KEMAYAN MANAGEMENT SERVICES (AUSTRALIA) PTY LTD (ACN 072 055 380)

Contract - Whether a contract was made between plaintiff and the first defendant - Turns on own facts

Builder - Unregistered builder contracting to carry out building work - Whether barred from making a contract to construct a building - Whether barred from claiming on a quantum meruit

Builders Registration Act 1939 (WA)

The first five preliminary issues are decided in favour of the first defendant and the sixth issue in favour of the plaintiff

Boranga v Flintoff (1997) 19 WAR 1

Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337

Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523

F L Schuler AG v Wickman Machine Tool Sales Ltd [1973] UKHL 2; [1974] AC 235

FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] VicRp 76; [1993] 2 VR 343

Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310

Howard Smith & Co Ltd v Varawa [1907] HCA 38; (1907) 5 CLR 68

Liebe v Molloy [1906] HCA 67; (1906) 4 CLR 347

Marist Bros Community Inc v Shire of Harvey (1995) 14 WAR 69

Nelson v Nelson [1995] HCA 25; (1995) 70 ALJR 47

Pegrum v Fatharly (1996) 14 WAR 92

Re Homfray Carpets Australia Pty Ltd v Hycraft Carpets Pty Ltd [1996] VicRp 67; (1996) 14 ACLC 555

Sportsvision Australia Pty Ltd v Tallglen (1998) 44 NSWLR 103

Spunwill Pty Ltd v Bab Pty Ltd (1994) 36 NSWLR 290

The Administration of the Territory of Papua & New Guinea v Guba [1973] HCA 59; (1973) 130 CLR 353

White & Anor v Australian & New Zealand Theatres Ltd [1943] HCA 6; (1943) 67 CLR 266

Winds v W H Heck & Sons Pty Ltd [1986] 1 Qd R 226

1 This matter comes before me pursuant to the order of a Master on the trial of the following preliminary issues:

(1) whether the plaintiff and the first defendant entered into a contract as pleaded in paragraph 3 of the statement of claim;

(2) whether there was a contract between the first defendant and Singvests Holdings Pty Ltd;

(3) whether there was a contract between Singvests Holdings Pty Ltd and the plaintiff;

(4) whether the terms of the contract were as pleaded in paragraphs 3 and 5 of the statement of claim;

(5) whether the contract between the plaintiff and the first defendant was terminated as pleaded in paragraph 12 of the statement of claim;

(6) whether section 4 of the Builders Registration Act WA (1939) on its correct construction:

(i) bars the plaintiff from making the contract as pleaded in the statement of claim;

(ii) precludes the plaintiff recovering from the first defendant payment for work done under the contract, if proved; or

(iii) precludes the plaintiff recovering from the first defendant payment for work done in restitution based on principles of unjust enrichment.

2 Paragraphs 3, 5 and 12 of the amended statement of claim pleads as follows:

"3. By an agreement made between the Plaintiff and the First Defendant, the Plaintiff agreed to carry out construction and renovation works to the Hotel, as directed by the First Defendant, or further and alternatively by the Second Defendant for and on behalf of the First Defendant, for a total estimated cost of $1,200,050.00 (the 'Contract').

(a) The said agreement between the parties was made partly orally, partly in writing and partly by conduct between in or about November 1996 and February 1997;

(b) in so far as it was made in writing it consisted of the following:

(i) a tender specification document provided to the Plaintiff and entitled 'Proposed interior design works to Kemayan Inn Hotel at Murray Street Perth, Western Australia' dated 11 November 1996;

(ii) a tender letter (the 'Tender') from the Plaintiff to the First Defendant (but addressed to the Kemayan Inn Hotel) dated 3 December 1996 attaching an estimated cost breakdown and general description of interior design work for the Hotel (the 'Works');

(c) in so far as it was oral it consisted of the following:

(i) the said agreement was made at a meeting, held on or about 9 January 1997, attended by Mr Tom Kee on behalf of the Plaintiff, Mr Andrew Kessler, Mr K K Low as Project Manager on behalf of the First Defendant and by the Second Defendant as design consultant on behalf of the First Defendant;

(ii) the meeting was to consider the Tender and the Works. At the meeting Mr Low instructed Mr Kee to meet with the Second Defendant, the following day, for the purpose of placing orders for materials, to commence the Works, to commence work on the renovation of one of the rooms of the Hotel (the 'Show Flat') and thereafter to carry out the Works in respect of the Hotel guest rooms if and when the Show Flat was approved by the First Defendant, or alternatively by the Second Defendant on behalf of the First Defendant;

(iii) During February 1997, Mr K K Low, on behalf of the First Defendant, approved the Show Flat in stages and orally directed the Plaintiff to commence the Works in respect of the Hotel guest rooms to the extent that they had not been already commenced, and to place orders for materials and provided the Plaintiff with a copy of building licence number 97007, in the name of the First Defendant, to assist the Plaintiff to place those orders;

