Vadasz v Gadaleta Steel Fabrication Pty Ltd - [2015] SASC 162

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
VADASZ v GADALETA STEEL FABRICATION PTY LTD
[2015] SASC 162
Judgment of The Honourable Justice Nicholson
16 October 2015
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSTRUCTION AND INTERPRETATION OF CONTRACTS - IMPLIED TERMS
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT - FUNCTIONS OF APPELLATE COURT - WHERE FINDINGS BASED ON CREDIBILITY OF WITNESSES - GENERALLY
The appellant engaged the respondent to undertake certain steel and welding services for the construction of a school hall. The appellant challenged the respondent's entitlement to be paid the invoiced amount of $70,168.01. After making an allowance for a $10,000 part payment and a reduction of $1,496.55 on account of proved errors in the invoices, a Magistrate found for the respondent in the amount of $58,671.46. The appellant raised a number of complaints on appeal, essentially, with reference to the Magistrate's findings of fact.
Held:
1. Appeal allowed in part.
2. The respondent had no contractual entitlement to charge a supervisor's hourly rate, to charge a minimum two hours for any supervisor site attendance or to charge overtime rates for employee attendances.
3. The amount due and payable as otherwise determined by the Magistrate is to be reduced in accordance with 2. above but all other grounds of appeal are dismissed.
Jones v Dunkel [1959] HCA 8, (1959) 101 CLR 298; O’Donnell v Reichard [1975] VR 916; Payne v Parker [1976] 1 NSWLR 191; Spence v Demasi (1988) 48 SASR 536; Frederick v State of South Australia [2006] SASC 165, (2006) 94 SASR 545; Fox v Percy [2003] HCA 22, (2003) 214 CLR 118, considered.

VADASZ v GADALETA STEEL FABRICATION PTY LTD
[2015] SASC 162
Magistrates Appeal: Civil
NICHOLSON J.
Introduction and factual background

This is an appeal from the decision of a Magistrate who found that the appellant was liable, pursuant to a contract, to pay the respondent the sum of $58,671.46 for work performed.
In November 2012, the appellant engaged the respondent to supply certain steel and welding services with respect to the construction of a hall at the John Pirie Secondary School at Port Pirie (“the works”). No written contract was entered into. The works were undertaken during the period 27 November 2012 to 29 January 2013. The works were satisfactorily completed or, at least, there is no complaint to the contrary.
Throughout the period during which the works were carried out, the respondent issued nine invoices for payment by the appellant of a total amount of $70,168.01. The appellant does not deny that he is liable to pay for the works but challenges the amount claimed by the respondent. The appellant, in his notice of appeal, has sought an order that the respondent have judgment for a “just and equitable amount that properly reflects the work carried out by the respondent at the request of the appellant”.The appellant contends that he should only have to pay the respondent something between $24,000 and $27,000.
There was an arrangement between the appellant and the respondent whereby the respondent’s site supervisor, Mr Sam Salvemini (and sometimes Mr Steven Williams, the respondent’s operations manager) would present to the appellant’s site foreman, Mr Simon West, for signature a claim sheet which set out completed work on a daily basis. Usually, the claim sheets would be provided for signature the day after the relevant work had been completed. There were occasions when it would take a few days for a claim sheet to be presented and signed. The respondent prepared its invoices on the basis of the claim sheets signed by Mr West and the invoices were provided to the appellant by post. The appellant attended the site on only two occasions during the period of the works.
The appellant first queried the amount claimed by the respondent in late February 2013, well after all of the invoices had been posted. The appellant maintains that he did not see the invoices until he received them in the post and did not see a need to enquire about them during the period during which the works were completed.
On or about 5 March 2013, the appellant paid $10,000 to the respondent in partial satisfaction of any amount due. No further payment has been made. By a claim filed in the Magistrates Court on 1 July 2013, the respondent sought recovery of the balance alleged to be outstanding. A default judgment was entered against the appellant upon his failure to file a defence. However, the appellant succeeded in having the default judgment set aside.
A two day trial took place in the Magistrates Court on 15 and 27 October 2014. The appellant appeared in person. The respondent was represented by counsel who also appeared for the respondent at the appeal. The respondent called two witnesses; Mr Salvemini and Mr Williams. The appellant gave evidence but called no other witnesses. Of particular note, the appellant did not call Mr West. At the trial, the appellant maintained that Mr West had been suffering ill health during the period of the works and also that, as a result of experiences he had with Mr West, including of an alleged criminal nature, he did not think Mr West would be a credible witness. The failure by the appellant to call Mr West was influential in the Magistrate’s reasoning process in a manner that is later explained.
