Simic v Prasad

[2017] NSWDC 158

District Court

New South Wales

Medium Neutral Citation:

Simic v Prasad [2017] NSWDC 158

Hearing dates:

26 and 27 April 2017, 8 June 2017

Date of orders:

29 June 2017

Decision date:

29 June 2017

Jurisdiction:

Civil

Before:

Dicker SC DCJ

Decision:

(1) Judgment for the defendants in relation to the Amended Statement of Claim;
(2) The Amended Statement of Claim is dismissed;
(3) The plaintiff is to pay the costs of the first and second defendants of the Amended Statement of Claim proceedings as agreed or assessed;
(4) Liberty to the parties to apply on two business days’ notice to vary the costs order in (3) above;
(5) Judgment for the cross-claimant 3D against New Era Enterprises Australia Pty Ltd on the First Cross-Claim;
(6) Judgment for Mr Simic and Ms Delaney on the First Cross-Claim;
(7) The cross-claimant 3D is to pay the costs of Mr Simic and Ms Delaney of the First Cross-Claim as agreed or assessed;
(8) Liberty to the parties to apply on two business days’ notice to vary the costs order in (7) above;
(9) The parties are to bring in short minutes of order within 7 days to reflect these reasons in relation to the First Cross-Claim together with any interest on the amount found;
(10) Liberty to the parties to apply in relation to the costs of the First Cross-Claim of 3D against New Era Enterprises Australia Pty Ltd on two business days’ notice;
(11) Exhibits are to be returned after 28 days.

Catchwords:

Contract – identity of contracting party – whether the plaintiff was a party to the relevant contract – whether the plaintiff as a natural person can sue on behalf of a company – whether the plaintiff or another company was liable for allegedly unpaid invoices

 

Misleading or deceptive conduct - whether representations as alleged were made – whether in trade or commerce

  Restitution – whether plaintiff and the second cross-defendant are liable in restitution

Legislation Cited:

Australian Consumer Law
Competition and Consumer Act 2010 (Cth)
Evidence Act 1995 (NSW)
Fair Trading Act 1987 (NSW)
Trade Practices Act 1974 (Cth)

Cases Cited:

Australian Financial Services and Leasing Pty Limited v Hills Industries Limited (2014) 253 CLR 560
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Coulls v Bagot’s Executor and Trustee Company Ltd (1967) 119 CLR 460
David Securities Pty Ltd v Commonwealth Bank of Australia (1993) 175 CLR 353
Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2016] NSWCA 123
Harold R Finger & Co v Karellas Investments Pty Ltd [2015] NSWSC 354
Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [2012] NSWCA 380
Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27
Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154

Category:

Principal judgment

Parties:

Daniel Simic (Plaintiff and First Cross Defendant)
Vinay Prasad (First Defendant)
3D Automation Group Pty Ltd (Second Defendant and First Cross-Claimant)
Hazel Mary Delaney (Second Cross-Defendant)
New Era Enterprises Australia Pty Ltd (Third Cross-Defendant)

Representation:

Counsel:
D Eardley (Plaintiff)
C Bolger (Defendant)

  Solicitors:
Stewart & Associates (Plaintiff)
Blacktown Legal (Defendant)

File Number(s):

2015/00036454

Judgment

1. In these proceedings the plaintiff, Mr Daniel Simic, sues the defendants for damages for breach of contract in respect of various electrical works undertaken at a residential property in Molong Road, Gymea Bay in Sydney in New South Wales (“the Property”). The works related to the installation of a home automation system at the Property.

2. The plaintiff alleges that the breaches arose from a contract entered into in May 2009. Damages are sought for the overcharging of services, double payments of invoices, for materials not supplied or installed and for defective materials. In the alternative, a claim was made by the plaintiff under Section 18 of the Australian Consumer Law (Schedule 2 to the Competition and Consumer Act 2010 (Cth)). This claim was not pressed in final submissions.

3. The plaintiff, Mr Simic, together with his wife a Ms Delaney, are the owners of the Property at which the home automation system was to be installed. The first defendant, Mr Prasad, is a director of the second defendant. The second defendant, 3D Automation Group Pty Ltd, is a company involved in the supply and installation of home automation systems.

4. 3D Automation Group Pty Ltd filed a Cross-Claim on 16 May 2016 seeking damages and equitable compensation against Mr Simic, Ms Delaney and New Era Enterprises Australia Pty Ltd, for breach of contract and alternatively, damages for restitution and for claims under Section 52 of the Trade Practices Act 1974 (Cth) and Section 18 of the Australian Consumer Law.

5. A major issue in the case was the identity of the contracting parties.

Procedural background

6. The proceedings have a long and tortuous procedural background. On 25 July 2016 the court ordered that the plaintiff serve his evidence by 5 September 2016. Apparently the plaintiff served his lay evidence a few days late on 9 September 2016.

7. On 12 September 2016 the court made orders by consent ordering the first defendant, the second defendant and the cross-claimant to serve any evidence on which they wished to rely by 14 October 2016 with further orders in relation to the filing of reply evidence. The proceedings were listed for hearing with a three day estimate commencing on 26 April 2017.

8. The defendants and the cross-claimant breached the orders and did not serve their evidence until 17 February 2017.

9. In due course, an application was made by the defendants and the cross-claimant for an extension of time to serve their evidence. The plaintiff also sought an order for the filing of expert evidence.

10. After a contested interlocutory hearing, on 24 April 2017 Letherbarrow DCJ dismissed both applications. A renewed application was made by the defendants and cross-claimant before me at the commencement of the final hearing on 26 April 2017. An affidavit of Mr Prasad was relied upon but this was available but not tendered (or read) in the application before Letherbarrow DCJ. After a lengthy further contested interlocutory hearing, the application by the defendants and the cross-claimant to rely on the evidence which had been served late was dismissed with costs.

11. Accordingly, the only affidavit evidence before the court at the final hearing was the affidavit of the plaintiff, Mr Simic, sworn 9 September 2016. No point was taken when this affidavit was read that it had been served a few days late.

12. Extensive objections were taken to the affidavit of Mr Simic by counsel for the defendants. One result of these objections was that numerous parts of the affidavit were not read by the plaintiff.

List of issues

13. At the commencement of the hearing, counsel for the plaintiff handed up a list of issues which I was informed had been agreed by the parties. The list had been prepared on behalf of the first and second defendants and the cross-claimant. The list of issues in that document is as follows:

1. Who are the contracting parties?

2. The terms of the agreement for 3D Automation to provide building and construction services.

3. The capacity the plaintiff has to recover or claim moneys invoiced to and paid by Nebax Constructions Pty Ltd.

4. What capacity the plaintiff has to conduct proceedings on behalf of New Era Enterprises Pty Ltd.

5. What capacity the plaintiff has to recover or claim moneys invoiced to and paid by New Era Enterprises Pty Ltd.

6. Whether there were any overpayments made by the plaintiff.

7. The quantum of the unpaid invoices issued by 3D Automation.

8. Whether there was any defective work and the quantum of that work.

9. What liability 3D Automation has to the plaintiff.

10. What liability Vinay Prasad has to the plaintiff.

Affidavit of Mr Simic

14. As indicated above, an affidavit of Mr Simic, the plaintiff, sworn on 9 September 2016 was read in the proceedings.

15. That affidavit:

1. Provides evidence that on 27 April 2009 Mr Simic sent an email to Mr Prasad outlining some of the written terms of a proposed contract and included an attachment which was architectural drawings. The attachment which is Annexure A1 (page 9) was sent by Mr Simic under the heading “New Era Enterprises Australia Pty Ltd”. The document contained several pages of architectural drawings relating to a proposed new residence at Molong Road, Gymea Bay in Sydney for Mr Simic and Ms Delaney: affidavit paragraph 3;