(d) in so far as the agreement was made by conduct, that conduct consisted of or is to be inferred from the following:

(i) the First Defendant and the Second Defendant were aware that the Plaintiff had submitted the Tender;

(ii) Mr K K Low, on behalf of the First Defendant, orally instructed the Plaintiff to commence the Works including work on the Show Flat, in conjunction with the Second Defendant as the First Defendant's designer, which the Plaintiff did;

(iii) following the construction of the Show Flat Mr K K Low, on behalf of the First Defendant, orally instructed the Plaintiff to commence the Works in respect of the Hotel guest rooms to the extent that they had not been already commenced, which the Plaintiff did during February 1997;

(iv) by reason of the particulars set out in subparagraphs 3(d)(i) to 3(d)(iii) above the First Defendant thereby accepted or alternatively signified its acceptance to the Plaintiff's Tender;

(v) alternatively, the First Defendant with full knowledge of the Tender retained the same without in anyway dissenting from or objecting to or demurring within a reasonable time, or at all, and thereby agreed to the Plaintiff's Tender and signified its acceptance of the same by reason of the matters pleaded in subparagraphs 3(c) to 3(d)(iv) above;

(vi) alternatively, the First Defendant by its silence and conduct, with full knowledge that the Plaintiff would proceed with the Works, permitted and induced the Plaintiff to believe, as in fact it did believe, that the First Defendant had agreed to and accepted the Plaintiff's Tender by reason of the matters pleaded in subparagraph 3(c) to 3(d)(iv) above.

5. It was an implied term of the Contract, which was obvious and reasonable and necessary to give business efficacy to the contract, that if the Plaintiff was directed by the First Defendant, or further and alternatively the Second Defendant on behalf of the First Defendant, to carry out work outside the scope of the Works and did so, the Plaintiff would be entitled to be paid a reasonable amount for those works ('Variations').

12. In or about late November or early December 1997, Tom Kee on behalf of the Plaintiff and Mr K K Low on behalf of the First Defendant, and the Second Defendant also on behalf of the First Defendant, agreed that in consideration of the Plaintiff having carried out the Works and the Variations, the First Defendant would pay all outstanding amounts then due and owing to the Plaintiff in relation to the Works and the Variations and would discharge the Plaintiff from any further obligations under the Contract except for those particular parts of the Works which were at that time being executed."

3 In relation to Singvests Holdings Pty Ltd, the first defendant pleads that:

"2. The first defendant denies of the allegations in paragraphs 3-12 (inclusive), 15, 16 and 17 of the statement of claim and further says that:

(1) All building works to the Inntown Hotel at Murray Street, Perth, Western Australia (the contract works) were performed for the first defendant by or at the direction of Singvests Holding Pty Ltd ACN 058 142 715 (Singvests) as an independent contractor pursuant to a contract between the first defendant and Singvests;

The contract with Singvests was in writing and consisted of tender documents and correspondence between the first defendant and Singvests dated 4 February 1997, 26 February 1997 and 10 March 1997.

(lA) The plaintiff agreed to perform work in respect of the contract works for Singvests under an independent contract between the plaintiff and Singvests (the subcontract), distinct from and separate to the contract between the first defendant and Singvests.

The subcontract was partly oral and partly in writing.

To the extent the sub contract was oral it consists of terms agreed at meeting between Thomas Kee on behalf of the plaintiff and Andrew Kessler and the second defendant on behalf of Singvests between November 1996 and February 1997 including a meeting at the Hyatt Hotel, Perth on 9 January 1997.

To the extent that the sub contract was written it consists of a document entitled 'Proposed Interior Design Works to Kemayan Inn Hotel at Murray Street, Perth, Western Australia' dated 11 November 1996, tender drawings Job no. 374, and a letter dated 3 December 1996 from the plaintiff addressed to 'Kemayan Inn Hotel'.

(2) All payments by the first defendant for the contract works performed were made to Singvests or its nominee.

(3) No payments for any of the contract works were paid by the first defendant to the plaintiff.

(4) The first defendant has not at any time been a party to any agreement with the plaintiff.

(5) Singvests remains bound by the terms of its agreement with the first defendant to conduct all rectification works to the contract works."

4 It is for the plaintiff to prove that the contract was made between the plaintiff and the first defendant; that the terms of the contract were as pleaded by it and, if the Builders' Registration Act bars a claim under the contract, that an equitable claim in restitution can be maintained (Issues 1, 4 and 5 (iii)). The onus in respect of the remaining issues is on the defendant.