In her judgment, delivered on 19 December 2014, the Magistrate found in favour of the plaintiff in the amount of $58,671.46. That amount represented the total of the respondent’s invoices, less the $10,000 part payment and less an amount of $1,496.55 found by the Magistrate to represent overcharges resulting from various errors made by the respondent in its invoicing process.
A fundamental problem for the appellant and for the case he presented at trial was that the respondent’s case, at least as to quantum, was based on the claim sheets signed and apparently verified by Mr West, together with the evidence of Mr Salvemini and Mr Williams concerning on-site interactions with Mr West and the work performed by the respondent’s employees. The problem for the appellant was not, so much, that he was exposed to a Jones v Dunkel[1] type inference but that he had presented no evidence capable of challenging that given by Mr Salvemini and Mr Williams or capable of explaining or putting in context Mr West’s conduct in signing the various claim sheets in apparent acceptance that the work had been performed in the way described therein. The Magistrate said this.[2]
In any event, in the absence of the defendant calling evidence from Mr West there was no evidence to rebut, for example, the documentary evidence relied upon by the plaintiff to support a finding that its workers were in fact on site working on various dates and at various times. Although the defendant did visit the site on two occasions during the course of the works, he was not physically present there to attest as to whether or not the plaintiff’s workers were on site on the various days and at the various times as disputed by him. Nor was he privy to the precise nature of the work being undertaken at the site each day and/or whether the plaintiff was required to use equipment and/or incur material costs to complete that work.
[1] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 and for further discussions of the principle and illustrations of its application in civil trials see, for example, O’Donnell v Reichard [1975] VR 916, Payne v Parker [1976] 1 NSWLR 191 (particularly at 200-202 per Glass JA), Spence v Demasi (1988) 48 SASR 536 at 547-549 and Frederick v State of South Australia [2006] SASC 165; (2006) 94 SASR 545 at [36]-[42] (White J).
[2] Gadaleta Steel Fabrication Pty Ltd v Vadasz, Magistrate’s reasons for judgment, 19 December 2014 (“Magistrate’s Reasons”) at [12].
The Magistrate comprehensively reviewed and summarised in her judgment the oral evidence given by the appellant, Mr Salvemini and Mr Williams and the extensive documentary evidence upon which the respondent’s claim, as to quantum, relied.
Mr Salvemini and Mr Williams accepted during their evidence that there were errors in the claim sheets which errors, insofar as material, were identified and taken into account by the Magistrate. Nevertheless, the Magistrate formed the view that Mr Salvemini was an honest witness and stated that she was impressed with his evidence. She said this about Mr Salvemini and his evidence.[3]
[H]e had a very thorough knowledge of the works and gave very detailed evidence to explain why certain work was done, why materials or equipment were necessary and why various employees were on site (or otherwise working on the job) for the hours as recorded by them. He conceded that he may not have expressly told the defendant about the overtime rates, his supervisor’s rate or his ‘two hour minimum rate’. I consider Mr Salvemini was an honest witness, doing his best to recount details so as to properly inform the court.
The Magistrate was satisfied that Mr Williams’ evidence was not controversial. Nevertheless, he also impressed the Magistrate as a witness and she could find no reason to doubt his honesty or reliability.
[3] Magistrate’s Reasons at [86].
The Magistrate was more critical of the appellant and his insistence that he had been grossly overcharged. She described him as presenting himself as someone who had been let down by his employee, Mr West, and taken advantage of by the respondent. Her Honour said that she found it difficult to accept aspects of the appellant’s evidence and that she had concerns as to the reliability of his evidence generally.[4] I have reviewed the evidence and the reasons given by the Magistrate for these conclusions. I am satisfied that it was open to the Magistrate on the evidence to reach these conclusions.
[4] See, generally, the Magistrate’s Reasons at [90]-[93].
Ultimately, the issues on appeal depend, in large part, upon this Court’s review of the Magistrate’s analysis and acceptance of the oral and documentary evidence. To the extent that the issues raised on appeal involve issues of law or inferences to be drawn from uncontested or established facts, the appeal court is in as good a position as was the Magistrate to determine such issues. However, fundamental to this appeal is a challenge to some of the Magistrate’s findings of fact.
The principles applicable to the approach to be taken by an appellate court by way of rehearing, such as in the present case, when reviewing findings of fact is settled. In Fox v Percy,[5] Gleeson CJ, Gummow and Kirby JJ explained the position as follows.
