Troy & Company v Cameron - [1999] WADC 122

JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL

LOCATION: PERTH

CITATION: TROY & COMPANY -v- CAMERON [1999] WADC 122

CORAM: CHARTERS DCJ

HEARD: 14,15 JANUARY, 24 FEBRUARY, 30 MARCH, 5 MAY, 17 AUGUST, 1 SEPTEMBER 1999 THE LAST OF THE WRITTEN SUBMISSIONS FILED 11 OCTOBER 1999

DELIVERED : 18 NOVEMBER 1999

FILE NO/S: CIV 2426 of 1997

BETWEEN: TROY & COMPANY
Plaintiff
AND
RICHARD LOCHIEL CAMERON
Defendant

Catchwords:

Contract - Pleadings - Turns on own facts

Legislation:

Nil

Result:

Judgment for the plaintiff in the sum of $30,084.40 with interest

Representation:

Counsel:

Plaintiff: Mr S M Temby
Defendant: Mr A C Thorpe

Solicitors:

Plaintiff: Phillips Fox
Defendant: A C Thorpe

Case(s) referred to in judgment(s):

Nil

Case(s) also cited:

Arkell & Arkell v Mei & Picchi (Aust) Pty Ltd, unreported; DCt of WA; Library NoD980118; 5 May 1998
Bremner v First Artists Management Pty Ltd (1993) 2 VR 221
Flett v Deniliquin Publishing Co Ltd [1964-65] NSWR 383

CHARTERS DCJ: The plaintiff at the material times was a firm of chartered accountants and the defendant is described in the statement of claim as a person carrying on business as "Great Breaks International". The plaintiff sues for professional services rendered to the defendant.
The pleadings
The statement of claim pleads that in or about February 1996 the defendant entered into an oral agreement, contained in a series of conversations, with Maxwell Leonard Troy (Mr Troy) as agent for the plaintiff whereby the plaintiff agreed to provide accounting services to the defendant in relation to a proposed tourist venture in Indonesia. The conversations were at the plaintiff's premises on 7 February and by telephone on 8 February 1996.
Between February 1996 and 13 May 1997 the plaintiff provided accounting services to the defendant in accordance with the agreement.
The plaintiff rendered invoices to the defendant it is pleaded, pursuant to the agreement, in relation to the accounting services and these invoices, particularised in the statement of claim, totalled $51,452.34. At the request of the defendant the invoices were drawn from 29 February 1996 to 31 March 1996 with the addressee shown as "Great Breaks International Limited, care of T Newby". The remaining invoices were drawn with the addressee shown as "Great Breaks International Limited" care of the defendant, again at the request of the defendant.
The request for the first batch of invoices was made during a telephone conversation between Mr Troy and the defendant on or about 13 February 1996 and the request for the second batch of invoices was made on a date unknown between 31 March 1996 and 30 April 1996, again during a telephone conversation between Mr Troy and the defendant.
The plaintiff then pleads that the defendant has paid to the plaintiff the sum of $21,367.94. These payments were made in the following manner:

"Date	Amount $	Payment Method
14.02.96	3,000.00	Withdrawal from Pioneer Surf Missions Bank Account
20.02.96	4,000.00	Withdrawal from Pioneer Surf Missions Bank Account
29.02.96	6,500.00	Withdrawal from Pioneer Surf Missions Bank Account
15.03.96	1,026.50	Withdrawal from Pioneer Surf Missions Bank Account
23.10.96	1,659.09	Withdrawal from Troy & Co Trust Account: Great Breaks International
02.12.96	782.35	Withdrawal from Troy & Co Trust Account: Great Breaks International
20.01.97	4,400.00	Withdrawal from Troy & Co Trust Account: Great Breaks International"

