A Sweet Memory Photography and Ors v Futur3 Studios Pty Ltd [2011] QCAT 591

CITATION: A Sweet Memory Photography and Ors v Futur3 Studios Pty Ltd [2011] QCAT 591 PARTIES: A Sweet Memory Photography (First Applicant) Mr Petr Sladky (Second Applicant) Mrs Karalyn Sladka (Third Applicant) v Futur3 Studios Pty Ltd (Respondent) APPLICATION NUMBER: MCDO2479-10 MATTER TYPE: Other minor civil dispute matters HEARING DATE: 15 September 2011 HEARD AT: Southport DECISION OF: Christine Trueman, Adjudicator DELIVERED ON: 25 November 2011 DELIVERED AT: Southport ORDERS MADE: [1] That the Claim is dismissed. CATCHWORDS: Website design contract – scope of works – terms of the contract – allegation contract partly written and partly oral – whether terms and conditions of contract complied with – claim for refund of contract payment due to unreasonable delay and breach of contract – claim for compensation for loss of income, profits, legal costs and interest APPEARANCES and REPRESENTATION (if any): APPLICANTS: Mr Petr Sladky and Mrs Karalyn Sladka RESPONDENT: Mr Fabian Buhagiar -- 1 of 20 -- 2 REASONS FOR DECISION [1] Mr and Mrs Sladky are the owners and operators of a photography business called A Sweet Memory Photography (“ASMP”). The business operates on the Gold Coast Queensland and is located in Southport Park. [2] The Applicants allege that they signed a contract with Futur3 Studios (“FS”) on 19 October 2009 for website design. They allege that the contract was for a “Revamp Website Package” that included: (a) Transforming their current website into a professional site; (b) A guarantee that their website would be on the first page of Google searches; (c) The site would be completed within six (6) weeks; and (d) All marketing and site editing was included in the contract price. [3] The application filed by ASMP on 6 September 2010 claimed for a refund of $2,205 being the contract payment, and filing fee of $92.00. The claim was initially heard on 10 December 2010 at Southport before a member of this Tribunal. ASMP made oral application at the hearing and sought to increase the amount of their claim to what appeared to be the sum of $22,997.00. The matter proceeded by way of a defended hearing. The Member made Orders at the hearing that : (i) The Respondent restore the website A Sweet Memory Photography to the Applicant forthwith. (ii) The Respondent pay to the Applicant the sum of $11,914.00 on or before 31 January 2011. [4] FS filed an Application Seeking leave to Appeal. The Appeal case number was APL040-11 and the Decision of the tribunal was that: (i) The time frame for filing the application for leave to appeal is extended to 10 February 2011. (ii) The application for leave to appeal is granted. (iii) The appeal is upheld and the adjudicator‟s order is set aside. (iv) The proceeding is returned to the tribunal for rehearing. [5] The matter was before the tribunal on 21 July 2011 where orders and directions were made relating to the filing and serving of all the parties evidence to prepare the matter for hearing. The matter was listed for rehearing on 15 September 2011. [6] ASMP are now claiming $24,977.50 for the following: (1) $4,600.00 for unreasonable delays; (2) $2,205.00 contract price refund; (3) $9,200.00 for illegal suspension of ASMP website; (4) $6,285.00 for further compensation since initial hearing; (5) $642.00 for legal and court costs; and -- 2 of 20 -- 3 (6) $2045.50 for interest. [7] ASMP allege that the written contract was the Website Design Activation Form and that the contract price was $2,950.00. They claim that the contract included further terms and conditions that were oral which were agreed to prior to the contract being signed on 19 October 2009. They claim that the oral terms of the contract are those that the Respondent has not complied with and that these oral terms of the contract also form part of the claim in relation to compensation for breach of contract. [8] ASMP contend that the oral terms of the contract were that the new professional website would be completed in six weeks, that their website would be guaranteed to be on the first page of Google searches and that the cost of a full studios marketing package was included in the total package costs and that also included all web hosting costs. [9] ASMP alleged they paid the first instalment under the contract, which was half the contract price, of $1,475.00 as the initial deposit. They stated they paid a reduced amount for the final deposit and instead of paying the sum indicated in the contract of $1,475.00 they paid $730.00. [10] ASMP allege that they have suffered loss of income and profit from the website design works that FS did and that the website was not professional and that FS was entirely responsible for extensive delays in getting their new website functional. ASMP claim, further, that FS illegally suspended their website for a period of time and that caused further loss of business for them. They state the website was only reinstated due to the order made by this tribunal at first instance on 10 December 2010. THE APPLICANTS’ EVIDENCE [11] ASMP allege that it was an oral term of the contract that the new website design would be completed and up and running in six weeks. The Applicants contend that by even allowing a twelve week period, the time it took to have the website up and running was some 27 weeks. Claim of $4,600.00 for unreasonable delay [12] ASMP are claiming that there were unreasonable delays caused by FS in producing the work pursuant to the agreement between them. ASMP claimed that it took from 19/10/2009 to 26/4/2010 for the website to be up and running. [13] The contract did not specify in writing a time frame for the works to be completed but ASMP alleged that FS included an oral term that the website would be up and running in six weeks. The actual written contract provides that: “If Futur3 Studies Pty. Ltd. are unable to complete work within certain quoted time periods due to unforeseen circumstances beyond its -- 3 of 20 -- 4 reasonable control, then Futur3 Studios Pty Ltd will not be held liable and will endeavour to complete the job at the earliest possible convenience.” [14] ASMP contend that the delays were caused entirely by FS and that 27 weeks was too long to wait for their new website to be designed and operational. They claim that the emails provided to the tribunal were evidence that they attempted to provide clear instructions to FS to assist in getting the website completed. They allege FS made many mistakes in the content and that the delays were caused because of the fact