Supreme Court New South Wales

• Medium Neutral Citation: Williams v Concreting Services Pty Ltd [2013] NSWSC 366
• Hearing dates: 7 March and 12 April 2013; written submissions 19 April 2013
• Decision date: 22 April 2013
• Jurisdiction: Equity Division - Technology and Construction List
• Before: Stevenson J

Decision

Determination void

• Catchwords: CONTRACT - identification of counterparty to a contract or arrangement; BUILDING AND CONSTRUCTION - adjudication - work done pursuant to construction contract - whether determination void - jurisdictional error
• Legislation Cited: Building and Construction Industry Security of Payment Act 1999; Environmental Planning and Assessment Regulation 2000
• Cases Cited: Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154
• Category: Principal judgment
• Parties: Lloyd Williams (plaintiff); Concreting Services Pty Ltd (first defendant); Alan Stapleton (second defendant)
• Representation: Counsel: M Painter with T Glover (plaintiff); T O Bland (first defendant); Solicitors: Adams and Partners Lawyers (plaintiff); Lou Baker & Associates (defendants)
• File Number(s): SC 2013/43294
• Publication restriction: Nil

Judgment

Introduction

1 The matter for consideration in these proceedings is the identity of the counterparty to a contract or an arrangement ("the Contract") pursuant to which the first defendant, Concreting Services Pty Ltd ("Concreting"), performed work at a site at Ropes Crossing in Western Sydney ("the Site").

2 On 18 June 2012, Childcare Specialists Australia Pty Ltd ("CSA") entered into a contract with the proprietor of the Site to construct a childcare centre.

3 The plaintiff, Mr Lloyd Williams, is the sole director of CSA.

4 The dispute in these proceedings arises out of a determination ("the Determination") made on 7 January 2013 by an adjudicator ("the Adjudicator") pursuant to the Building and Construction Industry Security of Payment Act 1999 ("the Act") that Mr Williams was (rather than CSA) obliged to pay Concreting $242,903.42 for work done by Concreting at the Site.

5 The Adjudicator found that such work was done pursuant to a "construction contract" for the purposes of s 3 of the Act, between Mr Williams and Concreting.

6 Mr Williams contended before the Adjudicator, and before me, that any "construction contract" in relation to work done by Concreting at the Site was between Concreting and CSA, and not between Concreting and Mr Williams.

7 The matter for me to determine is whether Mr Williams or CSA was the counterparty to the Contract pursuant to which Concreting did work at the Site. It is common ground that if the true position is that CSA, not Mr Williams, was the counterparty, the adjudicator had no jurisdiction under the Act, and the Determination is void.

8 No other challenge is made to the Determination.

Decision

9 The counterparty to the Contract was CSA, not Mr Williams. Accordingly, the Adjudicator had no jurisdiction under the Act to make the Determination, and the Determination is void.

Background

10 In July 2012, shortly after CSA had entered into the Contract to construct the childcare centre at the Site, Mr Williams decided to use panel construction for the project. On the recommendation of an associate of Mr Williams', Mr Mathew Miller, Mr Williams approached Mr Paul Galea, the director of Concreting.

11 At a meeting in mid July 2012, Mr Galea provided an oral estimate of $517,000 to complete all concrete and tilt panel works on the Site. The estimate included the supply of concrete. It is common ground that the estimate was not a quotation and that no agreement about terms or price was reached at this meeting.

12 Mr Williams said that at the July meeting he gave Mr Galea a business card ("the Business Card"), which is reproduced below (with contact details omitted): -

13 Mr Miller was also present at the meeting and corroborated Mr Williams' evidence in this regard. Mr Galea denied he was given the Business Card at this meeting, or at all. For the reasons that emerge below, I do not accept Mr Galea's evidence. I find Mr Williams gave Mr Galea the Business Card at this meeting

14 Mr Williams also told Mr Galea "all my details are on the sign".

15 The "sign" to which Mr Williams referred was a polyvinyl sign ("the Sign"), measuring approximately 3m by 1.2m and was an exact enlargement of the Business Card.

16 From around September 2011 to January 2013, the Sign was fixed to the inside of the fencing on the southern boundary of the Site, facing inwards to the Site. It was clearly visible to anyone entering the Site or, indeed, viewing the Site from the adjoining street.

17 Mr Galea denied that he had ever seen the Sign. He agreed the Sign was plain to see. In evidence there are photographs of Concreting's workers with the Sign prominently in the background.

