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Victoria Park Golf Club Inc v Brisbane City Council

VICTORIA PARK GOLF CLUB INC V BRISBANE CITY COUNCIL [2001] QSC 225

Supreme Court of Queensland – 29 June 2001

FACTS

The Council was the owner (on trust) of land used for a golf course. The golf club operated a clubhouse on the land and its members had entitlements to use the golf course. During the early 1990’s the Council and the members of the golf club wanted to formalise their legal relationship. In April 1996 the Council adopted a recommendation that negotiations be conducted withthe golf club for a lease of the land from the Council to the club and a separate agreement that the members of the club have some  exclusive rights to use the golf course.

During 1999 a Mr. S acted on behalf of the Council in negotiations for the relevant contracts. The Council sent a documenten titled “Proposed Lease and Block Playing Times” to the club in September 1999 and a member of the club signed this document to state  that the proposal would be put to members of the club. Other matters delayed a final decision about the future of the golf  course but eventually in 2000 the Council decided to withdraw the document of September 1999.

The golf club sued for specific performance of agreements allegedly outlined in the document of September 1999.

ISSUES

Did Mr. S have authority to bind the Council and make a contract with the golf club?

The golf club argued that Mr. S had actual authority to bind the Council and if he did not have actual authority he had ostensible or apparent authority to bind the Council.

FINDING

The Council’s recommendation of April 1996 only authorised Council officers to negotiate with the golf club and therefore Mr. S did not have actual authority. Also there was no evidence that the Council indicated to the golf club that Mr. S had authority to bind the Council and therefore Mr. S did not have ostensible or apparent authority to bind the Council.

The Court also found that the document of September 1999 was not sufficient evidence of a concluded agreement.

QUOTE

Moynihan J said:

“…[O]stensible or apparent authority arises from a representation made or permitted by a principal to a third party that an agent has authority.

The agent is essentially an agent to the transaction. …

This case is not an example of a corporate principal permitting an employee or officer to enter into contracts in the ordinary course of its business so founding an inference that he is authorised to do so.”

IMPACT

The golf club failed to prove that it was reasonable for it to believe or assume that Mr. S had authority to bind the Council. Relevant factors included: (1) that this was not the case of a corporate principal permitting its officers to enter into contracts in the ordinary course of business; (2) the unusual and important nature of the transaction.

Readers will be aware that corporate principals (particularly large companies) often develop internal procedures to prevent officers entering into contracts above specified amounts (eg. without first seeking the approved of the contracts manager). If an errant officer enters into a contract outside those procedures, the company may nevertheless be exposed. The other party may be able to claim that the officer had ostensible authority to enter into the contract.

Companies should always be vigilant to this prospect and ensure that officers are kept regularly informed of authority limits and the potential consequences of exceeding them (eg. through regular training).

South Bank Corporation v Mostia Construction

SOUTH BANK CORPORATION V MOSTIA CONSTRUCTIONS [1999] QSC 126

Supreme Court of Queensland – 11 June 1999

FACTS

Mostia served two notices of dispute on South Bank and referred a dispute to arbitration under clause 47 of the AS2124 Contract.

South Bank claimed that the first notice was not properly served and that the second notice did not adequately identify and provide details of the dispute.

Mostia claimed that it had provided the details in a conference and in correspondence to South Bank.

ISSUE

Did the Notice of Dispute served by Mostia adequately identify and detail the dispute?

FINDING

The Notice of Dispute did not adequately identify and provide details of the disputes. The Notice must provide information which conveys to the other party the details of the dispute.

QUOTE

Mackenzie J said:

“The sequence of events is set out to illustrate that if the documents in the applicant’s hands are the totality of the claim, it may be thought to be taking what is, in commercial if not legal terms, a narrow and rather sterile point, since it was common ground that there is no reason why the respondent could not provide a fresh notice which was, beyond argument in compliance with clause 41. Nevertheless, I am obliged to consider the adequacy of the notice according to the criteria set out in the authorities. With some reluctance I have come to the conclusion that I should find that the applicant is entitled to the declarations sought. It cannot be said on any view of the matter that the applicant has ever abandoned the stand that the notice of dispute was invalid even though it pursued avenues which may have lead to the dispute being resolved. No question of waiver estoppel arises.” – paragraph 10 of (1999) QSC 126

“It is a question of degree as to whether the details of the dispute have been adequately identified and provided. It is a question of the point at which sufficiency is reached.

In my view, the requirements of the clause have not been satisfied in this case and there being no basis upon which the respondent can succeed it is an appropriate can in which to give final relief.” -paragraph 12 of (1999) QSC 126

IMPACT

The court applied a strict test for the adequacy of a Notice of Dispute.

The court ignored the information provided to South Bank outside the Notice.

