Trevor John & Assoc P/L v John Bugg & Ano No. DCCIV-99-1522

Trevor John & Associates Pty Ltd
v John Harold Bugg and Andrew Charles Huddy
[2000] SADC 128

Civil
Judge Smith

Introduction

The plaintiff corporation carries on the business of a consulting civil engineer. Its principal, Trevor John, is a qualified civil engineer. The first defendant was, at the times material to this action, a partner in a firm called Rivercity Sheds which operated a business at 31 Princes Highway, Murray Bridge. From these premises, steel framed sheds for domestic, rural and industrial applications were made and sold to the public. The second named defendant, who retired from the partnership in October 1998, was not served and has taken no part in these proceedings. Nothing turns on his absence. Hereinafter I will refer to the first defendant as “the defendant” or Mr Bugg.
In this action, the plaintiff sues the defendant, in contract, on a quantum meruit for professional fees amounting to $42,000, which it alleges, remains owing of a total account of $45,750.00 for professional engineering services rendered between May 1998 and December 1998 described in the plaintiff’s invoice Exhibit P7, inter alia, as:-

consultations;
attendance at meeting at your office;
review of proposed building construction details;
preparation of engineering designs for complete range of domestic, industrial and rural buildings in accordance with the agreed scope of works.

In particular, this work included the preparation of 122 structural designs for the purpose of facilitating Council approval for almost every shed in the range of steel framed sheds likely to be made and sold to the public by the defendant. The defendant agrees that he retained the plaintiff to prepare structural designs, but contends that the terms of engagement required only eight structural designs, which the defendant said was all that was required for his needs as he could use one design for a number of sheds within the range of sheds sold by him.
Amongst the 122 designs prepared by the plaintiff, were seven of the eight designs which the defendant agrees he ordered. Whilst resisting any obligation to pay for the 122 structural designs and the work incidental thereto, the defendant accepts, and has paid for 10. So he has paid $3750 of the total account of $45,750.

The Issue

The sole issue for my determination is to ascertain what was the subject matter of the agreement, or to put it in the building parlance used in the documents in this case, what was “the scope of works” to be carried out by the engineer. In particular, there is no issue as to the reasonableness of the plaintiff’s charges.

The legal parameters

The steps are, firstly, to ascertain the terms of the contract and having done so proceed to construe it; (see Contract Law in Australia 3rd Edition, Carter & Harland at paras 701-703.) The onus is upon the plaintiff to prove, on the balance of probabilities, that the terms of the contract, and its legal effect, are as it contends.
If the parties are at cross purposes, so that after the evidence, the subject of the offer and acceptance remains ambiguous, such that neither view can be said to be more probable than not, then there is no proven contract; (see Falck v Williams 1900 AC 176; Scriven v Hindley (1913) 3 KB 564; Chitty on Contracts, General Principles 24th Edition para 290). The case of Scriven is a helpful example. The plaintiff’s auctioneer put up for sale lots of hemp and tow. The catalogue did not differentiate between the lots. A lot of tow was put up for sale, and the defendant purchased it thinking it was hemp. There was no evidence to indicate that the defendant ought to have known it was tow. The jury found that the auctioneer intended to sell tow, while the defendant intended to buy hemp. It was held that, there was no enforceable contract as the parties were never ad idem as to the subject matter of the contract.
However, if a party has a view about, for instance, the subject matter of the contract, which does not accord with the intent of the other, this of itself will not necessarily cause the agreement to fail. Certainly, the object of construction is to determine or give effect to the intention of the parties; (see River Wear Commissioners v Adamson (1877) 2 App Cas 743 at 763). However, the approach is nonetheless objective. So if one party subjectively intends a certain outcome which is not in accord with all of the objective circumstances, then such would not afford a defence to an action to enforce the contract. Rather, the court concerns itself with the interpretation which would be placed upon the words and actions of the parties by a reasonable person. As Blackburn J said at p.607 in Smith v Hughes (1871) LR 6QB 597:-
“If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man who thus conducting himself would be equally bound as if he had intended to agree to the other party’s terms”.

(See also Goldsborough Mort and Co Ltd v Quinn (1910) 10 CLR 674; Taylor v Johnson (1983) 151 CLR 422 at 429).