FS were “short of staff”, “lost paperwork” and were “too busy”. [15] ASMP stated that they were given a discount on the final payment by reducing it by $745.00 due to the complaint they had made about delays and the fact that ASMP had done much of the design works themselves. [16] The Applicants have estimated that the amount of compensation they should receive for the unreasonable delays for the website to become operational was based on the fact that “realistically a professional website up and running.... that ASMP would have at an absolute minimum of one booking per week ranging from jobs worth between $300 - $2000 on average..... then the sum of $1150 is the average income... and... therefore.... for the period of 10 weeks the lost sum would be $11,500.00.” They claimed that it would be “reasonable to claim 40% of the entire lost potential income” and estimated that the sum to be paid for the delay should therefore be $4,600.00. Claim for Refund of Contract price of $2205.00 for breach of Contract [17] ASMP are claiming that the full amount paid by them under the contract should be repaid. They allege that they are entitled to have these funds reimbursed as FS have not “completed their side of the agreement”. They rely on email communications between the parties as evidence of this. ASMP stated that they paid the final payment of the contract despite being happy with the work as they were keen to “hurry the process and go live with our new website as soon as possible”. They allege that after the final payment was made that FS ignored them and all attempts to chase them up to complete the works. A letter of demand dated 17 August 2010 was issued to FS for works to be completed and alleging breach of contract. [18] ASMP provided to the tribunal affidavit material of other witnesses who had allegedly been subject to “the same thing that has happened to us”. They were affidavits of Mrs Peta Anne Dunstan and Mr Edward Albert Cameron. Mr Cameron also appeared at the hearing and gave evidence in person. [19] Mr Cameron gave evidence and stated that he was approached by Futur3 Studios in September 2009. He met with representatives from the company and signed a contract for website design for $3,000.00 and $250 per month for ongoing cost to ensure his website remained at the top of the first page of Google search. He did not produce his contract nor provided any other documentary evidence to the tribunal. He said he paid his monthly account -- 4 of 20 -- 5 of $250.00 per month until approximately February 2010 when he stopped paying as he was not “seeing any increased business from the new website.” He gave evidence that since May 2010 he has not had any further contact with anyone from Futur3 Studios nor any increase in business that was “guaranteed from the new website,” he said he was “guaranteed he would have more business than he could handle”. [20] The Affidavit of Mrs Dunstan was sworn on 15/7/2011 at Noosaville. It deposes she is the Director of Nevs BarbieKleen Pty Ltd and entered into an agreement with Future Studios on 8/10/2009 for a total sum of $2,950.00. She deposes that she received all of the web design works as described in her package but that she did not “come up on a google search”. She deposes that she contacted FS and they did arrange for the website to come up on a Google search. [21] ASMP allege the evidence of their witnesses supports a finding that FS have engaged in misleading and inappropriate business practices and that FS guaranteed in writing that they will ensure that the website will appear on the first page of Google searches. Claim for $9,200.00 for illegal suspension of website [22] ASMP allege that FS illegally suspended their website from 13 October 2010 until 10 December 2010, a period stretching over some 8 weeks. They claim to have lost further business during this time and are claiming a loss of business opportunity over eight weeks of one job per week at a cost of $1,150 per job. [23] ASMP gave evidence that their account was unlawfully suspended and provided evidence to the tribunal that the estimates for loss of referrals and clients was estimated based on expert evidence and the content of a Simjen Google report.i [24] ASMP stated that by suspending their website it would have appeared to prospective clients that they were no longer in business. They claimed that they could not receive bookings and the suspension of the website put “a slur on their business name and personal integrity”. They stated that without a professional, effective website it was impossible to operate their business. [25] ASMP conceded that they received the invoices for payment of hosting services in December 2010 but did not pay them as they wanted to take their hosting services to another service provider. Claim for further compensation costs since hearing at first instance of $6,285.00 [26] The additional claim by ASMP for compensation for additional compensation since the last hearing are made up of the following: -- 5 of 20 -- 6 (a) Loss of search ranking $500.00 (b) Further delays $5,750.00 (c) Problems rehosting $35.00 [27] The particulars of this part of the claim relates to the fact that ASMP allege that due to the website being suspended they lost rankings they had on Google search and as they did all of the work to facilitate the website they should be reimbursed for the work they performed in assisting FS. ASMP allege they did work to get onto directories listings, installed Google maps to the site, site editing including updating and altering keywords and providing content and provision of photos and testimonials for the website. They allege as a result of their website being suspended they have lost all the work that they did and caused many hours of their time and work to have been lost. They estimate the time taken was a minimum of 20 hours of work performed to achieve their prior ranking and at $25.00 per hour that would equate to $500.00. [28] The claim for costs of further delay is allegedly substantiated by ASMP by the fact it took an additional 5 days for FS to activate their website pursuant to an order made by the tribunal on 10/12/2010 and the failure to reinstate immediately. They allege that they were also not provided with a hard copy of their website which was “ordered at the initial hearing”. They said this then did not allow rehosting to occur for another two months and this was further delay for the site to get back up and running. They estimate therefore that a further delay of nine weeks they are therefore entitled to receive compensation calculated