Concrete Constructions Pty Limited v Steel Engineering Pty Limited [1987] ACTSC 52 (17 July 1987)

SUPREME COURT OF THE ACT

CONCRETE CONSTRUCTIONS PTY LIMITED v. STEEL ENGINEERING PTY LIMITED
S.C. No. 1863 of 1986
Contract

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Kelly J.(1)

CATCHWORDS

Contract - Claim in Magistrates Court (A.C.T.) for amount allegedly outstanding - Whether claim properly pleaded - Whether claim sufficiently traversed by defence - Onus of proof on pleadings - Rules of pleading of Magistrates Court.

Magistrates Court (Civic Jurisdiction) Ordinance 1982 - ss.3(1), 16, 102, 103, 109, 110, 111(1).

HEARING

CANBERRA
17:7:1987

ORDER

The appeal be allowed.

The judgment of the learned Special Magistrate be set aside.

In lieu thereof there be judgment for the appellant.

The respondent pay the appellant's costs in this Court and in the Magistrates Court.

DECISION

By its special claim issued out of the Court of Petty Sessions (as it then was), Steel Engineering Pty. Limited (Steel) claimed of Concrete Constructions Pty. Limited (Concrete) the sum of $4,116.00 and costs. In its particulars of claim Steel pleaded first its incorporation and that of Concrete. About this there was no issue. It then pleaded as follows:

"3. By a document dated the 13th day of May

1980 the defendant accepted a tender by the
plaintiff in respect of a project at the
Belconnen Town Centre Library and Plaza.

4. It was a term of the agreement referred to
in paragraph 3 above that the Defendant would
pay to the Plaintiff the sum of $69,659.00 on
completion of the works.

5. The Defendant has paid to the Plaintiff
the sum of $65,543.00 pursuant to the
contract.

6. A sum of $4,116.00 is and remains
outstanding."

Thereafter Steel claimed the sum of $4,116.00 plus costs.

2. Concrete by its defence did not admit paragraph 3, denied paragraph 4, admitted paragraph 5 and did not admit paragraph 6 of the special claim and said that the whole of the moneys due had been paid.

3. Before proceeding to consider the course of the action before the learned Special Magistrate, I make some reference to the provisions in the Magistrates Court (Civil Jurisdiction) Ordinance 1982 (the Ordinance) relating to pleadings and particulars.

4. It seems to me that the rules of pleading in the Magistrates Court as set out in Part XII of the Ordinance were enacted so that that Court might have the benefit of the judicature system of pleading. I do not think it necessary to decide whether the Magistrates Court is a court of strict pleading.

5. I refer first to some provisions of the Ordinance which bear upon the question of pleading.

6. "Pleading" is defined in s. 3(1) to mean a claim, notice of grounds of defence, reply or third or subsequent party notice filed in proceedings. Section 15 of the Ordinance provides that proceedings shall be instituted by filing a claim for issue by the Clerk.

7. Section 16 (1) provides that a claim to recover a debt or liquidated damages shall be a special claim or an ordinary claim. Steel caused to be filed for issue by the Clerk a special claim as it was clearly entitled to do.

8. Section 16 (4) provides, inter alia, that a claim shall specify each cause of action in relation to which the proceedings are instituted, the amount of money or the other relief claimed in respect of each such cause of action and the prescribed costs. If there had been prescribed costs they were not specified in the claim.

9. In my opinion, the words "cause of action" appearing in s.16 (4) are to be given their ordinary meaning and this even though the Magistrates Court is a court of inferior jurisdiction. See Cooke v. Gill (1873) 8 LRCP 107. A cause of action was defined in that case at p 116 by Brett J. (as he then was) as "every fact which is material to be proved to entitle the plaintiff to succeed, - every fact which the defendant will have a right to traverse."

