Monaro Mix Specified Concrete Pty Limited v Silvio and Maria Martiniello Trading As Sunny Concrete [1988] ACTSC 54 (19 September 1988)

SUPREME COURT OF THE ACT

MONARO MIX SPECIFIED CONCRETE PTY. LIMITED v. SILVIO and MARIA MARTINIELLO
trading as SUNNY CONCRETE
S.C. No. 272 of 1987
Contract - Evidence

COURT

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

CATCHWORDS

Contract - oral agreement - whether contract entered into by defendants on their own behalf or on behalf of a principal - no new matter of principle.

Evidence - question of credibility of witnesses - no new matter of principle.

HEARING

CANBERRA
19:9:1988

Counsel for the Plaintiff: Mr B. Hull

Solicitors for the Plaintiff: Snedden Hall & Gallop

Counsel for the Defendant: Mr I. Byrne

Solicitors for the Defendant: Meyer Boettcher & Clapman

ORDER

There be judgment for the plaintiff in the sum of $33,868.00.

The defendants pay the plaintiff's costs.

DECISION

The plaintiff claims $26,459.39 for concrete supplied to the defendants between 17 June 1986 and 16 September 1986 pursuant to oral agreement.

2. By their amended defence the defendants claim that any agreement entered into with the plaintiff was entered into not on their own behalf but as agents for Jericho Constructions Pty Limited or John White. The defendants further agree that concrete to the value claimed was delivered to Arnott Place, Hume, but deny that it was delivered to the defendants. There were further issues raised on the amended defence including a counter-claim and set-off, but these were abandoned at the hearing. The real issue is whether the contract in question was entered into by the defendants on their own behalf or on behalf of a principal.

3. Certain facts are not in dispute. The plaintiff was at all material times in business supplying ready-mixed concrete from its depot at Queanbeyan. The defendants carried on business as concreting contractors under the name of "Sunny Concrete". On 11 May 1983 the defendants opened a credit account with the plaintiff and from then until the events in question the plaintiff from time to time supplied concrete to various sites at the request of the defendants. The defendants received monthly accounts and paid them.

4. The plaintiff had certain well-established procedures for taking orders, carrying out deliveries and rendering accounts. It is unnecessary to set those procedures out in detail. They may be summarised. In the case of the ordinary account customer, an order would be placed by telephone, and if placed in advance of the day for delivery, would be informally recorded in a diary. On the morning before anticipated delivery, entries in the diary would be transferred to a day book. Orders placed during the course of that day for delivery the following day would be recorded directly in the day book. Where an order was placed for delivery on the same day as the order, that order too would be recorded directly in the day book. Generally speaking, in this way the orders were recorded in chronological sequence. Where an order was placed other than by an account customer, or where, for any reason, the payment was not to be made according to the ordinary monthly accounts system, the plaintiff adopted a procedure for obtaining cash on delivery. This was recorded in the first instance by the application of a red stamp bearing the words "cash sale" in the day book, and also by the completion of a cash on delivery box appearing on the printed delivery dockets which accompanied the driver who delivered the concrete. There was also a procedure adopted by the plaintiff in the case where one customer telephoned an order on behalf of another customer. Unless there was a practice for a particular established customer to ring up on behalf of another particular established customer, the plaintiff would take the precaution of checking with the customer for whom the order had been placed before the concrete was delivered in response to the order.

5. Some time in the first half of 1986 the defendants were engaged by a company called Jericho Constructions Pty. Ltd. to carry out the concreting work associated with the erection of a warehouse in Arnott Place, Hume. Prior to 17 June 1986 the defendants obtained their concrete supplies for that project from a company referred to in evidence as B.M.G. or B.M.G. Concrete. Early on the morning of 17 June 1986, however, the defendants discovered that the employees of B.M.G. were on strike. There was discussion between Mr. Martiniello and Mr. John White, who represented Jericho Constructions Pty. Ltd., after which Mr. Martiniello went to a nearby soil and gravel yard run by Mr. Mario Lopilato. There he made a telephone call from Mr. Lopilato's office and spoke to Mr. Anthony Hain, who was in charge of the accounts and the telephone orders taken on behalf of the plaintiff. The content of that telephone conversation is really the central issue in the case.