The first and fourth issues: whether the plaintiff and the first defendant entered into a contract as pleaded in par 3 of the statement of claim and whether the terms of the contract were as pleaded in par 3 and par 5 of the statement of claim

5 It is convenient to deal with these issues together.

6 The plaintiff makes the following submissions in relation to these issues

"18. A contract may exist notwithstanding that it is difficult or impossible to analyse the transaction in terms of offer and acceptance, and it is sufficient that mutual assent be established from the entirety of the negotiations: Marist Brothers Community Inc v Shire of Harvey (1995) 14 WAR 69 at 75, 86, 90; Pegrum v Fatherly (1996) 14 WAR 92 at 94-5 and the authorities referred to therein.

19. Acceptance of an offer may be inferred from the conduct of the disputing party: Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 at 528. Such an inference may be drawn where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of them in circumstances which indicate that they were to be paid for in accordance with the offer: Empirnall Holdings (supra) at 534-5, 531.

The terms of the contract (preliminary issues order 4(d))

20. The term pleaded in paragraph 5 of the statement of claim was implied into the contract: Liebe v Molloy [1906] HCA 67; (1906) 4 CLR 347."

7 In opening the plaintiff's case, counsel said, in part:

"See, the case is put on the basis that in January 1997 there was an effect of an enforceable contract between the plaintiff and the first defendant and that subsequent to that time the first defendant purported to award a contract to Singvests for the same work. Singvests, as the evidence demonstrates and it is not contested, made the payments to the plaintiff."

8 The plaintiff's director, Thomas Kee, gave the evidence in support of the plaintiff's contention that there was a contract between the plaintiff and the first defendant.

"When did you first come to learn of the possible project at the Inntown Hotel?---It would be round September 96.

How did you come to learn of that?---Andrew telephoned me to say there was a job.

Did he say what the type of job was?---Hotel refurbishment.

What did he ask you to do at that conversation?---At the very first conversation I don't think he asked me to do anything other than he would get drawings to me for me to price.

Do you have a recollection of when that was?---It was a short while after, maybe being a week, 2 weeks. I'm not exactly sure of the date but he gave me a set of drawings which to price.

In addition to drawings did he give you anything else?---Yes, there was a specification with it and he asked me to price based on that specification and drawings."

"Who were you asked to submit the tender to by Mr Kessler?---He phoned me up with an address. It was in Singapore - sorry, it was Malaysia. I can't remember exactly what the address was. I think it was 12 something Jalan or - I can't honestly remember how it was worded and that was where it was to be sent.

Who was it to be addressed to?---To Kemayan Hotels or Kemayan Management Services I think or Kemayan Hotels. I'm not a hundred per cent sure."

11 He went on to discuss the meeting at the Hyatt hotel on 9 January 1997 (T40 - 42):

"What happened at the meeting? Let's start with who attended?--I was waiting in the main foyer. I always try and get to appointments early. I probably waited 15 or 20 minutes and then I saw Andrew, who I recognised, walking through the main entrance with two other people. They were introduced to me as KK from Kemayan, and Kiat, who was the architect for the project.

And Kiat is the second defendant in these proceedings?---Yes.

What then happened?---I recall that . . . I think Andrew went and got coffee for us all and we sat down. I can't remember exactly what was said initially. We didn't actually go straight into the work thing, we just - a couple of minutes, 'Where are you from?' and things like that, and then we proceeded then to discuss the job in hand.

What was said?---Again, it's such a long time ago. To the best of my knowledge the interest was, could we meet the $1.2 million.

Who said that?---I honestly can't remember which one actually said it.

When you say 'which one', which one out of the three people present?---I can't remember. I think Andrew might have led first of all, 'They want to know what they're going to get for $1.2 million.' Then I proceeded to explain the nature of the drawings, how expensive it was and the fact that the cherry wood design was expensive. I seem to recall Kiat saying that over in Malaysia and that this work was done very cheap. I know since that they only pay a couple of dollars a week for people to do the work, so obviously what was cheap over there wasn't necessarily going to be very cheap over here. I went through my feelings on how we could redesign the rooms to make them - or rather hit the budget and also explained what the cabinet-maker had said and the tile people, carpet fitters, on ordering of materials and such like, the time-scale involved, and basically it was how we were going to get to $1.2 million to do the job and basically what they were going to lose by me doing that.

Did you discuss anything about a show flat?---I made the suggestion to them, from my experiences with the cabinet maker, that the best way to do this was to construct a show flat, if they were concerned as to what they were going to get. I said this other guy had done three show flats. They didn't want to do three show flats. I says, 'We will pick one room and do one show flat,' which was agreed. They expressed that the thing had to be done quickly. I believe they was under pressure from overseas to get it going and, 'How soon could you get the thing underway?' I says, 'I have got no problem in starting it straightaway'.

In addition to discussing the show flat, was there any discussion about timing of commencing the work?---It was stressed that it had to be done quickly; to get into it as quickly as possible.

What was discussed about getting on and starting the work as quickly as possible?---They asked how soon could I get it underway and I said there was no problem starting straightaway.