2. Gives evidence that in or about November 2009 Mr Prasad and/or 3D Automation Pty Ltd (“3D Automation”) commenced work at the Property: paragraph 4;

3. States that from 2 November 2009, 3D Automation issued various invoices for work performed. These various invoices were issued variously to “Nebax” or to “Nebax Pty Ltd” or to “Nebax Constructions” or to “New Era Enterprises Australia” but not to Mr Simic himself: various paragraphs including paragraph 5 and following;

4. Gives evidence that at various dates Mr Simic paid the invoiced amounts by bank transfer. The bank transfers appear to have been not from the bank account of Mr Simic but from the accounts of “Nebax” or “New Era”: see various paragraphs in the affidavit including paragraph 6 and following and the annexures referred to;

5. Gives evidence that various items referred to in invoices were either removed, never delivered or never installed: paragraphs 30, 34, 43 and 47;

6. Gives evidence that certain designs invoiced were never provided: paragraphs 38 and 39;

7. Gives evidence that certain items invoiced were removed due to their faulty operation: paragraph 30;

8. Gives evidence that there were administrative errors which caused double payments of invoices to occur: paragraphs 49, 51-53, 55-57, 60-61, 63-65.

16. The affidavit of Mr Simic referred to above attaches a large number of invoices issued under the heading “3D Automation”. The Australian Company Number on these invoices is 127 516 858 which accords with the second defendant’s particulars on the Amended Statement of Claim being 3D Automation Group Pty Ltd. It is noted that on each invoice the banking details for payment of the invoice are bank accounts of 3D Automation Group Pty Ltd.

Mr Simic’s directorships and shareholdings

17. A number of ASIC company searches were tendered by the defendants in relation to companies which are relevant to these proceedings. These searches establish the following matters:

1. ASIC search of Nebax Constructions Australia Pty Ltd – Exhibit 1: The search shows that Nebax Constructions Australia Pty Ltd (“Nebax”) was registered on 21 June 2002 and was placed in external administration through the appointment of an administrator (and in due course a liquidator) on 6 June 2013. Mr Simic was appointed as a director on 21 June 2002 and ceased as a director of Nebax on 29 January 2013. He held 50 shares at one stage in Nebax;

2. ASIC search of New Era Enterprises Australia Pty Ltd – Exhibit 2: The search establishes that New Era Enterprises Australia Pty Ltd (“Era”) was registered on 20 December 2000. The search shows that Mr Simic was a director of Era from 20 December 2000 to 1 September 2011 and from 9 October 2013 to 30 September 2014. He is not a current director of Era. The search shows that Simic Management Investments Pty Ltd was a former shareholder of Era but is currently not a shareholder of Era. Mr Simic is not a shareholder of Era;

3. ASIC search of Simic Management Investments Pty Ltd – Exhibit 3: Simic Management Investments Pty Ltd (“Simic Management”) was registered on 3 February 2009 and was deregistered on 11 September 2016. Mr Simic was a director of Simic Management from 3 February 1999 until 11 September 2016. Mr Simic was at one stage a shareholder of Simic Management.

Mr Simic’s oral evidence

18. Mr Simic gave brief oral evidence in chief. In relation to the sound speakers referred to in paragraph 43(b) of his affidavit, Mr Simic gave evidence that one of the speakers was defective as it was not working. He gave evidence that there was no sound output from the speaker and thus it was defective: T6.11.

19. Mr Simic was then subjected to a lengthy cross-examination.

20. Mr Simic confirmed that he was the current owner of the Molong Road Property at Gymea Bay with his wife, the third cross-defendant Ms Hazel Delaney: T6.17. Mr Simic said that they purchased this property in 2007 and this is their current residence.

21. Mr Simic confirmed that he had been a director of Nebax and Era. He confirmed that Nebax was currently under external administration (T7.9) and that he was no longer a director of Nebax. No detail was provided in relation to the nature of the external administration by Mr Simic. Mr Simic said he had no reason to doubt the correctness of the company, directorship and shareholding details set out in the ASIC company searches which are Exhibits 1, 2 and 3. Mr Simic was taken to his verifying affidavit sworn 9 September 2016 in relation to the Defence to the First Cross-Claim. In the affidavit Mr Simic asserts that at the time he swore the affidavit he was a director of Era. Mr Simic agreed that when he swore the affidavit he was not a director of Era but believed he was at the time: T10.20. I accept this evidence.

22. Mr Simic was then cross-examined at length in relation to the various invoices and lodgment receipts which are annexed to his affidavit: T10.49-50.19. When this cross-examination is viewed as a whole, the following matters emerged:

1. Mr Simic accepted that all the invoices for work and materials were sent by the second defendant 3D Automation Group Pty Ltd;

2. Where an invoice was addressed to “Nebax”, “Nebax Pty Ltd”, “Nebax Constructions” and any similar version involving the word “Nebax” that the invoices were received by Nebax Constructions Australia Pty Ltd: for example T14.37; T15.30;

3. In relation to the one invoice dated 22 June 2010 addressed to New Era Enterprises Australia, Mr Simic accepted that this was received by New Era Enterprises Australia Pty Ltd: T13.47;

4. Where the lodgment receipts refer to the bank accounts of “Nebax” there were two bank accounts, the Nebax EFT account and the Nebax DS savings account: T22.30; T23.28;

5. Some lodgment receipts referred to various accounts of Era. These included the Era EFT account and the Era trading account;

6. In relation to the invoice to “New Era Enterprises Australia” from 3D Automation Group Pty Ltd dated 22 June 2010, Mr Simic confirmed that he believed he was a director of Era at the time. This is confirmed by Exhibit 2;

7. In relation to the 3D Automation Group Pty Ltd (“3D”) invoice number 3D-364 referred to in paragraphs 29-31 of Mr Simic’s affidavit, he does not attach the lodgment receipt for payment of that invoice. Mr Simic agreed that there was no mention in his affidavit of invoice 3D-364 having been paid. In re-examination he confirmed that the invoice had been paid: T55.44.

23. Mr Simic was cross-examined in relation to paragraphs 36 to 39 of his affidavit. The invoice number 3D-441 referred to in paragraph 36 of Mr Simic’s affidavit does not include an invoice amount. Mr Simic asserts that it was for $10,102.24 in paragraph 26 and claims that it was paid by bank transfer on 26 October 2010: paragraph 37 of his affidavit and Annexure B2.

24. Mr Simic was then taken to Annexure A2 which is the relevant invoice and it was put to him that this was for material supplied rather than designs: T16.35. Mr Simic referred to part of the detail of the invoice that refers to “provide security design with PIR x 27hrs” and “locations on floor plan and cabling specs & rec for various comp”. Mr Simic said that the materials referred to items relating to a security system for his house: T16.42. He conceded that a security system had been installed at his house and 3D had completed work at the site of the installation of the security system. He said he did not know that the scope of works for the installation of the security system had been contracted out to another company called Ampcom: T17.1. He said he did not believe he was familiar with this company.