[5] [2003] HCA 22; (2003) 214 CLR 118 at [23], [25]-[29] and [41] (citations omitted).
The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to "give the judgment which in its opinion ought to have been given in the first instance". On the other, it must, of necessity, observe the "natural limitations" that exist in the case of any appellate court proceeding wholly or substantially on the record. These limitations include the disadvantage that the appellate court has when compared with the trial judge in respect of the evaluation of witnesses' credibility and of the "feeling" of a case which an appellate court, reading the transcript, cannot always fully share. Furthermore, the appellate court does not typically get taken to, or read, all of the evidence taken at the trial. Commonly, the trial judge therefore has advantages that derive from the obligation at trial to receive and consider the entirety of the evidence and the opportunity, normally over a longer interval, to reflect upon that evidence and to draw conclusions from it, viewed as a whole.
. . . .
Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of "weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect". In Warren v Coombes, the majority of this Court reiterated the rule that:
"[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it."
As this Court there said, that approach was "not only sound in law, but beneficial in … operation".
After Warren v Coombes, a series of cases was decided in which this Court reiterated its earlier statements concerning the need for appellate respect for the advantages of trial judges, and especially where their decisions might be affected by their impression about the credibility of witnesses whom the trial judge sees but the appellate court does not. Three important decisions in this regard were Jones v Hyde, Abalos v Australian Postal Commission and Devries v Australian National Railways Commission. This trilogy of cases did not constitute a departure from established doctrine. The decisions were simply a reminder of the limits under which appellate judges typically operate when compared with trial judges.
The continuing application of the corrective expressed in the trilogy of cases was not questioned in this appeal. The cases mentioned remain the instruction of this Court to appellate decision-making throughout Australia. However, that instruction did not, and could not, derogate from the obligation of courts of appeal, in accordance with legislation such as the Supreme Court Act applicable in this case, to perform the appellate function as established by Parliament. Such courts must conduct the appeal by way of rehearing. If, making proper allowance for the advantages of the trial judge, they conclude that an error has been shown, they are authorised, and obliged, to discharge their appellate duties in accordance with the statute.
Over more than a century, this Court, and courts like it, have given instruction on how to resolve the dichotomy between the foregoing appellate obligations and appellate restraint. From time to time, by reference to considerations particular to each case, different emphasis appears in such reasons. However, the mere fact that a trial judge necessarily reached a conclusion favouring the witnesses of one party over those of another does not, and cannot, prevent the performance by a court of appeal of the functions imposed on it by statute. In particular cases incontrovertible facts or uncontested testimony will demonstrate that the trial judge's conclusions are erroneous, even when they appear to be, or are stated to be, based on credibility findings.
That this is so is demonstrated in several recent decisions of this Court. In some, quite rare, cases, although the facts fall short of being "incontrovertible", an appellate conclusion may be reached that the decision at trial is "glaringly improbable" or "contrary to compelling inferences" in the case. In such circumstances, the appellate court is not relieved of its statutory functions by the fact that the trial judge has, expressly or implicitly, reached a conclusion influenced by an opinion concerning the credibility of witnesses. In such a case, making all due allowances for the advantages available to the trial judge, the appellate court must "not shrink from giving effect to" its own conclusion. Finality in litigation is highly desirable. Litigation beyond a trial is costly and usually upsetting. But in every appeal by way of rehearing, a judgment of the appellate court is required both on the facts and the law. It is not forbidden (nor in the face of the statutory requirement could it be) by ritual incantation about witness credibility, nor by judicial reference to the desirability of finality in litigation or reminders of the general advantages of the trial over the appellate process.
. . . .
Therefore, the appellant had to rely before this Court on the advantages that the primary judge enjoyed in seeing the parties, and Mr Murdoch, give their evidence and in preferring the evidence of the appellant and Mr Murdoch to that of the respondent. The Court of Appeal was bound to make due allowance (as it did) for such advantages. The trial judge sat through four days of trial before giving his decision. He did so at a time when the impression made by the witnesses was still clearly in his mind. The Court of Appeal was bound to afford respect to the endeavour of the judge to give the correct and lawful conclusion to the puzzle presented to him. Clearly, the Court of Appeal was right to reject the respondent's belated suggestion of bias, which should not, in our view, have been made. No doubt, the Court of Appeal also took into account the unexpressed considerations that went into the judge's conclusion. No judicial reasons can ever state all of the pertinent factors; nor can they express every feature of the evidence that causes a decision-maker to prefer one factual conclusion over another.