at five weeks at $1,150 per week, a total of $5,750.00. [29] ASMP contend that the problems rehosting their site caused a financial loss to them as they were required to pay $35 to another company to host their website. They allege the attempts of another company to host their site was unsuccessful and stated they were therefore out of pocket. They allege to have a receipt for those costs sought to be reimbursed. [30] The claim by ASMP for court costs and legal fees was calculated as the filing fee of $92 and legal fees of $550.00. They alleged they were required to obtain legal advice in relation to a letter that FS had sent them raising allegations of defamation and requesting that ASMP refrain from contacting clients. FS wrote to ASMP stating that they had been advised that ASMP had “contacted our clients and enquired of,... that you were undertaking legal proceedings against us, questioning clients as to their relationship with us and whether they had any complaints regarding their association with us....” and that further, “ASMP refrain from making contact with clients or potential clients and refrain from making any comment about FS to any person or business and if an undertaking was not given to comply with the requests that FS would commence legal proceedings against ASMP seeking to injunct them from making further defamatory statements against FS.” -- 6 of 20 -- 7 [31] A copy of the letter was provided to the tribunal by ASMP in a bundle of documents that were presented to the tribunal; the letter was from Neo Netwise, signed by Mr Fabian Buhagiar as Director, dated 12 July 2011.ii ASMP stated they had to get legal advice regarding the allegations contained in that letter and that therefore FS should pay for those legal costs. Interest in the sum of $2,045.50 [32] ASMP gave evidence that their claim for interest is calculated for payment of the original claim of $22,347.00 for the period from 22/8/2010 when the claim was filed to the last hearing date of 21 July 2011, which equates to some 11 months. ASMP allege they are entitled to interest calculated at 10% on the original claimed amount for 11 months which is $2,048.50. The Respondent’s Evidence [33] Mr Fabian Buhagiar gave evidence on behalf of the Respondent Futur3 Studios. He stated he was the Director of FS and a number of other companies. He claims that the application filed by ASMP should be dismissed. He gave evidence that ASMP are not entitled to any payment for compensation as he stated he has complied with all obligations and requirements under the contract entered into between the parties. [34] A copy of the Contract being the document called Website Design Activation Form was provided to the tribunal. That contract was between FS and ASMP and signed by Mr Petr Sladky of ASMP on 19/10/2009. [35] Mr Buhagiar stated that the terms and conditions of the written contract were not disputed. He stated that the Search Engine Optimisation (“SEO”) and web hosting were both not offered as part of the initial contract. [36] Mr Buhagiar stated that he or his company should not be held responsible for services that the Sladkys‟ claims were not provided by his company that were not part of the written contract. He gave evidence that at no time did he ever discuss or agree with the Sladkys to add oral terms and conditions to the contract. In fact he gave evidence that the contract specifically precludes any variation to the contract unless it is in writing. [37] Mr Buhagiar gave evidence that on page 4 of the contract it specifically states: “The terms and conditions of this agreement between the Purchaser and Futur3 Studios Pty Ltd regarding the development of the clients website are contained in this Agreement and they may not be varied by any oral agreement. Any variation to this agreement must be in writing and signed by an authorised signatory of Futur3Studios Pty Ltd.” -- 7 of 20 -- 8 [38] Mr Buhagiar stated that there were no other documents or agreements signed or entered into by the parties and that he had fulfilled all contractual obligations pursuant to the written contract signed by ASMP in October 2009. [39] Mr Buhagiar stated further that the Sladkys were happy with the work that his company had performed for them in the web design and in fact made the final payment and signed a document agreeing to payment and approval of the website. He relied on a copy of a document called Website Launch Approval Formiii signed by Mr Petr Sladky on 21/4/2010 as evidence that the Sladkys were satisfied with the work his company had done in the design and setting up of the new website. The website Launch approval form and search engine activation form were document annexures to Mr Buhagiar‟s affidavit sworn on 10/8/2011.iv [40] Mr Buhagiar deposed in an affidavit filed in the proceedings sworn on 12/9/2011v that: a) His company has complied with all aspects of the written agreement entered into by the Applicant; b) The subject contract has been provided to the tribunal by both parties and the content of the agreement is not in dispute; c) That Search Engine Optimisation (“SEO”) was not offered as part of the initial contract; d) That web hosting was not offered as part of the contract. [41] Mr Buhagiar stated that ASMP were provided with a number of different website designs that they found unsuitable. He claims that they did not like the appearance of the design and chose to provide their own. He claims that ASMP were warned that the design that they wanted “might produce negative results” and that their design was not “web search engine friendly” and that “they would not achieve a high ranking that they desired.” [42] Mr Buhagiar deposed in his affidavit sworn 10/8/2011vi that ASMP were given a discount for their final payment when they complained that they had spent time themselves working on the website design. He explains that is the reason the final payment was reduced from the contract price of $1,475.00 to $730.00. This fact is agreed by ASMP. [43] Mr Buhagiar claims that as the site design was developed and provided by ASMP to FS he presumed that they were happy with the design and that it met each of their business requirements. He gave evidence that ASMP were satisfied with the work FS had done and stated that they were happy with the final website. He relied on the Website Launch Approval Form as evidence of that and stated that ASMP signed that form on 21/4/2010 and paid the final amount outstanding. The form signed by Mr Petr Sladky on 21/4/2010 states: “The client is of the understanding that in signing this Website launch