25. Mr Simic was then taken to a series of emails which became Exhibit 4 which attached a three page plan of Mr Simic’s “proposed new residence” at Molong Road at Gymea Bay. It was put to Mr Simic that these emails included a security floor plan and design within the invoice. Mr Simic denied this and he said the plans were only part of a design for a security system and only related to one item on the invoice: T17.40; T19.44; T20.21. In particular, Mr Simic said that the document was a layout not a design and only indicated the area where passive infrared detection items were to be installed: T17.20-20.22; T20.47.

26. In relation to paragraph 38 of Mr Simic’s affidavit, Mr Simic:

1. Agreed that his brother had received the plans which were part of Exhibit 4: T18.21;

2. Agreed that his brother was involved in the construction of the property at Molong Road from time to time: T18.31;

3. Said he did not recall whether his brother was working for Era or Nebax at the time or was working directly for Mr Simic although he thought the latter: T18.37;

4. Accepted that his brother had a role in the construction of the residence: T19.3;

5. Accepted that a security system was installed by 3D in part: T19.17;

6. Said he was not aware whether the items referred to in the invoice Annexure A2 were installed: T19.22 cf T19.40;

7. After cross-examination, accepted that the parts referred to were on site or were installed but said that the designs were never provided to anyone referred to in the invoice: T19.44. Mr Simic said this created problems in finishing the system: T20.3. Mr Simic said the document attached to Exhibit 4 appeared to be only a layout of the passive infrared detection items not a design. In particular, Mr Simic said that the layout shows the radiation for the security devices but no security interface was provided in the document. Whilst he accepted that all the passive infrared detections items had now been installed he said they were not installed by 3D. He did not accept that if part of the devices had been installed that a design was provided for that part.

27. Mr Simic confirmed that the two “Nebax” bank accounts referred to in the lodgment receipts were operated by Nebax: T22.34.

28. Mr Simic gave some significant evidence in relation to the use of the Nebax bank accounts: T23.30-T24.15. He said that in relation to the Nebax EFT account, its use required the sign off of both the Nebax directors being another director and himself and an accountant. In relation to the Nebax DS savings account, he was the authorized signatory on the account and he could operate it by himself. Mr Simic claimed that he used the Nebax accounts personally to pay for the 3D invoices: T23.38; T25.20. He said he paid funds as required into the Nebax account and then the sums were paid out by Nebax. Mr Simic referred to his affidavit in a number of places where he says words to the effect “I paid the invoiced amount”. He accepted that the invoices were paid from the accounts of Nebax but gave evidence that he had paid money into the accounts to do this: T25.23. He accepted that there was nothing in his affidavit which said that he paid his personal funds into the Nebax account for the purposes of paying the invoices: T26.8.

29. It is noted that there are no documents in evidence, including attached to Mr Simic’s affidavit, which show the payment of moneys from a personal account of Mr Simic into Nebax’s account. Similarly, there are no documents showing the accounting treatment within Nebax (or Era) in relation to the moneys paid into any account by Mr Simic. For example, it is not shown whether these moneys allegedly paid in were treated as a director loan from Mr Simic to Nebax or further equity. It is also not shown in the accounting records of Nebax how such sums were treated in financial statements or in audited accounts, if any.

30. In evidence was an email dated 28 January 2010 from Mr Prashant Arora, who Mr Simic confirmed was an employee of Nebax (T34.29) who managed accounts but who was also responsible for paying invoices relating to Mr Simic’s house, to Ms Felicia Prasad at 3D Automation: T35.17. The substance of the email is that Mr Arora requested that the full name of Nebax Constructions Australia Pty Ltd and its ABN number be placed on every 3D invoice in order for the invoice to be considered “a valid tax invoice by [the] ATO”. This provides some support for the fact that the invoice was directed to Nebax itself and not Mr Simic personally.

27. There was also no evidence before the court in relation to the tax treatment by either Nebax, Era, Mr Simic or Ms Delaney in relation to the invoice amounts paid to 3D Automation.

28. Mr Simic was then taken to paragraph 30 of his affidavit. In relation to paragraph 30(b) and (c) Mr Simic confirmed that one Axiom 450, which appeared to be part of the security system, was supplied on site but it was not installed: T41.2. However, Mr Simic accepted that invoice 364 was only for the supply of goods: T41.16. In relation to the various components referred to in paragraph 30(a) of his affidavit, Mr Simic gives evidence in his affidavit that the items referred to were removed “due to their faulty operation”. It was put to him that they were replaced by 3D in 2013. Mr Simic agreed that they had been replaced by other components with another brand but that what had been replaced was a totally different system involving a button as opposed to keypad operation. Mr Simic said this was a vastly inferior system to that which had been invoiced: T41.46-42.25. Mr Simic said that the new Avanti system did not work and therefore there had not been a replacement with appropriate hardware for the security system. Mr Simic claimed that the Avanti components “did 1%” of what the system was supposed to do: T42.30. Mr Simic expanded on this and said that the replaced system was faulty because the button system with Avanti did not operate or control any form of automated device in the house like the television: T42.40.

29. Mr Simic was cross-examined in relation to paragraphs 32-34 of his affidavit. After cross-examination he confirmed that what was in paragraph 34 was incorrect. It was not that a touch screen invoiced was not supplied but that the “Axiom ethernet router x 1” referred to in the 3D invoice dated 10 May 2010 (Annexure Y1) was not supplied: T43.39.

30. In paragraph 56 of his affidavit Mr Simic referred to being charged an additional amount against “my deposit”. It was put to him that he had not paid a deposit and he said that the deposit was paid to a company called Zitak but agreed that there was no reference to Zitak in his affidavit. Although “my deposit” is referred to in paragraphs 60 and 64 in addition to paragraph 56 of Mr Simic’s affidavit, he accepted that he did not explain it in his affidavit: T47.13-47.47.

31. In relation to paragraphs 56-57 of his affidavit Mr Simic confirmed that he had not been issued with invoice 3D-367, although it was paid by him: T49.47.

32. Mr Simic was then cross-examined in relation to a number of invoices which the first cross-defendant Era had received from 3D. Mr Simic confirmed he had received many invoices: T50.39. A bundle of these 3D invoices became Exhibit 6 in the proceedings. Mr Simic’s evidence on these invoices was very limited. It is particularly relied upon by 3D for the purposes of its cross-claim. The evidence in summary was as follows:

1. In relation to the 3D Automation invoice addressed to New Era Enterprises Australia for $15,323 dated 20 October 2010 with the number 3D-472, Mr Simic confirmed that it had been received by Era: T51.18. In answer to the assertion that it was not paid, Mr Simic said it was credited to the “Rexcel invoices” and “was paid”: T51.21. He said the Rexcel account with Era was a trading account. There was no further cross-examination on the invoice and Mr Simic’s assertion that the invoice was paid was not challenged in cross-examination. This evidence has to be reviewed in the light of the Agreed Facts in Exhibit 7;

2. In relation to the 3D invoice dated 30 November 2010 number 3D-532 addressed to New Era Enterprises Australia in the sum of $11,266.55, Mr Simic confirmed that it was received by Era (T51.47). In answer to the assertion that the invoice was not paid, Mr Simic said that it “was taken off the credits from Rexcel, from which 3D Automation or Vinay [Prasad] used our trading account to the value of $30,533.23”. There was no further cross-examination challenging this answer. This evidence has to be reviewed in the light of the Agreed Facts in Exhibit 7;