In this case, the Magistrate heard and observed the witnesses give their evidence over two days and delivered her reasons for judgment some eight weeks or so after the first day of hearing. Her Honour had distinct and obvious advantages, as compared with this Court, when forming a view about the truthfulness and reliability of their respective accounts. Her Honour delivered reasons for judgment at a time when the impressions made by the various witnesses still must have been clearly in her mind.
Issues on appeal - Consideration
It is apparent from the evidence at trial and her Honour’s findings that the contract negotiated by the appellant and Mr Salvemini on behalf of the respondent was in simple, if somewhat imprecise, terms. In November 2012,[6] Mr Salvemini was contacted by the appellant and asked to undertake certain work at the John Pirie Secondary School. He and the appellant spoke by telephone about the works and thereafter exchanged emails. The works involved the installation of 120 to 140 steel piles drilled and/or hammered into the ground to support the foundations for a new hall. Each pile was to comprise various lengths of steel pipe which were to be prepared and bevelled by the respondent. The pipes were to be stored offsite at the respondent’s premises. Mr Salvemini’s role was to manage the respondent’s workers on and off site and to liaise with the appellant’s foreman or supervisor on the site, Mr West.
[6] Mr Salvemini gave conflicting evidence as to this timing and her Honour refers to the oral discussions as taking place in December (Magistrate’s Reasons at [17]). However, a review of Mr Salvemini’s evidence on the topic as a whole, the date and content of the email exchanges referred to below and the fact that the works commenced in early December, combine to persuade me that the initial oral discussions took place in (probably, late) November. In any event, the precise timing, in this respect, is of no consequence for her Honour’s findings concerning the terms, particularly as to hourly rates, of the contract.

The Magistrate found that during their discussions, it was more likely than not that Mr Salvemini told the appellant that his workers would be charged out at $75 an hour plus GST.[7] Her Honour also found that by proceeding to retain the respondent to perform the works, the appellant accepted this rate.[8]
[7] Magistrate’s Reasons at [96].
[8] Magistrate’s Reasons at [96].
After their oral discussions, the two men exchanged emails. On 27 November 2012, the appellant emailed Mr Salvemini in these terms:
Sam, please supply steel and welding services to my supervisor, Simon West, as required and email your accounts to me for prompt payment.
Thanks for your assistance!
Postal address: PO Box ..., Dry Creek ...
Mr Salvemini replied by email on the same day in the following terms:
Thanks for the email to proceed with the works at John Pirie School, I will talk with Simon West and get him to sign the daily claim sheets as we go, please let me know if there are any issue (sic).
The appellant has raised a number of arguments in his attempt to impugn the amount of the judgment against him of $58,671.46. The parties’ respective contentions can be collected and dealt with under a series of headings or topics.
Agreed rates
The appellant contends that the hourly rates charged by the respondent were never conveyed to him. The rates charged and identified in the various daily claim sheets signed by Mr West were $75 an hour plus GST for normal time for all of the respondent’s employees (including apprentices) $85 an hour plus GST for Mr Salvemini himself with a minimum two hour charge for any day worked by Mr Salvemini and an overtime rate (for Friday afternoon and weekend hours) for all workers.
As indicated above, her Honour found that the appellant and Mr Salvemini had agreed a rate of $75 per hour plus GST with respect to all of the respondent’s workers. Given her Honour’s preference for Mr Salvemini’s evidence over that of the appellant’s and given the usual advantages her Honour enjoyed from seeing and hearing the witnesses, I am satisfied that the finding that an hourly rate of $75 plus GST had been agreed was open on the evidence and is not to be disturbed.
However, the Magistrate was not satisfied that Mr Salvemini, at any time prior to the commencement of the works, informed the appellant of his supervisor’s rate, his two hour minimum rate, or the fact of, and basis for charging, overtime rates. Nevertheless, the Magistrate held that the respondent was entitled to charge these additional rates and that, to the extent they were identified in the various invoices rendered, they were payable. Her Honour reasoned as follows.[9]
The defendant knew from his initial discussions and email correspondence with Mr Salvemini that Mr Salvemini was to present daily claim sheets to Mr West for signature. The defendant delegated the responsibility for authorising the contents of the claim sheets to Mr West. Mr West had the express authority of the defendant to sign the claim sheets and insofar as the claim sheets appear to bear his signature I find that he did sign such claim sheets. I find that insofar as Mr Salvemini presented the claim sheets to Mr West for signature, Mr West signed the claim sheets in Mr Salvemini’s presence. I find that at the time Mr West signed the claim sheets the relevant information outlining what hours work were charged for each employee and the applicable rate, what equipment had been used and what materials had been used were already recorded on the claim sheets.