Approval Form that they are completely happy with their website and do -- 8 of 20 -- 9 not have any final changes which are required to be made to their website before launch… They understand that all monies have to be paid in full prior to the launch of their website and that once the website has been launched Futur3 Studios are no longer under any obligation to complete any further work on behalf of the client. If the client wishes to employ Futur3 Studios in the future to make any modifications to their website this will be done at a discounted rate of only $50 per hour. I/We have read and understand the terms and conditions of this agreement I agree to be bound by the terms and conditions as set out above.” [44] Mr Buhagiar stated that ASMP were also provided with a training session in person and training over the telephone regarding the CMS. He claimed that there were also further discussions by email communications regarding training in the website content management. [45] Mr Buhagiar further deposed in his affidavit sworn 10/8/2011 that the cause of some of the initial delays were due to the fact that ASMP were not contactable due to illness in the family. Further that there were communication problems with ASMP in achieving what they wanted for a design and that was the reason why multiple designs were provided to them. Mr Buhagiar stated that ASMP signed and initialled the contract that provided for delays that were “caused by circumstances beyond its reasonable control”. [46] Mr Buhagiar relied upon the content of the Contract and in particular the clause that stated: “If Futur3 Studios Pty Ltd are unable to complete work within certain quoted time periods due to unforseen circumstances beyond its reasonable control, then Futur3 Studios Pty ltd will not be held liable and will endeavour to complete the job at the earliest possible convenience.” [47] The evidence of Mr Buhagiar was that any delays to the website becoming activated were delays wholly caused by ASMP. He further stated that the fact that ASMP were unhappy with their ranking on the Google search engine was not something referable to any act or omission from his company. He stated that Google is an independent company to which he has no control over. He stated that the website design that ASMP had prepared had directly impacted on their site ranking and whether they came up on the first page of the Google search engine. [48] Mr Buhagiar responded to the evidence of ASMP that his company had suspended their website and therefore caused them loss of profit and damage to their business by stating that ASMP were advised many times that their hosting would be terminated unless they made payment for it and that they refused to pay. He said that he did host ASMP website for the first 12 months although he was not required to under the contract. He said that the contract was signed on 15/10/2009 and he advised ASMP that the free hosting to their site was withdrawn when they commenced legal action against them in September 2010. He said he advised them and gave -- 9 of 20 -- 10 notice that the hosting would be suspended unless they made the payments. He relied on the content of the invoices and email communicationsvii that were sent to ASMP relating to the website hosting fees. [49] The Invoice marked „w‟ in Exhibit 3 was dated 15/7/2011 numbered 522992. It provided for Website modification fees and website yearly hosting fees. The total cost was $548.00. The email marked „h‟ in Exhibit 3 was an email dated 13/10/2010 headed “Service Suspensions Notification” and advised ASMP the following: “Dear Peter and Carolyn, This is a notification that you service has now been suspended. The details of this suspension are below: Product/Service: Business Hosting with 5GB of Data.Domain:asweetmemoryphotography.com.au Amount:$299.95AUD Due Date: 19/1/2011 Suspension: Legal Action Please contact us as soon as possible to get your service reactivated. Regards NeoNetWise” [50] Mr Buhagiar stated that ASMP responded to that email on 1 November 2010 and were well aware that their hosting had been suspended and that they were required to pay the hosting fees. On the same day FS stated that they responded to them acknowledging that they had contacted their support team and that a support ticket had been opened for their request. Mr Buhagiar gave evidence that his company had provide hosting to ASMP initially at no cost to get them started but that he was under no obligation to have done that. He stated that once ASMP commenced legal action against FS he withdrew the free hosting and sent ASMP invoices to start paying for the hosting. He said they refused to make any payments for their hosting and despite warning that their service would be suspended, they did not pay. He stated that the suspension of the website was an act caused by them by failing to pay for the hosting fees. [51] Mr Buhagiar stated that the search engine optimisation option was not included in the contract and is a cost of $500 per month on a 12 month contract with the use of five key words. He said FS guaranteed two of those key words would get you to a front page of Google search. He said that option is a $6,000 cost for 12 months and at no time would it ever be included for free with the cost of a $3,000 website design. He said he never offered that service to ASMP. He stated that ASMP were confused and misunderstood what the contract provided for. [52] Mr Buhagiar said that the Simjen report and website analysis reportviii was not really useful in its content and does not support the Applicants‟ case. He said the report actually states that the report highlights that the website design is not of the quality that gives Google search optimisation. He said the Applicants themselves admitted that the content and the design were -- 10 of 20 -- 11 their work and they demanded the content against the advice of FS. Mr Buhagiar said that the reason the web page did not feature on the first page of Google searches were because the site had too many photos and not enough words and the content was lacking. He stated that was not his company‟s fault but the content was “as demanded by the Applicants”. Mr Buhagiar said that while he tried to advise and persuade ASMP to change the content of their website to maximise search optimisation he “eventually gave up and just went with what they (the applicant’s) wanted”. [53] Mr Buhagiar stated that he gave ASMP notice of intention to suspend their website around October 2010, made demand for payment of the hosting costs and emailed them the relevant invoices