Securemation Consulting Pty Ltd v The Jag Group Pty Ltd

CITATION:	Securemation Consulting Pty Ltd v The Jag Group Pty Ltd [2017] QCAT 289
PARTIES:	Securemation Consulting Pty Ltd (Applicant)
v
The Jag Group Pty Ltd (Respondent)
APPLICATION NUMBER:	MCDO2019-16
MATTER TYPE:	Other minor civil dispute matters
HEARING DATE:	31 March 2017
HEARD AT:	Brisbane
DECISION OF:	Adjudicator Bertelsen
DELIVERED ON:	28 June 2017
DELIVERED AT:	Brisbane
ORDERS MADE:	1. The respondent pay to the applicant the sum of $25,315.70.
CATCHWORDS:	CONTRACTS – FORMATION OF CONTRACTUAL RELATIONS – AGREEMENTS CONTEMPLATING EXECUTION OF FORMAL DOCUMENT – WHETHER CONCLUDED CONTRACT – where negotiations were conducted verbally and by email – where latter production of formal agreement non-reflective of prior arrangements – where services were suspended – whether entitlement exists to payment for works to date
APPEARANCES:
APPLICANT:	Ashwin Sharma
RESPONDENT:	Torien De Jager

REASONS FOR DECISION

Application

By application filed 17 October 2016, the applicant Securemation Consulting Pty Ltd (the applicant/Mr Sharma) seeks as a debt owing the sum of $25,000.00 from The Jag Group Pty Ltd (the respondent/Mr De Jager) for services performed for Origin Energy (Origin) pursuant to a teaming agreement entered into between the applicant and the respondent.