10. In Read v. Brown (1888) 22 QBD 128, Lord Esher MR again dealt with the meaning of the phrase. At p 131 he defined it as:-

"Every fact which it would be necessary for
the plaintiff to prove, if traversed, in
order to support his right to the judgment of
the Court. It does not comprise every piece
of evidence which is necessary to prove each
fact, but every fact which is necessary to be
proved. It has been suggested today in
argument that this definition is too broad,
but I cannot assent to this, and I think that
the definition is right."

11. Division 1 of Part XII of the Ordinance deals with pleadings generally. In substance the provisions in the Division have their counterpart in rules generally common under the judicature system of pleading. It is unnecessary to set out the details of the correspondence between the Division and those rules. I point out that s.102, at least, is an unusual provision.

12. Section 102 provides that where it is a condition precedent necessary for the case of a party to proceedings that a thing has been done or an event has happened, a statement that the thing has been done or the event has happened shall be included in his pleadings.

13. Section 103 provides in part that where a plaintiff's claim alleges money payable by a defendant to the plaintiff for work done and materials provided by the plaintiff for the defendant at the defendant's request it shall be sufficient to plead facts in the manner described in sub-section (1) of the section. Thereafter the defendant may within 21 days after service of the claim on him file and serve on the plaintiff a notice requiring him to plead the facts on which he relies in accordance with the provisions of Part XII other than s.103. Upon service of such a notice upon him, the plaintiff is required to plead the facts upon which he relies as required by the notice.

14. Section 109 reads:-

"(1) Subject to sub-section (3), an
allegation of fact made by a party to
proceedings in his pleadings shall stand
admitted by an opposite party unless it is
traversed by that opposite party in his
pleading or an implied joinder of issue under
section 110 operates as a denial of it.

(2) A traverse may be made either by a denial
or by a statement of non-admission, and
either expressly or by necessary implication,
and either generally or as regards any
particular allegation."

Section 110 reads as follows:-

"(1) No express joinder of issue shall be
required in any proceedings.

(2) If no reply is filed, there shall be an
implied joinder of issue on any ground of
defence specified in a notice of grounds of
defence filed in proceedings.

(3) An implied joinder of issue operates as a
denial of every allegation of fact made in
the relevant pleading except to the extent
that any such allegation is expressly
admitted."

Section 111(1) reads:-

"Where a pleading -

(a) discloses no reasonable cause of action
or defence or other case appropriate to
the nature of the pleading;

(b) has a tendency to cause prejudice,
embarrassment or delay in the
proceedings; or

(c) is otherwise an abuse of the process of
the court,

the court may, at any stage of the
proceedings, on such terms as it thinks just,
order that the whole or any part of the
pleading be struck out."

15. Application of the rules of pleading to the particulars of claim and defence shows, as it seems to me, that Concrete admitted that there was a contract in existence between Steel and it and that pursuant to that $65,543.00 had been paid to Steel. When Concrete admitted the truth of paragraph 5 of the particulars of claim, it admitted the existence of "the contract". There being only one contract referred to in the particulars it must be the contract referred to in paragraph 3 of the particulars of claim. On the pleadings that contract was made by the acceptance by Concrete of the tender by Steel in respect of a project at the Belconnen Town Centre Library and Plaza. Concrete, having by its defence denied paragraph 4 of the particulars of claim, put Steel to proof of the terms of the agreement referred to in that paragraph and it put Steel to proof also of the fact that the amount claimed remained outstanding by virtue of its denial of paragraph 6.

16. Giving to the phrase "condition precedent" used in s.102 of the Ordinance the widest possible meaning, it seems to me that the section means that where payment under a contract depends upon completion of certain work, a statement that those works have been completed must necessarily be included in the pleadings. The operation of the section in this case is not ousted by s.103 because Steel chose not to proceed under that section.