for paymentsix dated between October 2010, January and March 2011. The Applicants failed to make any such payment of the invoices issued to them. He claimed that any costs or damages from the suspension of the website were caused by ASMP and their failure to pay the invoices for the hosting service. [54] Mr Buhagiar gave evidence that ASMP had never requested a copy of their website design files to get their site up and running again. He said the first time he was able to provide a copy of the website files on disc to ASMP was at the hearing of the matter and he had bought that disc with him to the hearing. Witness Evidence APPLICANTS’ WITNESSES – Mr Cameron & Mrs Dunstan [55] The evidence of the Applicants‟ witnesses Mr Edward Cameron and Mrs Peta Dunstan were of little use to the tribunal. Mrs Dunstan deposed in an affidavit sworn on 15/7/2011x that she received all of the web design as contained in the terms and conditions outlined in her agreement that she signed with FS dated 8/10/2009. From her evidence there appeared little complaint against FS other than she was not on page one of Google searches. [56] Mr Cameron swore an affidavit on 24/8/2010xi and also gave oral evidence at the hearing. He did not produce the contract that he had signed with the FS and it appeared from his evidence, that his contract was different to the one entered into by ASMP. His evidence was that he did not get more work or business from his website. He gave evidence that this was not a term or condition of the contract but that he was told orally by FS that he would see an increase in business from the new website. Mr Cameron gave evidence that he was promised his web page would be on page one of a Google search. He conceded that this was not a written term of the contract but an oral term. Mr Cameron gave evidence that he never monitored his website and relied on a third party informing him that his site was not working. He stated that he did not put any complaints in writing to FS regarding the alleged failings of his website. There was no evidence given by Mr Cameron of any failing of FS. The evidence of Mr Cameron was not useful and did not support the evidence of ASMP as alleged by them. -- 11 of 20 -- 12 RESPONDENT’S WITNESS – Mr Nicholas Tod [57] The evidence of Mr Nicholas Tod from FS was extremely detailed, quite technical and provided assistance to the tribunal in explaining the actual works performed by FS for ASMP and identified some of the issues and problems with the website design works. Mr Tod stated he was a Web Developer and Designer employed by FS. He said that he worked on ASMP web design, although he said that by the time he did work on it, that it had already been dealt with by others at FS and he did the work nearing the end of the job. [58] He said that there were countless problems with the job and there were many emails between the parties highlighting those issues and problems. He also stated that there were language barriers. [59] He stated that he advised ASMP that their website design was not “search engine friendly.” He said he advised them that plain text headers would have been more easily identified by Google when searching the internet. Mr Tod stated that ASMP insisted on using graphic images and could not be persuaded from using particular images on the website that were not search engine friendly. He said that the structure of the site was a problem, for example the colour of the page they wanted to use, the way the site was formatted, and that these led to problems. Mr Tod said that he repeatedly tried to advise ASMP to change the design of the website but they were persistent in using the design they did and wanted and that “in the end I just did what they asked me to do and did not try and advise them any more”. He said the problems with the site were many and included the width of the site, the lack of key words, there being too many pictures or photos, pixel width causing problems with site navigation, and the request for too many pixels causing the images to be distorted. He said this affected the site by causing it not to fit onto a typical sized computer screen which meant you had to scroll down and scroll across to fully view the site. He said the site was not user friendly and did not flow well, and that when surfing the net it would be seen to not be user friendly. [60] Mr Tod stated that he had ASMP in the office and went through the problems with them, explained to them the problems with the site and that the Applicants insisted on the size and design of the site. He said he tried to explain to ASMP that their website design was too wide and not displayed properly but that they would not listen to his advice. [61] Mr Tod gave evidence that the earliest that a Google website ranking would come up on page one of a search could take about three months or more, but that such websites he had worked on that had reached page one within three months required the web page to be perfectly structured and he said that “it must be work perfect.” He gave evidence that the format and web page design structure that ASMP had insisted be used was “never going to make first page on a Google search engine.” -- 12 of 20 -- 13 [62] Mr Tod stated that the Simjen and Website Analysis Report prepared by Daniel Szustrow and dated April 2010xii and provided to the tribunal as part of the Applicants‟ evidence was “spot on” and that the content of the report accurately reflected the problems with the website. He said the report stated that the site needed the correct tags and made criticism that Google could not read images and that “the site lacked few relevant key words and no appropriate description in the meta tags.” Mr Tod said that the report stated “all the problems that I had tried to tell Petr about and where …. it was going to stop the site being successful.” [63] Mr Tod gave evidence that by the time he received the job, the design was set, and that as ASMP had already set their mind on the content and web design that there was little he could do to convince them to change it. He said there were arguments between him and ASMP about many things relating to the site. He said the arguments included one “over a single pixel, and a week of emails back and forth about that, and the fact the flat file Jpeg was difficult to collate and set out, they demanded a swirl being placed on the website that proved very difficult to format and get onto the site…..there were many problems.” [64] Mr Tod stated that the content management system (“CMS”) was very specific and that the job for ASMP was