Waste Water Lining Systems Pty Ltd v Simons - [2015] QCAT 206

CITATION:

Waste Water Lining Systems Pty Ltd v Simons [2015] QCAT 206

PARTIES:	Waste Water Lining Systems Pty Ltd (ABN 48 143 939 846) (Applicant)
v
Matthew Douglas Simons (ABN 52 149 390 141) (Respondent)

APPLICATION NUMBER:

MCDO182-15

MATTER TYPE:	Other minor civil dispute matters
HEARING DATE:	2 June 2015

HEARD AT:

Southport

DECISION OF:

Member McDonald

DELIVERED ON:

3 June 2015

DELIVERED AT:

Southport

ORDERS MADE:		The Respondent shall pay the Applicant the sum of $5,678 forthwith.
CATCHWORDS:	Minor civil dispute matter - provisions of services, obligation on of due care and skill

APPEARANCES:

APPLICANT:

Kel Attkins

RESPONDENT:

Matthew Simons (by Phone )

REASONS FOR DECISION

The Applicant, Waste Water Lining Systems Pty Ltd, through its director Mr Attkins, verbally contracted with Mr Simons on 12 January 2015 for the provision of Mr Simon’s professional services.
The agreed terms of the contract were: that Mr Simon source debt factoring finance, additional finance of $25,000 from non bank financiers, and the provided a business plan for the Applicant’s business as a tool to source further funds.
Mr Simon generated three invoices for which payment was required before any work commenced. A payment of $1350 was requested and paid 5 February 2015. Invoice of 12 January 2015 was for $1155 for professional fees to “Consult on the matters related to stock cash flow and profit deficiency, outstanding debtors and current invoice funding. New funding as well as working capital requirements”. The Applicant claims that this successfully generated a short term debtor factoring facility. This invoice is not disputed. The invoices of 15 January 2015 and 21 January 2015 are in dispute, as well as a charge of $1350 for pursuing alternate funding that was not invoiced. The terms of engagement under these two invoices were, respectively noted as “cash flow funding, alternate banking. Working capital requirements” and “writing a business plan.”
The Applicant provided evidence that funds were deposited to Mr Simons account as follows:
a)   On 13 January 2015, $1,155 (not disputed).
b)   On 15 January 2015 $1348
c)   On 23 January 2015 $1430 as part payment for the business plan.
d)   On 29 January 2015 $1430 as final payment of the business plan
e)   On 5 February 2015, $1350.
The Applicant argued that has been overcharged because he did not receive the services for which he contracted. The Respondent, Mr Simon noted that the debtor factoring facility was provided in accordance with the agreed terms. He advised that alternate funding sources were consulted but did not provide finance because of the financial position of the Applicant, which he considered reflected insolvent trading. He confirmed that he had provided a business plan in accordance with the agreement.
The Applicant identified concerns about the business plan in the following terms: it was not provided in a timely manner; it did not meet the basic standard expected of a business plan and was not a useable document; It lacked substance, was generic in nature and did not assist a potential funder to understand the business at all which is the purpose of the document.
In email correspondence of 21 January 2015, Mr Simons identified the need for the Applicant to have a business plan and requested 50% payment immediately and the balance within a week.
Repeated requests were made by the Applicant for the business plan to be provided.
On 27 January 2015 Mr Simons noted that the document was underway. On 3 February 2015, the Applicant requested the business plan be provided and was informed by Mr Simons that it would be sent later that week. By 11 February 2015 it had not been received and the Applicant queried why it had not been provided together with an absence of funds and invoice for funds paid. His email emphasised that that time was of the essence and the business plan and funding arrangements fell outside of a reasonable timeframe. Further enquiries for the same where made again on 13 February 2015. Mr Simon provided no response to these enquiries.
On 1 March 2015 the business plan had not been received, and was directly requested by the Applicant’s commercial agent. Mr Simons responded stating that the business plan was attached to the reply. The Applicant’s commercial agent indicated that no attachment had been received.
Ultimately when the business plan was received the Applicant expressed concerns that it was significantly inadequate, noting the company entity was incorrectly identified in the business plan. It had noted that that it was prepared in January but was reviewed February and 2 March 2015, and was generic in nature with no identification of the Applicant’s direct business. Financial Documents noted as Attachments were not provided. The Applicant criticized the business model canvas as being generic without specific application for the Applicant’s business.
Review of the Business plan produced does confirm that these criticisms are accurate and the document appears to be manifestly inadequate for the purpose of obtaining funding, for which it was produced.
The Tribunal notes that in correspondence between the parties Mr Simon adds the qualification MBA to his name. He claims that he has undertaken an executive MBA at Bond University. The Tribunal finds that he has held himself out as having expertise in the development of a business plan and qualified to provide the same. However, the document produced does not demonstrate the level of care and skill required to perform this task. Service providers are under a common law obligation to provide a service with a due care and diligence, Voli v Inglewood Shire Council (1963) 110 CLR 74. Mr Simon has not satisfied this obligation in the provision of the business plan for the Applicant. He must refund the payment made for this service in the sum of $2860.
Mr Simon argued that he had approached five funding sources in relation to the alternative finance sources for $25,000. He stated that the Applicant’s financial position which teetered on insolvency was the reason that that funding was unable to be obtained. He said prospective funders were concerned that by the company’s lack of assets, financial liquidity, high liabilities and trading week to week deterred from offering support.
The Applicant strongly denies that his business was insolvent and referred to lucrative contracts with specific councils at the time. It is noted that these contracts were identified to Mr Simon in correspondence from the Applicant to Mr Simon on 13 January 2014 to assist him in his understanding of the business and preparation of the Business plan.
Mr Simon said it was the lack of depth in the business itself not the business plan that undermined the Applicant’s position regarding funding applications.
Although Mr Simon indicated five funders had been approached he provide only evidence of the debtor factoring facility through FIFO.
The Tribunal is not satisfied that there is any evidence that Mr Simon pursued alternate funding sources beyond the debtor factoring facility, but did obtain $2698 from the Applicant to do so. It would be expected that some paper trail is likely to have been generated from such representations if made, but no such documentation has been presented to the Tribunal.
The Applicant has paid $1348 under invoice of 15 January 2015 for this purpose for services he did not receive. On 5 February $1350 was paid at Mr Simon’s request but no invoice was issued. It is agreed that this was to pursue alternate funding. Mr Simons acknowledges that a credit of $400 has been offered on this invoice through the commercial agent due to the Applicant being overcharged.
The Tribunal concludes that Mr Simon has not provided the services for which he has changed the Applicant. The Applicant is due a full refund of these fees, totalling $2698.
In summary, the Respondent must refund the amount paid for the business plan and the $25,000 in alternate funding under the aforementioned invoices. The Applicant claims costs of filing fee and service fees totalling a further $120. As the Respondent made no effort to appear at mediation, this is also granted.
The Respondent shall pay the Applicant the total sum of $5,678 forthwith.