I turn to two cases which show this objective theory at work.
In the 1864 English case of Raffles v Wichelhaus 159 ER 375 the defendants contracted to buy a cargo of cotton to arrive “Ex Peerless from Bombay”. There were two ships named “Peerless” sailing from Bombay; one was due to sail in October and the other in December. The plaintiff and the defendant each intended to contract in respect of different vessels. The cotton was on the December ship but the defendant refused to accept it contending that he intended to buy cotton to be shipped at the earlier time. The plaintiff sued for damages for non-acceptance and contended that it was not open for the buyer to adduce evidence of his actual intention and that all that mattered was that the seller had performed in accordance with the literal wording of the contract. The evidence did not clearly indicate the cargo which was the subject of the contract. Indeed, the description of the cargo pointed equally well to the two different cargos. Accordingly, it was held that there was no binding contract and the court found for the defendant. In Contract Law in Australia (supra) at para 1234, the learned authors Messrs Carter and Harland comment on the significance of the case as follows:-
“This case does not contradict the objective theory of contract for the important reason that it was not possible to say that the only reasonable interpretation to be placed upon the words used by one party was that advanced by one party or the other. Where there is an insoluble ambiguity and the evidence shows that both parties meant different things, there is no contract. On the other hand, the evidence may show that the only reasonable construction to be placed on words or conduct was that contended for by one party and in this event there will be a contract conforming to that construction. In the context of the facts of Raffles v Wichelhaus, if the evidence had shown that a reasonable person in the buyer’s position should have construed the seller’s offer as referring to the December Peerless, the buyer would be bound accordingly even though subjectively he intended by his acceptance, to buy cotton via the earlier ship. This is the objective theory of contract at work. It is not clear that the court actually held the contract to be void for mutual mistake. Although the case is certainly open to this interpretation, a better rationale may be that there was no contract, since the agreement was void for uncertainty.”
On the other hand, in Goldsborough Mort & Co Ltd v Quinn (supra) the defendant Thomas Quinn was held bound to a contract despite this contention that he understood the terms to mean something fundamentally different to that contended for by the plaintiff, Goldsborough Mort. Quinn, for valuable consideration, gave Goldsborough Mort an option for a week to purchase Quinn’s conditionally purchased and conditionally leased lands at a price of 30s. per acre, “calculated on a freehold bases.” Before acceptance, Quinn repudiated the offer. Goldsborough Mort, notwithstanding the alleged repudiation, accepted the offer within the week, and brought a suit for specific performance of the agreement for sale at a price of 30s. per acre, after deducting the payments due to the Crown to make the land freehold, which was a fair price for the land. Quinn swore that when he signed the contract he understood that he would receive a clear sum of 30s. per acre for the land. The High Court held, acknowledging the objective view of construction, that the expression “calculated on a freehold basis” was not ambiguous, and that, as Quinn had signed the contract in which he knew this term was included, and there being no circumstances of fraud or misleading conduct, and no hardship in the bargain, he could not resist specific performance upon the ground that he entered into the contract under a mistake as to its meaning.
So, taking all that into account, the first step is to ascertain whether there was a consensus ad idem as to the work to be done by the plaintiff. If there was in fact no consensus, then it still remains to look at the admissible evidence, namely the words “conduct” and “documents” and assess whether there was objectively, an enforceable contract. If insoluble ambiguity remains as in Raffles (supra) and Scriven (supra), then there is no proven and enforceable contract. If on the other hand the ambiguity was in the mind of one party only, and upon an objective assessment the meaning and intent of the parties was clear, as in Goldsborough Mort and Co Ltd v Quinn (supra), the contract will be enforced.

Credit and demeanour

The only witnesses in this trial were the two parties. Both were at times disarmingly frank. I am of the view that both were patently honest and did their best to recount the events accurately and truthfully. I did find it difficult to accept that Mr Bugg could not have been alarmed when, on the 17th December 1998, he received 22 ringback folders containing the 122 designs, even though he expected only eight designs. However, in the end I accept what he said about this, namely, that the delivery occurred on the eve of the Christmas break-up and that he put the boxes aside, coming back to them later. So a credibility finding does not provide an avenue by which this matter can be resolved.

Preliminary findings

I start with some uncontentious findings which explain what brought the parties together.
The defendant has had a life-time of experience in building sheds. In 1996 he came out of retirement to enter into a partnership with Andrew Charles Huddy who is the second defendant. In October 1998, the first defendant purchased Mr Huddy’s interest in the business and so became the sole owner and operator. As at May 1998, the business of Rivercity Sheds had just moved to larger rented premises at 31 Princes Highway, Murray Bridge. The business had no employees. In terms of engineering assistance prior to the engaging of the plaintiff, the defendant said that he had operated a shed-building business in Murray Bridge before his retirement. However, the local council had accepted calculations done by him rather than require current engineering calculations. In early 1997, Rivercity Sheds engaged an engineer named Chris Ayrten from the Barossa Valley who provided one set of calculations. Then in August 1997, because the business was expanding in Victoria via an agency in Horsham, two sets of calculations were obtained from a Victorian engineer named Leigh Davies (see Exhibits P12 and P13 dated respectively 4th and 15th August 1997.) Then by May 1998, as the defendant was considering expanding into Adelaide he decided that he needed to upgrade his calculations in order to obtain the appropriate council approval. So, as a result of a recommendation he telephoned Mr John of the plaintiff with a view to instructing him to provide some engineering designs.

Explanation of some technical matters

I set out an explanation which emerged from the evidence of some technical matters which is of some assistance in understanding the contract negotiations.
The Australian Standards provide varying parameters for the construction of steel-framed sheds depending upon, inter alia, whether they are for domestic, rural or industrial application. For instance, as a general proposition, the industrial shed is required to be of stronger construction than both the domestic and rural shed. Further, the design requirements vary within those categories according to the wind loads which the shed might be subjected to in situ. For instance, much of the states of South Australia, Victoria and New South Wales are within a region which requires such sheds to withstand windloadings known as Wind Terrain Category 2 or the lesser loading known as Wind Terrain Category 3. For instance, Wind Terrain Category 3 is the wind strength a designer should cater for in a shed that is to be erected in a sheltered suburban setting.