a challenge. This was due to the fact that ASMP wanted to load three different looks onto the site and there was overlaying of images. He gave evidence that it was hard to overlay a different header, footer and with a content file in the middle of the website which was at the specific request of ASMP. He said this website was difficult and with more complex websites he had designed in the past for clients, including complex overlays and with so many changes, that a client could and had spent up to $15,000.00 for such websites. [65] Mr Tod explained in his evidence that he did training with ASMP to help them with the CMS. He stated that he advised ASMP “not to mess with the photo gallery on the site as it was difficult to navigate the site and he (Petr) could easily delete files”. He gave evidence that in fact Petr did accidentally remove tags and renamed the photo gallery source files and caused problems to the site. He said he had to go through all the Jpeg files and rename the files so they would function. He said that when Petr renamed the folders he “broke the photo gallery”. Mr Tod said he spent time having to rename the files and fix the damage Petr had done. He said that Petr had also deleted some files, moved others around and that it took him “an hour or more of his time to fix the things that ASMP had done and that he did not charge them for that work.” [66] Mr Tod further stated that ASMP caused problems with the backup on the CMS, that they broke the website prior to the backup and as the backup was not done before it was broken, that this caused the backup to download the broken website. He said that this could easily be done and that the site should not be played with unless you “knew what you are doing”. He gave evidence and stated that “even something simple like a full -- 13 of 20 -- 14 stop or a space in the wrong place could break the website” and cause the site to go down. [67] Mr Tod said that by ASMP removing tags from photos or images in the gallery that the search engine could then not identify the pictures. This meant that the photos were not tagged and is seen as a blank image and Google cannot recognise the image. He said he placed tags on the images when designing the website. He explained Meta tags are tags or a series of codes that identify the image. He said that if you don‟t specify tags on images they cannot be identified by Google. He said that the tags were removed and he stated that FS did not remove them. He gave evidence that ASMP must have deleted the tags and this could have easily been done if they did not know what they were doing. He stated that ASMP argued with him that it was their request that they wanted particular photos put onto the site and not the key words he had suggested. Mr Tod said that he built the CMS and it worked efficiently and he had been using it for over 10 years. [68] Mr Tod said that he resized the size of the photos, at the insistence of ASMP and made the photos bigger. However he said that after doing that, it became obvious that they were not right he had to change the photos back to the smaller original size to fit the site design. He said he did repetitious work unnecessarily requested by ASMP and felt frustrated by having to do work again. ASMP attempted to blame the failings of the site after they went live and made allegations that FS had deleted or interfered with their site. Mr Tod stated that he was never provided with ASMP password to the site and did not make any changes to the site after it was loaded up. [69] ASMP questioned him about breaking the site and Mr Tod stated that the problem was the specific layout which did not allow him to use the CMS system with three interfaces and that did not allow the level of flexibility that ASMP wanted but that was the fault of ASMP, not FS. [70] Mr Tod said that in fact the website broke on two occasions, the first time the photo gallery broke because Petr renamed it. The second time he said that Petr broke the wedding gallery in that he accidentally removed tags and resized it, causing damage. [71] Mr Tod gave evidence that at handover of the website that the site was fully functional and when ASMP signed the approval form that ASMP were happy with the site and it was fully operational. He said that after access was given to ASMP to the CMS then “things got broken.” [72] Mr Tod said that the job was delayed and finishing the website was prolonged by many factors that included the fact that ASMP kept changing their mind about content, were given many site designs from FS but they were not happy with the design and wanted to provide their own design, were demanding by wanting more photos and less words on the site, requested photo sizes be changed and then re-changed back to the original -- 14 of 20 -- 15 size, would not take advice about the content they had proposed and the effect it would have on achieving a high ranking to search engines, were slow in getting back to him about word changes, there were language difficulties and barriers, that they were arguments about site content and that generally ASMP were “difficult clients” to deal with and that during his involvement he alone made “20 changes to the content of the website to suit their demands which still did not give them the engine search ranking that they wanted”. [73] Mr Tod stated that when the website was loaded up it was a complete site, and in his opinion, that if six months after the site went live that there were now things missing or not working properly then ASMP must have had deleted tags and files and directly caused those problems to the site. SUMMARY OF EVIDENCE & FINDINGS Breach of contract [74] It is not disputed that the Contract for the website design works was entered into between the parties in October 2009. The contract contains specific terms, conditions and obligations that bind the parties to the website design works, the website package that was to be provided and the amount and time of payments that were to be made. I find that the contract specifically excludes either of the parties varying the terms and conditions of the agreement either orally or in writing unless the variations were reduced to writing and were signed by an authorized signatory of FS. I find that the contract was not varied in writing and signed by FS and therefore that the contract dated 19 October 2009 is the only legal contract that binds the parties to the website design works. I find that FS have not taken longer to complete the website design works as alleged by ASMP as the contract does not specify a time frame for the