Archaeo Cultural Heritage Services Pty Ltd v Baroon Pty Ltd & Ors [2006] QMC 2

MAGISTRATES COURTS OF QUEENSLAND CITATION: Archaeo Cultural Heritage Services P/L v Baroon P/L & Ors [2006] QMC 002 PARTIES: ARCHAEO CULTURAL HERITAGE SERVICES PTY LTD (plaintiff) v BAROON PTY LTD (first defendant) GIULIAN ASHTON LOMAX (second defendant) 4-D.I.P. PTY LTD (third defendant) FILE NO/S: M11372/04 DIVISION: Magistrates Court PROCEEDING: Claim ORIGINATING COURT: Brisbane Magistrates Court DELIVERED ON: 29 August 2006 DELIVERED AT: Brisbane HEARING DATE: 15 June 2006 MAGISTRATE: Previtera T ORDER: 1. That judgement be entered for the Plaintiff against the First, Second and Third Defendants. 2. That the Defendants pay to the Plaintiff the sum of $17 517.81; plus interest in the sum of $3 152.20; plus solicitor’s costs on an indemnity basis to be agreed or in default, as assessed; plus expenses of $315.00; plus counsel’s fees of $2 160. CATCHWORDS: CONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – conditional contract PROCEDURE - COSTS – CIVIL – indemnity costs COUNSEL: Defendants appeared on their own behalf -- 1 of 8 -- 2 SOLICITORS: Defendants on their own behalf [1] By Amended Statement of Claim filed 8th November 2005, the plaintiff seeks the sum of $17 517.81 from the three defendants pursuant to an Agreement entered into between the Plaintiff and the Third Defendant (as Trustee for the 4-D trust) on or about the 16th April 2004. [2] The First and Third Defendants are each companies; the Third Defendant is a shareholder in the First Defendant and the Second Defendant is a Director of each of the two companies. [3] By Notice of Intention to Defend and Defence filed on 19th December, 2005, all three defendants admit: 1. an Agreement between the Plaintiff and the Third Defendant on or about the 16th April 2004; 2. That its relevant terms included ; (i) that the plaintiff was to organise a meeting with the representatives of family groups of descendants of the Kabi Kabi people and the Third Defendant 4 D.I.P Pty Ltd, including seeking and conferring with attendees; book a conference venue; pay travelling and attendance charges for attendees: and adequately cater the meeting. (ii) that the payments for the venue, attendees food and travelling expenses would be paid by the Plaintiff and all of the necessary paperwork for the Australian Taxation Office would also be completed by the Plaintiff. An invoice would then be issued to 4 D.I.P Pty Ltd for the outlays paid, plus a surcharge of 20% to cover all of the bookkeeping and costs of lodging the forms with the Australian Taxation Office. 3. That the Plaintiff issued an invoice to the First Defendant dated 19th April 2004 in the amount of $17 517.81. 4. That none of the Defendants has paid the invoice. [4] The Defendants plead, however, that the Agreement was conditional; that the condition was not fulfilled and as such the failure operates to support the Defendants’ non-payment of the sum claimed. WITNESSES [5] The plaintiff called the following witnesses:- 1. Ms. Ann Wallin, the Director of the Plaintiff company. 2. Mr. Tony Dalton, the coordinator for a large number of Kabi Kabi descendant families involved in Native Title Claim proceedings in the Federal Court. 3. Mr. Andrew Preston, Barrister-at-Law, who represents Mr. Tony Dalton and Mr. Davidson (also a coordinator for particular Kabi Kabi family groups) in the Federal Court proceedings. -- 2 of 8 -- 3 [6] The defendant gave evidence on his own behalf and called Mr. Davidson. [7] The following additional matters are not disputed:- 1. On or about each of 26th March 2004, 29th March 2004 and 12th April 2004, there were meetings variously involving Ms. Wallin, the Second Defendant, Mr. Tony Dalton, Mr. Davidson, Mr. Preston, the Second Defendant’s solicitor and relevant Kabi Kabi elders. 2. At the meeting on 26th March 2004, it was agreed to have a second meeting. At the meeting on 29th March 2004, Mr. Dalton was paid the sum of $1000.00, via a personal cheque of the Second Defendant, for his services and travel expenses associated with consulting with the Kabi Kabi elders about attendance at a larger meeting (herein after referred to as the Gympie meeting) to discuss, inter alia, a development/land use agreement involving the Defendants. 3. By letter dated 2nd April 2004 from Ann Wallin to the Second Defendant (Exhibit 1) confirmation of the meeting venue, a costs guide and a suggested format for the weekend meeting was provided and a request made of the Second Defendant as to how he wanted to handle the payment of the conference costs. 4. On the 16th April 2004, the Second Defendant made the following handwritten notation at the end of the original typed contents of that letter– “16/04/04 As director of 4-D.I.P P/L atf the 4-D Unit Trust, I accept the liability for the above costs of calling the meeting of the Kabi Kabi on 17/18 April 2004 on the basis of the attached proposed initialled attached draft Memorandum of Understanding embodying the purposes for which the meeting is being called Signed Giulian Ashton Lomax”. (Exhibit 1). That letter was then returned to the Plaintiff. 5. The Memorandum of Understanding (Exhibit 2) referred to in that letter had been prepared by the Second Defendant and discussed at one of the earlier meetings. 