Castano v Ashglow Pty Ltd as trustee for The Ashglow Trust

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 CASES CITED : Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082

PARTIES : Edgar Castano (Plaintiff) Ashglow Pty Ltd as trustee for The Ashglow Trust (Defendant)

COUNSEL : J Wilcsek (Plaintiff) J Clifton (Defendant)

SOLICITORS : Savio Solicitors (Plaintiff) Bruce R Rexstraw & Associates (Defendant)

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

16690/2008 Edgar Castano v Ashglow Pty Ltd as trustee for The Ashglow Trust

JUDGMENT 1 HER HONOUR: Pursuant to s 39 of the Local Court Act 2007 ("the Act"), the plaintiff in the present proceedings, Mr Edgar Castano (who was the defendant in Local Court proceedings and to whom, in order to avoid confusion, I will therefore refer by name) appeals against the judgment of Mr Dunlevy LCM given on 24 November 2008. By s 39(1) of the Act such an appeal is confined to questions of law: by s 40(1) an appeal on a question of mixed fact and law is permitted, but only by leave of this Court. 2 At the commencement of the appeal, counsel who appeared for Mr Castano sought, and was granted (over opposition) leave to file a Further Amended Summons Commencing an Appeal, claiming leave under s 40(1) of the Act. 3 The appeal arises out of proceedings heard in the Local Court over three non-consecutive days in June, September and October 2008, which were commenced by statement of claim filed by Ashglow Pty Ltd ("Ashglow"), the present defendant. 4 Ashglow claimed, against Mr Castano, damages arising out of a contract for the performance of some concreting work at the home of a director of Ashglow, Mr Michael Porter. 5 Ashglow pleaded that, in late 2005, and through the agency of Mr Porter, it had orally contracted with Mr Castano for the performance of concreting work at residential premises at Wahroonga; that Mr Castano undertook the work, but that the work failed, in a variety of ways, to meet the quality conditions of the contract. 6 Two issues arose for determination:

(i) whether Ashglow had contracted with Mr Castano in his personal capacity, or whether it had contracted with Wildstorm Pty Ltd trading as Alpha Concrete Spraying & Pumping ("Wildstorm");

(ii) whether the work performed was below the standards for which the parties contracted. 7 Mr Dunlevy found in favour of Ashglow on both issues and awarded damages in the sum of $37,446 plus interest and costs. After a detailed consideration of the evidence as to the identification of the parties to the contract, he found that they were Ashglow and Mr Castano as an individual. This can be found in two separate passages in a lengthy, careful and detailed judgment. At para 33 Mr Dunlevy said: "… an objective assessment points to Mr. Castano being a party to the contract … the continual use of the first person implies he is entering into the contract himself." 8 At para 62, he said: "In summary, I accept Mr. Porter's version of events as to the lead up to the formation of the contract. On an objective assessment of Mr. Porter's evidence I find that the contract was between Ashglow and Mr. Castano as an individual." 9 His Honour then considered the evidence relevant to the quality of the work, and found that, in a number of respects, the work did not measure up to the standard for which the parties had contracted. Since no ground of appeal challenges this last finding, there is no need to say any more about it. 10 The grounds pleaded in the further amended summons are as follows: "1. His Honour erred in finding that the Contract was between the Plaintiff and the Defendant.

His Honour should have found that the Contract was between the Plaintiff and Wildstorm Pty Ltd … trading as Alpha Concrete Spraying & Pumping.

His Honour erred in finding when the contract was formed.

His Honour should have found that the handing over of the business card of Alpha Concrete Spraying & Pumping by the Defendant to the Plaintiff occurred prior to the formation of the contract.

In the alternative, His Honour erred in not taking into account post-formation communications in construing the terms of the contract (in particular, the identity of the parties).

Having found that the Defendant handed to the Plaintiff the business card of Alpha Concrete Spraying & Pumping, his Honour ought to have found that the Plaintiff was dealing with whomever was carrying on business under the name Alpha Concrete Spraying & Pumping.