works to have been completed by. [75] I find that the letter of demand issued by ASMP on 17 August 2010 was some four months after the site went live in 21 April 2010. ASMP did not provide any reasonable explanation for the delay in issuing a letter of demand complaining about the website and demanding a refund of the contract monies paid for breach of contract. I find that if the website was not operating sufficiently shortly after April 2010 when they signed the Website launch approval form they would have issued the letter of demand shortly thereafter. I find that the delay was likely caused by the fact that ASMP were using the CMS and playing around with the website content which resulted in them breaking the website and causing problems with it. I find that if the website had problems at the time it went live in April 2010 ASMP would not have signed off on the Approval form and would have sent a letter of demand shortly after April 2010 if there were still ongoing problems as they allege. I find that ASMP likely caused problems with the site and that as at April 2010 when the site went live, ASMP were happy with the site, they were given control of the site and the CMS and some four months later they are unhappy with the site and its operating. I find that any -- 15 of 20 -- 16 problems, if there were any, arising after 21 April 2010 was solely caused by ASMP. [76] I find that the contract between the parties was specific and provided for obligations, terms and conditions on both parties. I find that the contract does not include any oral terms and conditions. I find, having considered each and every term and condition of the contract there has not been any breach of any of the terms and conditions by FS as alleged. I find that ASMP is not entitled to a refund of the contract price as the website was handed over to them fully functional and operating and that as at 21 April 2010 that ASMP were satisfied with the website, did not require any additional changes to the website and paid all monies owing in full and signed the Website Launch Approval Form. [77] I find that the Simjen report and the website analysis report does state that; “some of the issues that are affecting the performance of your site include ... there are few relevant keywords and no appropriate description in the meta tags...”. The content of the website was provided to FS by ASMP and in fact ASMP conceded they were adamant as to what the content of the website should be and demanded a decrease in the contract price for the work they had done in relation to the website design. I find that the major failings of the website not reaching first page ranking on Google search to not be any fault of FS and that they have not breached the contract in this regard. I find that the failing to reach page one of Google search was largely due to the site content and I find that is the direct fault of the Applicants as they were responsible for such content. Unreasonable Delays [78] I find that the delays in the website design and the website eventually becoming live was not caused entirely by FS but that some delays were caused by ASMP. I find that these included delays by ASMP resulting from health problems with the Applicants‟ newborn causing delays in ASMP getting back to FS regarding website changes. This was conceded by ASMP and evidenced in an email dated 18 January 2010. I find that there were further delays in providing instructions by ASMP to FS for the website design works. I accept the evidence of Mr Tod in that there were repeated requests by ASMP for FS to make changes to the layout that were unnecessary, inappropriate or repetitious and that this caused delays by changes being made that were later changed or rejected. I accept Mr Tod‟s evidence and his explanation for some delays in that he was required to change the design, and then later having to change it back again, numerous emails and disputes about content and that ASMP were “difficult” in that there were many requests to change the design which caused delays in getting the site live. [79] I accept Mr Tod‟s evidence when he said that the job was prolonged by various acts or omissions of ASMP. I find, as the evidence supports the contention, that ASMP kept changing their mind about content, that they were given various site designs from FS but were not happy with those -- 16 of 20 -- 17 design and eventually wanted to, and did, design their own. I find for that ASMP to then criticise the content of the website design and blame FS for not achieving high Google search rankings to be entirely without merit. I find that any blame for the content of the website is the fault of ASMP. I accept that ASMP designed the content of the website, were adamant that the website had numerous photos and lesser words on the site than Mr Tod had advised and I find ASMP rejected the advice of FS to change the content of the website. [80] I accept that ASMP requested photo sizes be changed and then re- changed back to the original size, did not take advice about the web design content FS had proposed and the effect it then had on achieving a higher ranking to search engines. I find that ASMP were at times slow in getting back to FS about word changes. I accept that there may have been language difficulties and barriers and I accept Mr Tod‟s evidence that there were arguments about the site content and that eventually Mr Tod refused to advise ASMP about the content and just in the end he “did what they wanted”. I find that the failure of ASMP website not reaching page one of Google search to not be the fault of FS. I find that ASMP refused the advice of FS and were to some extent insistent on designing the website themselves. This is conceded and the evidence supports this fact as the Applicants were given a discount for the initial contract price after they complained they had designed the website and did the work and should receive such discount. This is the explanation for their contract price being $2,950 yet they only paid the sum of $2,205.00. [81] I find that the Applicants‟ evidence contained in the Simjen report highlights the problems with the site. The report explains why the ASMP website is not SEO and highlights the failings of the site. I find that the failing in reaching page one of Google searches is the content of the web page itself. The website design and content is the work that ASMP actually did and I find it unreasonable for ASMP to then criticise and blame FS for this work. I find that ASMP‟s request for a refund of the contract price and for the work that FS