I accept the evidence of Mr Salvemini that at no time did Mr West ever raise any queries with him with respect to the claim sheets.
In those circumstances it is irrelevant whether or not Mr Salvemini and the defendant agreed the hourly rate (or the other rates as referred to above) at the time the contract was entered. Mr West had the defendant’s authority to sign the claim sheets. In then signing and authorising the claim sheets he, on behalf of the defendant, accepted and agreed to the basis upon which the plaintiff charged for the works. In other words, Mr West has accepted, on behalf of the defendant, that the plaintiff was to charge for its employees’ work at an ordinary rate of $75/hour plus GST, a ‘time and a half rate’ of $85 plus GST and a double time rate of $95 plus GST. In addition, Mr West has authorised, and therefore accepted on behalf of the defendant, that Mr Salvemini as supervisor was entitled to charge a higher ordinary rate of $85/hour plus GST and that when he charged, he would charge for a minimum of two hours per day. Further he did not challenge the fact that there was no reduction in the number of hours charged for lunch breaks and the like, thus endorsing and authorising the basis upon which the plaintiff had charged for the work.
It was open to Mr West to refuse to sign the claim sheets and to instead either revert to the defendant for further instructions and/or to insist, on behalf of the defendant, that the rates be reduced. There was no evidence that this occurred.
The plaintiff was entitled to rely on the ongoing authorisation of Mr West, on behalf of the defendant, to continue to undertake the works on the basis that they charged the rates as set forth clearly on the time sheets.
I disagree with this reasoning. Her Honour’s findings as to Mr West’s and Mr Salvemini’s conduct with respect to the claim sheets were open on the evidence. However, her Honour’s conclusions based on these primary facts were not. This latter issue is not one with respect to which her Honour enjoyed any particular advantage in having heard and seen the witnesses give their evidence.
[9] Magistrate’s Reasons at [97]-[101].
On her Honour’s findings, at the time the contract was entered into by the appellant and Mr Salvemini, the parties agreed an hourly rate of $75 plus GST. On my assessment of the oral and documentary evidence, I agree that Mr West had authority on behalf of the appellant to sign the claim sheets and, in so doing, to be seen as accepting the claim sheets as accurate in the absence of any challenge. However, I would restrict his authority in this respect to encompass factual matters and not variations to the contractual terms agreed upon by the appellant and Mr Salvemini prior to the works commencing.
Mr West’s job, as the appellant’s site foreman, was to be satisfied that the works were completed, as required, and that the hours said to have been worked and recorded in a claim sheet were in fact worked by the respondent’s workers. Mr West was operating in a context of the contractual terms having already been agreed between the principals. Mr Salvemini’s conduct of including hourly rates in a claim sheet different from the agreed rate of $75 per hour plus GST, can only be interpreted as an offer or request to vary the contract as to terms of payment. In the absence of Mr West having authority on behalf of the appellant to accept, that is, agree to an offer to vary the contract as to terms of payment, that variation remained unagreed. It could not be unilaterally imposed. There was no evidence before the court sufficient to find that Mr West was clothed with that authority. The Magistrate erred in so finding.
The fact that neither Mr West nor, for that matter, the appellant complained about these varied hourly rates, such that Mr Salvemini may have continued to perform the works under the impression that they were not challenged, is not to the point. Mr Salvemini had a contract to do the works at $75 per hour and was obliged to complete that contract at that rate unless and until the parties agreed to vary that hourly rate. It was not incumbent on the appellant to reject Mr Salvemini’s implied request for a variation. It was incumbent on Mr Salvemini to point to an authorised communicated acceptance.
The appeal should be allowed to this extent. The overcharging that derives from the respondent charging $85 per hour instead of $75 per hour for Mr Salvemini’s own work or charging for a minimum two hours when two hours was not worked by Mr Salvemini or charging for overtime worked by any of his employees, needs to be accounted for. My discussions with counsel and the appellant during the hearing of the appeal would suggest that only a relatively small amount is involved in this respect. Nevertheless, it would not be appropriate for the Court to attempt the calculations in the first instance. I will invite the parties to review the invoices and the claim sheets on which they are based with a view to agreeing an appropriate amount by way of reduction.