If an applicant wants to ensure that their Notice of Dispute is valid they should include all particulars and information in their Notice, even if it has already been provided.

Queensland Ice Supplies v Anco Australasia

QUEENSLAND ICE SUPPLIES PTY LTD V ANCO AUSTRALASIA PTY LTD [2000] QSC 72

Supreme Court of Queensland – 31 March 2000

FACTS

Queensland Ice manufactured and sold ice products in Queensland, and operated two ice making machines which were serviced by one condenser.

Anco was engaged by Queensland ice to treat the water in the condenser but the condenser itself was cleaned by an employee of Queensland Ice. The employee who cleaned the condenser left the employ of Queensland Ice in late 1997 and Queensland Ice engaged Anco to clean the condenser as well as treat the water.

On 26 November 1997, Rennie, a casual employee of Anco, attended Queensland Ice’s premises and treated the water and apparently cleaned the condenser. On 15 December 1997, one ice making machine failed and on 18 December 1997 both ice making machines failed and attempts to fix the machine were unsuccessful. On 21 December 1997, the director of Queensland Ice managed to fix the ice making machines cleaning the strainer in the condenser.

Queensland Ice sued Anco for negligence and breach of contract and claimed that Rennie had failed to clean the strainer when he cleaned the condenser. The Court found that Rennie had failed to clean the strainer in November 1997. Queensland Ice were unable to manufacture ice for six days and lost some major customers due to its inability to supply enough ice.

ISSUES

Was Queensland Ice guilty of contributory negligence by taking six days from the date of the failure of the ice making machines to inspect and then clean the strainer?

Was the failure of Anco to clean the strainer the cause of the loss to Queensland Ice or was Queensland Ice’s failure to promptly identify the problem with the strainer

FINDING

Queensland Ice sued Anco for both breach of contract and negligence. Contributory negligence is not a defence to an action for breach of contract. The delay in inspecting and cleaning the strainer was a cause of the financial losses suffered by Queensland Ice and this loss would not have occurred but for the breach of contract by Anco.

QUOTE

Chesterman J said:

“It is no doubt right that had Mr Bradley looked for the cause of the high pressure in the operation of the condenser or, more particularly, at the strainer he would have discovered it was blocked and cleaned it in time to avoid the sever disruption to its production which the Plaintiff suffered in the week 15 to 21 December. Applying the “but for” test it may be said that Mr Bradley’s failure to look at and clean the strainer was the cause of the disruption and subsequent loss.

It remains equally true that “but for” the defendant’s failure to clean the strainer in November there would have been no disruption and loss. There are two concurrent causes of the loss. In these circumstances I do not apprehendthat the law requires a Plaintiff to prove that the breach of contract was the “dominant” or the “effective” cause. It isenough if it was a cause of  the loss, or put differently, that the breach of contract causally contributed to the loss.”

IMPACT

This case is an example of a defendant being liable for both breach of contract and negligence and not being able to rely on the contributory negligence of the plaintiff as a defence to the breach of contract action.

The failure of Queensland Ice to properly inspect the condenser when the ice making machines broke down has held not to have broken the causal link between the breach of contract and the losses suffered by Queensland Ice.

McCoy Construction v Dabrowski

MCCOY CONSTRUCTION PTY LTD. V DABROWSKI (2000) QSC 385

Supreme Court of Queensland 26 October 2000

FACTS

McCoy built kit homes which were open for display to members of the public. McCoy had constructed a home for Dabrowski but there were alleged defects in the building work.

When the parties failed to resolve their differences in respect of the construction work, the case was listed before the Building Tribunal. Prior to the hearing, Dabrowski stood before McCoy’s premises and told visitors to the premises that he had a contract with McCoy for the construction of his home and that there was a dispute that was currently awaiting determination before the Building Tribunal.

McCoy made an application to the court to restrain Dabrowski from engaging in a conduct that constituted nuisance.

ISSUES

What factors should the Court take into account in considering whether to grant an interlocutory injunction to prevent the nuisance continuing?

FINDING

The facts inferred that there was a serious question to be tried because Dabrowski was not merely giving helpful advice to potential home purchasers but he had an intention to denigrate McCoy’s business.

In considering on the balance of convenience whether the injunction should be imposed, the court found that Dabrowski’s conduct had the potential of causing McCoy to lose business but that Dabrowski would not suffer any loss by being restricted from speaking to intending visitors at the display homes.

Although Dabrowski’s conduct was lawful, the circumstances of the acts extended to McCoy’s land and interfered with McCoy’s comfort and enjoyment of the land.

Dabrowski could therefore use the roadways and footpaths outside McCoy’s premises, but he would be restricted from communicating to intending visitors of McCoy’s display homes of a complaint of bad workmanship by McCoy or of facts from which such an inference could be reasonably drawn.