17. When the matter first came before the learned Special Magistrate, counsel for Concrete submitted that even if Steel were to prove all the facts alleged in its particulars of claim it would not be entitled to any relief. The learned Special Magistrate remarked that the particulars did not plead that work was done pursuant to the agreement, that is to say, as I understood him, that it was completed pursuant to it so as to entitle Steel to the difference referred to in paragraph 6 of the claim. In this, upon reflection, I think, with respect, that he was mistaken at least in part. Implicit in the particulars is the statement that the works were completed. Had the defendant wished to challenge the sufficiency of that implicit statement because it was defective, having regard to s.102 of the Ordinance, it should, I think, have sought to have the particulars dealt with under s.111. It did not and cannot now be heard to complain of the insufficiency.

18. The learned Special Magistrate also indicated that he would not enter judgment for Concrete on the application but was minded, quite properly as I think, to make use of the amendment provisions in s.124 of the Ordinance.

19. Steel then made application for judgment under s.156(1) of the Ordinance. The learned Special Magistrate refused that application also and the matter proceeded to hearing.

20. A director of Steel, Vinko Mijoc, gave evidence that a tender made to Concrete was accepted. A document headed "Acceptance of Tender" plainly issued by Concrete was tendered as Exhibit A. Addressed to Steel, it referred first to the contract in relation to the Belconnen Town Centre Library and Plaza. It then proceeded:-

"Details of Acceptance:

Your quotation in the form of priced B.O.Q.
to fabricate, supply and erect structural
steel as per the specification, drawings and
B.O.Q. items. for the lump sum fixed price
$69,659-00. B.O.Q. items 6/1A-6/10M.
7/2H-7/3P, 7/4D-I.

N.B. No Progress Payments will be made until
the lower tear off section of this form
is completed and returned.

Two separate claims must be made for
contract Progress Claims, and extras, or
claims will be returned."

21. Thereafter Mr Mijoc was asked, "What sort of work did you have to carry out?" He replied, "Structural work". He was then asked, "Did you carry it out?" to which he replied, "We did - I did". Subsequently he was asked, "Did you finish the work?" He replied, "We finished the work". He said that the sum of $4,116.00 was still outstanding.

22. In cross-examination, Mr Mijoc was shown a bill of quantities. Amongst other questions he was asked the following and gave the answers recorded:-

"My next question is do you agree that those
two items were part of the job that your
company was to do? --- I cannot say yes, I
cannot say no because . . .

I next ask you did your company carry out the
work on items L and M? --- I do not know.
What is it? Cannot say yes, cannot say no.
I do not know what is it. . . . I know . . . I
show drawing.

I ask that this reference to . . . be struck
out. It is irrelevant to the question. I
take you now to the succeeding page, 7/2.
Can you see that page, 7/2, items H, I, J,
K? --- I see, yes.

J, I am sorry, down to J. You see those
three items? --- Page . . . H, I, J? --- . . .
Under the heading Roller, Shutter, Support
Frame? --- Nothing to do - that . . . to do
with us.

Perhaps the witness . . .? --- Was not in the
contract, was not . . ."

Shortly afterwards he was shown the acceptance of tender, Exhibit A. The cross-examination continued:-

"The acceptance of the tender? --- This?
Can you see there 7/2H, item 7/3P? --- 7/2H,
7/3P, yes, I see that.

That refers to items 7/2H to 7/3P in that
bill of quantities, does it - the document in
front of you? --- Yes, I see this, yes. What
you want me to tell you?

This reference in the . . .? --- What that
means?

This reference is the acceptance of tender,
7/2H to 7/3P, refers, does it not, to this
document, 7/2H to 7/3P, is not that so? ---
That says here, yes.

That is what it refers to? Did your company
do that work in 7/2H to 7/3P? --- You asking
me difficult question. I do not know.

I ask that that . . .? --- I have to see shop
drawing, I have to see the plan."

Then he was asked:-

"Would you agree that that is another page
out of the same bill of quantity?"

He replied:-

"I cannot see nothing - I need a shop drawing
plan and everything is there and everybody
can see and that is job . . . and that job was
$69,659. We done it, we complete it I . . ."