WHITE J: Who is 'they', Mr Kee?---Sorry. I addressed all comments to KK and Kiat as one. I didn't really address one individual. It was sort of a group conversation in the sense there was KK and Kiat on one side of the table and me on the other side.

WILENSKI, MR: Was there any discussion as to the different roles that Mr Low or Kiat might have?---No, other than their introductions. I took it that KK was the big boss and Kiat was his architect.

Was the name Singvests mentioned?---It was never mentioned.

Was the name of any other contractor mentioned?---No other contractor was ever mentioned to me.

Your proposal to commence the works, which on your evidence they wished to have done quickly - where did you tell them that the works should be commenced?---I don't know whether I actually indicated where to commence but whilst the show flat was to go ahead - it was agreed that the show flat would be a good idea and could we get on with other areas of the hotel whilst the show flat was under construction and the restaurant was suggested as this was now no longer in use and had been closed down basically. I don't think the kitchens were operating at the time.

What is the best of your recollection about what was said to you to commence the work?---I was told to commence the show flat as soon as possible. I was told to meet with Kiat the next day to discuss material to be used and choices of and that was it basically.

Who told you to meet with Kiat the next day?---KK said that we should meet the next day.

WHITE J: Who told you to commence the show flat?---KK.

WILENSKI, MR: What about the work in the ground floor, the restaurant, you have mentioned? ---The same again. KK was the one who said yay or nay.

Was there anything discussed at the meeting relating to payment?---I always request a deposit for any construction work. The normal deposit in WA on a house under 200,000 is 6 and a half per cent. If I'm working with people from overseas, I normally request 10 per cent. So basically it was - most people pay a deposit before we start the work and that was what was requested, 10 per cent of the contract value.

When you say it was requested, what did you say?---That 10 per cent was required.

And this was at the meeting at the Hyatt?---This was at the meeting at the Hyatt - for 10 per cent. KK had said there was a problem with that and he asked, 'Why do you have 10 per cent?' and I said, 'That's the way it works in Australia.' He said that they actually don't do that in Malaysia and I says, 'I find that hard to believe. You don't spend hundreds of thousands of dollars of your own money. The art of construction is to get your client to finance it from the start and that's the way I work and that's the way I would like it to be.' He said that he would return and sort out the deposit. He didn't seem to have too much of a problem with that. Andrew said to me, 'No worries. They are a big hotel group. He will get you the money. Let's get on with it as quickly as we can'."

13 At T48 - 49, Mr Kee gave the following evidence:

"When did you first submit a claim for any part of the work?---I submitted a claim for the show flat.

Can you recall when you did that?---It was around February, end of February.

Could you look at document number 43, [exhibit 43] which is I think in volume 2 of the trial bundle at page 560? I understand the tender of the document isn't objected to.

Can you have a look at that document, Mr Kee? Do you have it?---Yes.

What is that document?---That was a progress claim for the works on the show flat.

Is that the document that you just referred to in your evidence?---That is, yes.

The document is addressed to Kemayan Inn Hotel. There are no other details. Do you recall how you came to the opinion that those are the words that should be written there?---As far as I was concerned it was the Kemayan Inn Hotel who I was working for to refurbish their hotel.

Did you have any further contact with Mr Kessler once you had started the work?---Andrew would pop into the hotel from time to time. As the work progressed and there was still no deposit I tackled Andrew and said, 'Look, I can't keep going on like this. You will have to have a word with whoever - KK in Malaysia to get this payment through.' He said to me, 'Look, do a breakdown on what you have spent so far and I will attend to it.' So I then did a breakdown on where the works were at to get the money."

14 Mr Kee then referred to the building licence, exhibit 44, issued in the name of the first defendant and said that he had received a copy from Mr Kessler. He said that he had received a cheque for $50,000.00 as a first payment and gave the following evidence in relation to it (T51 - 52):

"Do you recall the circumstances in which you came to receive it?---I had been putting pressure to get payment because obviously I was reluctant to carry on and Andrew actually came - I'm pretty sure he came to the hotel and handed me the cheque for $50,000.

When you received the cheque for $50,000 what happened next?---Obviously I looked at the cheque and, '$50,000. I'm $130,000 behind. What is going on? Where does anyone relate to 50,000?' It had the name of Singvests on the cheque and I said, 'Well, who is Singvests?' Andrew said, 'Look, Singvests is a company which is a restaurant,' he said it was which was carrying $800,000 worth of losses and that the money was being paid through this for tax purposes. I said, 'I'm not too bothered where the money comes from but $50,000 isn't enough.' He said, 'Bank it, take any money you can get and I will go back and we will see what we can do on the rest.' So I wasn't going to turn up $50,000, it was reducing the bill, so I took the $50,000, placed it in the bank and a day or so later the bank informed me the $50,000 had been returned unpaid.