3. In relation to the 3D Automation invoice dated 18 January 2011 number 3D-554 in the sum of $10,551.30, Mr Simic confirmed that it was received by Era: T52.6. Mr Simic denied this was not paid: T52.9. He then appeared to say that it was part paid through a set off on the Rexcel account: T52.28. Mr Simic said that the materials had been delivered by 3D to him not Era but he said that they had not been installed by 3D: T52.29. The invoice refers to items being installed: see Exhibit 6. There was no further cross-examination to clarify these answers. This evidence has to be reviewed in the light of the Agreed Facts in Exhibit 7. In final submissions, counsel for the plaintiff/cross-defendants conceded that the amount not paid by Era on this invoice after the part payment through use of the Rexcel account was considered, was owed by Era to 3D. Invoices 3D-472, 3D-532 and 3D-554 when added together total $37,140.85. When the agreed Rexcel offset of $26, 134.59 is taken into account, this leaves $11,006.26 owed by Era to 3D;

4. In relation to the 3D invoice dated 18 January 2011 invoice number 3D-573 in the amount of $3,137.21, Mr Simic agreed that the invoice had been received by Era (T52.37) and said the invoice “wasn’t approved and hasn’t been paid”: T52.34. Mr Simic said part of the materials had not been received and he could not remember that the balance had been received:T52.40 and T52.47. In my view, the evidence did not establish what materials had been received nor any liability for them;

5. In relation to the 3D invoice dated 30 January 2011 invoice number 3D-577 in the amount of $10,653.50 Mr Simic agreed that it had been received by Era from 3D but it was “disputed” and had not been paid: T52.49-53.4. No admission of liability was obtained on this invoice nor was there any further cross-examination as to why the invoice was disputed;

6. In relation to the 3D invoice dated 30 January 2011 invoice number 3D-591 in the sum of $10,568.95 Mr Simic agreed that it had been received by Era but it was “disputed”: T53.11. There was no cross-examination on the invoice which revealed why it was disputed. No admission of liability was obtained;

7. In relation to the 3D invoice dated 11 February 2011 invoice number 3D-597 for “under floor heating conduit works” Mr Simic said that this was never received: T53.27. In relation to the suggestion that the work had been performed he agreed that the conduit work “had been done” but said that the heating had not been completed and had never worked. Whether conduit works had been completed in accordance with the details in the invoice was unclear and there was no further cross-examination on the issue;

8. In relation to the 3D invoice dated 10 May 2010 directed to Nebax invoice number 3D-403 in the sum of $38,571.50 Mr Simic said he had never seen this invoice and it had not been provided to him at any time: T53.40. He denied that it had been provided to him by Mr Prasad in a meeting in March 2013. There was no cross-examination in relation to whether Mr Simic conceded the work was completed or completed satisfactorily or that any of the cross-defendants had any liability for the invoice. At the date of the invoice Mr Simic was not a director of Nebax.

37. At the commencement of final submissions, an Agreed Facts documents was tendered and became Exhibit 7 in the proceedings. This provided as follows:

1. Era between 17 February 2011 and 7 March 2011 allowed 3D to use Era’s account with Rexcel Electrical Supplies (the “Rexcel Account”) to make purchases;

2. The purchases by 3D on Era’s Rexcel Account between 17 February 2011 and 7 March 2011 totalled $26,134.59; and

3. Era and 3D agreed that the purchases made by 3D on Era’s Rexcel Account between 17 February 2011 and 7 March 2011 were to be offset against 3D’s outstanding invoices that were due and payable by Era.

38. Mr Simic was subject to cross-examination over an extensive period. Overall, I formed a positive view of Mr Simic. He gave his evidence in an honest and forthright fashion, appeared diligent in reviewing the materials and considering the questions and made concessions where appropriate. Wherever he saw errors in his affidavit (of which there were several) he pointed them out and corrected them. I accept him generally as a witness of truth. However, his affidavit as read was very limited and the evidence which emerged in cross-examination was similarly limited. On occasions he referred to matters such as “the deposit” where there was no evidence before the court to explain the deposit or its operation or purpose.

Other evidence

39. Due to the decision on 24 April 2017 the defendants could not rely on their affidavit evidence which was served very late. Accordingly, the evidence before the court was limited to:

1. The affidavit of Mr Simic;

2. A number of company searches which have been discussed above;

3. Limited email evidence which is discussed above;

4. The Agreed Facts document; and

5. A number of invoices which were tendered on behalf of the defendants and became Exhibit 6.

40. There was no evidence before the court from Mr Prasad or any other person on behalf of the defendants as to the terms of the contractual arrangements which were entered into in relation to the works undertaken at the home of Mr Simic and Ms Delaney. This is relevant to a consideration of the issues arising in the Statement of Claim and in the Cross-Claim.

Consideration of the issues

41. I will now consider the issues raised between the parties which were set out earlier in these reasons.

1.  Who are the contracting parties?

42. In paragraph 8 of the Amended Statement of Claim filed on 7 March 2016, Mr Simic asserts that in or about May 2009 he entered into a contract with Mr Prasad and 3D whereby Mr Prasad and 3D agreed to install a home automation system at Mr Simic’s residence. It is asserted that Mr Prasad and 3D under the contract would be responsible for the completion of considerable works. Other terms of the contract are also asserted (see paragraph 8(b)).

43. Both defendants deny the plaintiff’s allegation in paragraph 8 of the Amended Statement of Claim.

44. In particular, in the Defence filed by Mr Prasad on 9 May 2016 (“Mr Prasad’s Defence”) Mr Prasad pleads:

1. That he was at all times the director and employee of 3D Automation Group Pty Ltd;

2. That he only held a Supervisor’s Certificate (Electrician);

3. That Mr Simic requested 3D to perform and provide electrical contracting services, including the installation of a home automation system, at the Molong Road Property;

4. That the plaintiff requested that the provision of services by 3D at the Property be performed for various companies including Era and Nebax;

5. That the services provided 3D at the Property were on a design and construct basis;

6. That he did not provide any goods or services to Mr Simic in his own capacity.

45. In 3D’s Defence filed 16 May 2016 (“3D’s Defence”) 3D makes similar allegations. In paragraph 8(a) of 3D’s Defence, 3D pleads:

1. That it denied it entered into an agreement with the plaintiff;

2. The scope of works at the property included the matters specified in paragraph 8(a) of the Statement of Claim;

3. 3D Automation was not responsible for the completion of the works;

4. The services provided by 3D at the Property were on a design and construct basis;

5. The completion of the work was conditional on 3D being paid for the goods and services supplied.

46. Accordingly, the first matter to be determined is who were the contracting parties and, in particular, was the plaintiff one of the contracting parties. The defendants submit, in the very lengthy written submissions served on their behalf, that Mr Simic was not a party to any contract with the defendants.

47. The plaintiff submits that he was a contracting party with Mr Prasad and 3D. In paragraph 19 of the plaintiff’s written submissions dated 15 May 2017 it is submitted that “there is no dispute that Mr Simic entered into a contract for the installation of a home automation system.”