did, unreasonable in all the circumstances. I find the failing of the website and failure to reach page one on Google ranking to not have been caused by FS. I find that FS have not breached their contract with ASMP. [82] I accept the evidence of Mr Tod and that further delays were caused by ASMP when they attempted to make changes to the website through the CMS and broke the website. Further, that ASMP deleted Meta tags on the photo gallery pictures, albeit accidentally, but that they caused problems to the website that required Mr Tod to spend hours rectifying various problems caused by them. [83] I find that the claim for damages for unreasonable delays in the sum of $4,600.00 unreasonable and without merit. [84] The Website Approval Form signed by ASMP clearly indicates that they were happy with the final website design and did not require any changes. ASMP gave evidence that they signed the form even though they were -- 17 of 20 -- 18 promised that ongoing changes to the website could occur at their request and without further cost to them. This is inconsistent with the form that they signed. I find the evidence of ASPM on this point not accepted. I find it unbelievable that ASMP would pay the final payment under their contract and sign off on the final approval form if there were outstanding issues, or problems and things that they were not happy about. [85] I do not find that the delays in the website becoming active were any fault of FS. I find from the evidence that ASMP requested many changes to the website design. I accept that they eventually designed it themselves and that the voluminous amount of evidence including emails exchanged between the parties shows that there were many changes to the site, additional work was required to be done, set out and links were lost, ASMP deleted files or changed the site that required rectification by FS, that there was a delay by ASMP in providing instructions to FS in correspondence dated 18/1/2010 ASMP states: “I decided the best thing for my company would be to do the complete design myself. (Unfortunately in the meantime I have had some delay in getting the final draft back to your office as I have been dealing with some personal issues regarding the health of my newborn).” [86] While I find that FS were not as timely as they claim, I find that emails between the parties do suggest that FS did have some “staff problems” and “some delays caused by staff sickness putting them a bit behind.” I find that FS were not entirely responsible for the delay in getting the website live and that, in any event, the contract did not provide a specific time frame that the website works had to be completed by. There was no time frame specified in the contract as to when the website would go “live”. I find the claim for damages due to unreasonable delay is without sufficient evidence to support such a finding, and the claim must fail. Illegal Suspension [87] I find that ASMP were provided with invoices and demands to pay for the hosting of their website and they refused to pay them. I find that as a consequence of ASMP not paying the hosting invoices resulted in their website being suspended. I find that the contract between the parties for the sum of $2,950 does not include the cost of website hosting. The fact that FS initially provided it at no cost to ASMP was something that it did at its own direction. There was not a legal or contractual liability or any obligation for FS to provide hosting to ASMP at no charge. I find that in all the circumstances the evidence of ASMP that alleges that there were oral terms of the contract regarding the cost of hosting their website without merit. I do not accept that there were oral terms when the contract between the parties was specifically reduced to writing, was detailed and covered all the necessary terms and conditions and obligations of the parties and specifically included a clause that stated that the contract or the agreement could not be varied unless it was “in writing and signed by an authorized signatory of Futur3 Studio Pty Ltd.” -- 18 of 20 -- 19 [88] I find that there are no written variations to the contract and I do not accept the evidence of ASMP in this regard. I find that they should have paid for the website hosting when the invoices were sent to them in October 2010, and their failure to make any payments caused their website to be suspended. I find that ASMP have directly caused any alleged loss of income and profits and are entirely responsible for the fact that they may have lost business. I find that the fact that ASMP website was suspended was not through any fault of FS. I find that the claim for damages arising from the suspension of the website must therefore fail. Court Costs and Legal Fees [89] I do not accept that the costs sought by ASMP for reimbursement for their legal costs of $550 to be fair and reasonable in the circumstances. ASMP took it upon themselves to obtain legal advice regarding their position with FS. I find no reason to order that FS should be liable for those legal costs and I find that these costs should be solely borne by them. The claim for reimbursement of ASMP‟s legal costs is without merit and is refused. Further compensation since hearing at first instance [90] For the reasons I have given I find that the claim for further compensation since the hearing at first instance must fail as FS have not been found to be in breach of the contract, did not illegally suspend the ASMP website, have not caused unreasonable delays in the website works that they performed and are not required to pay compensation to ASMP for the contract works as claimed by ASMP. The claim for further compensation has no merit and must be dismissed. Interest [91] The claim filed by ASMP against FS for interest is dismissed as their claim for compensation and refund of contract price due to breach of contract and claim for damages has no merit and has failed and the application is to be dismissed. Conclusion [92] I find that having considered all of the evidence of the parties, their witnesses and having carefully considered the content of all of the voluminous exhibits provided to the tribunal and the evidence that was filed with the original claim that was filed on 6 September 2010 and for the reasons set out above I make the following decision and order as follows: ORDER [1] That the Claim is dismissed. -- 19 of 20 -- 20 i Exhibit 5. ii Exhibit 3. iii Exhibit 3. iv Exhibit 2. v Exhibit 1. vi Exhibit 2. vii Exhibit 3. viii Exhibit 5. ix Exhibit 7. x Exhibit 7. xi Exhibit 7. xii Exhibit 5. -- 20 of 20 --