Qualifications of the respondent’s workers
The appellant has complained that the respondent did not advise him that some of the work would be done by apprentice boilermakers. He contends that he should not have to pay for apprentices at the same hourly rate as for qualified boilermakers. The respondent charged out all work, whether performed by qualified boilermakers or apprentice boilermakers at $75 per hour plus GST. The appellant contends that the invoices should be discounted to reflect that some of the work was performed by apprentices.
One can understand, to an extent, why the appellant might feel aggrieved in this respect. Nevertheless, on her Honour’s findings, the appellant required certain works to be performed by the respondent. Further, the appellant agreed to pay $75 per hour plus GST for the work required. That was the agreed price. The evidence before the court and accepted by the Magistrate was to the effect that the works were performed satisfactorily and that all of the workers performed the same work with the same level of skill. This was not a complex exercise and the apprentice boilermakers were, according to the evidence, as well equipped to do the work as were the qualified boilermakers. This was not a situation where apprentices were being supervised by or merely providing assistance to, qualified boilermakers who were responsible for the finished product. This, also, is not a case where the fact that the respondent might have enjoyed a windfall, by being able to charge out apprentices at $75 per hour (although there is no evidence upon which a finding could be made in this respect) is a relevant consideration.[10] The Magistrate was correct to allow the respondent’s claim at the contractually agreed rate of $75 per hour notwithstanding who performed the work.
[10] There is no evidence as to the hourly rates paid by the respondent to its employees who worked on this job or whether they, in fact, differed according to qualifications. Perhaps more importantly, there is no evidence as to the basis upon which the headline rate charged to this client of $75 per hour had been calculated. The rate of $75 per hour presumably takes into account all of the expenses of the business including any variable hourly rates paid to employees. It is not to be assumed that the difference between $75 and the hourly rate paid to an apprentice is necessarily only profit. For example and depending on the respondent’s pricing model, any reduction in charge out rate for apprentices might need to be compensated for by an increase in charge out rate for qualified boilermakers or for goods and other services supplied.
Friday afternoon work and weekend work at time and a half
I have already dealt with this issue under the heading “Agreed rates”.
Purchase of materials
The appellant contends that a number of material purchases were not authorised by the appellant. The works contracted for necessarily included the provision of labour and the supply of equipment and materials. The appellant played no role in the ongoing management of the works but left this to his site foreman, Mr West.
Mr Salvemini’s evidence as to materials supplied was accepted by the Magistrate and the purchase orders were included in claim sheets approved of and signed by Mr West. The Magistrate accepted that Mr West was aware of and approved the incurring of such costs. Her Honour also accepted Mr Salvemini’s evidence to the effect that he had received an email from the appellant authorising the purchase of various items necessary to undertake the works and notwithstanding that Mr Salvemini was not able to locate a copy of the email. The Magistrate expressly rejected any suggestion that the respondent had deliberately included false claims for materials or equipment on the claim sheets.
On my review of the evidence, these various findings were open to her Honour. Further, there is nothing to suggest that any of them is to be seen as contrary to incontrovertible facts or uncontested testimony, to be glaringly improbable or to be contrary to compelling inferences available from other evidence.[11]
[11] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28]-[29].
Failure to email the accounts
The appellant has complained that the respondent ignored his request that the invoices be sent to him by email. He complains that the invoices were only posted and that he did not see them until February 2013 after the works had been completed. He submitted that it was for this reason that he took issue with the amounts charged only relatively late in the piece. The Magistrate did not expressly resolve the question of whether or not emails were sent. Her Honour took the view that the appellant had provided Mr West with authority to authorise the contents of the daily claim sheets and that he should have been aware of and made enquiries with respect to any issues arising during the period of the works.
In my view, whether or not accounts or invoices were emailed is of no consequence. The works contracted for were performed satisfactorily. The works were to be paid for, according to my conclusion above, at the agreed rate of $75 per hour for each hour worked by an employee of the respondent. Subject to errors and discrepancies within the claim sheets or invoices, as found and allowed for by the Magistrate, the appellant was liable to pay for the works at this hourly rate. The fact that the appellant did not receive the invoices by email during the period that the works were being performed does not affect that position.