6. The Gympie meeting of the Kabi Kabi group, at which were also present Ms. Wallin, the Second Defendant, his business associate Mr.Rowell, Mr. Preston, Mr. Dalton, Mr. Davidson and others did take place on the 17th and 18th April 2004. Ann Wallin made contemporaneous notes in the form of Minutes (Exhibit 3) and the Second Defendant presented to and had discussions with the attendees as proposed in the letter dated 2nd April 2004 (Exhibit 1). 7. The Plaintiff then issued the invoice to the First Defendant for $17 517.81 (being $17 811.64, less the advance of $1000.00 to Tony Dalton i.e.$16 811.64 plus GST of $706.17). 8. On 21st April 2004, Ann Wallin forwarded a letter by email to the Second Defendant referring to an earlier verbal instruction from the Second Defendant to Ms. Wallin to make the invoice for the conference costs out to the First Defendant, Baroon Pty Ltd, and indicating that she would prefer that the invoices be directed to the Second Defendant. (Exhibit 4). 9. By letter from the Plaintiff to the Second Defendant dated 10th May 2004, the Plaintiff advised of its bank account details “so that you can pay us directly”. (Exhibit 6). 10. Thereafter, Ann Wallin wrote to the Second Defendant on three occasions by email requesting payment of the invoice and referring to a promise by -- 3 of 8 -- 4 the Second Defendant to pay the amount by direct debit to the Plaintiff’s account. (Exhibit 7). 11. These emails were followed by a further letter by email from Ann Wallin to the Second Defendant and his solicitor Peter Gore dated 20th July 2004, in which she directs the following comment to the Second Defendant -“You both verbally promised, and stated in writing, that you would pay my invoice…” (Exhibit 8). 12. The Second Defendant by letter dated 22nd July 2004 (Exhibit 9) stated that the agreement that 4-DIP Pty Ltd would accept liability for the meeting costs was conditional upon the Kabi Kabi being “open to considering, and willing and able to work with, the existing joint venture organisational structure and the existing Gubbi Gubbi claims(s) on which it is based, and that 4-D could rely upon the Kabi Kabi to follow through on this basis”. (Exhibit 9). This was the first and only occasion on which the Defendants had indicated that a condition of the agreement had not been met. (Whilst the Second defendant attempted to suggest otherwise in his oral evidence, no such proposition was either pleaded or put to Ms. Wallin under cross- examination or supported by any other oral or documentary evidence). [8] Whilst, therefore, it is not disputed by the Defendants that the Plaintiff undertook the agreed tasks, they assert as the sole basis of their Defence that the Agreement was subject to a condition that the Defendants would only be liable for the costs of the meeting if the meeting agreed to certain matters; that because the meeting did not agree to those matters, the condition was not fulfilled; and therefore the Defendants are not liable to the Plaintiff. [9] The Plaintiff takes issue with the existence of any condition to which the Agreement was subject. [10] ISSUES FOR CONSIDERATION 1. What were the terms of the agreement between the plaintiff and the Third Defendant? Was the agreement conditional? 2. If conditional, what was the condition? Was that condition fulfilled, so as to operate to make the agreement unconditional and therefore enforceable? 3. Which defendants are liable? CREDIT [11] Ms. Ann Wallin, Director of the Plaintiff, gave her evidence in a clear, concise and consistent manner. She was not successfully challenged in relation to any of her evidence. Indeed, a great deal of her evidence was supported by the admitted documentary evidence. [12] Mr. Dalton and Mr. Preston, whilst involved in a working relationship with the plaintiff as a result of the Federal Court proceedings, are accepted by the court as credible witnesses also. They have no material or other interest in the outcome of these proceedings. They too gave their evidence in a clear, concise and consistent manner supportive of that evidence provided by Ms. Wallin, although clear of such exactness as might lead the court to consider that there may have been any discussion between them in relation to these proceedings. -- 4 of 8 -- 5 [13] On the other hand, the Second Defendant gave his evidence in a vague, inconsistent, rambling, desperate fashion. He attempted to give evidence in relation to matters which had not been pleaded and which, in any event, were irrelevant. He has continued with such attempts in his submissions, which do not address the issues relevant to the matter and which were pointed out very carefully to him on numerous occasions throughout the hearing in a manner which took account of the fact that the Defendants were not legally represented. In relation to any issues either not pleaded, not put to the Plaintiff’s witnesses, not relevant, not raised by the Second Defendant in his evidence or otherwise not admitted into evidence during the hearing, they have been disregarded by the court. [14] When evidence given in the Plaintiff’s case was unable to be challenged by him, he sought an adjournment of the matter after the luncheon break. This application was refused having regard, inter alia, to the length of the time the matter had been before the court and