You mean the cheque had been dishonoured?---The cheque had been dishonoured.

What did you do in consequence of that?---I contacted Andrew and said, 'Look, what is going on? The $50,000 was returned.' He then - I can't remember exactly how the timing went. It might have been a day later. He then gave me a cheque for 78,000 - no, get it right. Andrew told me - he then told me not to bank the cheque and I said, 'I have already done it.' He says, 'There's another cheque coming for $78,000.' So when I got the cheque - that's right. He gave me the cheque for $78,000 and asked for the $50,000 cheque back. It hadn't been returned from the bank by then. The $78,000 cheque I put that in the bank and this time express cleared it. Again it was returned unpaid. I phoned KK in Malaysia, I think he was in Malaysia at the time, and said, 'What is going on?' He assured me that funds had been made available. He said $81,000. It didn't quite click. I thought, '81? I'm 78,' but anyway he assured me it had been sent. He faxed me through a bank TT advice to say that this money had gone on a certain date. By coincidence we both banked with the same bank. I was with ANZ and he was with ANZ. I then went to my bank ANZ and said, 'This has been TT'd nearly a week ago. What is going on?' As it happened it wasn't TT'd. It was just transferred through the normal circumstances. That cheque got dishonoured."

15 The "bank TT advice" to which Mr Kee referred is exhibit 58, which confirms a transfer of funds from the first defendant to Singvests Holdings Pty Ltd - the third party in these proceedings.

16 When cross-examined, Mr Kee deposed to the preparation by him, at the request of Mr Kessler, of a written proposal of what work could be done within a budget figure of $1.2 million (exhibit 19) and also a formal tender at a cost of $2,602,000.00 (exhibit 17) for the refurbishment work to be done at the hotel. Mr Kee was aware that Mr Kessler intended submitting the formal tender, exhibit 17, in the name of some one other than the plaintiff and knew that the idea of putting in the tender at $2.602 million was to help ensure, one way or another, that he ended up with the construction project: (T70).

17 There was no evidence given by Mr Kee to establish the existence of any contract between the plaintiff and the first defendant apart from the passage cited above, namely:

"WHITE J: Who told you to commence the show flat?---KK.

WILENSKI, MR: What about the work in the ground floor, the restaurant, you have mentioned? ---The same again. KK was the one who said yay or nay."

18 That brief evidence is, in my opinion, quite inadequate to prove the existence of a $1.2 million contract between plaintiff and the first defendant for the renovation of the hotel. It is to be understood in the light of the earlier testimony, when Mr Kee said, in the evidence quoted above:

"What was discussed about getting on and starting the work as quickly as possible?---They asked how soon could I get it underway and I said there was no problem starting straightaway.

WHITE J: Who is 'they', Mr Kee?---Sorry. I addressed all comments to KK and Kiat as one. I didn't really address one individual. It was sort of a group conversation in the sense there was KK and Kiat on one side of the table and me on the other side."

19 The plaintiff never received any payment from the first defendant.

20 Mr Low gave the following evidence concerning the meeting in January 1997, (T208):

"When did you first hear of Great City Pty Ltd?---Late December 96 when Kiat Pong asked me to attend a meeting on 9 January 1998 - sorry, 1997.

When did you first hear of Tom Kee?---The same time, end December 1996.

Why did Mr Pong invite you to the meeting in January 1997?---He wanted me to see his subbie and he wanted me to hear for myself that the subbie wanted a deposit or down payment.

Why did he want you to hear that?---Because I didn't believe him and he say, 'Singvests wanted the down payment.'

When had he suggested to you that he might require a down payment?---When the - when you award the contract.

No, I'm sorry, I'm not talking about when it was to be paid. When was there any discussion about such a deposit to be paid?---That was in October, the 10th.

What was it that he told you then?---He told me that there is a request or rather that in order for them to do this job there is a need for a down payment and Andrew also said, 'Yes, that's the practice - a down payment of certain percentage.'

Did you tell them in October what you thought about that?---Yes. I say, 'This is not the practice in Malaysia.'

Did you attend a meeting in January at the Hyatt Hotel with Mr Pong and Mr Kessler?---Yes, I did. "

"When Mr Kee arrived at the meeting were introductions made?---Yes. Andrew introduced Mr Kee as his builder and he introduced me to Tom Kee, to Tom. He said, 'This is the man from Kemayan,' so we exchanged cards and he has a very interesting card. Behind is a calendar.

And Mr Pong? Was he introduced?---Yes, Mr Pong was introduced. They exchanged cards and I laugh at him and I say, 'You're real cheap. Can't you afford to have a Singvests card?'

How was Mr Pong introduced?---Mr Pong was introduced as Singvests.

"By the end of this meeting had you agreed to pay a deposit?---No.

Did you ever agree to pay a deposit?---No, your Honour.