Later he said:-

"Then after we change the contract that
number - this numbers we did not want to do
that because we . . . we do not want to do
metal work, this and that, lot of numbers is
out. That is what I say. I want to see
where I sign it or my brother - I am not
sure, I think brother sign it - and this
man. Where is the two signatures? This is
contract after . . ."

Finally, he was asked in re-examination the following questions and gave the answers recorded:-

"The roller shutter, was that something that
you had given a price for?--- Not yet. This
metalwork - we did not quote a price of the
metalwork.

Any metalwork? --- They asked us, we could
not do it.

Any metalwork? --- Any metalwork because we
was too busy, it was a very big job.
Structural steel, we could not take it.

What about the support framing? --- Support
framing on the trusses. They have been asked
us and we could not do it.

HIS WORSHIP: Support trusses did not get
mentioned. As far as I can remember it was
only the bulkheads and the matter you just
raised, the roller shutter.

MR ROMANO: Yes.

THE WITNESS: That is extra work, nothing to
do with my contract.

What about the bulkhead? --- Bulkhead?
Bulkhead, can I know what is that? Where is
that? Any plan you got here, show me what is
that.

Well, you were asked questions of the
bulkhead, do you know what it is? --- I do
not know. I need a plan to see it."

23. He had apparently been shown pages, Exhibit 1, from the Bill of Quantities numbered 7/2 and 7/3. On page 7/2 appeared the items "H" to "N" under the heading "Roller Shutter Support Framing". On page 7/3 appeared a number of items identified as "A" to "P" both inclusive. The first two of those items appeared as a continuation under the heading "Roller Shutter Support Framing". Those from "C" to "J" appeared under the heading "Vanity Bench Unit Support Framing" while the remainder appeared under the heading "Gutter Support Brackets".

24. Mr Mijoc was further cross-examined to show that his company had used Concrete's crane for a total of 7 1/4 hours. As I understand the evidence, he agreed with these figures and although he did not agree that a price of $60 per hour had been agreed upon as a reasonable price he said that it was reasonable. It was put to him that a reasonable price to do the work covered in respect of a number of items in the bill of quantities was a total of $4,710.00. Mr Mijoc said in answer to the two questions confirmed, "Never had it, never see that" and " I do not know". He also agreed that Concrete had made phone calls in connection with the contract although he denied that his company could be held responsible for them.

25. By this time it had become apparent that the dispute between the parties related to the terms of the contract. It seemed that Mr Mijoc took the view that the contract did not include any items other than those under the heading "Structural Steelwork". The situation became plain during Mr Mijoc's re-examination in the passage from it quoted above.

26. At the close of Mr Mijoc's evidence the following exchange took place between the learned Special Magistrate and counsel for Steel:-

". . . it is my submission that because of the
manner in which this matter has proceeded,
the plaintiff has been caught by surprise as
to the matters which have been raised. He
did not seek particulars of any defence
because no defence appeared on the face of
the document. It did not interrogate on the
base (sic) of that. It also did not seek to
obtain and have evidence available in
relation to the matters which have been
canvassed in cross-examination which now
appears to lay the basis for the second
defence. I would submit that in due course
the plaintiff may have to make an application
with a view to adduce evidence in reply, and
whilst they are conscious of the fact that
splitting one's case may create problems, I
would submit that this would be an
appropriate case in which that course ought
to be taken." (He immediately closed the
plaintiff's case.)

The learned Special Magistrate replied:-

"I do not know that I can give any ruling on
an application at this stage whether you will
be able to split your case, and I do not know
just how far I can agree that the plaintiff
must have been taken by surprise. On the
pleadings as they stand, it seems to me that
there is only one course that the defendant
could have taken, and that was simply that
the whole of the contract was not performed.
It seems to me that there is nothing else
open to the defendant. He admits he has paid
$65,543.00 and he says that the whole of the
moneys due have been paid, which can only
give rise to the conclusion that because of
something intervening, $69,659.00 no longer
was the amount that was due on completion."