Narrative of events - some uncontentious findings - identification of the contentious issues

There was ambiguity about the scope of work the subject of the agreement and so I received evidence of circumstances surrounding the contractual negotiations in an attempt to resolve the ambiguity; (see Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337; Reardon Smith Line Ltd v Yngvar Hansen-Tangen (1976) 1 WLR 989 at 997 per Lord Wilberforce; see Contract Law in Australia 3rd Edition JW Carter and DJ Harland Chapter 7 paras 702-722).
I now turn to the narrative of events. Unless indicated as contentious, I find that the events unfolded as now set out below. I will indicate the areas of contention and make findings about them later.
On or about the 7th May 1998, Mr Bugg telephoned Mr John of the plaintiff and made arrangements for Mr John to attend at his factory premises at Murray Bridge with a view to instructing him to prepare engineering or structural designs for sheds.
Mr John attended at the Rivercity Sheds premises on Saturday afternoon, 9th May 1998. The meeting lasted two hours and consisted of a preliminary discussion in Mr Bugg’s office followed by a tour of the factory so Mr John, to use his own words, “could view the connection details and the forms of construction that he [the defendant] wanted to adopt in the range of buildings”; (see John p.42).
Neither Mr John nor Mr Bugg were able to give a verbatim account of the conversation in which the contract terms respectively contended for were spelled out. Rather, both men related his view of what emerged from the meeting.
Mr John’s version was aided by five pages of contemporaneous notes (see Exhibit P11), and a follow-up letter to Mr Bugg dated the 11th May 1998 (see Exhibit P1), which he said recorded what Mr Bugg said.
Mr John said that in the course of this meeting and inspection tour, Mr Bugg instructed him to prepare engineering designs for each shed in a range of shed sizes to be made by him, for domestic, rural and industrial application, which sheds had to withstand windloadings of wind terrain categories 2 and 3. Mr John said that in his instructions were some “constants” to be incorporated into the designs of all those sheds, such as a roof pitch of 15 degrees and structural members to come from a fixed stock of structural members called “C” Sections commonly used by the defendant. The stock of “C” Sections available were nominated as C.150 12, C.150 15, C.150 19 and C.150 24, as produced by Brice Metals and supplied to the defendant. In other words, the defendant only used those structural members and accordingly any design which required a larger or different structural member was not made by him.
Mr John said that Mr Bugg told him and he noted at pages 1 and 4 of his notes, Exhibit P11, and page 2 of his letter, Exhibit P1, that Rivercity Sheds made the following sheds in the various applications:-
Range of building sizes:
Type:                Width (m)       Height (m)
Domestic                6.0            2.4     2.7     3.0     3.6
  7.5            2.4     2.7     3.0     3.6
Industrial                7.5            2.4     2.7     3.0     3.6
  9.0            2.4     2.7     3.0     3.6      4.2     4.8     5.4     6.0
  10.5            2.4     2.7     3.0     3.6      4.2     4.8     5.4     6.0
  12.0            2.4     2.7     3.0     3.6      4.2     4.8     5.4     6.0
Rural  6.0            2.4     2.7     3.0     3.6
  7.5            2.4     2.7     3.0     3.6
  9.0            2.4     2.7     3.0     3.6      4.2     4.8     5.4     6.0
  10.5            2.4     2.7     3.0     3.6      4.2     4.8     5.4     6.0
  12.0            2.4     2.7     3.0     3.6      4.2     4.8     5.4     6.0

It is notable that there are no lengths particularised. In structural terms and, in particular, in connection with applications to council, the length is of no consequence subject only to the acceptance that bay spacings are fixed at 3 metres.
I need to say here that Mr John did not say that Mr Bugg said the words “... these are the shed sizes I make in the three applications, given my method of construction and the structural members I use, I want you to produce calculations for each of them for each of the three applications for each of wind terrain categories 2 and 3”. Rather, it is my view that Mr John inferred the wide brief from a raft of circumstances which surrounded his visit on the 9th May 1998, including the alleged response of the defendant on the 11th June 1998 to the so called confirmatory letter of the 11th May 1998.
Mr Bugg denied that he spelled out to Mr John each and every shed size in each of the applications as per the above table; (see Bugg pp.197, 198, 221, 222, 258 and 259). Mr Bugg said that the listed dimensions were commonplace in the industry; (see Bugg p.222). Mr John accepted that; (see John p.57). He [Mr Bugg] denied categorically that he provided Mr John with the sizes and denied that he led him to believe that he wanted calculations for all of those permutations and combinations. In particular, his retort to that proposition was as follows:-
“A.... No, because I have never done it, in 25 years, ordered calculations like that. it’s always been - it’s standard practice in our industry to order the way that I’ve said to order it. Other - in our size industry, not the Olympics of the industry or Standbuilt, Brand Built, a few of the others that are Australia-wide. They can afford to have things like that, to have those separate things, but where there is a cost factor in producing our size there is no point in me having all those sizes. I can see that, yes, that it’s done but it’s not what I ordered.”
It can be seen by reference to the above Table, that there are 68 individual building sizes particularised. Separate calculations for the two windloadings therefore would, potentially at least, produce 136 designs. In fact, Mr John produced 122 designs. He explained that there were 14 designs which could not be prepared given the limited stock of “C” Sections used by the defendant and the method of construction.
On the other hand, Mr Bugg said that at this meeting he instructed Mr John as follows:-

that in respect of sheds for domestic applications, he asked for calculations for sheds 6 metres wide and 7.5 metres wide to whatever maximum height given certain specified “C” Sections, and for Wind Terrain Categories 2 and 3, being four calculations;
that in respect of sheds for industrial applications, he asked for calculations for sheds 9 metres wide and 12 metres wide to whatever maximum height given certain specified “C” Sections, and for only Wind Terrain Category 2 being two calculations; and
that in respect of sheds for rural applications, he asked for calculations for sheds 9 metres wide and 12 metres wide to whatever maximum height given certain specified “C” Sections, and for Wind Terrain Category 2, being two calculations.
(See Bugg pp.192, 193, 194, 234, 235 and 237.)