At the meeting was there any discussion about a budget of $1.2 million?---No, your Honour."

"All right. Was there a discussion about the construction of a show flat?---No, sir.

Did you, in the month of January, tell someone to go ahead and construct a show flat?---Yes, I did, Kiat Pong.

When did you first discuss the idea of a show flat?---That's in middle 96, June, July, when we had a presentation of what we're going to do - a concept kind of meeting, what we think we can do. We did this presentation for the chief executive officer of the hotel management, Mr Simon Wan.

Had you ever had a discussion prior to January 9, 1997, with Mr Pong about the idea of a show flat?---Yes.

Now, had there been any discussion in the earlier meeting around the 9th and 10th about work in any part of the hotel other than the show flat?---Yes. In the Hyatt meeting Kee and Pong were discussing very generally how they were going to attack the work; whether they were going to start 7th floor downwards or not, you see. So, yes, more of sequence in

Did you give any direction on that first visit in January to Perth to do work anywhere other than on the show flat?---No. The contract was not awarded then."

21 I preferred the evidence of Mr Low to that of Mr Kee as to what transpired at the meeting in the Hyatt Hotel in January 1997. Mr Kee's evidence as to the alleged agreement by the first defendant to pay a deposit is improbable. Mr Kee said (T78-9):

"Mr Kee, you knew, didn't you, that Mr Kessler was very interested in arranging for a deposit to be paid for this work?---Of course, yes. That was the way I set up the contracts, with a deposit.

Was it the intention that Mr Kessler would be paid out of the deposit?---No, not necessarily, no.

If you received money as a deposit though - - -?---Then he would naturally be paid a fee.

All right; so he was pretty keen to get a deposit, wasn't he?---I would say he was keen as I was to get a deposit.

Yes, and that was the main focus of the discussion in the meeting at the Hyatt, wasn't it?---No, definitely not.

You were anxious about securing payment in some way or another and that was discussed at the meeting, wasn't it?---No. The deposit was briefly discussed at the end. It certainly wasn't the main topic of conversation.

And your evidence is that having met you for the first time and having had a relatively brief discussion with you, Mr Low agreed to pay you $120,000. Is that your evidence?---He didn't say he would agree to pay me $120,000. He said he would go back and sort out the $120,000.

So he didn't actually agree at that meeting to pay you a deposit?---He agreed that the payment would be forthcoming.

So he did agree to pay you a deposit?---He said he would go back and sort it out.

Now I'm confused. Did he agree to pay you the deposit or not?---He agreed to go back and sort out a deposit, yes.

And did you take that to mean that he had agreed to pay a deposit of $120,000?---I took that to mean that he had agreed to pay a deposit of $120,000."

22 Mr Kessler did not favourably impress me as a witness. He got into difficulties under cross-examination, when the following transpired (T164-166):

"Of course you understood that Singvests got the contract, you are working for Singvests, Singvests would be paying you. Do you agree?---No. We did not actually go to the extent of Singvests getting the contract. There was talk about utilising the loss of Singvests.

Yes. You knew that the idea was that the job was to be done with Singvests if it could be?---Possible.

No, you knew that the idea was that Singvests was to get the contract, didn't you?---No, because the discussion of Singvests was between Rodney and Kiat. It was never discussed with me.

Let me put it in a different way. Certainly by December 1996 you knew that the idea was that Singvests was supposed to win the tender and get the contract, didn't you?---My understanding to that was that they were trying to utilise the loss of Singvests if they could to do the project. Whether Singvests gets the project or not I don't know.

I will ask the question once more. You knew the idea was that Singvests was to try to win the tender to get the job. Do you agree with that or disagree?---I don't agree.

Do you recall earlier this morning I asked you about the statement that you had signed for the plaintiff's solicitors?---Yes.

You have it there with you, don't you?---Yes, the same one.

Before you open it, Mr Kessler, let me suggest to you - actually, your Honour, I suppose in fairness the statement is in writing. Mr Kessler should be offered the opportunity to see precisely what it is.

Mr Kessler, would you please take out your witness statement? You will recall of course that one of the things that you had to do for Mr Ng and Mr Pong was to arrange for a couple of other tenders in different amounts. Do you remember that?---Correct.

Would you please look at paragraph 53 of your statement?---Yes.

This is your statement, isn't it, 'Kiat asked me to price one of these higher than 2,600,000 and the other higher than $3,000,000?' You know that that refers to the tenders we have been discussing?---Correct.

Look at the next statement, 'Kiat told me that these prices from my other companies would cause Singvests to win the contract as the lowest bidder.' Is that true?---Correct.

Now I will ask you once more then: you knew that the idea was that Singvests was supposed to get the contract to do the work on the hotel, didn't you?---No. The understanding I had then was that if they can utilise the loss of Singvests, they will want to use Singvests to do the work. It's different.