Background and evidence

Both applicant and respondent had on two prior occasions performed services for Origin, namely the setting up of predictive monitoring for Origin’s assets in the APLNG Gas Fields in the Bowen and Surat basins, as well as other operational assets including solar power systems.
On the two prior occasions the applicant and respondent entered into a written teaming agreement setting out the terms on which the applicant would perform services for Origin on behalf of the respondent. On those two prior occasions all services were apparently performed and all parties paid. Those two occasions, and the occasion the subject of this application were variously referred to as phases or opportunities.
Mr Sharma contended on this occasion that agreement was verbal and by email in determining the time and effort that would be required to complete this third phase or opportunity; that the written teaming agreement when presented on about 19 February 2016 some six weeks after he had commenced performance of services for Origin did not reflect the correct time and effort in its scope. It recited the opportunity start date as 15 January 2016.
Mr Sharma said the written teaming agreement did not acknowledge the ‘time that was agreed to finish that body of work’. He said the initial estimate for completion was 60 days, but the agreement stated 34 days. He said he decided not to sign the written teaming agreement because it expected him to do more work than what he had ‘agreed up front because not all the resources that we had agreed upon were hired’. He said it ‘wasn’t possible for me to do what was required in the project in 34 days’; that it was not the pay rate that was in dispute. It was the timeframe, particularly so as the proposed project manager was never hired.
Mr Sharma said there were to be five resources working on the third opportunity: one project manager and four technical resources, namely the two individuals Guyanen and Munir, as well as Mr De Jager and Mr Sharma; that neither a project manager nor the individual Munir were ever engaged; that Mr De Jager did not engage in the project/opportunity to any degree leaving Mr Sharma and the individual Guyanen working on the project. That, according to Mr Sharma, left himself performing also at the request of Mr De Jager the role of project manager. Mr Sharma asserted that he was, as a result, required to perform (at the rate of four days per week, eight hours per day) the services over 15 weeks, i.e. 60 days.
Mr De Jager stated that he:
…went through the scope of work, we were very clear on the fact that it was the same as the previous scope of work, which embodied the same amount of time and effort. At no point in time was Mr Sharma ever asked to partake as a project manager on this project.
He confirmed that the first two opportunities had been completed and paid for. He said the procedure was that the client, Origin, would agree to a scope of works with the contract between Origin and Jag Group first being put in place, followed by the teaming agreement with Mr Sharma; that payment by Origin was based on outcomes; that the contract with Origin, even without Mr Sharma’s involvement was delivered within budget and without additional resources but at huge inconvenience requiring him to ‘backfill for Mr Sharma immediately’; that Mr Sharma’s not working out any notice period left the client, Origin, and himself at risk such that no further contracted work has been forthcoming from Origin – his primary client.
Mr Sharma relied on weekly timesheets totally 21 days at $1,200.00 per day (ex GST), but limiting his claim to $25,000.00.
Mr De Jager contended the partial services performed by Mr Sharma were of no use anyway, because Mr Sharma submitted his record of services ‘encrypted until he got paid, which meant that we had no access to any data that Mr Sharma presented and anything that was left with the client took us a significant amount of time to validate and start over’.
Mr Sharma replied that encryption was ‘just a bargaining chip in my favour to get the Jag Group to pay me what was owed’. However, he also said ‘the reality is everyone in the project had access to everything that was being done on the project. There was no work done in secrecy’. He said the approach to all work was collaborative where everything was shared between all participants.
Mr Sharma produced an email from Mr De Jager to Mr Sharma dated 21 January 2016 which he said confirmed that he and Mr De Jager were to project manage the opportunity, thus not necessitating an independent project manager. The third technical resource (a technically savvy person) that was supposed to be hired to assist never eventuated, leaving essential work to be done by himself and one engineer, the person Guyanen. That email stated ‘in the interim if you and Guyanen can kick off the audit and start on the deliverables I will wait on your feedback on Munir’s role as I am still unsure of how to use him’. Despite that he contended there was never any dissatisfaction with his work.
Mr Sharma pointed to emails from Mr De Jager dated 21 January 2017, 10 February 2017, and 17 February 2017 describing his work as ‘a great outcome, nicely done and amazing’. Mr De Jager agreed that Mr Sharma’s daily rate was $1,200.00. He said he only invoiced (Origin) on outcomes/milestones; that until there was a physical tangible outcome for Origin, he was not in a position to invoice Origin; that here that meant presenting Origin with a ‘documented outcome in terms of our findings’. He said the overall outcome was to be able to monitor a multiplicity of variable elements.
Mr Sharma reiterated that emails supported his view of the resources and effort required on this occasion; that the only agreement was that made by email, verbally and by reference to the previous teaming agreement terms and conditions ‘where we’d operated in a similar manner’.
Mr De Jager stated that he offered Mr Sharma more money to continue; that he nominated himself as project manager and as a technical resource to get the job done. He reiterated that this agreement was never a time and materials agreement, but rather milestone based. He contended Mr Sharma was never appointed project manager, then stated ‘the actual contract that we signed with the customer deviated because the client no longer saw value in having a project manager when it was just two of our resources and their team’.
Mr De Jager asserted that Mr Sharma ‘did not work out his retention period’ and that ‘if he didn’t work out his terms and conditions as per our previous contract that there was no contract in place and the fact that the data that he encrypted was of no value to us because we had to start again’.
Mr Sharma referred to two emails which he said asked him to project manage and stating that he would be paid when Jag Group was paid by Origin.
In his email to Mr Sharma of 21 January 2016, Mr De Jager stated that ‘you and I can coordinate the project as we have done in the past’. This statement was consequent on Origin rejecting a past project manager.
Mr Sharma in his email of 23 February 2016 to Mr De Jager stated that his previous contract/teaming agreement was for eight weeks at $1,200.00 per day; that there was an error in the teaming agreement proposed for opportunity 3.
Mr De Jager, replying by email the same day, stated:
For all three engagements, I have accepted the risk of engaging you without any agreements in writing from the customer. This was done in good faith and there never any intention [sic] not to pay for the work you have so ably completed on the Jag Group’s behalf.
Mr De Jager said that it was ‘verbally agreed that the commercial agreement would mirror phase 2’; that the total number of working days applicable to phase 3 was 42 days; that he was prepared to offer an ‘additional 8 to 10 days over and above your previous contract at the same rate to address any shortfall that has arisen through scope creep on this project’ (approximately 50 days).
In his reply email of 24 February 2016, Mr Sharma said phase 2 was for two months only; that phase 3 was quoted at three months effort; that if he accepted the offer of 50 days changes to the milestone references in the teaming agreement would have to be made and a daily rate change made ‘for as much work as can be done towards delivering what we have scoped for the client’. Mr Sharma did not consider such approach as benefitting Origin, Jag Group or Securemation. He stated that he had decided to ‘finish off my work as of this week and not proceed any further… I will invoice you for the hours spent till last Friday. Timesheets are attached. Let me know whether you plan to pay this or not’.
In replying by email the same day, Mr De Jager set conditions for considering Mr Sharma’s invoices as follows:
1.Return all documentation relating to the project for all phases;
2.Return access passes to the Origin building;
3.Not discuss the issue with Origin;
4.Submit an invoice with timesheets attached together with written acceptance of conditions 1 to 3.
Mr Sharma emailed Mr De Jager on 25 February 2016 stating that he would send all project documents in encrypted form ‘so that when you pay me as per my invoice I will give you the key to unencrypt the content’.
Shortly after the same day, Mr De Jager emailed Mr Sharma stating:
I have made it very clear that your invoices will be received and paid under the terms of our teaming agreement. When the Jag Group is paid you will receive your funds within 24 hours of receipt of payment from this customer… let me get on with finishing the work which will enable us all to be paid and move on from this sorry situation.

