided by email on 24 May 2016. This quotation encompassed the scope of works. The Tribunal is not satisfied on the basis of the evidence given by Mr Mechur, Mr Ayoub and Mr Sleiman that the plans included the hydraulic plans.

45. The applicant’s assumption that the set of plans that were given to the respondent in May 2016 and the set of plans referred to in the respondent’s written quotation were the Hydraulic Plans is not supported by the evidence. The applicant was not able to satisfy the Tribunal that at any time the hydraulic plans were given to the respondent prior to the end of August 2017.

46. The applicant’s submission that the contract was to carry out all plumbing and storm water work on site is not supported by the evidence. In the alternative the applicant submits that it does not matter at the end of the day whether the hydraulic plans were made available to the respondent. The applicant argues that the respondent has committed itself to the quote based on “assumptions” made by the respondent as to the type of pits, the number of pits and pipes to be used to carry out the works. The applicant argues that the respondent should have asked for further clarity or detail associated with the quote. The applicant argues that because of the respondent’s background as a qualified builder, plumber and a person with many years’ experience carrying out the works he should have been cognizant to the fact that the plans that were provided to him lacked detail.

47. The applicant has not satisfied the Tribunal that the work quoted for by the respondent based on the architectural plans could not have been carried out in accordance with the Australian Building Code of Australia. The respondent has given evidence that he has quoted and completed numerous jobs where it was not necessary to have hydraulic plans and there was nothing in this job to alert him to the fact that there may have been other plans which were not provided to him. The Tribunal understood the evidence to mean that Mr Ayoub quoted the job using his skills and experience from the architectural plans ensuring that the material provided and the work done would be in accordance with the Australian Building Code.

48. The Tribunal does not accept the argument of the applicant that it was incumbent on the respondent to make additional enquiries from the builder before preparing the quotation. There is little evidence that the respondent was not able to perform the works set out in the architectural plans for the amount that he quoted.

49. The Tribunal finds that the contract provided for the respondent to undertake plumbing works in accordance with the architectural plans provided on 24 May 2016 for the contract price of $45,000 exclusive of GST.

How did the Contract come to an end?

50. The applicant asserts that the respondent repudiated the contract on or around 23 October 2017 when the respondent refused to complete the works under the oral agreement entered into between the parties in May /June 2016.

51. The applicant submits that the basis of the termination by the respondent is that “in his mind the business was owed money and had not been paid”. The applicant submits that the only invoice that was unpaid was the invoice dated 23 October 2017 for $4250.00. The applicant submits that this invoice was not issued in accordance with any terms of any contract and was issued 10 days after a prior invoice was issued in the same month. It was also issued when no further work had occurred. After the applicant issued a notice to complete, the respondent repudiated the contract by not honouring the oral agreement reached in May 2016. The applicant submits that this is wrongful termination and as a result the applicant is entitled to damages.

52. The respondent submits that the relationship between the parties experienced difficulties in about September or October 2017 when the respondent raised the issue with the applicant of the hydraulic plans that had not previously been seen. At that time the respondent in an attempt to assist the applicant and to ensure that the works were able to be completed carried out additional works for the applicant and assisted the applicant to purchase concrete pits. On the basis of a conversation with the applicant on 16 October 2017 the respondent formed the view that the applicant would not pay the respondent for the work carried out up until that time. The respondent interpreted this as a repudiation of the contract and accepted the repudiation. The applicant was seeking to enforce the terms on the respondent in relation to the hydraulic plans that did not form part of the contract.

53. On the basis of Laurinda Pty Ltd (1989) v Capalaba Park Shopping Centre Pty Ltd ( 1989)166 CLR at 657 the test for renunciation is whether:

“Viewed objectively, the conduct of the relevant party has been such as to convey to a reasonable person, in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it.”

54. The Tribunal finds that the applicant’s claim that the respondent has repudiated the contract by failing to complete the works is not supported by the evidence. It is clear from the Affidavit of Mr Mehcur that on 16 October 2017 he was requiring the respondent to complete the works in accordance with the Hydraulic Plans. This is clear from the correspondence sent by the applicant to the respondent on 16 and 23 October 2017. The Tribunal has found that the Hydraulic Plans did not form part of the agreement. The respondent’s refusal to return and complete works that were outside the scope of the Contract cannot in the Tribunal’s mind be interpreted as a repudiation of the contract by the respondent. The respondent wrote to the applicant on 23 October 2017 advising him that there was an amount of $4250.00 outstanding for the works completed and attaching an invoice for immediate payment.

54. The applicant’s conduct in trying to vary the terms of the contract and refusing to pay the respondent for work carried out amounts to repudiation. The respondent accepted the repudiation and elected not to return to site. The Tribunal accepts the respondent’s submissions that the conduct of the applicant in refusing to accept the terms of the Contract and to make payment demonstrates a clear indication of the absence of readiness and willingness to perform the contract (Shevill v Builders Licensing Board (1982) 149CLR 620).

55. On balance the applicant has failed to make out its case on the balance of probabilities and the application is dismissed.

56. There is one remaining issue, which is the correct name of the respondent. The respondent argues that Mr Ayoub is not a party to the proceedings and should be removed. Mr Ayoub deposed in his affidavit sworn 17 July 2019 that he was employed in a management role on behalf of Ms Minerva Khoury trading as Sungary Services and that he had been approached by Mr Sleiman in that capacity. Mr Ayoub confirmed under cross examination that:

1. When engaged he was quoting on behalf of Sungary Services and not on his own behalf;

2. That Mr Minerva Khoury was trading as Sungary Services:

3. That he was conducting all negotiations on behalf of Sungary Services

4. That he was authorized to enter into contract on behalf of Sungary Services ; and

5. That he was responsible for undertaking the actual plumbing work on behalf of Sungary Services.

58. The respondent submits that Mr Ayoub was not a party to the contract and has been improperly joined as a party to the proceedings.

59. The applicant did not make any submissions opposing Mr Ayoub being removed as a respondent. The Tribunal removes Mr Ayoub as a respondent to the proceedings.

Costs

60. In the determination of the claim now made by the Tribunal, the Tribunal would normally consider that costs should follow the event and an order would be made in the respondent’s favour against the applicant pursuant to Rule 38 of the Civil and Administrative Rules 2014. However, the parties must be given the opportunity to make submission in respect of a costs order.

1. Any application for costs by the respondent is to be supported by evidence and submissions of no more than 2 pages in length and is to be filed with the Tribunal and served on the applicant  on or before 30 October 2019.

2. Any evidence and submissions in response to the application for costs from the applicant opposing the application for costs, of no more than 2 pages in length, is to be filed with the Tribunal and served on the respondent on or before 15 November 2019.

3. If there is no application made for costs by 30 October 2019 there will be no order as to costs.

Opportunity to make submissions about proposed order to dispense with costs hearing

61. The parties are to advise the Tribunal in their respective submissions as to costs if they consent to the issue of costs being determined on the papers without a hearing.

62. Alternatively the parties are to make submissions as to why such an order should not be made pursuant to section 50 of the Civil and Administrative Tribunal Act 2013.

**********

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.

Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 15 June 2021