that pleadings filed on behalf of the Defendants had been prepared by solicitors a significant time ago. [15] The Second Defendant, when cross-examining Ms. Wallin, was inconsistent in relation to the content of propositions put to her. For example, he put to her that the meeting costs were to be met only if the Memorandum of Understanding was reached before the meeting on 17/18 April 2004. He then immediately put a further proposition to Ms. Wallin that the position of the Third Defendant was that there would be no liability on their part to pay the costs of the meeting unless the Memorandum of Understanding in was place as a result of the meeting. Further questioning then suggested that the Second Defendant’s position was that there be either a Memorandum of Understanding or a Letter of Intent in place as a result of the meeting. No Letter of Intent has been pleaded. [16] Despite cross-examining Mr. Dalton at a later stage to the contrary, the Second Defendant agreed with a response under cross-examination by him of Ms. Wallin that Ms. Wallin had told the Second Defendant prior to the Gympie meeting that it was not likely that the Memorandum of Understanding would be signed at the Gympie meeting. [17] Indeed, even in correspondence (Exhibit 9), the Second Defendant was inconsistent in relation to what the conditional nature of the agreement was to the extent that it was stated “…the motion carried at the Gympie meeting indicated that the Kabi Kabi group were open to considering, and prepared to work with, the existing joint venture organisational structure and the existing Gubbi Gubbi..claims..” [18] Finally, the suggestion of the Second Defendant that the reason for the Defendants raising no objection to the invoice earlier than the letter of 22nd July 2004 was because the Plaintiffs knew that they were not entitled to payment, is fanciful in light of the substantial and oral and documentary evidence to the contrary. [19] In relation to Mr. Davidson, he gave his evidence in a truthful manner but his evidence was based on assumptions rather than a clear recollection of events. -- 5 of 8 -- 6 [20] Therefore, in relation to any conflict in the evidence of the witnesses, the court accepts the evidence of the witnesses for the Plaintiff over the evidence of the Second Defendant and Mr. Davidson. FINDINGS [21] The court accepts the evidence of Ms. Wallin, Mr. Dalton and Mr. Preston that; a. At the 12th April 2004 meeting, the Second Defendant agreed to pay the costs of the Gympie meeting; b. The Gympie meeting would not have been called or held but for the Second Defendant’s request to discuss the development proposal with the elders and his agreement to pay the costs. c. That whilst the draft Memorandum of Understanding was the reason for the Gympie meeting, it was made clear to the Second Defendant at the earlier meeting by Mr. Dalton and Ms. Wallin that the Memorandum of Understanding would not be signed at the Gympie meeting which would be an information session only. The minutes of the Gympie meeting indicate in fact that the Memorandum of Understanding was only handed to the Elders (as confirmed by Mr. Preston’s evidence) at that Gympie meeting so that “ …each person was to take it back to the independent members, and come back to a meeting within 2 weeks to discuss it again. The intention was to further this through discussion. Lawyer will write a letter to this effect” (Exhibit 3 page 10). d. The Second Defendant addressed the meeting as proposed in the letter dated 2nd April 2004 (Exhibit 1). [22] The court accepts the evidence of Ms. Wallin that; e. On or about 19th April 2004 the Second Defendant orally provided a personal guarantee to Ms. Wallin to meet payment for the work performed by the Plaintiff in accordance with the Agreement, despite the invoice being requested to be directed to the First Defendant; f. On or about 10 May 2004 the Second Defendant advised the Plaintiff that a direct debit for the entire amount of the invoice would be placed in the bank account of the Plaintiff. g. Had the signing of the draft Memorandum of Understanding been a pre- condition for payment, she would not have entered into the Agreement. [23] On that basis, the court finds that the agreement was not conditional as at 12th April when it was made. [24] If it was conditional, the condition is that of the endorsement made by the Second Defendant to the letter dated 16th April 2004. On the basis of the court’s acceptance of the evidence of Ms. Wallin, Mr. Dalton and Mr. Preston that discussion of the draft Memorandum of Understanding was the reason for the meeting, that condition has been fulfilled and the agreement is enforceable. LIABILITY [25] The Second Defendant is personally liable as he not only gave verbal assurances at the meeting on 12th April 2004 that he would meet the costs of the Gympie meeting; he personally guaranteed in writing on 16th April 2004 that he would pay the costs; he -- 6 of 8 -- 7 continued to conduct himself in a way to indicate his intentions to by requesting that an invoice be made out to the First Defendant; upon inquiry from Ms. Wallin he assured her that he would nonetheless personally take care of the invoice; he then requested from Ms. Wallin the Plaintiff’s bank details so that the amount of the invoice could be paid to