18 Mr Galea said that because of his familiarity with reg 98A of the Environmental Planning and Assessment Regulation 2000 (which, he said, requires signs on a building site to state that "Unauthorised Entry to the Work Site is Prohibited") and because of the absence of those words from the Sign: -

"Even if I had noticed the sign, I say and believe that I could not know that the sign was intended to advertise the builder. The sign is a soft sign and appears to me to advertise the operator of the childcare centre ...

Owing to the sign not complying with regulation 98A and as I was not directed to it by Lloyd Williams, I would not have contemplated that the sign identified the principal contractor in control of the site."

19 Nonetheless, Mr Galea agreed that the words not "highlighted" on the sign (by which Mr Galea meant those not in upper case) made clear that CSA was the builder, not the operator of the proposed childcare centre.

20 I do not accept that Mr Galea did not see, and understand, the Sign. It was so prominent that he could not have failed to see it. I find he did see it and understood from it that CSA was the party constructing the childcare centre. In any event, any reasonable bystander would understand, from the Sign, that CSA was the builder.

21 When Mr Williams met Mr Galea he was wearing a shirt with the words "Childcare Specialists Australia Pty Ltd Design and Construction of Childcare Centres" embroidered on the front left hand side of the shirt. Mr Williams said, and I accept, that it was his usual practice to wear a shirt of that nature whenever he was on the Site and whenever he dealt with Mr Galea.

22 Mr Miller also gave evidence that Mr Williams was wearing this shirt. Mr Galea denied this. I do not accept Mr Galea's evidence. I find that Mr Williams was wearing the shirt.

23 Concreting commenced work on the Site in about August 2012 and worked on the Site until at least October 2012.

24 On 14 August 2012 Mr Miller forwarded to Mr Galea by email, panel layout and pier layout plans of the Site prepared by S Tut Pty Ltd, consulting engineers engaged by CSA. Those documents clearly identified S Tut Pty Ltd's client as being CSA.

25 On the same day, Mr Miller also forwarded to Mr Galea by email, a plan of the Site prepared by GB Meyer & Associates Surveyors. That plan also clearly identified GB Meyer & Associates Surveyors' client as being CSA.

26 On 29 August 2012 Mr Simon Tutureski, from S Tut Pty Ltd forwarded to Mr Galea by email, a "Panel Book" which set out, in diagrammatic form, details of the concrete wall panels to be used on the Site. That document stated, prominently on each page, that S Tut Pty Ltd's client was CSA.

27 Mr Galea said that he did not notice these details. He did, however, agree that they were plain to see. I do not accept Mr Galea's evidence. He must have noticed, and I find that he did notice, that the engineers and the surveyors were identifying CSA as being their client. He must have thereby concluded, and I find did conclude, from those documents that Concreting's client was CSA. Even if he did not, it was quite obvious from the documents that this was so.

28 Further, Mr Galea accepted that, prior to commencing work on the Site, Mr Miller gave him a USB stick which contained drawings of the proposed childcare centre. Those drawings indicated that they had been drawn up for a member of the now defunct ABC Childcare Centres Group. Mr Galea agreed that he had noticed that fact. It is probable, in those circumstances, that he also noticed the identification of CSA as the client on the engineers' and surveyors' drawings he received in August.

29 Concreting issued five invoices for work done during the period August to October 2012.

30 There is a dispute between the parties as to whether those five invoices were in respect to one contract or arrangement, or five separate contracts or arrangements. In view of the conclusions to which I have come, it is not necessary to resolve that dispute.

First "contract" - supply and installation of gate, post and hinges

31 This was an oral contract or arrangement arising from the conversation I referred to at [11] between Mr Williams and Mr Galea in July 2012.

32 On 10 October 2012 Concreting sent an invoice addressed to "Lloyd Williams" at a post office box at Kurmond, with details of Mr Williams' email address, fax number and mobile telephone number.

33 The only means by which Mr Williams could have given Mr Galea his post office box, email address, fax number and mobile phone number was when he gave Mr Galea the Business Card and directed Mr Galea's attention to the Sign.

34 Apart from obtaining those details from Mr Williams personally, Mr Galea could have also ascertained Mr Williams' email address from the email chains which accompanied the plans and diagrams he received from the engineer and surveyor.