Like Mr John, Mr Bugg’s evidence about the above instructions was not said to be couched in express terms but rather emerged in an amorphous way from the discussions.
So, the defendant expected eight calculations.
It is common ground that at no time in the dealings between the parties was there any indication from Mr John of the likely cost of the work and nor did he indicate, even approximately, how many designs would be provided. Also Mr Bugg did not articulate to Mr John that he was expecting approximately eight designs and that he had a budget of $6,000.00 to devote to this expenditure, save that Mr Bugg did say that, in about December, 1998, before the arrival of the designs, he rang Mr John’s office and in the absence of Mr John, queried with the person answering the phone “the time it was taking to produce eight designs”; (see Bugg pp.256, 289).
Before I make findings about this crucial meeting, I turn to the balance of the evidence of the dealings between the parties, and what the parties say about the impact of this evidence.
On the 11th May 1998 the plaintiff wrote to the defendant purportedly confirming what was agreed on the Saturday the 9th May 1998; (see letter 9.5.98 Exhibit P1). This letter was sent by facsimile transmission on the 11th May 1998; (see fax report Exhibit P10). Mr Bugg said that this letter did not come to his attention. I note that the plaintiff’s statement of claim in paragraphs 4, 5 and 6 appears to rely upon this so called confirmatory letter, Exhibit P1, as an offer which was accepted over the telephone on the 11th June 1998 by Mr Bugg. Rather, it is my view that the letter purported to be a confirmation of the scope of works agreed at the 9th May 1998 meeting at Murray Bridge. Despite the pleadings, this view is also shared by Mr John; (see John pp.56, 63, 64 and 69).
There was no answer to this facsimile transmission of the 11th May 1998; (see Exhibit P1).
On the 11th May 1998 and 19th May 1998 the plaintiff, by two facsimile transmissions to Brice Metals (see Exhibit P2 pp.2 and 3), requested data on the structural sections commonly used by Rivercity Sheds, namely C 150.12, C 150.15, C 150.19, C 150.24 and C 7545.10. By the 19th May 1998, there was no response from Brice Metals.
So, on the 19th May 1998, the plaintiff forwarded to the defendant a copy of the two facsimile transmissions and requested that Bugg exert some influence over Brice Metals; (see Exhibit P2 p.1). Mr Bugg did so. The plaintiff points to the assertion in the two transmissions to the effect that it had been instructed by Rivercity Sheds “to prepare designs for their range of buildings”, as confirming and giving notice to Mr Bugg of the extent of the brief as perceived by the plaintiff. In other words, the plaintiff says that if the defendant was expecting only eight designs the assertions in these communications with Brice Metals should have raised “alarm bells”, and ought to have provoked a response.
On the 10th June 1998 the plaintiff wrote to Mr Bugg requesting his decision about “purlins and girts for Category 2 buildings”. This letter again was a facsimile transmission and required an answer by ticking one of two boxes; (see Exhibit P3 p.1). Again, on the same day Mr Bugg faxed back an answer; (see also Exhibit P3 p.2).
On the 11th June 1998 there was a telephone conversation between Mr John and Mr Bugg. Mr John contended that the purpose of the telephone conversation was to obtain Mr Bugg’s consent to proceed with the calculations on the basis of the letter of the 11th May 1998 (ie Exhibit P1), which was then two months old, and said that in that telephone conversation Mr Bugg said that he did not want to change any details; (see John pp.75,76). Mr Bugg said, categorically, that he did not have that letter at the time of this conversation and was talking to Mr John about the fax of the previous day (see again Exhibit P3) which related to the purlins and girts. So, Mr Bugg said that he and Mr John were talking at cross purposes; (see Bugg pp.200, 201). Later in cross-examination, Mr Bugg became unsure about his view of this conversation; (see Bugg pp.268, 269).
So, Mr John and his staff went ahead with the work and by October 1998 had developed a computer model; (see transcript pp.65, 66, 67). The development of this model required a considerable expenditure of time - approximately 400 hours Mr John personally and 150 hours for a draftsman; (see p.78). Such a model would not have been developed, said Mr John, if the instructions had been for eight designs only; (see John pp.71).
On the 22nd October 1998 Mr John forwarded to Mr Bugg a sample calculation for a standard Domestic Garage 6.00 metre wide, 3.00 metre high, Terrain Category 3; (see Exhibit P4). Again, the plaintiff’s point in adducing this evidence was to demonstrate that Mr Bugg did not protest at this despite the fact that it was not one of the eight ordered and, moreover, Mr Bugg had plans which covered those specifications; (see Exhibit P13). Therefore, the plaintiff says, Mr Bugg must have known that the plaintiff was preparing a full set of designs for all his sheds. Mr Bugg said that when he received the plans, Exhibit P4, he merely considered that P4 was a sample.
The facsimile letter of the 22nd October 1998 which accompanied the plans, Exhibit P4, also requested a sketch from Mr Bugg relating to a carry beam over a door opening. On the 17th November 1998 Mr Bugg responded to the letter by, inter alia, forwarding the requested sketch; (see Exhibit P5).
At a time prior to 17th December 1998, Mr Bugg said that he rang Mr John’s office and spoke to a person there, not being Mr John, and said words to the effect “How long does it take to make and get eight calculations ready?”; (see Bugg pp.256, 289).
On the 17th December 1998, 22 lever arch files containing 122 designs were delivered to the Murray Bridge premises of the defendant; (see Exhibit P6). There was no response by Mr Bugg to this huge delivery until as late as on 27 April 1999.
On about the 26th February 1999, Mr Bugg received an account from the plaintiff in the sum of $45,750.00 attached to which was a coded reference list to the 122 designs; (see Exhibit P7). Again, Mr Bugg did not react to this account until the 27th April 1999 when Mr John telephoned.
As indicated, on the 27th April 1999 Mr John telephoned Mr Bugg about the outstanding account. It is undisputed that Mr Bugg told Mr John, inter alia, that the number of calculations were “far more, far greater number of buildings than what he anticipated ...”; (see John p.83-4, Bugg pp.205, 206). In this conversation, Mr John drew Mr Bugg’s attention to the so called confirmatory letter of the 11th May 1998; (see Exhibit P1). Mr Bugg said he did not have the letter and requested a copy. On the same date, Mr John faxed a copy of the letter with a covering letter; (see Exhibit P8 incorrectly dated in 1998).
After the 27th April 1999, Mr Bugg sought legal advice from a Mr Pfitzner of Messrs Andersons; (see Bugg pp.207, 209).
On the 31st May 1999, Mr Bugg forwarded to the plaintiff a cheque in the sum of $3,750.00. A copy of the coded list of the 122 calculations (Exhibit P9), accompanied the payment and the endorsement “paid” indicated the ten calculations for which the payment was made. Exhibit P9, in its original form accompanied the 22 lever arch files which were delivered to the defendant on the 17th December 1998. By way of explanation, the code is to be read as follows, referring to the first calculation for which Mr Bugg has paid:

33758, is a code for the plaintiff’s office identifying the domestic sheds calculations for Rivercity.
A2, is Wind Terrain Category 2.
60 is the width, namely 6 metres.
36 is the height, namely 3.6 metres.
30 is the length which is of no consequence; and
15 is unexplained.

The plaintiff made the following points about this payment of $3,750.00 which it says impacts adversely on the credibility on the defendant’s account:-

the defendant paid for 10 calculations when he said in evidence that he only ordered 8;
of the seven calculations which the defendant said he ordered among the 122, he has only paid for five and in particular he should have paid for 33760.A2.90.60.30.15 and 33760.A2.120.60.30.15 under the heading rural sheds; and
the defendant has paid for two industrial sheds and one rural shed for Wind Terrain Category 3 whereas he said in evidence that he did not order sheds in those applications for that Wind Terrain Category.

The defendant Mr Bugg, by way of answer, said in his evidence that he “made a gesture of what I could and couldn’t pay for ...” after the shock of a $45,000 bill; (see Bugg p.253). He said he made the payment “... to show some faith and then start working it out with him”; (see Bugg p.207).
Further, the plaintiff argues that the credibility of the defendant’s position is impaired by adverse inferences which arise from the correspondence before action (see Exhibits P14 and P15), and by certain inconsistencies in the Defence, pleaded in this action.
Finally, the plaintiff contends that the circumstances surrounding Mr Bugg’s acquisition of the business, such as the move to larger premises and the expansion into Adelaide and Victoria, are consistent with a purchase of a large suite of plans.
Such is the narrative of events and the identification of the issues. I now turn to my findings as to the contentious issues.

Findings

Meeting 9th May 1998 at Murray Bridge

I am unable to find that there was an oral agreement struck at the time of the meeting of the 9th May 1998, in the terms contended for by the plaintiff. I accept that Mr John believed at least by the 11th June 1998, when the so called confirmatory letter was, as he believed, accepted, that he was briefed to prepare calculations for each shed in the full range of sizes for the two wind categories. I accept also that Mr Bugg thought he had briefed Mr John to prepare only eight calculations.
My reasons for so finding include:-

The evidence of Mr John about what was said at the site meeting was vague and unspecific as indeed was that of Mr Bugg. Neither view of the scope of works was more convincing that the other.
Mr John seemed to be uncertain about the extent of his instructions from Mr Bugg at this factory meeting and relied on the confirmatory letter of the 11th May 1998 to, as he put it, clear up any “misunderstandings”; (see John p.64).
The notes, Exhibit P11, and the confirmatory letter of the 11th May 1998, Exhibit P1, are vague and uncertain as to the precise scope of work and are equally consistent with Mr Bugg’s contention, namely that he requested a set of eight representative designs to cover the range of “standard buildings” offered by him to the public on the basis that the calculations for the larger buildings would suffice for the smaller; (see Bugg pp.112, 232).
Mr John quite candidly agreed with the broad proposition that a calculation for the larger shed size would facilitate council approval for the smaller; but he countered that concession by saying that the smaller shed would therefore be over designed and uneconomical; (see John pp.49, 50, 168). I found convincing Mr Bugg’s answer to this rationale, namely that in his business the major expense was labour and that he could buy the structural members, namely the “C Sections” by the truck load and therefore not be too fussed by some elements of over design; (see Bugg p.233).
Also convincing was Mr Bugg’s assertion that he certainly did not order, for example, calculations for Wind Terrain Category 3. He said that he rarely manufactured a shed for rural and industrial applications for the lowest Wind Terrain Category 3 because there was no market for such a shed. Category 2 was the typical windloading that such sheds had to withstand; (see Bugg pp.226, 227). Mr John’s responses to the proposition that he should have known such calculations, there being some 59 of them (see Exhibit D2), were useless to Mr Bugg, were unconvincing; (see John pp.119, 120, 121 and 122.)