QUOTE

Jones J said:

“One of the features of nuisance claims is that a nuisance can occur notwithstanding that the conduct complained is not unlawful. Such conduct may become nuisance when the circumstances of lawful acts extend to the land of a neighbour and interfere with the neighbour’s comfort and enjoyment of the land.”

IMPACT

An interlocutory injunction is granted when the facts infer that there is a serious question to be tried and that on the balance of convenience, an interlocutory injunction should be imposed.

The power to impose an injunction is not limited to unlawful acts but may extends to lawful acts that constitute a nuisance. A lawful act of a person becomes a nuisance when the circumstances of the act interfere with the neighbour’s comfort and enjoyment of the land.

Franklin v Giddins

FRANKLIN V. GIDDINS [1978] QD R 72

Supreme Court of Queensland – 12 October 1977

FACTS

Franklin was the owner of an orchard and had developed a new type of nectarine called the Franklin Early White. This nectarine was of better quality than most nectarines and had the commercial advantage of ripening before other nectarines.

Giddins was a neighbour and friend of Franklin’s son and was aware of the commercial value of the new nectarine type and was also aware that Franklin did not wish to sell the nectarine budwood and allow others to grown the new nectarine.

Giddins trespassed onto Franklin’s property and stole some nectarine budwood. Giddins later began to grow the new nectarine and sold it to the public.

ISSUES

Had Giddins breached an obligation of confidence to Franklin, and if so was Franklin entitled to an order that the budwood be delivered by Giddins to Franklin?

FINDING

An obligation of confidence could be imposed even if the confidential information was not directly imparted by the owner of the information to the person misusing the information.

The Court ordered that the budwood be delivered up to Franklin and Giddins be barred by injunction from any further use of the budwood or new nectarines.

QUOTE

Dunn J at page 80 said:

“I find myself quite unable to accept that a thief who steals a trade secret, knowing it to be a trade secret, with the intention of using it in commercial competition with its owner, to the detriment of the latter, and so uses it, is less conscionable than a traitorous servant.

The thief is unconscionable because he plans to use and does use his own wrong conduct to better his position in competition with the owner, and also to place himself in a better position than that of a person who deals consensually with the owner.”

At page 81 he said:

“If it be right to regard the defendants as constructive trustees of the productive wood, leaves, flowers and fruit then they are obliged to deal with them as the plaintiff’s direct. If they were directed to do so by the Plaintiff they would be bound to destroy the property.”

IMPACT

An obligation of confidence can be imposed even if the person misusing the confidential information did not receive it directly from the owner of the information.

Clyde Contractors v Northern Beaches

CLYDE CONTRACTORS P/L V NORTHERN BEACHES P/L [2001] QCA 314

Supreme Court of Queensland – 7 August 2001

FACTS

Clyde contractors entered into a contract with Northern Beaches in which Clyde was to carry out certain work with respect to a land development for Northern Beaches.

Clyde Contractors claimed that Practical Completion was reached on 22 March 1999 as evidenced by letters of the Superintendent dated 19 and 20 May and that Northern Beaches failed to pay monies owing.

Northern Beaches refused to pay saying that practical completion had not been achieved as they had not been informed of practical completion in the correct manner and therefore they were entitled to liquidated damages from 16 March 1999.

ISSUES

At what date was practical completion reached – were letters from the Superintendent sufficient evidence that practical completion had been reached?

Whether Clyde was entitled to the return of the retention moneys due to the fact that no Certificate of Final Completion was issued?

FINDING

It was held that the letters from the Superintended provided sufficient evidence that practical completion had been reached and there was nothing in the contract requiring notification to be given in a specific form.

The retention moneys were to be returned to Clyde due to the fact that the matter was not raised by Northern Beaches until the time of the Appeal. Had they raised the matter earlier Clyde would have taken steps to ensure the Certificate was issued. No reason was found as to why a certificate would not have been issued.

QUOTE

“There was an onus on the appellant to demonstrate that there was some issue to be tried or some other good reason for the matter to go to trial. In all the circumstances it cannot be said that the learned District Court judge was wrong in concluding that on the evidence practical completion had been reached in March 1999 and there was no triable issue with respect thereto”

IMPACT

That essentially practical completion is a question of fact and the absence of a formal certificate does not necessarily mean that practical completion has not been reached.

This publication is intended to be a topical report on recent cases in the construction, development and engineering industries. This publication is not intended to be a substitute for professional advice, and no liability is accepted. This publication may be reproduced with full acknowledgement.

Jim Doyle

Tel.: 1800 888 783

jdoyle@doylesconstructionlawyers.com
www.doylesconstructionlawyers.com