His Honour erred in coming to his conclusion in that his Honour did not have regard to the Yellow Pages advertisement of the business name Alpha Concrete Spraying & Pumping." 11 It is quite plain that the grounds numbered 3, 4 and 6 can not, either under s 39 or s 40(1), be raised on appeal in this Court. They raise questions of fact. 12 I am also satisfied that the grounds numbered 1 and 2 raise questions of fact. While it may, in some circumstances, be the case that a ground concerning the identity of parties to a contract raises questions of law, or questions of mixed fact and law, that is here not the case. Here there was no issue that a contract existed, nor what were the terms of the contract. Accordingly, who the contracting parties were is a question of fact. 13 The issues can be stated reasonably briefly. The evidence before the Magistrate was to the following effect. Mr Castano was the director of Wildstorm. Wildstorm held a "Contractor Licence" authorising it to perform certain kinds of general concreting and tiling, with a restriction to "swimming pools only". Wildstorm was the registered proprietor of the business name "Alpha Concrete Spraying & Pumping" ("Alpha"). Alpha had a business card. 14 Alpha's business card was described by Mr Dunlevy as follows: "30. … On the left hand side it has a triangular logo and the word 'ALPHA' in large bold upper case letters. Under this is 'EDGAR CASTANO' in smaller upper case letters and then under that is the word 'PRINCIPAL' in even smaller upper case letters.

31. On the right hand side of the card - separated by a vertical line - are the words 'CONCRETE SPRAYING & PUMPING' in upper case letters that are smaller than the word 'ALPHA' but larger than Mr. Castano's name. The rest of the card contains contact details." 15 Alpha had an entry in the Yellow Pages telephone directory, and an advertisement. The advertisement also showed, at the top centre of the advertisement, a triangular logo, followed by, in large bold upper case letters, the word "ALPHA". Underneath that, in smaller bold upper case letters are the words "CONCRETE SPRAYING & PUMPING". Underneath that are the words: "SHOTCRETE SWIMMING POOLS RETAINING WALLS UNDERPINNING" 16 Under that, in bold upper case letters, but smaller than the previous upper case letters, the words "RENDER PUMPS FOR HIRE". Underneath that, in smaller upper case letters are the words: "SITE INSPECTIONS & OBLIGATION FREE QUOTES"

These are followed by a mobile telephone number, a landline number, and a facsimile number and the name of a suburb. 17 At some time on or before 4 October 2005 Mr Porter contacted Mr Castano. The two met at the Wahroonga premises on 4 October 2005. There they had a discussion which resulted in what was accepted to have been an oral contract for concreting of a basement area. Mr Castano told Mr Porter that the job would cost $8000 to $10,000 including materials. Mr Porter agreed to this. The agreement was never reduced to writing. During the course of this conversation Mr Castano did not mention the name Wildstorm (or Wildstorm Pty Ltd) or Alpha Concrete Spraying & Pumping. 18 In relation to the formation of the contract, Mr Dunlevy made findings of fact. Where there was a conflict of evidence between Mr Porter and Mr Castano, he preferred the evidence of Mr Porter. Essentially, he found that the contract was with Mr Castano, as distinct from Wildstorm, for the following reasons:

(i) during the conversations Mr Castano referred to himself in the first person and made no mention of Wildstorm, or any other type of company; he did not use a plural pronoun to imply "a joint or corporate effort";

(ii) Mr Castano made no mention of either of the names Alpha Concrete Spraying & Pumping or Wildstorm;