Confirmatory letter 11th May 1998 (Exhibit P1)

I put aside for the moment the claim by Mr Bugg that the letter did not come to his attention until the 27th April 1999.
As indicated, the terms of the letter even when read in the context of the meeting of the 9th May 1998 do not spell out with any sufficient clarity and certainty the terms of an agreement allegedly entered into on the 9th May 1998. Nor could it be regarded as an offer of the provision of sufficiently defined professional services such that it could be accepted as the terms of an enforceable contract of services.
For instance, the letter does not make it sufficiently clear and certain that the plaintiff either, had agreed to, or offers to prepare, structural designs and documentation for each of the 68 buildings particularised for each of the two specified windloadings. The letter, like the evidence of the conversations at the defendant’s premises on the 9th May 1998 is not necessarily inconsistent with the defendant’s contention, namely that eight representative designs would have sufficed for council approval for the full range of buildings offered to the public.
In any event, I make the following further findings about this letter.
I find that it was sent to Mr Bugg by facsimile transmission on the 11th May 1998, but for some inexplicable reason did not come to his attention. I note in making this finding that indeed Mr Bugg did deal promptly with every other requisition made upon him by Mr John, and the question therefore arises why, if he did receive the confirmatory letter, did he not respond to it. For instance, he did respond to the request to “hurry up” Brice Metals; (see Exhibit P2.) He did reply to the “purlins and girts” enquiry of the 10th June 1998; (see Exhibit P3). Further, on the 17th November 1998 by facsimile transmission, Exhibit P5, he provided the sketch requested by Mr John’s request of the 22nd October 1998; (see Exhibit P4).
Further, I find that the letter first came to Mr Bugg’s attention on the 27th April 1999 when, in the context of being asked by Mr John to explain why the account had not been paid, he was referred by Mr John to the confirmatory letter, and indicated that he did not have the letter. It was then sent to him; (see Exhibit P8).

19th May 1998 - Brice Metals letters

The plaintiff argues that the copy correspondence to Brice Metals forwarded to the defendant, and including the assertion that Rivercity Sheds had instructed the plaintiff to “prepare designs for their range of buildings”, was notice to the defendant that the plaintiff regarded itself as instructed to prepare designs for, in effect, all the sheds. The lack of response by the defendant can be read, argues the plaintiff, as an acceptance that such was the case. The defendant said he did not read it that way (see Bugg p.267), and it is my view that no such wide implication can be drawn from the lack of response.

Telephone conversation of the 11th June 1998

It follows from the above findings as to the confirmatory letter of the 11th May 1998, that I am unable to find that it was the joint focus of this telephone conversation as Mr John alleged. I accept Mr Bugg to the extent that he denied that the letter was, to this knowledge, the topic of conversation at this time. It is possible that Mr Bugg was correct when he alleged that he and Mr John were talking at cross purposes, namely, that he [Mr Bugg] was addressing the letter of the previous day, the 10th June 1998 (Exhibit P3), concerning the purlins and girts, albeit a letter to which he had already responded whilst Mr John was addressing the contents of the letter of the 11th May 1998.
Further, Mr John does not assert that in the course of this conversation either he or Mr Bugg specifically referred to the letter of the 11th May 1998. Indeed, Mr John quite candidly said that neither he nor Mr Bugg, in specific words, made any reference to the letter at all; (see John’s pp.69, 70, 135, 136, 137 and 180). Further, Mr John said that the conversation was a “fairly short conversation ...”; (see John p.69).
Finally, in the later conversation between Mr John and Mr Bugg on the 27th April 1999 concerning the outstanding account Mr Bugg protested that the letter of the 11th May 1998 (see Exhibit P1) had not come to his attention and asked that a copy be forwarded to him. It was forwarded on that same day, 27th April 1999; (see Exhibit P8). Indeed, the covering letter dated the 27th April 1999 (incorrectly dated in 1998) reads as follows:-
“Dear John
Further to today’s discussions enclosed please find a copy of our letter dated 11th May 1998, and the accompanying fax.
When I spoke to you on 11th June (after sending my fax of 10th June) I asked you if you wanted to make any other changes to what we were designing before we continued, and you said there weren’t. I can appreciate that if you didn’t have my fax of 11th May at hand you may not have been fully aware of the range of buildings for which we had set out to prepare calculations.
I hope that we can reach a sensible solution to this dilemma, and I am willing to consider any proposal that is acceptable to us both.
Please give me a call when you have given the matter further consideration, and, as discussed, I would appreciate some part payment as we have obviously incurred substantial costs to date.
Regards,
T.J.”
(The italics are mine.)
The above letter, is inconsistent with Mr John being convinced that there was an oral contract for the scope of works contended for by him and purportedly entered into on the 9th May 1998. It is also inconsistent with Mr John’s evidence that Mr Bugg acknowledged, if not the actual letter, then at least its import, during the telephone conversation of the 11th June 1998. If Mr Bugg was speaking of this letter when he spoke to Mr John on the 11th June 1998, why would not Mr John contend in this letter that the subject of the conversation on the 11th June was indeed the letter of the 11th May, and ask, why therefore, was Mr Bugg distancing himself from it?
The above findings, relating to the meeting of the 9th May 1998, the letter of the 11th May 1998 and the conversation of the 11th June 1998, are sufficient to dispose of the plaintiff’s claim in contract. However, I will deal with the plaintiff’s further contentions and explain why I have concluded they do not undermine the above primary findings.