6. Mr. Hain said in evidence that he recognized the voice of Mr. Martiniello, having spoken to him on several occasions in the past. Mr. Hain said that the conversation was in these terms:
"At approximately about 6, 6.30, 20 to 7 the

phone rang. I answered in the normal manner of
"Good morning, Monaro Mix". The caller said,
"Tony, its Silvio from Sunny Concrete. I want to
order some concrete for Hume." I then said, "How
much concrete and what time to you want it?" He
said forty-five metres plus a balance straight
away". I then said we could not do it until
about 10.30. We carried on, then I got this
street address. I asked Silvio where-abouts in
Hume it was and he gave me the street address of
Arnott Street, Hume. I asked the type of
concrete required. He said "20 mpa" and being so
late he asked me could he have two percent
calcium added to the concrete . . . . and would I
put the price on the docket."

7. Mr. Hain said that he had a clear recollection of the conversation and that he had three reasons for so recollecting. The first reason was that the phone call was early in the morning when the yard was busy. The second reason was that Mr. Martiniello requested a price to be written on the last docket and the other reason was that there was later some confusion about the address. The driver who delivered the concrete rang back to the yard where it was decided that the correct address was not Arnott Street as originally written in the day sheet but Arnott Place. The letters "Pl" clearly appear written over the word "Street". The record in the day book made by Mr. Hain is not consistent with his accepting the order as a cash on delivery sale or otherwise than an ordinary sale to the account customer recorded, namely Sunny Concrete, the name under which the defendants traded.

8. According to Mr. Martiniello, the telephone conversation was as follows:

"I said, "Tony, it is Silvio here. We do job for
John White in Hume. They are supplied by B.M.G.
B.M.G. is on strike, as you know. Would you like
to supply the concrete. There will be a COD
basis." And he said, "It is all right with me".

9. Later in his evidence he said that he requested Mr. Hain to "send straight away", that he said "Tony, it will be COD" and that he also said "Total on the last docket, and collect the cheques . . . . from John White".

10. Mr. Lopilato was called in evidence and he said that Mr. Martiniello came to his office on the morning in question and that he heard Mr. Martiniello speak on the telephone to someone called Tony and say "The B.M.G. is strike, I hope that some concrete be off John White Constructions." Mr. Lopilato added that he heard the following:

"Then he said, . . . . . to collect the cheque for
him COD. He repeated three times."

11. It is undisputed that concrete was delivered by the plaintiff to the site at Hume following this telephone conversation. It is also undisputed that concrete was delivered to the site at Hume by the plaintiff on 18, 19, 20, 25, 26 and 27 June 1986 and also 1 July 1986. It appears to be undisputed and I find that there was a delivery on 11 July 1986, although according to the particulars supplied this does not seem to have been initially part of the plaintiff's claim. According to Mr. Hain, the deliveries on the subsequent dates were made pursuant to telephone orders. He was not sure whether all those orders were placed by Mr. Martiniello. Indeed, according to Mr. Hain, the deliveries on 26 and 27 June 1986 were made in response to orders taken by somebody other than Mr. Hain. Mr. Martiniello said in his evidence that the subsequent deliveries were made as a result of orders placed by truck drivers who made the deliveries. The orders were, according to Mr. Martiniello, placed by the drivers for the day following each delivery.

12. The plaintiff called two of the truck drivers, Mr. K.E. Johnson and Mr. G.A. Robson, who said that the deliveries were not made on a cash on delivery basis insofar as the plaintiff had not given either of them any specific instructions to follow the cash on delivery procedures.

13. The evidence relating to later transactions between the plaintiff and the defendants sheds some light on the nature of the arrangements made for the delivery of the concrete to Hume. From about 11 July 1986 through to the middle of September 1986, the plaintiff continued to supply concrete to the defendants at their request to other sites in the area. This was done on the monthly account basis. However, according to Mr. Hain, on 21 August there was a telephone conversation between him and Mr. Martiniello in which he told Mr. Martiniello that the account was over due and Mr. Martiniello promised that he would be in the next day with a cheque. As a result of that conversation Mr. Hain, according to his evidence, then authorised the supply of further concrete to the defendants. Mr. Martiniello denied that such a conversation took place. However, it was not denied that there was an incident the following day, 22 August, when Mr. Martiniello visited the Queanbeyan office. Evidence as to what happened on that day was given by Mr. Ian Robert McPherson, Managing Director of the company. He said that the first time the deliveries to Hume in June and July came to his notice was on 22 August when Mr. Martiniello came to his office and, after some initial discussion about the defendants' account, the following conversation occurred:

"And Silvio said to me, "The job for John White,
it appears that John White is going to go
bankrupt and I want to put something to you."
And I said, "What is that?" And Silvio said,
"Would you be prepared to lose half of the
concrete and I lose the other half, what do you
think?" And I said to Silvio, "Our company
doesn't work that way, Silvio, and I cannot
accept it." And he said, "Well, it will be very
hard for me to pay but if you're patient and
don't press I'll eventually pay the debt." And I
said, "Well, if you make regular reductions we'll
accept it." Silvio said that he would make sure
that some money was paid off at least monthly.
And I do not think there was much more
conversation than that."