48. However, that is not correct. The defendants submit that the contracting parties did not include Mr Simic or Mr Prasad but the contract was between Era, Nebax and 3D.

49. The evidence relevant to this issue is very limited. The evidence includes:

1. An email sent by Mr Simic to Mr Prasad on 27 April 2009 which is referred to in paragraph 3 of Mr Simic’s affidavit. This has been already referred to. The email is sent by Mr Simic from a corporate email address ([email protected]) to Mr Prasad at a corporate email address. The email is sent by Mr Simic over the name of “New Era Enterprises Australia Pty Ltd”. Mr Simic did say in his oral evidence that he did not have a personal email address: T33.45;

2. All of the invoices annexed to Mr Simic’s affidavit were sent to either Nebax or Era by 3D. They were not addressed to Mr Simic. There is no evidence they were sent by Mr Prasad;

3. All the payments for the invoices were made out of bank accounts in the name of Nebax or Era not Mr Simic;

4. The evidence of Mr Simic that he put money into the account of Nebax over which he had control as sole signatory for the purposes of paying the invoices. In final submissions, counsel for the plaintiff submitted that the evidence showed that Mr Simic used Nebax and Era to “channel” Mr Simic’s money to 3D;

5. Exhibit 5 is the email from Mr Arora, an employee of Era, to Ms Prasad (not Mr Prasad), asking for a particular invoice to be in the name of Nebax Australia Pty Ltd with its ABN to be inserted on the invoice. Although this email relates to invoice 3D-370 which was not in dispute between the parties the evidence shows that the invoices sent after this date included the ABN of Nebax. Accordingly, 3D took the email to apply to all of its future invoices;

6. Exhibit 4 includes emails from 2009 addressed to Mr Prasad by an employee of Ampcom but these are sent to Mr Prasad’s corporate email address;

7. Exhibit 6 is a series of invoices from 3D to Era. None are addressed to Mr Simic. These are the invoices relied on by 3D for the purposes of the Cross-Claim.

50. In Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 Campbell JA (with whom Beazley and Basten JJA agreed) considered the question whether a building contract was made with a company or with what Campbell JA described at [2] as “the man who stands behind the company”. After a detailed examination of the authorities Campbell JA stated as follows at paragraph [54]:

“[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.”

51. In the case, Campbell JA looked at the objective indications as to who was the correct contract party:

1. Who was indicated on the quotations?

2. Who communications were addressed to?

3. Personal beliefs as to who someone was contracting with are of no significance to the result and are contrary to the objective theory of contract except to the extent that the belief has been manifested in words or actions that are known to the other contracting party: at [60].

52. In Harold R Finger & Co v Karellas Investments Pty Ltd [2015] NSWSC 354 Robb J stated as follows at paragraphs [79]-[86]:

[79]It will be necessary first to consider the legal principles that govern how the parties to a contract should be identified.

[80]In Air Tahiti Nui Pty Ltd v McKenzie [2009] NSWCA 429; (2009) 77 NSWLR 299 at [28], Allsop P and Handley AJA in a joint judgment (Hodgson JA agreeing) said the following:

[28] The identity of the contracting party is to be determined looking at the matter objectively, examining and construing any relevant documents in the factual matrix in which they were created and ascertaining between whom the parties objectively intended to contract. This is, to a point, a process of construction similar to the task of identifying whether a clearly contractual document (such as a bill of lading) is made with one party or another (such as a shipowner or time charterer): The Starsin at 770 and the cases considered in Wilford et al Time Charters (5th Ed Informa Publishing 2003) Ch 21. Where the documents are silent or ambiguous, but there is undoubtedly a contract, the identity of the parties must be determined objectively from the surrounding circumstances: see Barroora Pty Ltd v Provincial Insurance Ltd (1992) 26 NSWLR 170 at 174; Protean (Holdings) Ltd v American Home Assurance Co (1985) 4 ANZ Ins Cas 60–683 at 74,055–74,056; Coulls v Bagot’s Executor and Trustee Co Ltd [1967] HCA 3; 119 CLR 460 at 477 at 478–479 and 486.

[81]The Victorian Court of Appeal in Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262; (2012) 38 VR 509 at [19] put the principle in the following way:

Identification of the parties to a contract must be in accordance with the objective theory of contract. That is the intention that a reasonable person, with the knowledge of the words and actions of the parties communicated to each other, and the knowledge that the parties had of the surrounding circumstances, would conclude that the parties had. The process of construction requires consideration of not only the text of the documents, but also the surrounding circumstances known to the parties and the purpose and object of the transaction. This, in turn, presupposes knowledge of the genesis of the transaction, the background, and the context in which the parties are operating. [Footnotes omitted]

[82]There is also a question of whether, and if so how, the court may have regard to the conduct of the parties after the date of the contract to identify the intended parties.

[83]The Court of Appeal in Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 left open the question whether it is permissible to look at post-contractual communications and conduct in order to determine whether a contract with a particular party existed: at [2] (Basten JA); at [59] (Campbell JA, Beazley JA agreeing).

[84]In Tomko v Palasty [2007] NSWCA 25, Basten JA (Mason P agreeing) added that “[e]xcept to the extent that [subsequent conduct of the parties] constitute admissions by one or other party, they are largely equivocal“. In that same case, Einstein J (Mason P agreeing) considered the Pethybridge case and found that “evidence of post-contractual conduct is admissible on the question of whether a contract was formed“: at [67]. In his Honour’s view (at [68]), that meant that:

subsequent communications may legitimately be used against a party as an admission by conduct of the existence or non-existence, as the case may be, of a subsisting contract, where an issue concerns whether a particular person was a party to that contract.

[85]In Lederberger, the Victorian Court of Appeal considered the question whether the trial judge erred in determining the identity of the parties by reference to post-contractual conduct. The court set out the key principles elucidated by Heydon JA (as he then was, Mason P and Ipp AJA agreeing) in Brambles Holdings Pty Ltd v Bathurst City Council (2001) 53 NSWLR 153 at 163–4, particularly the following:

The second relevant principle is that post-contractual conduct is admissible on the question of whether a contract was formed. [Citations omitted]

[86] The court accepted an argument that the general principle in contractual interpretation does not permit the use of post-contractual conduct of the parties as an aid to the construction of the contract. The court continued (at [31]):

But we are not inclined to think that this now well-settled principle has affected the second principle stated by Heydon JA in Brambles Holdings so as to have precluded the trial judge from relying upon tax returns filed after the tax effective scheme contracts had been signed, in order to ascertain whether the respondents and the partners of the partnership had entered into the agricultural contracts.

The legitimacy of the court’s taking into account conduct after the date of the contract to determine the identity of the parties was accepted by Ball J in Filadelfia Projects Pty Ltd v Entirity Business Services Pty Ltd [2011] NSWSC 116, where his Honour said:

[38] There are two principal difficulties with Mr Barlow’s second submission … Second, it is clear that post-contractual conduct can be taken into account in determining whether a contract was formed: see, for example, Geebung Investments Pty Ltd v Varga Group Investments (No 8) Pty Ltd (1995) 7 BPR 14,551 at 14,569–70 per Kirby P; Brambles Holdings Ltd v Bathurst City Council [2001] NSWCA 61; (2001) 53 NSWLR 153 at [25]. Necessarily, that extends to the question whether it was formed between particular parties, since contracts do not exist in the abstract …

53. This case went on appeal and the appeal was dismissed: Harold R Finger & Co Pty Ltd v Karellas Investments Pty Ltd [2016] NSWCA 123.