22nd October 1998 - sample calculation - Exhibit P4

I accept what Mr Bugg said about this communication, namely that it was taken by him to be a sample of what was to be provided. Further, I accept that he did not turn his mind to whether he had ordered it or whether it duplicated plans which he already had.
The language of the covering letter in Exhibit P4 supports what Mr Bugg said, namely that the calculation was a tentative and incomplete sample.

17th December 1998 - delivery of 22 lever arch files containing 122 calculations - Exhibit P6 - the account 26th February 1999 - the conversation and correspondence of the 27th April 1999

It is common ground that it was not until the 27th April 1999 that Mr Bugg raised a query about the multitude of calculations which arrived in boxes at his Murray Bridge premises on the 17th December 1998. This delayed response, it was argued, is inconsistent with Mr Bugg’s contention that he ordered only eight calculations, and therefore, reflects on the credibility of Bugg’s account of what was agreed.
Mr Bugg said that the boxes arrived a day after the Christmas closure and they remained on the office floor for some 4-6 weeks. He said the plans had taken so long to come that “... it was long ... passed the point of worrying about them”, and so they sat on the floor until into the end of January; (see Bugg p.203). The bulk of the delivery did not alert Mr Bugg that something was wrong. He said that he accessed the box in late January or early February and obtained a calculation for a council application; (see Bugg p.203). He said that he really did not appreciate the extent of his dilemma until the 26th February 1999 when he received the account in the sum of $45,750.00 (see Exhibit P7) and even then he thought the decimal point was in the wrong place; (see Bugg p.276). When he realised that the bill was not $4,575.00 he explained in evidence that he was in shock and started to worry about his legal position; (see Bugg pp.203, 204, 274-277). It’s common ground that, on the 27th April 1999 when Mr John rang about the outstanding account, Mr Bugg said that the number of calculations were “... far more, far greater number of buildings than what he anticipated ...”; (see John pp 83, 84, 85, 205 and 206).

I accept all of what Mr Bugg said about this by way of an explanation of the late response. I am unable to infer something sinister from it, namely, that Mr Bugg had, as Mr John’s counsel put it, “bitten off more than he could chew” and that his lack of response was a failure to face up to what he contracted for. Rather, I am of the opinion that his reaction was understandable and not necessarily inconsistent with his contentions.

31st May 1999 - payment for 10 calculations

I accept that what the defendant has and has not paid for bears no logical relationship to his defence. However, I am unable to go so far as to find that it indicates that in material respects what the defendant, Mr Bugg, has said about the matter generally is not credible. In my view, the evidence of Mr Bugg on this topic indicates that paramount in his mind was effecting a resolution of a serious problem by paying for what he could use and thereby placating Mr John.

Aftermath - letters before action - pleadings - inconsistency

Mr Bugg was cross-examined about his failure to respond to the letter of demand from Mr John’s solicitors dated 25th August 1999 (see Exhibit P14), and the failure of his solicitors, Messrs Andersons, to write again as indicated in the final paragraph of the letter dated 31st January 2000; (see Exhibit P15). Mr Bugg said that he left these matters to his solicitors.
In my view, nothing compelling one way or the other can be drawn from these letters.
As far as the inconsistency between Mr Bugg’s position in Court, as against the pleaded defence, and in particular paragraphs 3.3 and 4.1, he explained that his position has always been that there were eight calculations ordered from Mr John; (see Bugg pp.256, 289). His case in Court has remained the same throughout. In the absence of objection, I declined to demand that amendments be made. Indeed, the plaintiff’s pleadings were ambiguous. Mr Bugg commenced explaining the inconsistency by suggesting that he had problems explaining structural details to his solicitor (see Bugg pp.284, 285, 288-290) but then he finally said that he could offer no explanation; (see Bugg p.290).
Again, it is my view that nothing turns on such matters. Without there being evidence of the client’s close involvement in the preparation of the legal documents referred to, drawing adverse inferences against litigants such as Mr Bugg for the unfulfilled promises of his legal advisor and for apparent inconsistencies in pleadings in cases such as this, which involve matters of some technicality, is fraught with difficulties.

The overview argument

Counsel for the plaintiff, Mr Black, contended that the wider proven circumstances of Mr Bugg’s business situation tended to support the plaintiff’s case that Mr Bugg would likely have ordered calculations for 136 sheds and would, therefore, be prepared to expend at least $45,000 on plans. This nebulous contention relied upon the following circumstances:-

that Rivercity Sheds was a new business in the sense that Mr Bugg had in October 1998 purchased the interest of his partner and was the sole owner and operator;
that the business had moved to larger premises in Murray Bridge;
that the business was expanding from Murray Bridge and its surrounding areas into Adelaide; and
that an agency had opened in Victoria.