14. Mr. Hain said that he saw Mr. Martiniello go into Mr. McPherson's office but he did not hear any conversation between them.

15. Mr. Martiniello's account of the conversation with Mr. McPherson is not as easy to follow. He said that he was at the counter talking to Tony, it being a rainy day and there being no work, and when he saw Mr. McPherson walk by, the following conversation occurred:

"And he say, "Hello Silvio", and I say, "Hello
Bob." And I say, "By the way Bob, did you
collect any money from John White yet?" He said,
"No, why?" I said, "Because he around then he
goes and bung it up". And then he said, "Come
into my office." So I went into his little
office and he said, well, tell him, and I said,
"Well, I just been there to collect the money",
and he said, "Has not got any money. John White
is not around any more."

16. Mr. Martiniello went on to say that Mr. McPherson called his son into the room and instructed him to write to John White and that he saw the son start typing in the office. He added that Mr. McPherson appeared very upset and turned to him and said, "I get my money one way or the other".

17. The plaintiff's case as to the initial and crucial conversation of 17 June was supported directly only by the evidence of Mr. Hain. The defendant's case, on the other hand, was supported directly by the evidence of Mr. Martiniello and also the evidence of Mr. Lopilato. However, there is a considerable body of evidence which tends to support the plaintiff's case. The plaintiff's own records point to a contract with the defendants and not to a contract with someone else. There would have been no reason why the documentation would have been prepared at the time with a view to implicating the defendants rather than a principal on whose behalf Mr. Martiniello claimed to be acting. In this sense the documents are not self-serving. The evidence of the truck drivers tends to support the contention that the contract was with the defendants on the normal monthly account basis.

18. As far as demeanour of witnesses is concerned, Mr. Hain was very impressive, indeed unusually so. The impression gained from observing him in the witness box was supported by the efficient and orderly system of documentation which he supervised. He gave reasons why he remembered the initial conversation clearly, and whilst the first of those reasons, namely, that the telephone call came at a busy time, does not appear to be very convincing in itself, the other reasons are, in my view, acceptable. Mr. Hain was not as definite in his evidence as to the conversations relating to the orders subsequent to 17 June, but taken overall I do not think that that affects his credit. Mr. Martiniello was not an impressive witness. As to Mr. Lopilato, I have given careful consideration to his evidence and I conclude that I cannot accept him as a credible witness on the content of the conversation over the telephone. I have made every proper allowance for what appears to be the fact that both Mr. Martiniello and Mr. Lopilato have difficulty expressing themselves in English, but the difference in the accounts given by each of them as to the details of the conversation cannot, in my view, be explained away on that basis.

19. There is one final matter which I think is fatal to the defendants' case. Evidence was given on behalf of the defendants by Mr. John White, the managing director of Jericho Constructions Pty. Ltd. It is clear from the evidence of Mr. White that the defendants were carrying out concreting work for Jericho Constructions Pty. Ltd. and not for Mr. White personally. According to Mr. Martiniello's own evidence, however, he said nothing about Jericho Constructions Pty. Ltd. when he spoke to Mr. Hain on the telephone nor indeed when he spoke to Mr. McPherson in the office on 25 August. I accept the evidence of both Mr. Hain and Mr. McPherson that the first they heard of Jericho Constructions Pty. Ltd. was upon receipt of a letter written to the plaintiff by the defendants' solicitors dated 25 August 1986 in which it was stated, inter alia, "we appreciate that the order was placed by Silvio Martiniello but are instructed that he made it plain that it was being ordered on behalf of Jericho Constructions Pty. Ltd. as that firm was unable to obtain concrete from their usual supplier, Pioneer Concrete". In his evidence Mr. Martiniello simply made no such claim.

20. For these reasons the plaintiff's claim is made out and the defendants' defence that the contract was entered into by them not on their own behalf but on behalf of a principal fails. There will be judgment for the plaintiff for the $26,459.39 claimed together with interest assessed at fourteen percent per annum from 16 September 1986 to 16 September 1988 calculated at $7,408.62 making a total of $33,868.00. Unless the parties wish to be heard, I propose to order the defendants to pay the plaintiff's costs.