54. As stated above, the plaintiff submits that Mr Simic was the contracting party in relation to the works to be completed at the Property. The defendant in very lengthy submissions, submits that Nebax and Era not Mr Simic were the relevant contracting parties.

55. In my view, looking at the matter objectively and reviewing the relevant documents in evidence referred to in the factual matrix in which they were created, the evidence does not support the assertion that Mr Prasad was a party to any contract as alleged. All of the invoices in issue in the Amended Statement of Claim were sent on the letterhead of 3D, they were sent to Nebax or in one case Era, and there is no document or conversation before me in evidence relevantly pointing to Mr Prasad as being a contracting party. The 27 April 2009 email is sent by Mr Simic to Mr Prasad but to a corporate email address. There is nothing to suggest it was directed to Mr Prasad in an individual capacity or, if it was, that it resulted in any contract to which Mr Prasad was a party.

56. Accordingly, I find on the evidence that Mr Prasad the first defendant was not a party to any relevant contract. I accept the defendants’ submissions in this regard: see defendants’ submissions paragraphs 10, 14-17, 21-31 and 35-36.

57. The evidence shows that the house in question was owned by Mr Simic and his wife Ms Delaney. That would be some evidence pointing to the fact that they may be a contracting party as the home automation system was installed at their house. However, Mr Simic bears the onus of proving that one of the relevant defendants contracted with him. He must establish this on the balance of probabilities.

58. Was Mr Simic party to a contract with 3D? The only relevant documentation before me points to the contracting parties as not including Mr Simic. The 27 April 2009 email was sent by Mr Simic above the words “New Era Enterprises Australia Pty Ltd”. Mr Simic used a corporate email although he gave evidence that he had no personal email. All payments were made in relation to invoices from bank accounts of Nebax or Era. A third party may pay for a liability incurred by another party as a contracting party under a contract. The fact that a payment is made by a party does not necessarily mean that it was a contracting party. In the present case all of the invoices in the Amended Statement of Claim were sent to either Nebax Constructions Australia Pty Ltd or to Era and paid by them. The 28 January 2010 email from Mr Arora which is Exhibit 5 requests the invoices to include the full name and Australian Business Number of Nebax.

59. Mr Simic asserted that he paid money into the corporate bank accounts which was then used to pay the invoices. There was no documentary evidence to support this assertion as one would expect. Even apart from that matter, no evidence was provided as to how the payments were reflected in the accounting records of Nebax and Era. One would have expected evidence to be placed before the court showing how the payments were treated in the accounts of Nebax and, in particular, whether the amounts paid by Mr Simic as he asserts created any loan relationship between Nebax and him. There was also no evidence before the court as to whether tax deductions had been claimed by Nebax or Era in relation to the payments Mr Simic asserts he made to Nebax and Era. The evidence in Mr Simic’s affidavit that he paid certain invoices must be viewed in the light of the documentary evidence that establishes that the invoices were paid from accounts of Era or Nebax.

60. Ultimately it is for a plaintiff to establish its case on the balance of probabilities: section 140 of the Evidence Act 1995 (NSW). In the present case it was up to Mr Simic to establish on the balance of probabilities that he was a party to the relevant contract. There is no doubt that work was undertaken at the Molong Road house. It seems that the work was undertaken at least by 3D. However, having regard to the invoices in question in particular, I am not satisfied that Mr Simic was a party to the relevant contract. The contract appears to have been between 3D and Nebax and later between 3D and Nebax and Era. I accept the defendants’ submissions on this issue: defendants’ submissions paragraphs 20-22, 34-36 and 52.

61. The invoices relied on by the plaintiff for the purposes of the Statement of Claim point to Nebax not Mr Simic as being the contracting party. The invoices relied on by 3D for the purposes of its Cross-Claim (Exhibit 6), indicate that Era was also a contracting party. One of the invoices relevant to the Statement of Claim also suggests that Era was a party to the contract. That Era is a party is also asserted in paragraph 8(g) of the Defence filed for 3D. The commencing email from Mr Simic dated 27 April 2009 is on Era email letterhead. In the end I am not satisfied that it has been established on the balance of probabilities that Mr Simic was a party to the contract as opposed to Nebax and Era and 3D. His assertions are simply not established by the evidence.

62. The assertion that Mr Simic may have been the undisclosed principal for Nebax and/or Era is also rejected: see plaintiff’s closing submissions paragraph 20; defendants’ submissions paragraphs 53-57. This is not pleaded and was not asserted in Mr Simic’s affidavit. In my view, there is no relevant evidence establishing it. Further, the plaintiff should not be allowed to raise this allegation after the evidence was completed as the cross-examination of Mr Simic may well have been different. I accept the oral submissions of counsel for the defendants on this issue.

63. Accordingly, the claim by Mr Simic in contract against 3D must also fail.

64. If I am wrong in relation to my conclusion that Mr Simic was not the relevant contracting party with 3D and/or Mr Prasad then the plaintiff’s damages must be considered.

65. The plaintiff claims for overcharging of labour, failure to complete contract works and double payments. In my view these claims should be rejected. As to the overcharging, there was no evidence to support the rate said by the plaintiff to be agreed between the parties. As to the failure to complete the works, the contract agreed appears to have been on a do and charge basis, not a lump sum basis. I do not accept that the evidence establishes the relevant works were not completed. As to the double payments, I was not satisfied of these, except for the amount referred to in the next paragraph.

66. There was agreement between the parties that in the event Mr Simic was the correct contracting party the damages would include:

1. $10,158.79 for materials invoiced but not supplied: see paragraph 208 of the cross-claimant’s submissions; and

2. $6,117.76 for double payment of invoice 3D-420 being Annexure I1 to Mr Simic’s affidavit: see defendant’s submissions paragraph 92.

2.  The terms of the agreement for 3D Automation to provide building and construction services

67. Having regard to the limited evidence before the court, it is very difficult to ascertain the precise terms under which 3D was to perform services under the contract. I accept the submission of counsel for the plaintiff that there was a degree of informality between the parties in relation to documenting the terms of their relationship. However, 3D appears to assert that the scope of works included the matters set out in paragraph 8(a) of the Amended Statement of Claim.

68. Taking into account the pleadings and the invoices it appears to me that 3D had agreed with Nebax and later Era to provide electrical and home automation services at the Molong Road property on a do and charge or time and materials basis. It appears to be not in dispute that the contracted works included those works set out in paragraph 8(a) of the Amended Statement of Claim. Having regard to the invoices it appears that 3D was retained to design the electrical and home automation services, to provide the components necessary for those services and to install those services. It is clearly a term of the contract that the goods and services provided were to be suitable for their purpose and the services performed with reasonable care and skill. It seems also to have been a term that 3D would be paid on a do and charge basis as opposed to a lump sum basis: see paragraphs 68-69 of the Defendants’ submissions.

3.  The capacity the plaintiff has to recover or claim moneys invoiced to and paid by Nebax Constructions Pty Ltd

69. I have found above that the plaintiff has not established on the balance of probabilities that he is a party to any contract with Mr Prasad or 3D. Exhibit 1 establishes that Mr Simic ceased as a director of Nebax on 29 January 2013 and is no longer a shareholder of Nebax. The company search of Nebax which is Exhibit 1 shows that Nebax is currently in liquidation.

