Satisfaction Software Pty Ltd v Sunshine Timber Treatment Pty Ltd - [2012] QCAT 686

CITATION:

Satisfaction Software Pty Ltd v Sunshine Timber Treatment Pty Ltd [2012] QCAT 686

PARTIES:	Satisfaction Software Pty Ltd
v
Sunshine Timber Treatment Pty Ltd

APPLICATION NUMBER:

MCDO531-12

MATTER TYPE:

Other minor civil disputes matters

HEARING DATE:

2 October 2012

HEARD AT:

Brisbane

DECISION OF:

Paul Favell, Member

DELIVERED ON:

3 December 2012

DELIVERED AT:

Brisbane

ORDERS MADE:

The application is dismissed.

CATCHWORDS:

Whether debt owed to applicant by the respondent – whether any contractual obligations between the parties

APPEARANCES and REPRESENTATION (if any):

APPLICANT:

Daryl Northfield, director of the applicant

RESPONDENT:

Adam Gleeson, director of the respondent

REASONS FOR DECISION

Satisfaction Software Pty Ltd provides infoware services to businesses by a centrally hosted infoware business management and accounting software via a virtual private network. The infoware services allow users to access and use portions of the infoware software on a host computer system. The users’ data is stored on the host computer. A nightly backup of the users’ data is carried out for disaster recovery purposes.
Such a service was provided to Ausgum Furniture Pty Ltd by Satisfaction Software.
Exhibit 1 is a copy of an infoware services proposal which was accepted by Adam Gleeson on behalf of Ausgum Furniture by an email dated 13 April 2010.
Thereafter Satisfaction Software provided the services. By 31 March 2011 Ausgum Furniture owed $9,055.99 to Satisfaction Software for the services.
In April 2011 Ausgum Furniture was placed into liquidation.
Satisfaction Software now makes a claim for the debt owed by Ausgum Furniture and further services changes up to 31 January 2012 in the sum of $14,725.34 against Sunshine Timber Treatment Pty Ltd.
The claim is advanced against Sunshine Timber Treatment on the basis that Mr Gleeson, a former director of Ausgum Furniture and Sunshine Timber Treatments, told Mr Daryl Northfield, a director of Satisfaction Software, that he would honour the debts of Ausgum Furniture.
Mr Gleeson gave evidence that he did say he would honour the debts of Ausgum because they had business together for 22 years. He said that promise was not in return for anything but there may have been a possibility of using Satisfaction Software “further down the line”. He said Sunshine Timber Treatment does not use the services of Satisfaction Software and in fact uses the MYOB system. He said the data on the Satisfaction Software computer is data of Ausgum Furniture.
In the amended response Mr Gleeson said:
“In an error of judgment at the time of Ausgum Furniture Pty Ltd being liquidated due to my longstanding relationship with Satisfaction Software I suggested that they credit the amount outstanding to them at the time Ausgum Furniture Pty Ltd ($9055.99) in invoice Sunshine Timber Treatment Pty Ltd for the same.”
Mr Gleeson was provided with some advice and he now says, “Sunshine Timber Treatment Pty Ltd does not have an agreement to provide such services by the Satisfaction Software and should not have been charged for such and is consequently not liable for the charges raised.”
This claim is made in the minor civil dispute jurisdiction of QCAT. For QCAT to have jurisdiction the claim must be a claim of one of the types set out in s 12(4) and in the definition of minor civil dispute in the Queensland Civil and Administrative Tribunal Act 2009.
Relevantly such a claim could be a claim to recover a debt or liquidated demand of money by a person to whom the debt is owed or money is payable or a claim arising out of a contract between a consumer and a trader by the consumer or a claim arising out of a contract between 2 or more traders, by any of the traders.
In my view the claim cannot be categorised as a claim by a consumer and the relevant questions in this matter are whether Satisfaction Software was owed a debt by Sunshine Timber or whether the claim arises out of a contract between two contractors.
Both questions raise the issue of whether a contract existed between Satisfaction Software and Sunshine Timber.
The evidence supports a finding that Mr Gleeson made a promise or suggestion to Mr Northfield. That promise or suggestion was that Sunshine Timber Treatment would take over all outstanding invoices from Satisfaction Software to Ausgum Furniture. The question then is whether there was an enforceable contract.
One 15 March 2011, Mr Northfield, by email to [email protected] said:
“Adam
Despite promises we still have money outstanding to May last year.
Unless we get your agreement to start paying off the account at no less than the oldest month each and every month, then there is no commercial basis for us to continue to provide you with infoware services. This is on the basis that you will also start to progressively catch up you account to normal trading terms in the near future.
While it is not what I want to do, if we provided all debtors with the luxury of well overdue accounts we would be out of business & having been stung recently, this is not going to continue.