The plaintiff says that in breach of the agreement the defendant has failed or refused to pay the plaintiff the balance outstanding of $30,084.40 or any amount and that the sum claimed is a reasonable fee for the work carried out by the plaintiff at the defendant's request.
Alternatively between February 1996 and 13 March (sic) 1997 the plaintiff provided accounting services to the defendant in relation to a proposed tourist venture in Indonesia at the defendant's request.
The defence is brief. The defendant does not admit that the plaintiff at the material times carried on business as a firm of chartered accountants. The defendant says that he has not paid the plaintiff any moneys and that he is not obliged to do so, that he did not engage the plaintiff to provide accounting services as alleged or at all and that the plaintiff did not render invoices to the defendant as alleged or at all. The defendant denies the allegations in the statement of claim. The defence is a general traverse of the statement of claim which would be acceptable if indeed there had been no communication whatever between Mr Troy and the defendant.
The issues
Upon the pleadings the narrow issues are whether the defendant engaged the plaintiff to provide any accounting services and whether the plaintiff provided accounting services at the defendant's request.
At the commencement of this trial I remarked that the defence was entirely uninformative and I asked whether there was a contract with anyone.
Mr Thorpe told me that there was a corporation known as "Great Breaks International Limited" and a business name registered as "Great Breaks International" in the name of the defendant - but of which there were no partners. The defendant never traded as Great Breaks International. The defendant had negotiations and communications with the plaintiff in the defendant's capacity as director of Great Breaks International Limited but his client does not "have instructions from the company to admit the existence of a contract". He said "there may well be one but I don't have any instructions to do that". He insisted the pleadings cover the position - "it was not for us to prove that another party was the contracting party and we say the evidence in this matter is sufficient to show that there never was a contract".
He also told me that he "would not be seeking to lead evidence to say there was another contracting party … There simply wasn't a contract between Mr Cameron and the plaintiff" and that is what would be asserted. The defendant would not be proving the existence of a contract with another party and he would not be proceeding on the basis that he was acting as agent for someone else (T8 and 101).
Mr Temby for the plaintiff told me that aspects of the defence were raised a week before the trial and he advised defendant's counsel that the plaintiff would require the defendant strictly to follow his defence.
Notwithstanding Mr Thorpe's expressed stand he has sought to cross‑examine Mr Troy, the only witness for the plaintiff, and lead evidence which could only be interpreted as suggesting that the defendant was acting on behalf of Great Breaks International Limited.
As a consequence if the real issue were whether the plaintiff personally, or he as agent for Great Breaks International Limited was the contracting party, I am not satisfied that that issue between the parties has been properly or adequately put before me.
If the issues are not properly before me, the inadequacy of the pleadings, notably the defence, cannot be regarded simply as technical.
It is not relevant to enquire why the plaintiff has sued the defendant and not Great Breaks International Limited - there may be a number of reasons including perhaps the questions of incorporation of Great Breaks International Limited (apparently it was not domiciled in Western Australia); if it were incorporated whether it had a place of business in Western Australia; and whether the defendant had the authority to contract on its behalf.
The plaintiff plainly proceeds on the basis that he was adviser to the defendant in his personal capacity.
In an affidavit sworn in December 1997 the defendant said he had no discoverable documents in his possession, power or custody. In the course of his evidence he said he was the Chief Executive Officer of Great Breaks International Limited. Questions of shareholding and control of the corporation may have been relevant as well as the break up of the accounts to differentiate the responsible parties - to determine whether all or part of the work was done for the defendant or the corporation. I have no difficulty finding that work was done for the defendant's own business interests. Moneys have moreover been credited to the plaintiff's account from a business operated by the defendant.
The view that I hold is that if the defendant's case be that he did not contract on his own behalf but contracted on behalf of Great Breaks International Limited that fact should have been pleaded. It would have given the plaintiff the opportunity of seeking full particulars, interrogating the defendant, obtaining full discovery of documents relevant to that issue and conceivably joining Great Breaks International Limited as a defendant. It may or may not have transpired that at some stage the defendant ceased to contract for himself and thereafter become the agent for a corporation. I cannot deal with that question.