35 Mr Galea swore two affidavits in the proceedings. He did not say, in either of those affidavits, how he had come to know Mr Williams' post office box.

36 In cross-examination, Mr Galea said that Mr Miller had told him these details. Mr Miller was called to give evidence in reply and denied this. Mr Miller said that he did not know the number of Mr Williams' post office box. I accept Mr Miller's evidence. Mr Miller has no interest in the outcome of these proceedings. He gave his evidence (in chief as well as in reply) in a straightforward, open manner. I find him to be a witness of truth. I find that Mr Galea knew Mr Williams' post office box because he had read it on the Business Card.

37 In his first affidavit, Mr Galea said that he obtained Mr Williams' fax number from Mr Miller. Mr Miller denied this and said that he did not know Mr Williams' fax number. Again, I accept Mr Millers' evidence and reject that of Mr Galea. I find Mr Galea obtained Mr Williams' fax number from the Business Card.

38 CSA paid the invoice of 10 October 2012 on 17 October 2012. On that date, an annotation appeared in Concreting's bank statement, referable to the payment, which read "Csa inv".

Second "contract" - pier work

39 On 17 August 2012 Mr Galea sent Mr Williams an email, which read: -

"Please find my quote for piers as per new engineering plans".

40 The quotation for the piers was addressed in the same manner as Concreting's invoice referred to above.

41 Concreting sent an invoice, also dated 10 October 2012 and addressed to Mr Williams with the same details as on the first invoice, for the work done in relation to the piers.

42 CSA paid that invoice. The "Csa inv" notation appeared adjacent to the relevant credit in Concreting's bank statement.

Third "contract" - retaining walls

43 This was an oral contract or arrangement arising from a conversation between Mr Williams and Mr Galea at the Site in late August 2012 and was based on an oral quotation given by Mr Galea of "$25,000 to $30,000".

44 Concreting did not send a written quotation. Its invoice was addressed in the same manner as the two earlier invoices. It was paid by CSA and the "Csa inv" notation again appeared on Concreting's bank statement.

Fourth "contract" - ground floor slab

45 The only evidence in respect of this contract or arrangement was Concreting's invoice which was addressed in the same manner as the three earlier invoices. It was also paid by CSA. The "Csa inv" notation again appeared on Concreting's bank statement.

Fifth "contract" - tilt slab work

46 This is the work which led to the application under the Act and the Determination. It is the subject of the controversy before me.

47 Concreting commenced the tilt slab work on 8 October 2012.

48 Three days later, on 11 October 2012, Mr Galea sent Mr Williams a quotation for the work in the sum of $245,357. The quotation was dated 8 October 2012, and addressed to Mr Williams in the same manner as the earlier invoices.

49 On 12 October 2012 Mr Williams replied to Mr Galea's email: -

"Thanks Paul. Can you email me your original total job estimate we went through at the café [in July 2012] with Matt [Miller] so I can see where this job is heading."

50 Both Mr Williams and Mr Miller gave evidence that they met Mr Galea later on 12 October 2012. Mr Galea denied that this meeting took place. I do not accept Mr Galea's denial. The size of Mr Galea's quotation, compared to the indication he had given in July 2012 as to the total cost of Concreting's work and the amount invoiced to date, makes it probable that it would be disputed by Mr Williams and that Mr Williams would wish to discuss that matter with Mr Galea. Further, both Mr Williams and Mr Miller gave a detailed account of what was said at the meeting. Their evidence was not challenged in cross-examination.

51 At this meeting, according to both Mr Williams and Mr Miller, Mr Williams told Mr Galea that there "is something drastically wrong with your quote" and that "[t]here is no way that we are going to pay $245,000 plus concrete plus GST for this job". I accept this evidence.

52 On 23 October 2012 Mr Galea sent Mr Williams what he described as being the "original estimate" for the concreting works. In that document Mr Galea gave an explanation for the figure of $245,357 in the quotation. His note concluded:-

'Accordingly, as discussed I sent you a quote with the revised tilt panel price of $245,357 excluding GST not including the supply of concrete".

53 Although Mr Galea denied this in cross examination, that note makes clear, in my opinion, that Mr Galea did not believe that, at this stage, the quotation had been accepted.

54 Nonetheless Concreting continued to fabricate the concrete panels and, on 25 October 2012, sent Mr Williams an invoice (addressed in the same manner as the preceding four invoices) for $242,903.43 (slightly less than the figure in the quotation).