Conclusions

Mr Sharma commenced providing third opportunity services to Origin on about 15 January 2016 on behalf of the Jag Group. Those services were in the same vein as services he had previously provided in two phases or opportunities to Origin under two written teaming agreements with the Jag Group.
Here, at the time of commencement of provision of services no written teaming agreement had been entered into. The third opportunity was to involve a project manager, Mr De Jager, Mr Sharma and the two technically savvy persons assisting, namely Guyanen and Munir, all working together and collaboratively with Origin. As it transpired no independent project manager was appointed as Origin apparently did not deem it necessary. Mr De Jager offered himself as project manager and technical assistant in lieu of the person Munir.
Mr De Jager said ‘at no point in time was Mr Sharma ever asked to partake as a project manager on this project’. That would appear to fly in the face Mr De Jager’s email of 21 January 2016 wherein he stated that he and Mr Sharma could coordinate the project as they had done in the past. There was no evidence produced to the Tribunal as to the extent of participation by Mr De Jager personally, either in the capacity of project manager or technical assistant, in the period 15 January 2016 through 19 February 2016. Rather, it appears Mr Sharma was working on site with one assistant, Guyanen. Mr De Jager only asserted inconvenience in backfilling for Mr Sharma after 19 February 2016.
Mr Sharma’s email of 10 February 2016 supports his assertion of time and effort expended to ensure project services were well on track. The email from Mr De Jager to Mr Sharma of 21 January 2016 supports and accords with Mr Sharma’s contention that he and the person Guyanen were putting in the time and effort into the project services.
Given the reduction in persons assigned to the project it is not surprising that Mr Sharma’s workload increased dramatically from the estimated 34 days to 60 days. The teaming agreement produced on 19 February 2016 ought properly to have recorded these changed circumstances but it did not. One can well understand his refusal to sign the contract as produced. He was entitled to withdraw his services and be paid for his contribution to date. Mr De Jager’s assertion that this third opportunity involved on Mr Sharma’s part the same time and effort is not sustainable.
Mr De Jager offered additional payment to Mr Sharma to complete his work with Origin. That could well be construed as recognition that additional resources were required to complete the third opportunity.
Nor is it the case that because Jag Group’s contract with Origin provided for payment based on milestones that such somehow exonerated Jag Group from liability for payment of time and effort on Mr Sharma’s part. Payment according to milestones was simply the intervals at which payments were to be made as between Jag Group and Origin.
The pay rate for Securemation was never contested. In fact Mr De Jager agreed in evidence with the pay rate of $1,200.00 per 8 hour day GST exclusive.
It was never contested that a substantial body of work had been completed by Mr Sharma by 19 February 2016, only that inconvenience resulted from Mr Sharma’s departure on 24 February 2016. Mr De Jager’s email of 25 February 2016 evidences an intention to pay Mr Sharma after Mr Sharma had ceased provision of his services.
The Tribunal is satisfied that the written teaming agreement produced to Mr Sharma did not reflect the extent of services Mr Sharma was expected to provide; that this came about due primarily due to a lack of resources to be applied to the opportunity, and perhaps to a lesser extent, due to scope creep; that the teaming agreement produced may have been a mirror reflection of prior teaming agreements only insofar as terms and conditions generally were concerned i.e. it was the same style of agreement.
It is also clear that even with the offer of payment for an additional eight to ten days services that Mr Sharma was never going to be fully reimbursed for the totality of services he had and was expected to provide. Mr Sharma is entitled to be paid for those services that he provided.
Mr Sharma’s pay rates are calculable and were not contested. That being the case Mr Sharma is entitled to $25,000.00 being a sum lesser than that which he was entitled to claim (21 days at $1,200.00 per day exclusive of GST), together with the application fee of $315.70, a total of $25,315.70.

[2017] QCAT 289

28 June 2017