The affidavit of documents sworn by the defendant in December 1997 was deficient and unsatisfactory. Documents which should have been discovered include cheque stubs of payments from the account of Pioneer Surf Missions. I do not accept the defendant's explanation "Because those payments were made on behalf of Great Breaks International Limited, not me personally, and the writ was issued to me personally … they were not paid in respect to my personal liability … ever rendered to me …", and "I believed that the claim and the case in fact referred to work that had been done with respect to Great Breaks International Ltd and therefore I personally had no reasons to declare documents in my possession".
In the result I am not trying this action by reference to the question whether the defendant gave instructions as agent for Great Breaks International Limited. If, therefore, the defendant gave instructions to the plaintiff to do work, then it must follow that the defendant himself was the contracting party.
The defendant, through his counsel, does not "overtly" challenge the reasonableness of the fees charged by the plaintiff (T80-81) nor that the plaintiff's account has been credited with the sum totalling $21,367.94: as to the latter the defendant says that he did not make or authorise payments for the crediting of that account. Nevertheless those funds, emanating from Pioneer Surf Missions were by cheques drawn by the defendant.
The written submission by the defendant's counsel that "the reasonableness of the work alleged to have been carried out and the reasonableness of the hourly rates has not been the subject of any evidence" is not accepted.
Facts proved
I relate now the facts which I find to be proved from the evidence or admitted by counsel. I should say at the outset that I found Mr Troy's evidence satisfactory and reliable generally. I have reservations about some of Mr Cameron's evidence. I have already made reference to his affidavit of documents. Whilst a room in the plaintiff's offices were clearly made available for him he claimed he "didn't truly move into Mr Troy's office". When answering questions concerning the address to which the accounts were to be sent the defendant's evidence was unsatisfactory (T174 and 197) but I am satisfied Mr Troy asked to whom the accounts should be addressed, he was told by the defendant and addressed them accordingly.
Mr Troy was at the material times a chartered accountant and a partner in the plaintiff firm.
He first met the defendant in Bali six or seven years ago when the plaintiff did some work for a group called "Bali Hai Cruises" who were setting up a ferry business in Bali at Denpasar.
In February 1996 an architect, Mr Ross Wilcox, on behalf of the defendant telephoned Mr Troy to say that the defendant had a venture that he was looking at and required the professional services of Mr Troy's practice. On 6 or 7 February 1996 the defendant and Mr Wilcox came to see Mr Troy at the latter's office in West Perth and the defendant explained that he was presently operating a surf holiday business called "Pioneer Surf Missions" in Indonesia and intended extending that business to establish a holiday resort for surfing holidays. He needed investors. The defendant had a ketch in Indonesia, he had been running surf holidays for the business "Pioneer Surf Missions" and intended developing a resort, and obtaining land and water rights in Indonesia.
On this visit the defendant showed the plaintiff a business card - exhibit 1. Mr Troy had, I find, forgotten seeing the card. I doubt that it would have made an impression upon him. Mr Cameron did not, I find, say he was representing Great Breaks International Ltd. He was plainly seeking advice to enhance and protect his own business interests.
The defendant is shown in exhibit A to be one of the persons carrying on business as Pioneer Surf Missions (a business name registered in Western Australia), the business having started on 13 April 1994. He is shown to have ceased that business on 14 June 1997.
The defendant was, in 1994-1995, a consultant to a company in Jakarta and ran his business, Pioneer Surf Missions, which operated his yacht in Indonesia. He was invited by the West Sumatran government to establish a charter and resort venture in the Mentawai Islands off the west coast of Sumatra. He wanted to expand his business by obtaining land and surfing rights, he intended to purchase a number of catamarans and build a surf resort.
All of the activities of Pioneer Surf Missions were to be conducted by Great Breaks International Limited of which the defendant is chief executive officer. The changeover commenced to take place in April 1996. It was in respect of these interests that the defendant went to see Mr Troy for professional advice.
The defendant's venture was intended to be a joint venture between an Indonesian company, P T Mentawai Bizharti Bahari, and Great Breaks International Limited. He called it the Mentawai Surf Sanctuary project.