So the plaintiff was seeking to have me infer that such instructions were consistent with the above surrounding circumstances. I could not so infer. Indeed, it is equally arguable that the intrinsic likelihood accords with the defendant’s evidence which was why would a small fledging one man business in Murray Bridge commission the preparation of, potentially at least, 136 calculations, at a known potential cost of $600 to $650 each, when as a general proposition “the calculations for the bigger will suffice for the smaller”; (see John pp.49, 50, 168; Bugg pp.112, 232).
In any event, the exercise advocated by the plaintiff is an exercise in conjecture and speculation and is not the drawing of inferences which reasonably arise from proven facts; (see TNT v Brooks (1979) 23 ALR 345 per Gibbs J at p.349; Caswell v Powell Duffryn Assoc. Collieries Ltd (1939) 3 All ER 722 per Lord Wright at p.733).

Conclusion

The plaintiff has not proven on the balance of probabilities either:-

that on the 9th May 1998 there was an oral agreement entered into at the Murray Bridge premises of the defendant; or
that on the 11th June 1998 there was an agreement constituted by the defendant accepting in a telephone conversation a written offer of the plaintiff constituted by the confirmatory letter of the 11th May 1998; (see Exhibit P1);

whereby the plaintiff was in return for reasonable remuneration to provide for the defendant structural designs for the 68 steel framed sheds manufactured by the defendant for each of Wind Terrain Categories 2 and 3.

In other words, I am unable to find it proven that “the scope of works” were as contended for by the plaintiff. There was no consensus ad idem as to the scope of the work to be done by the plaintiff. Nor does an objective assessment of the material circumstances indicate a clear common contractual intent. Rather, an insoluble ambiguity remains as to the scope of the works to be undertaken by the engineer. The defendant is therefore not liable in contract to pay the reasonable charges of the plaintiff for the work associated with the preparation of 122 structural calculations; (see Exhibit P6).
Labelling the effect of this finding is difficult. However, in my view, as I have found that no agreement can be imputed to the parties, it follows that there is no proven and enforceable contract (see Cheshire & Fifoot’s Law of Contract 5th Australian Edition by Starke, Seddon and Ellinghaus, para.650). It is arguable also, that the contract here is void for mutual mistake or “that there was no contract, since the agreement was void for uncertainty”; (see Contract Law in Australia 3rd Edition by Carter & Harland (supra) at para.1234 where the learned authors set out their view of the basis of the decision in the analogous Raffels v Wichelhaus [supra]).
Accordingly, the plaintiff’s claim against the defendant in contract must fail.

Restitution - Unjust Enrichment

The defendant’s liability to the plaintiff is not necessarily eclipsed by the finding that the contract is unenforceable. The value of benefits conferred under contracts which are void for mistake or uncertainty or are otherwise “ineffective” may be recovered; (see The Law of Restitution 4th Edition Goff & Jones Chapter 21; Restitution Law in Australia 1st Edition Mason & Carter Chapter 10). In Pavey & Matthews Pty Ltd v Paul (1987) 162 CLR 221 at 225 Deane J said that such claims for benefits received, lie, not in the fiction of implied contract or promise, but rather in restitution or unjust enrichment. It is difficult to be exhaustive about the required criteria, but the primary requisites are that the defendant’s request, albeit expressed in a void contract, has been complied with, and as a consequence the defendant has accepted the benefit of the performance; (see Pavey & Matthews Pty Ltd v Paul (supra); Hansen v Mayfair Trading Co Pty Ltd (1962) WAR 148; Rover International Ltd v Cannon Film Sales Ltd (1989) 1 WLR 912). It must be the case that an acceptance of part only of the benefit of what has been performed - which is the case here - must be sufficient to give rise to the same obligation to make restitution.
I return to the facts of this case.
The plaintiff has provided, at the defendant’s request, seven of the eight requested designs. The defendant has accepted and paid $375 for each of five of them and has indicated a willingness to accept and pay for the remaining two. Further, the defendant has paid $375 each for five other plans; (see Exhibits P9 and D2). Finally, the defendant has indicated an acceptance of a further two plans making a total of 14 designs. Thus far, he has paid a total of $3750.00.
Both parties accept that the value of such engineering calculations is between $600 and $650 per design; (see John p.176; Bugg p.220). Moreover, in his final address, at p.362, Mr Bugg said that he would pay “the regular price” per design which he indicated was between $600 and $650. So, I find that the defendant has accepted the following designs and I here refer to the coded reference sheet Exhibits P9 and D2:-
Domestic Sheds
33758.A2.60.36.30.15
33758.A2.75.36.30.15
33759.A3.60.36.30.14
33758.A3.75.36.30.15
Industrial Sheds
33759.A2.75.36.30.15
33759.A2.90.48.30.15
33759.A2.105.42.30.15
33759.A3.90.60.30.15
33759.A3.105.54.30.15
33759.A3.120.60.30.15
Rural Sheds
33760.A2.75.36.30.15
33760.A2.90.60.30.15
33760.A2.120.60.30.15
33760.A3.120.60.30.15
The fair value of the plaintiff’s professional services for the preparation of these designs is, say $625 each, and so the defendant is liable to pay the plaintiff as follows:-
14   x   $625 =  $8,750
Less amount paid on 31st May 1999               $3,750
Balance owing  $5,000

Accordingly, there will be judgment for the plaintiff against the defendant for the sum of $5,000. I will hear the parties as to any interest and costs.

[2000] SADC 128

25 October 2000