The appellant appears to have taken a somewhat cavalier approach to the performance of the contract. He only visited the worksite twice and at no time during those visits, or at any other time it would seem, did he complain about not seeing invoices. At no time did he ask Mr West for copies of daily claim sheets. The appellant contends that he never agreed an hourly rate of $75 plus GST but at all times expected he would be charged a reasonable rate or a fair rate. However, the Magistrate has found that the parties did agree on this hourly rate and this finding is not to be overturned. In these circumstances, the appellant was prepared to allow the works to be performed and charges to accrue at $75 per hour with minimal supervision other than that provided by Mr West on site. The fact that he didn’t receive the invoices in a more timely fashion is no defence.
Date of purchase order 3011
This complaint relates to a specific purchase order (no. 3011) presented by the respondent. The purchase order was dated 5 December 2012. However, a claim for payment with respect thereto was included in an invoice dated 27 November 2012. The appellant challenges his liability in this respect on the basis that the invoice must have come about through some form of deception or that in some other way the respondent’s claim is not reliable.
Mr Salvemini gave evidence to the effect that the amount claimed was legitimate and he did not claim for charges that were not incurred. He said that Mr West would have verbally indicated the purchase order number to him. It was, in effect, a case of the paperwork simply following at a later date. It can be accepted that Mr West was on site from 27 November 2012 given that the claim sheets he has signed go back that far. Further, and in any event, it remains the fact that the works were performed on and after 27 November 2012 and that Mr West signed a daily claim sheet for 27 November 2012 and the days following, thus indicating that the items of work and claims made, as referred to in the claim sheets, were not challenged.
The Magistrate accepted that Mr Salvemini was honest and, essentially, reliable in his evidence. At the end of the day, there is no evidence, as opposed to speculation by the appellant, to support a finding that the amount claimed with respect to purchase order 3011 was not a legitimate expense incurred by the respondent and was not recoverable.
The daily timesheets
Daily timesheets were filled out by the respondent’s employees and constituted, essentially, an internal record of the respondent. The employee timesheets formed the basis for identifying and then recording in the claim sheets the hours charged for work done by the respondent’s employees.
In her judgment, the Magistrate identified various discrepancies between the employee timesheets and the respondent’s claim sheets as presented to Mr West and which formed the basis for the invoices. However, the Magistrate formed a view that the errors and discrepancies were “occasioned by the ordinary pressures of work and human frailty”. They were not a deliberate attempt by the respondent to overcharge the appellant. Given her Honour’s assessment of the witnesses and my earlier discussion as to the proper approach by an appeal court, in a case such as this, to reviewing the evidence and the Magistrate’s findings of fact, I am not persuaded that there is any basis to overturn this finding.
The Magistrate took account of the various errors and discrepancies that were identified and adjusted, in favour of the appellant, in the amount she ultimately awarded to the respondent. During the appeal, the appellant conceded that the Magistrate identified, in her judgment, all of the mistakes or discrepancies asserted by the appellant. However, and the nub of his complaint in this respect, is that she only provided credit to him for some of the asserted discrepancies or errors. I have reviewed the documentary evidence and the oral evidence relevant to this issue. I am satisfied that the decision made by her Honour as to the amount of credit to be allowed in this respect was justified on the basis of that evidence. In this respect, it is to be noted that her Honour found that, as far as claim sheet 16061 is concerned, the respondent had undercharged the appellant by the amount of $240. However, her Honour in her calculations has ignored this undercharge to the benefit of the appellant.
The appellant also complained that there were a number of employee timesheets missing, that is, not available at trial. Notwithstanding this, her Honour accepted the relevant oral evidence of Mr Salvemini and the fact that Mr West had authorised relevant claim sheets. She was satisfied, on this basis, that this aspect of the respondent’s claim should be allowed. In the absence of any evidence to the contrary, the evidentiary basis relied upon by her Honour, in this respect, was sufficient in support of this finding.[12]
[12] See, generally, Magistrate’s Reasons at [107]-[108].
However, her Honour did allow, possibly unnecessarily, a 5 per cent discount with respect to the hours claimed in claim sheets approved by Mr West and reflected in invoices but which were not supported by employee timesheets. She did this on the basis that 5 per cent represented the error rate she had identified from her comparison of claim sheets and employee timesheets that were in evidence. There has been no complaint with respect to this approach by the respondent.
I am satisfied that the appellant’s complaints concerning errors and discrepancies in the claim sheets as compared with the employee timesheets and with respect to the missing employee timesheets should be rejected.