I see. Now I appreciate the difference. So that if they were able to - I will rephrase that. If they got the job and if they could use Singvests, then it would be Singvests that got the contract?---Correct.

Now we understand each other. So of course when you appreciated that it would be Singvests getting the contract to do the work, it would be Singvests in fact that was going to pay you your fee. Do you agree?---No. Because this agreement was - or this arrangement with myself was made with Kiat rather that Singvests himself."

"Kiat told me that these prices from my other companies would cause Singvests to win the contract as the lowest bidder . . ."

24 At (T168-169) Mr Kessler gave the following evidence, initially referring to Mr Kee:

"He left the name of the tenderer blank, didn't he?---Yes.

Because, as you told him, you planned to put somebody else's name in for the tenderer?---Correct.

However, you were later told by Mr Pong that actually he needed a tenderer for $2.6 million, weren't you?---No.

All right. Look at paragraph 53 of your statement, if you still have it there:

Kiat asked me to price one of these higher than $2,600,000 and the other higher than $3,000,000?

So, Mr Pong did ask you to provide him with a tender for $2,600,000 or more, didn't he?---First he actually told me that the project he was prepared to award, or the amount they were supposed to be doing the job was only ever $1.2 million but he wants me to do two other quotes, okay, which was higher than the $1.2 million. That's the case.

Yes. So first you had Mr Kee prepare a quote - not a quote, a form of tender in the amount of $1,602,000. Correct?---Correct.

Except he had told you that the job couldn't be done for less than $4,000,000?---Correct.

And you told him that the budget was only $1.2 million?---Correct.

And you told him that you wanted another tender so that you could put someone else's name on it. Correct?---I wanted him to give me some higher numbers, numbers higher than $1.2 million.

Yes, so you could put someone else's name on it and submit it as a tender?---Correct.

But then as it turned out $1.6 million wasn't enough. You had to have a $2.6 million tender, didn't you?---$2.6 million is higher but 2.6 - if you work back number 502 and 503, add up the numbers, it's nearly 2.6.

Kiat Pong told you that you had to have a tender for $2.6 million or more, didn't he?---He told me to give him two figures higher than $1.2 million, yes.

And he told you that it was to be $2.6 million or more. Correct?---I can't really remember that part.

Let's look at paragraph 53 again. Didn't you tell the plaintiff's solicitors, as it says at paragraph 53, 'Kiat asked me to price one of these higher than $2,600,000 and the other higher than $3,000,000'?---Correct.

So after Mr Kee gave you the form of tender for $1,602,000 you then learned that in fact - I will rephrase that. After Mr Kee gave you the quote, the form of tender for $1.6 million, you told him that you needed a quote for $2.6 million, didn't you?---No, I didn't tell him I wanted a quote for 2.6.

You didn't?---No. I told him to give me prices higher than $1.2 million, and things like that, and eventually he gave us a quote of $2.602 million.

Is it your evidence - are you telling his Honour that you didn't tell Mr Kee to provide you with a quote for $2.6 million?---I didn't actually tell him the actual number, the figure. I told him to give me another price and from then I adjusted the figures myself."

Now, you had Mr Kee provide you with that document, didn't you?---Correct.

And you have now told him about his arithmetical error and he has corrected it. Is that the position?---Correct.

And this is the final draft of the tender, is it, exhibit 17?---Final draft of what tender?

The final draft of the document that we saw as exhibit 20 at page 499, the form of tender?---It could be.

And you knew that the purpose of this tender was to ensure that Singvests won the contract to build the hotel - to construct the works and the hotel, as the lowest bidder. Isn't that right?---I knew that, yes.

You prepared another form of tender which I would like to put before you. . . .

Mr Kessler, do you have that document in front of you now?---Yes, I do.

Do you see on the cover it says, 'Project, proposed renovation works at ground floor of Kemayan at corner of Murray and Pier Streets, Perth'?---Correct.

And over on the second - I beg your pardon, on the third page, is the signature of what appears to be a man named Clive Freeman?---Correct.

Do you recognise this as being the complete version of the document that you were referred to earlier this morning?---Correct.

Am I correct in understanding, Mr Kessler, that your sister completed some parts of this for you?---Correct.

And you had Mr Freeman sign the document. Correct?---Correct.

And that was because you didn't want it to be obvious that the tenders came - that both came from you?---Correct.

Do you see anything wrong with that?---I was told to do that.

WHITE J: Sorry? Would you say that again?---I was told to do it that way.

You were told to do it but that's not an answer to the question, Mr Kessler?---Sorry?

You didn't answer counsel's question?---What is your question, sorry?

O'NEAL, MR: Did you see anything wrong with that?---Well, if I'm told to do it, I don't see anything wrong."