Counsel replied:-

"That was a matter which ought to have been
particularised, with respect, if that was the
case."

The learned Special Magistrate said:-

"And particulars should have been sought as I
have said before."

Counsel said:-

"No, with respect, should have been
particularised in the defence."

The learned Special Magistrate replied:

"Yes. As I said earlier, that does raise the
issue and I think that should have been
canvassed. That is all I can say about it at
this stage."

27. In his reasons for judgment, the learned Special
Magistrate dealt with the contract as follows:-

"That indicates in the plaintiff's case that
there has been an alteration to the original
contract which limited the work to be done by
the plaintiff to structural work. Now, it
seems to be spelled out on the evidence led
on behalf of the defendant that certain work
included in the specifications and referred
to by number in the acceptance of tender, was
not known.

That work apparently is contained in the
items 7/2H and 7/3P. That seems to me to be
the only evidence tendered against the
contention of the plaintiff that the contract
was altered and that that alteration also
appeared in the shop drawings. Reference has
been made to Jones v. Dunkel and I think it
is clear from the evidence that the contract
and the shop drawings would be in the
possession of the defendant, and the
inference can be drawn that their
non-production is due to the fact that they
are of no assistance to them.

The matter could no doubt have been clarified
had advantage been taken of the provisions of
the Ordinance for discovery and
interrogatories, then perhaps even a notice
to produce on subpoenas, but that is the
situation you are left with in relation to
what was the work required to be done.

We have a clear statement from the plaintiff
through Mr Mijoc that the work which he
contracted to do was all done.

. . .

The other matter which goes to make up the
amount deducted from the figure referred to
in the acceptance of tender and which
constitutes the amount claimed by the
plaintiff, is an amount paid to some other
company for erection of support framing for a
roller shutter and a ground floor bulkhead,
whatever that was. Again, these matters are
not supported in any way on the part of the
defendant, except to say that some other firm
did them, and to refer to the bill of
quantities as having been referred to in the
acceptance of tender and being work which was
to be done by the plaintiff company.

Again I refer to the evidence of Mr Mijoc to
which I have earlier referred, that there was
an alteration to the contract, that he wanted
to see the contract and the shop drawings,
that they were not to do any metal work, that
these specific items were excluded from the
final contract, and no evidence from the
defendant to counteract that evidence of the
plaintiff has been produced."

28. It seems to me to have been essential in this case to keep steadily in mind where the onus of proof lay. If there had been no doubt about the terms of the contract, I think that the particulars of claim, although very badly pleaded, were sufficient to make a case on behalf of Steel. Once, however, it became obvious that Steel was alleging that there had been a variation of the contract, apparently entered into, it became necessary for Steel to prove what the terms of the agreement were so that it might show what was the work it had engaged to do and that it had completed all that work.

29. Steel failed to do this. The learned Special Magistrate apparently thought that it was enough that it should have given the evidence through Mr Mijoc that it did, namely, that it had agreed to do certain work at a given price and that it had completed the work which it had agreed to do but had not been paid the contract price. In fact, the evidence Steel gave did not establish what the contract was. In the way in which the case was brought, the onus of proving what the contract was lay always on Steel. Concrete had put it to proof but on its own evidence the contract was not that the making of which was indicated by the acceptance of tender, Exhibit A.

30. Much attention was devoted to the problem which Concrete apparently had in proving what were the terms of the contract and the learned Special Magistrate's judgment reflected somewhat unfavourably on a witness called on behalf of Concrete. However, it always remained a matter for Steel to prove what the contract was once the pleadings made it incumbent upon it to do so. The onus never shifted to Concrete.

31. In my opinion Steel failed to prove the contract and the verdict in its favour was wrong.

32. In the result I allow the appeal, set aside the judgment of the learned Special Magistrate and order that Steel pay Concrete's costs in this Court and in the Magistrates Court.