70. In all those circumstances, Mr Simic has no standing to recover or claim moneys invoiced to and paid by Nebax under the contract: see Coulls v Bagot’s Executor and Trustee Company Ltd (1967) 119 CLR 460 at 478. The proper claim is that of the liquidator of Nebax.

4.  What capacity the plaintiff has to conduct proceedings on behalf of New Era Enterprises Pty Ltd

71. Mr Simic is a former director of Era. He was a director, as set out above, from December 2000 to September 2011 and from October 2013 to September 2014.

72. These proceedings were commenced in 2015.

73. There is no evidence before me that Era has delegated the power to commence proceedings on its behalf to Mr Simic. There is no satisfactory evidence before me that Mr Simic was the agent of Era. Accordingly, Mr Simic has no authority to conduct proceedings on behalf of Era. I agree with the defendants’ submissions in this regard: see paragraph 67. This does not mean that the solicitors retained on behalf of the plaintiff and cross-defendants do not have authority to defend the Cross-Claim on behalf of Era.

5.  What capacity the plaintiff has to recover or claim moneys invoiced to and paid by New Era Enterprises

74. There is no evidence before me that Mr Simic has any capacity to recover or claim moneys invoiced to and paid by Era. Mr Simic has not established on the balance of probabilities that he is a party to the relevant contract.

6.  Whether there were any overpayments made by the plaintiff

75. The evidence does not establish that any payments were made by the plaintiff to 3D. All payments were made by Nebax or Era. Whilst the plaintiff says in a number of places in his affidavit that he “paid” invoiced amounts that does not mean that he was the contracting party. Accordingly there were no overpayments made by the plaintiff as a contracting party. Any overpayments were made by Nebax or Era and they are the correct parties to seek to recover such overpayments not Mr Simic.

7.  The quantum of the unpaid invoices issued by 3D Automation

The Cross-Claim contract claim

76. In the Cross-Claim, the cross-claimant 3D seeks orders against Era, Mr Simic and Ms Delaney for specified alleged unpaid invoices. In paragraph 9 of the Cross-Claim, 3D pleads in general terms that Mr Simic made a request that 3D provide certain services. This was admitted in paragraph 5 of the Defence to Cross-Claim. In paragraphs 10-11 of the Cross-Claim, it is pleaded that Mr Simic accepted 3D’s terms pleaded in paragraph 10 and represented to 3D that the goods and services provided would be paid for by Mr Simic’s companies Era, Nebax and Zitak Pty Ltd. The allegation that Mr Simic accepted the terms of 3D is not admitted in paragraph 11 of the Defence to Cross-Claim. In paragraph 13 of the Defence to Cross-Claim it is denied that 3D supplied goods and services to Era, Nebax and Zitak Pty Ltd and it is asserted that the goods and services were provided to Mr Simic.

77. As I read these pleadings (which are not entirely clear), the identity of the contracting parties is put in issue for the purposes of the Cross-Claim.

78. For the reasons which I set out above, in my view the contracting parties were 3D and Nebax and later Era in relation to the provision of the goods and services by 3D referred to in the Amended Statement of Claim and the Cross-Claim.

79. In my view, the following should be noted in relation to the contract claim against Era in the Cross-Claim:

1. There is a general denial in the paragraphs in the Defence to Cross-Claim that Era, Mr Simic and Ms Delaney have any liability to 3D on the invoices pleaded in the Cross-Claim;

2. The invoices which are Exhibit 6 are not only addressed to Era but also in relation to invoice 3D-403 directed to Nebax;

3. None of the Cross-Claim invoices are addressed to Mr Simic or Ms Delaney. There is no satisfactory evidence in my view that establishes on the balance of probabilities that either was a contracting party at any time with 3D in relation to the Cross-Claim invoices;

4. In my view, the limited cross-examination of Mr Simic only assisted 3D in relation to its contractual Cross-Claim in the light of the Agreed Facts. I reject the submissions in paragraphs 198-211 of the cross-claimant’s submissions except in relation to the invoices offset against the Rexcel Account. Mr Simic’s cross-examination has to be reviewed carefully. A summary of Mr Simic’s evidence is set out in paragraphs 36-37 above. In essence, Mr Simic gave evidence that the invoices were either paid or part-paid, a credit was given due to 3D’s access to the Rexcel account, they were disputed or only part of the work or materials was supplied. There is no satisfactory evidence before the court to counter Mr Simic’s evidence. Where Mr Simic conceded that part of the materials had been supplied only or work had been only partially completed there was no satisfactory evidence before the court to enable an assessment of that work or materials, particularly as to its value or whether a partial provision only by 3D amounted to a breach of contract. A partial provision may in the circumstances have been of no worth to Era;

5. The remaining amount, after the credit on the Rexcel Account is considered, stands in a different situation. The Agreed Facts result in Era owing $11,006.26 under the first three invoices in issue on the Cross-Claim. Accordingly, in my view the cross-claimant 3D has established on the balance of probabilities on the evidence an entitlement to judgment in the sum of $11,006.26 against Era on the Cross-Claim contract cause of action.

The Cross-Claim Equitable Compensation Claim

80. The cross-claimant in its cross-claim seeks equitable compensation: see paragraph 50 of the cross-claim. There is no breach of trust or fiduciary duty or other equitable duty established on the evidence which would give rise to the award of equitable compensation. This is rejected. No submission was made in relation to it.

The Cross-Claim Unjust Enrichment Claim

81. The cross claimant also pleads unjust enrichment against Mr Simic and Ms Delaney through receiving the benefit of goods and services as set out in the cross claim invoices: paragraphs 46-49 of the cross-claim. In the Defence to Cross-Claim, paragraph 47 was denied, paragraph 48 was not admitted and paragraph 49 was denied. On the very limited evidence before the court I am not satisfied that this cause of action has been established. The evidence does not permit me, in the light of Mr Simic’s evidence, to find that the precise goods and services were provided by 3D referred to in these invoices which were requested by Mr Simic and/or Ms Delaney, were completed, were of the value claimed, were not defective and were not paid for such that Mr Simic and Ms Delaney were unjustly enriched.

82. Further, as I have found, the contract for this work and materials was with Era and Nebax not Mr Simic and Ms Delaney.

83. It seems to be established that a restitutionary remedy may not be available where the restitutionary remedy interferes with an existing and bargained for allocation of risk and liability: Hills Industries Ltd v Australian Financial Services and Leasing Pty Ltd [2012] NSWCA 380 at [74]. In that situation the retention of any materials/work by Mr Simic and Ms Delaney was not unjust as against 3D if the contract was between Era or Nebax and 3D, as I have found: see David Securities Pty Ltd v Commonwealth Bank of Australia (1993) 175 CLR 353 at 379. Hills Industries was upheld on appeal: (2014) 253 CLR 560.

84. The case of Lumbers v W Cook Builders Pty Ltd (in liq) [2008] HCA 27 especially at [39] which was relied on by the cross-claimant does not in my view alter this conclusion.

85. Accordingly, the restitution claim against Mr Simic and Ms Delaney fails.

The Cross-Claim Representation Claim

86. In paragraph 11 of the Cross-Claim, 3D pleads that Mr Simic accepted 3D’s terms and represented to 3D that the goods and services provided would be paid for by Mr Simic’s companies. Particulars are provided in paragraph 11 of the Cross-Claim as follows: “Conversation between [Mr Simic] and Vinay Prasad, on behalf of [3D].”