The appellant’s bankruptcy
The appellant submits that the Magistrate erred by having regard to his bankruptcy on the basis that the issue was irrelevant, prejudicial and of no assistance to any conclusions she might otherwise arrive at. The Magistrate observed that, given his status as an undischarged bankrupt, it would be expected that the appellant would be particularly concerned to know what he was being charged for. Her Honour was of the view that the appellant should have made enquiries of Mr West concerning the amounts being charged for the works undertaken. For this reason, her Honour found it difficult to accept the appellant’s evidence to the effect that he did not see the invoices until after the works had been completed and did not have any discussions with Mr West concerning the invoices.

It is to be remembered that the evidence of Mr Salvemini, accepted by the Magistrate, was that the invoices were prepared and posted during the period that the works were performed. The evidence concerning the appellant’s bankruptcy and the use made of it by the Magistrate was peripheral, at best, to any issue in contest between the parties. The Magistrate did not err in having regard to this evidence as but one factor bearing on her conclusion as to the lack of reliability of the appellant’s evidence.
Further, it is to be borne in mind that the appellant was unable to give any evidence concerning the actual issues in dispute – whether the work was performed, by whom the work was performed and as to the number of hours the respondent’s employees worked. Whether or not the appellant received invoices earlier than he said he did, or whether or not he delayed unnecessarily in challenging the invoices was really of no consequence for the outcome of the dispute over the amount payable for the work done.
Heat policy
At the trial, the appellant challenged whether or not the respondent’s employees worked at certain times on certain dates on the basis that some of the claim sheets indicated 8 hour shifts being worked on days of extreme heat. The appellant adduced evidence of temperatures on certain days in December 2012 and January 2013 when the temperature exceeded 40 degrees.
The evidence of Mr Salvemini and Mr Williams was to the effect that their employees worked regardless of the heat, although, they took more drinks breaks than usual and they would start their day much earlier than usual and finish much earlier than usual. The Magistrate accepted this evidence and rejected the appellant’s submission that the invoices, in this respect, were either inaccurate or had been fabricated.
Again, I have reviewed the evidence relevant to this topic. I am not satisfied that her Honour’s findings, based on her acceptance of the evidence of Mr Salvemini and Mr Williams with respect to this topic, is to be seen as contrary to incontrovertible facts or uncontested testimony, to be glaringly improbable or to be contrary to compelling inferences available from other evidence.[13]
[13] Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 at [28]-[29].
Reasonableness of the respondent’s charges
The appellant maintained at trial and on appeal that there had been no agreement as to hourly rates and that the respondent was entitled to charge only a reasonable hourly rate for the works. The appellant produced two aides memoire at the trial in support of what he contended was a reasonable rate. The aides memoire could only be regarded as comprising submissions. However, no evidence was adduced at trial to support the assertions as to what constituted a reasonable rate for the type of work performed.
In any event, I have already found that the Magistrate did not err in finding that the parties had agreed an hourly rate of $75 per hour plus GST for all of the respondent’s employees who performed the works. Given this finding, the respondent was entitled to a contractually agreed rate and the questions of whether or not that rate was reasonable and, if not, what would constitute a reasonable rate, do not arise.
Appellant’s failure to call Mr West to give evidence at the trial
I have already dealt with the relevance of Mr West. Mr West could have been called and the reasons given for not calling Mr West were not persuasive. In any event, as I have indicated, the real problem for the appellant is not so much the question of whether an adverse inference might be drawn from the failure to call Mr West but arises from the fact that the appellant simply had no evidence to challenge the respondent’s evidence as to what took place between Mr Salvemini and Mr West on site and the fact that Mr West, as the appellant’s site foreman, signed and apparently approved the various daily claim sheets.
Conclusion
The appellant has succeeded with respect to one ground of appeal or contention; that being to the effect that the respondent had no contractual entitlement to claim: a higher rate for Mr Salvemini’s attendances, a minimum two hour attendance for Mr Salvemini for each day he was on site or the overtime rates. In other words, all hours of work performed by the respondent’s employees, including Mr Salvemini, were to be charged out at the agreed rate of $75 per hour plus GST. The appellant has failed with respect to all other grounds of appeal. The appeal is to be allowed only to the extent I have indicated and the total amount found due and payable by the Magistrate of $58,671.46 is to be adjusted downwards accordingly.
I invite the respondent and the appellant to review the invoices and the claim sheets with a view to agreeing upon an amount by which the claim should be adjusted in this respect. I will adjourn the matter to enable the respondent to file draft minutes of orders on the appeal that properly reflect these reasons. I will hear the parties with respect to the costs of both the trial and the appeal on the next occasion and once the amount by which the judgment is to be reduced has been determined.