The defendant told Mr Troy that if the project were to proceed it would be called Great Breaks International. Accepting Mr Troy's evidence, as I do, this "was a company to be incorporated - a British Virgin Island company incorporated - I mean, domiciled in Hong Kong. That was to be the name of that vehicle should that project proceed ... if investors invested money and if the whole thing was going to proceed".
The defendant saw Mr Troy for guidance through the investment process. He wanted the plaintiff's financial advice for the venture. Because of the size of the venture he could not afford it himself and required not only investors but accounting and legal advice.
The defendant's objective was to expand his business, to purchase expensive catamarans and establish a resort. Holiday makers would spend a week surfing from the catamarans and if they wished then they would stay at the resort. He wanted the plaintiff to develop a business plan with a feasibility exercise - a budget and profit and loss, cash flow and capital costings for building a resort. He then wanted to approach investors to invest money in the project. He wanted to examine the viability of the project before seeking investment.
The plaintiff was engaged by the defendant to work upon the project. Agreement of the charging rate of fees was reached.
It is plain from exhibit L that from February 1996 the plaintiff was asked to prepare a corporate plan for setting up a company and the issue of various classes of shares. This company appears to have been Great Breaks International Limited. It is evident from the first account dated 29 February 1996 that work was done to this end, and also prepared was an estimated capital cost of the proposed surf sanctuary venture. The nature of the work done was reflected in the various accounts and this work included meetings with prospective shareholders and investors and extended to meetings outside the metropolitan area. Effectively Great Breaks International Ltd would buy out Pioneer Surf Missions.
Mr Troy attended meetings with prospective investors and prepared cash flows at the request of the defendant. For ease of communication with the defendant the latter was given the use of a room in the plaintiff's premises for a month.
Mr Troy asked the defendant how his fees were to be paid and to whom the accounts should be addressed and the defendant replied "Great Breaks International Limited". The accounts were accordingly addressed in that fashion first "care of T Newby" and later "care of" the defendant - at the defendant's request.
During the course of this work there was discussion concerning the registration of the business name, Great Breaks International. The name was registered, the defendant said "to protect it in Australia as we had a dispute with a number of shareholders". Mr Troy advised its registration to protect the defendant and the latter gave instructions to effect registration accordingly. It was registered on 22 March 1996 showing the defendant to be carrying on that business.
During February 1996, namely on 14 February, 20 February and 29 February, the defendant handed over three cheques drawn by him, respectively for the amounts of $3,000, $4,000 and $6,500, drawn upon an account of Pioneer Surf Missions.
A further cheque was drawn on 15 March 1996 for $1,026.50 although I am not told how that cheque came to be issued or handed over.
The defendant therefore sought advice from Mr Troy to launch a venture which was designed to expand the defendant's business interests. His aim to have a limited company provide finance by way of investors does not detract from the instructions he gave to Mr Troy to enhance and protect his own business interests. It is certainly conceivable that the defendant's interests may have conflicted with those of the prospective investors and the prospective corporate vehicle. He required his personal interests to be protected.
Investors' moneys, perhaps small amounts, were put into the Pioneer Surf Missions account; otherwise they were placed into a solicitor's trust account and the plaintiff's trust account and withdrawn from time to time with the investors' authority.
Although the defendant volunteered that he approached Mr Troy on behalf of the company I do not accept his evidence that that was the case. As I have pointed out this was not his case upon the pleadings.
Conclusions
Since the defendant sought the plaintiff's professional advice and assistance concerning a venture in which the defendant was clearly personally interested, and the plaintiff provided those services in a variety of ways for fees, the reasonableness of which is not challenged, the plaintiff must succeed.
It matters not that the accounts at the defendant's request were addressed to Great Breaks International Limited - the work was done for and at the request of the defendant.
The balance of the account is $30,084.40 and judgment is given to the plaintiff for that sum. Interest will be awarded upon that sum.
I shall hear counsel further concerning interest, unless this can be agreed.