87. In paragraph 9 of the Defence to the Cross-Claim this is not admitted. There was no evidence before the Court of any alleged relevant conversation between Mr Simic and Mr Prasad. Accordingly, the representation pleaded in paragraph 11 of the Cross-Claim was not established by 3D.

88. In various paragraphs of the Cross-Claim it is pleaded that Mr Simic in requesting 3D to invoice Nebax or Era represented to 3D that:

1. He accepted that the services had been provided;

2. He had the direct or implied authority to act for and on behalf of Nebax or Era;

3. That Nebax or Era would pay 3D for the services provided: see paragraphs 17, 20, 23, 26, 29, 32, 35 and 38 of the Cross-Claim.

89. It is also pleaded that the representations alleged at paragraphs 11, 17, 20, 23, 26, 29, 32, 35 and 38 of the Cross-Claim were:

1. Made in trade or commerce within the meaning of the Trade Practices Act 1974 (Cth);

2. Where as to future matters within the meaning of Section 51A of the Trade Practices Act;

3. Were made in trade or commerce within the meaning of the Australian Consumer Law;

4. Where as to future matters within the meaning of Section 4 of the Australian Consumer Law;

5. Were false;

6. Were misleading or deceptive or likely to mislead or deceive in breach of and in contravention of Section 52 of the Trade Practices Act and Section 18 of the Australian Consumer Law.

90. These various paragraphs in the Cross-Claim are denied in the Defence to Cross-Claim. In particular, it is alleged that any representations were not made in trade or commerce by Mr Simic. No accessorial liability claim is pleaded by 3D as cross-claimant against Mr Simic as the second cross-defendant under Section 75B of the Trade Practices Act or Section 236 of the Australian Consumer Law.

91. In my view, it is difficult to argue that any conduct of Mr Simic was “in trade or commerce” where his liability is not pleaded as being based on accessorial liability. Mr Simic was the owner of the Property with Ms Delaney. It was his residential property. Any representation was made in relation to his residential property building activity not in relation to any activity in trade or commerce. Accordingly, the claim against Mr Simic under Section 52 of the Trade Practices Act and Section 18 of the Australian Consumer Law must fail: see Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 603-4.

92. Further, in my view it is not established on the very limited evidence before the Court that Mr Simic made the requests of 3D pleaded in the various paragraphs of the Cross-Claim. It is also not established to my satisfaction that representations were made by Mr Simic as alleged including that he/Era accepted that the services had been provided by 3D or that the rates for labour were accepted for the relevant invoices. Mr Simic only admitted that the invoices were received by Era and Nebax. The fact there is no evidence of complaint by Mr Simic in relation to the invoices is not determinative. There was no evidence of any representation that the invoices would be paid irrespective of any set off arrangement or any dispute by Mr Simic/Era as to the work being completed or the quality of that work. Accordingly, in my view the cross-claimant has failed to establish its case in relation to the misleading or deceptive conduct causes of action. These claims are therefore dismissed.

8.  Whether there was any defective work and the quantum of that work

93. There was very limited evidence in relation to defective materials or works supplied by 3D.

94. In relation to paragraph 43(b) of Mr Simic’s affidavit, Mr Simic gave evidence that one of the two speakers referred to in Invoice 3D-484 was defective as it was not working. He said that no sound output came from the speaker.

95. In relation to paragraph 30 of Mr Simic’s affidavit, Mr Simic gives evidence that 20 Axiom keypads and four AX-4 routers invoiced in the amount of $12,970.80 including GST were defective due to their faulty operation and were removed by the first defendant. These were supplied, Mr Simic asserts, under Invoice 3D-364.

96. As I have found, Mr Simic was not a party to the contract in relation to these items and cannot sue in contract concerning them or any defective issues relating to them.

97. Further, Mr Simic no longer pressed the defective materials claims in his final submissions.

9.  What liability 3D Automation has to the plaintiff

98. In my view, as the plaintiff was not a contracting party in relation to the work and materials referred to in the Amended Statement of Claim, 3D has no contractual liability to the plaintiff.

99. In paragraphs 55 and following of the Amended Statement of Claim filed on 7 March 2016, Mr Simic pleads:

1. That in presenting certain invoices to the plaintiff, 3D (by Mr Prasad) and Mr Prasad on his own behalf represented to the plaintiff in trade and commerce that goods, the subject of those invoices, would be supplied to the plaintiff within a reasonable time, being a time that was sufficient to enable the works to be completed by 7 May (presumably 2010);

2. In reliance on those representations the plaintiff caused to be paid to 3D the amounts claimed in the invoices;

3. Contrary to the representations, certain of the goods and/or services the subject of the invoices were not delivered to the plaintiff in a reasonable time, or at all;

4. Neither of Mr Prasad or 3D had reasonable grounds to make the representations;

5. In the circumstances, in relation to the issue of the invoices and 3D accepting payment of the amounts claimed under the invoices, the representation made was likely misleading or deceptive in breach of Section 18 of the Australian Consumer Law;

6. Mr Prasad was directly or indirectly knowingly concerned in the making of the representation and was involved in its contravention;

7. Mr Simic has suffered loss and damage as a result of the misleading or deceptive representation.

100. The invoices involved are invoices 3D-364, 3D-408, 3D-441, 3D-485 and 3D-484.

101. The representation case against 3D was no longer pressed in Mr Simic’s closing submissions.

102. No claim is made by the plaintiff in the Amended Statement of Claim relying on a money count or unjust enrichment.

103. Accordingly, 3D has no liability to Mr Simic pursuant to the Statement of Claim.

10.  What liability Vinay Prasad has to the plaintiff

104. I have found that Mr Prasad is not a contracting party with the plaintiff. Accordingly, he has no liability to the plaintiff in contract.

105. The representation case against Mr Prasad is no longer relied on by the plaintiff, Mr Simic.

106. Therefore, in my view, Mr Prasad has no liability to the plaintiff as is alleged in the Amended Statement of Claim.

Disposition of the proceedings

107. In the light of the reasons above, I make the following orders:

1. Judgment for the defendants in relation to the Amended Statement of Claim;

2. The Amended Statement of Claim is dismissed;

3. The plaintiff is to pay the costs of the first and second defendants of the Amended Statement of Claim proceedings as agreed or assessed;

4. Liberty to the parties to apply on two business days’ notice to vary the costs order in (3) above;

5. Judgment for the cross-claimant 3D against New Era Enterprises Australia Pty Ltd on the First Cross-Claim;

6. Judgment for Mr Simic and Ms Delaney on the First Cross-Claim;

7. The cross-claimant 3D is to pay the costs of Mr Simic and Ms Delaney of the First Cross-Claim as agreed or assessed;

8. Liberty to the parties to apply on two business days’ notice to vary the costs order in (7) above;

9. The parties are to bring in short minutes of order within 7 days to reflect these reasons in relation to the First Cross-Claim together with any interest on the amount found;

10. Liberty to the parties to apply in relation to the costs of the First Cross-Claim of 3D against New Era Enterprises Australia Pty Ltd on two business days’ notice;

11. Exhibits are to be returned after 28 days.

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Decision last updated: 29 June 2017