In the past you have mostly paid when you said you would but this has not been happening since on infoware services.
Hopefully you will start paying your account, otherwise we will have to terminate infoware services very shortly.
Regards,
Daryl”.
By email on 16 March 2011, Mr Gleeson said to Mr Northfield:
“I have been waiting for some weeks for the confirmation of a new funding package. This was put on the back burner when a property I have went to contract 4 weeks ago… with a 4 day finance clause. Unfortunately the purchaser has had to ask for several extensions of this with the latest being that this Friday due to slowness in the banking system and getting bank approval (definitely a pain at present).
The long and short of it is the purchaser is extremely confident all will be A-OK and the subsequent settlement which was originally scheduled for the end of the month I would anticipate will be extended due to the approval delays but will not know this until into next week.
So… it is all happening but time is frustrating. I wish I could be more precise with the timing but will not know more till early next week I expect. If the account is not likely to be fixed 100% shortly then I am sure we can get into a cycle as you suggest as you could well understand the leases will not function very well if you terminate the services.”
In an email dated 19 May 2011 (Exhibit 2) in answer to the question,
“Can you confirm:
(i)     new entities billing details
(ii)    new entity will take over all outstanding invoices from Satisfaction Software Pty Ltd to Ausgum;
Mr Gleeson replied:
(i)     as per previous
(ii)    Sunshine Timber Treatment Pty Ltd ABN 12 136 509 567”.
Exhibits 3, 4 and 5 show requests for payments from Sunshine Timber and responses which indicated Sunshine Timber were having trouble paying as promised.
It therefore must be determined whether the evidence supports the existence of a contract between Satisfaction Software Pty Ltd and Sunshine Timber.
In order for the agreement between the parties to constitute a valid and legally binding contract, it must satisfy the following criteria: there must be an agreement consisting of an offer and acceptance, with an intention to create legal relations, and consideration for the promise.
Mr Gleeson suggested that Sunshine Timber Treatment would take up the debts owing to Satisfaction Software by Ausgum Furniture Pty Ltd. This suggestion may be regarded as simply an invitation to deal (Pharmaceutical Society of Great Britain v Boots [1953] 1 QB 401). The party making the offer must intend that an affirmative response would give rise to an agreement, rather than continued negotiations. It is arguable that the offer was made on 19 May 2011 when Mr Gleeson provided Mr Northfield with the ABN and billing details in an email (Exhibit 2). At this point, it would have been contemplated by Mr Gleeson that Mr Northfield would issue an invoice to Sunshine Timber Treatment. The two entities would thus enter into legal relations. Sunshine Timber Treatment effectively entered into a contractual agreement to pay the amounts owing by Ausgum Furniture to Satisfaction Software.
There must also be acceptance communicated to the offeror. If it is contemplated that email would be the mode of communication between the parties, (in this case it arguably was) then the acceptance occurs when the email is sent. As such, acceptance may be said to have taken place on 23 May 2011 when Mr Northfield indicated that he had seen Mr Gleeson’s reply to his email asking for the billing details (Exhibit 2). He replied, “Thanks – did not see your reply. Now very CLEAR!” Alternatively, it may be argued that acceptance occurred on 29 July 2011, when Mr Northfield notified Mr Gleeson that he had transferred the Ausgum Furniture account balance to Sunshine Timber Treatments as requested and attached the April, May and June invoices (Exhibit 3).
In order for a valid contract to stand, it must be ascertained whether there is a bargain between the two parties. Therefore, it must be determined whether Satisfaction Software gave any consideration for the agreement that Sunshine Timber Treatment would account for the debts of Ausgum Furniture. In my view this consideration is lacking. The promisee, Satisfaction Software, must provide consideration for Sunshine Timber Treatment’s promise to pay Ausgum’s debts. The rule that “consideration must move from the promisee” means that a person can enforce a promise only if he himself provided consideration for it. Consideration may be either a benefit to the promisor or a detriment to the promisee (Currie v Misa (1875) LR 10 Ex 135). For example, where he renders services in exchange for the promise.
In addition, past consideration is not good consideration (Eastwood v Kenyon (1840) 11A&E 438). Therefore, the provision of infoware services by Satisfaction Software, which was part of the initial contract for service, in not valuable consideration as it is past consideration.