(iii) the business card that Mr Castano handed to Mr Porter at some stage did not disclose the existence of Wildstorm. 19 He made a finding that a business card was handed to Mr Porter after the contract had been made. In the appeal, it was conceded that this was an error. If it is, it is, essentially, an error of fact. However, it is arguable that this was an error of fact which may amount to an error of law on the basis that there is no evidence to support the finding: see the analysis of Kirby J in R L & D Investments Pty Ltd v Bisby [2002] NSWSC 1082 at [12]-[14]; and in particular the reference to Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321. Even if that is so, it makes no difference to the result. As the Magistrate observed, there was nothing in the business card to identify Wildstorm as a party on whose behalf Mr Castano was contracting. 20 The principal submission put on behalf of Mr Castano, both in the Local Court and in this Court, was that Mr Castano, when he made the arrangement with Mr Porter, was doing so as agent for Wildstorm. It was this proposition which his Honour rejected. 21 In written submissions filed on behalf of Mr Castano, it was contended that his Honour: "… erred in finding that [Mr Castano] was liable under the contract as agent for an undisclosed principal." 22 This submission is misconceived. His Honour made no such finding. That is apparent from the passages I have extracted above. The submissions, which were detailed, in relation to the circumstances in which an agent may, or may not, be held liable for a contract made in the name of another party are therefore irrelevant. It is true that, in the Local Court, submissions were directed to the law of contract in relation to an undisclosed principal, and it is true that his Honour addressed those submissions. He did not, however, make any finding to that effect. On the contrary, he found that Mr Castano contracted on his own behalf. 23 An argument was put to the effect that the decision of the Court of Appeal in Pethybridge v Stedikas Holdings Pty Ltd [2007] NSWCA 154 establishes that registration of a business name amounts to prima facie proof that the "registered body" (registered owner) is the trading entity. Counsel for Mr Castano relied upon the following, in [55]: "It is the effect of section 24 Business Names Act 1962 that, if there had been no other evidence on the topic, tender of the extract from the Business Names Register would have been sufficient to establish that it was the Appellant who was carrying on business under the name …" 24 However, that was preceded in that case by the observation of Campbell JA that the objective evidence in that case established that a reasonable observer of the pre-contract communications, together with background facts known to the parties, would conclude that the parties intended that the contract would be "with whomever it was that was carrying on business under the [business] name". Identification of the person or entity who owned the business name was therefore, in that case, a very material fact. 25 That is an important factual distinction in the present case. Moreover, the approach taken by Campbell JA shows that the identification of the parties to the contract is a conclusion of fact - see, for example, para [54]. 26 The decision in Pethybridge does not assist Mr Castano. The issue there, as here, was identification of the party to the contract; the first step to that identification was the conclusion that that party was the operator of the business name: from there, the next step was identification of the operation of the business name. 27 Counsel also argued, in this context, that the advertisement in the Yellow Pages was of significance. This was the subject of the specific ground numbered 7, asserting error of law in failing to have regard to that advertisement. 28 It is therefore necessary to look to the evidence with respect to that advertisement. 29 A submission made by counsel for Mr Castano was that the evidence established that the Yellow Pages advertisement was the only possible source of Mr Porter's knowledge of the existence of Mr Castano and therefore was an indication that he knew that Mr Castano was acting as agent for Wildstorm. This proposition does not withstand scrutiny. 30 The only evidence to which counsel was able to refer was that contained in para 7 of an affidavit sworn by Mr Castano on 5 June 2008. There Mr Castano deposed: "Annexed hereto and marked with the letter ' A ' is a true copy of the business advertisement for Alpha Concrete Spraying & Pumping (Alpha) in the Yellow Pages under concrete pumping services … Since 2003 the advertisement for the business in the Yellow Pages has always appeared as Alpha Concrete Spraying & Pumping. No where is my name advertised as a concreter." 31 From this, counsel argued, Mr Porter and his legal advisors ought to have realised that he was making the contention outlined above - that is, that Mr Porter's source of knowledge of the existence of Alpha (or, more precisely, Mr Castano) was the Yellow Pages, and that, since Mr Porter did not contradict or deny the conversation, it could be taken that he accepted that he had located Mr Castano through the Yellow Pages. 32 One problem with this is that para 7 is wholly inadequate to prove that Mr Porter's source of knowledge leading him to contact Mr Castano was the Yellow Pages advertisement. No reasonable person, or legal advisor, would consider that para 7 of Mr Castano's affidavit was intended as an assertion that Mr Porter's path to Mr Castano was (and could only have been) through the Yellow Pages. In any event, had it been read as making that assertion, it must have been rejected as inadmissible, since Mr Castano could not give evidence to that effect. 33 That argument was one step on the way to the further argument that the Yellow Pages advertisement made it clear that Mr Castano did business as agent for Alpha, which in turn was operated by Wildstorm. 34 There was nothing in the Yellow Pages advertisement that indicated that, in his discussions with Mr Porter, Mr Castano was acting as the agent, or nominee, of Wildstorm. 35 Ground 7 is rejected. 36 Ground 5 is in the same category as Ground 7, in conceivably raising a question of mixed fact and law. However, no separate argument was addressed to it. No doubt that is because it was, if argued, bound to fail. 37 As I have indicated, all other grounds raise questions of fact which are not amenable to the jurisdiction of this Court. 38 The summons is dismissed. I order the plaintiff to pay the defendant's costs of the appeal. **********

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