55 On 1 and 2 November 2012, CSA made payments to Concreting totalling $142,903.43; exactly $100,000 less than the figure in the invoice.

Conversations about the "CSA job"

56 Mr Williams gave evidence that, on a number of occasions, he said to Mr Galea that he believed Mr Galea needed more people on the job. Mr Williams said that during one of those conversations Mr Galea referred to the project as being "the CSA job".

57 Mr Williams was not challenged about this conversation.

58 A number of witnesses gave evidence of conversations with Mr Galea suggesting that he understood Concreting was dealing with CSA, rather than Mr Williams personally.

59 On about 14 September 2012, Mr Galea contacted Mr Bruce Butler and asked him to give a quote to supply structural steel and purlins for the Ropes Crossing project.

60 Mr Butler is a steel fabricator and, with his wife, operates a business known as Butler Steel Fabrications.

61 Mr Butler said that between 12 and 22 October 2012 he had a conversation with Mr Galea as follows: -

"Mr Galea: Bruce, the owners of the project at Ropes Crossing are Childcare Specialists Australia Pty Ltd. They are managing the job themselves. I have contracted with them to do the concrete work only. Send your invoices to Childcare Specialists and they will pay you.

Mr Butler: OK."

62 Mr Butler adhered to this evidence in cross-examination. Like Mr Miller, Mr Butler gave his evidence in a straightforward and direct fashion. He has no interest in the outcome of the proceedings. I find him to be a witness of truth and accept his evidence.

63 Mr Scott Dunn is the sole director of All Dunn Excavations Pty Ltd, which operates an earthwork moving business that did work at the Site.

64 Mr Dunn caused his company to send an invoice to Concreting for the work done at the Site of 31 October 2012.

65 Mr Dunn said that thereafter he had this conversation with Mr Galea: -

"Mr Galea: Some of the work on your invoice is to go to Childcare.

Mr Dunn: OK. Let me know which items should be billed to you and which should be billed to Childcare.

Mr Galea: I'll have to get back to you about that."

66 Mr Dunn said that he tried to contact Mr Galea several times in November 2012 to get the correct break up of work so that he could issue invoices to Concreting and to CSA. He said that when he did speak to Mr Galea sometime prior to 23 November 2012, Mr Galea said to him: -

"Bill everything to Childcare Specialists."

67 Mr Dunn adhered to this evidence in cross-examination. Like Messrs Miller and Butler, Mr Dunn impressed me as a witness who was telling the truth as he recalled it. I accept his evidence.

Principles

68 There was no dispute before me as to the principles to be applied.

69 The identity of parties to a contract is to be determined, objectively, from all the circumstances: see Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 at [54] per Campbell JA (with whom Beazley and Basten JJA agreed).

Who was the counterparty?

70 Each of the invoices issued by Concreting were addressed to Mr Williams personally. On the face of it, this might be thought to be a factor pointing to the conclusion that Mr Galea believed that Concreting was contracting with Mr Williams in a personal capacity.

71 However, as was put to Mr Galea in cross-examination, his true motivation for addressing his invoices to Mr Williams was revealed in an email he sent Mr Butler on 30 November 2012: -

"I send and address my invoices to Lloyd him self its [sic] safer if there is ever a problem he has never asked me to change whom I'm invoicing..."

72 Every other circumstance of the case points to the conclusion that CSA was the counterparty to the contract.

73 Those circumstances are: -

(1) the details on the Business Card;

(2) the details on the Sign;

(3) the embroidery on Mr Williams' shirt;

(4) the nomination by the engineer and surveyor of CSA as their "client"; and

(5) the payment of the invoices by CSA.

74 Thus, looking at the matter objectively, the evidence points, overwhelmingly in my opinion, to the conclusion that the relevant contract was between Concreting and CSA, not Mr Williams.

75 In any event, I find that Mr Galea understood that CSA was the counterparty, as revealed in his conversations with Mr Williams, Mr Butler and Mr Dunn referred to above.

Conclusion

76 In all those circumstances, I conclude that the counterparty to the Contract pursuant to which Concreting did work at the Site was CSA, and not Mr Williams.

77 For that reason, the Adjudicator had no jurisdiction under the Act to make the Determination. The Determination is void.

78 I invite the parties to bring in short minutes to give effect to these reasons.

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Decision last updated: 22 April 2013