Mr Gleeson suggested in his email of 11 November that he requested Satisfaction Software change the invoices ‘so that Satisfaction Software did not get caught up in the liquidation of Ausgum Furniture’ (Exhibit 6).
In Wiggan v Edwards (1973) 47 ALR 497, it was held that refraining from pursuing legal action is good consideration if the party believes in good faith that they would have good prospects of success. That is not the case here.
By an email dated 11 November 2011, Mr Northfield advised Mr Gleeson:
“Adam,
It is hard to believe that another 8 months have passed – and we get the odd flippant email (the last being 29 September 11 saying you had some funds ‘earmarked’ for us for payment the following day) – but continue with no regard to paying off any amount of our account.
The last time we spoke you said you would pay off at least monthly infoware services fee – so account would get no worse. We did not even received one monthly payment that you promise. I can only presume you must be trading while insolvent. You do not return the last couple of emails or calls so:
-Satisfaction Software are providing you with 7 days notice that we are terminating your agreement with infoware services
-Then we will commence legal actions to recover monies due – if you do not return to us our infoware services router in a working condition including cables; this will be added to legal action.
Regards
Daryl Northfield”.
The content of the email contemplates a termination of “your agreement with infoware services”.
By a further email of 11 November 2011, Mr Gleeson advised Mr Northfield:
“Morning Daryl,
I am doing my (sic) what I can to get things all sorted. Our funds have been tied up with some property settlements……….. 2 of which have fallen over and now on another property settlement has been extended a number of times. At this stage we are now schedule (sic) to have a property settlement next Friday (fingers crossed) which will in turn free up funds with our debtor financier which will in turn provide funds for you.
As you are aware Ausgum Furniture P/L ceased trading in March and subsequently infoware has basically not been used since then as the ongoing entity of Sunshine Timber was running on MYOB and with trading the way it has been (not a lot of furniture manufacturing etc) we have not needed to change across at this stage (for detailed job costing etc etc).
I cannot advise you commercially what to do Darryl (sic) but my suggestions is that let me just get these properties sorted out as that is what will free up funds for you. I do not expect we have caused excessive costs for you since early April given we are not using the system so in terms of monthly charges and support since then I respectively would suggest you are on the right end of the deal…based on getting paid in due course.
Don’t hesitate to call for more discussion on it..but I am working on it and won’t let you down.
Regards,
Adam”.
By a further email of 11 November 2011, Mr Northfield replied:
“Adam.
In March you faithfully promised to pay at least monthly subscription (now $679.37) while you sorted out your “finances”.
Not one payment has been received?
Daryl.”
Mr Gleeson replied:
“Daryl,
Respectfully......I also requested you change your invoices over so that Satisfaction Software did not get caught up in the liquidation of Ausgum Furniture P/L. So…I am clearly not trying to get out of anything…but the opposite…actually assist.
Regards,
Adam”
Mr Northfield replied:
“Respectfully did this as requested 6 months ago,”
Satisfaction Software did invoice Sunshine Timber by invoices dated 31-3-11 for services given from 7 May 2010 to 31 March 2011. By an invoice dated 30.4.2011, 31.5.11, 30.6.11, 31.7.11, 31.8.11, 30.9.11, 31.10.11, 30.11.11, 31.12.11 and 31.1.12 Satisfaction Software invoiced Sunshine Timber Treatment for access charges and included support. No other details were provided in invoices after 30.4.11.
The applicant by Exhibit 9 sought to show use of the service by Sunshine Timber Treatment. That document only shows the last logs for “agm adam, agm chris, agm cr and agm donna.” The “agm” in each authorisation seems to denote “Ausgum” and the remainder the name of the individual.
It seems likely that those are log on details for Ausgum data. The last log on for “adam” was 31 August 2011. For the other 3 they were 21 April 2011, 31 October 2011 and 10 October 2011.
In my view the evidence does not show any benefit for Sunshine Timber because of the promise conveyed by Mr Gleeson. There was no benefit in Sunshine Timber promising to pay the debts of Ausgum Furniture.
Sunshine Timber had no agreement that it would be provided with the infoware services. It did not take over the contract which Ausgum Furniture had with Satisfaction software.
By the time the promise to pay was made and accepted Ausgum Furniture was in liquidation. The data held on the host was not that of Sunshine Timber but that of Ausgum Furniture. Sunshine Timber had no use for it. Mr Northfield had provided the liquidator of Ausgum Furniture with access to that data.
The Tribunal finds there is no basis for the claim against the respondent and the application is dismissed.