the Plaintiff and then simply refused to pay. [26] The First Defendant is liable as it assumed the debt and is not relieved from payment by reason of the guarantee of the Second Defendant. The evidence clearly suggests that at no time was the Plaintiff forgoing its rights against the Second Defendant or indeed the Third Defendant by reason of its consent to issue the invoice to the First Defendant. [27] The Third Defendant is liable. It has admitted in the pleadings to the Agreement. On the basis that the court finds that the Agreement was not conditional or if conditional, the condition was satisfied, the Third Defendant is liable. [28] The three defendants are therefore jointly and severally liable. COSTS [29] The plaintiff seeks costs on an indemnity basis and argues that the defendants’ demonstrated conduct justifies the making of such an order. Elements of that conduct include their actions in seeking from the plaintiff a rendered invoice; requesting the plaintiff’s bank account details; indicating thereby a recognition that payment was due to the plaintiff by the Defendants; pursuing the case despite clear documentary evidence in support of the plaintiff’s contentions; the lack of genuineness of the defence; the suggestion, not pleaded or otherwise raised in any documentary or other evidence of a Letter of Intent forming the basis of the payment condition. [30] The Defendants argue against such an award of costs and simply deny the suggestion by the Plaintiff that they were delinquent in not making payment. [31] Having regard to the findings referred to above, this court accepts and is assisted by the submissions made by the Plaintiff in relation to costs. On the basis of this court’s findings and acceptance of the submissions made by the plaintiff additional thereto in relation to the defendants’ conduct, the court is satisfied that the preconditions of an award of costs on an indemnity basis as formulated by His Honour Sheppard J in Colgate Palmolive Co. Cussons Pty Ltd (1993) 118 ALR 248 at pages 254-256 have been made out, that is “..(d) the fact that the proceedings were commenced in wilful disregard of known facts or clearly established law; (e) the making of allegations that ought never to have been made or the undue prolongation of a case by groundless contentions;…” [32] It is further considered that the circumstances of the Defendants’ conduct amount to unusual circumstances so as to justify the court from departing from the usual rule that costs be awarded on a party and party basis. [33] As stated in Fountain Selected Meats (Sales) Pty Ltd v. International Produce Merchants & Ors (1988) 81 ALR 397 by Woodward J and affirmed by Lindgren J in MGICA (1992) Ltd v. Kenny & Good Pty Ltd & Anor (No 4) (1996) 140 ALR 707 at 710 “The principle emerging from those cases is that where it appears that an action -- 7 of 8 -- 8 has been either commenced or continued in circumstances where the applicant properly advised should have known that he had no chance of success, the action may be presumed to have been commenced or continued for some ulterior motive or because of some wilful disregard of the known facts on clearly established evidence. In some cases it is appropriate to make an order for indemnity costs to make it known that the court will not readily accept that its time and the successful litigant’s money can be wasted on totally frivolous and thoroughly unjustified proceeding.” [34] The defendant argues against an award of expenses for the witness Mr. Preston. The court rejects that argument on the basis of the evidence provided by Mr. Preston, the court’s acceptance of him as a credible witness and the findings made as a result of his evidence in support of contentions by the plaintiff generally and its other witnesses in particular. [35] The defendant does not argue against an award of expenses of $165.00 for the filing of the claim by the Plaintiff. [36] The court accepts that an award of interest should also be made as is usual in these circumstances, calculated in accordance with the plaintiff’s submissions at 9% of $17 517.81 for a period of 730 days from 25th April 2004 to the date of trial. [37] The court notes that the Plaintiff is not seeking an indemnity award of costs in relation to counsel’s fees. In any event the court certifies the matter as one appropriate for attendance by counsel on behalf of the Plaintiff despite the fact that the Defendants were not legally represented at trial. The Defendants had previously been legally represented. [38] The court refuses the allowance for counsel’s fees in amending the claim as it is not satisfied that there are circumstances justifying the allowance. It otherwise considers an award of costs for counsel to include those sought pursuant to Items 6(d), (e) and (f) in addition to the costs of the reply at Item 6(e) and attendance by counsel at judgement as submitted by the plaintiffs. [39] The court therefore orders as follows:- 1. That judgement be entered for the Plaintiff against the First, Second and Third Defendants. 2. That the Defendants pay to the Plaintiff the sum of $17 517.81; plus interest in the sum of $3 152.20; plus solicitor’s costs on an indemnity basis to be agreed or in default, as assessed; plus expenses of $315.00; plus counsel’s fees of $2 160. -- 8 of 8 --