26 I find that neither Mr Kessler nor Mr Kiat was at any material time an agent of the first defendant nor did either at any material time hold himself out as such agent. All claims for payment for variations to the contract made by the plaintiff and signed by Mr Kee were directed to Singvests Holdings Pty Ltd and were stated to be made pursuant to the contract between Singvests Holdings Pty Ltd and the plaintiff - see exhibits 78 - 86. Mr Kessler was the agent of the plaintiff to pursue the award of a construction contract for the plaintiff.

In this regard, Mr Kee gave the following evidence:

"It was plain that Andrew Kessler knew exactly who had to be spoken to so that you could receive this contract. Is that right?---He was the go-between, yes.

When it came to fine details like precisely who it was that you were contracting with, were you happy to leave that to him?---As far as I was concerned, and I'm sure as far as Andrew was concerned, it was Kemayan the hotel who we were contracting with.

I will ask the question again, Mr Kee: did you leave matters of detail about who these arrangements should be made with to Mr Kessler?---I trusted Andrew Kessler 110 per cent that any arrangement made was okay.

27 I am satisfied that Mr Kiat, at all material times, was the agent of Singvests Holdings Pty Ltd, of which company he was a director.

28 In par 8 of the amended statement of claim, the plaintiff pleads that, between January 1997 and December 1997, the plaintiff prepared and provided to the first defendant various progress claims for payment, numbered 1 to 11 (inclusive). However, the plaintiff did not tender any progress claim directed to the first defendant. Of the three progress claims put into evidence, each signed by Mr Kee, that dated February 1997 (exhibit 40) was, significantly, addressed to Singvests Holdings Pty Ltd while the two dated 1 March 1997 (which seemed to claim the same amount and to have been duplicated) (exhibits 42 and 43 respectively) were directed to Kemayan Inn Hotel. Other progress claims were listed but not tendered by the plaintiff.

29 In relation to the first issue, I find that the plaintiff has failed to establish on the balance of probabilities the existence of a contract between the plaintiff and the first defendant.

30 In the light of the evidence given during the trial, the first defendant moved to amend the defence to allege that if there were any such agreement as alleged at par 3 or par 12 of the amended statement of claim, which was denied, the enforcement of any such agreement would be contrary to public policy in that such agreement was obtained by, or attempted to be obtained by, or associated with collusive and fraudulent tendering practices to the knowledge of the plaintiff.

31 Mr Kessler, who had previously had an involvement with Singvests Holdings Pty Ltd and who was well-acquainted with the directors of Singvests Holdings Pty Ltd, Messrs Ng and Kiat, was a party to the plan by those persons to secure the subcontract from the first defendant for the refurbishment of the hotel, by putting up three tenders, in the names of different parties, of which their tender would be the lowest.

32 A tender was put forward by Group Interiors (signed by Mr Ng) (exhibit 15) in an amount of $2,497,965. Subsequently, that tender was withdrawn, by consent, and substituted by a tender by Singvests Holdings Pty Ltd in an amount of $2,262,265 (exhibit 16, also signed by Mr Ng).

33 Mr Kee admitted having prepared tenders, knowing that they would be submitted in different names, that the object was to secure a contract for an associate or client of Mr Kessler with the result that the plaintiff would obtain construction work under such contract.

"O'NEAL, MR: Mr Kee, you knew, as you told his Honour earlier, that this work could not be done in accordance with this document for less than $4,000,000. Isn't that right?---That's correct.

You prepared a proposal, as you have told us, dated 3 December for $1.2 million. Correct?---Correct.

And you prepared this document, exhibit 17, for $2.6 million?---Correct.

You did that because Mr Kessler asked you to do it for him, didn't he?---Correct.

You didn't complete the section to show who was submitting the tender. Correct?---Correct.

And that's because Mr Kessler told you to leave it blank?---Correct.

You knew, of course, that Mr Kessler intended to submit that proposal under someone else's name, didn't you?---I knew that, yes.

Of course, you appreciated that there was a difference between what was in this document, exhibit 17, and what was in your own proposal, didn't you?---Yes.

You knew that what exhibit 17 was, was a complying tender, a formal tender. Correct?---Correct, yes.

You didn't expect for a minute that your proposal was in the same sort of category as exhibit 17, did you?---No.

And you knew that it would not be regarded in any tender process in which exhibit 17 was submitted. Correct? ---Correct.

You knew that the idea of putting in the tender at $2.6 million was to help ensure, one way or another, that you ended up with this construction project. Isn't that right?---That's correct."

"Am I correct in understanding, Mr Kessler, that your sister completed some parts of this for you?---Correct.

And you had Mr Freeman sign the document. Correct?---Correct.

And that was because you didn't want it to be obvious that the tenders came - that both came from you?---Correct.

Do you see anything wrong with that?---I was told to do that.

WHITE J: . . .You were told to do it but that's not an answer to the question, Mr Kessler?---Sorry?

You didn't answer counsel's question?---What is your question, sorry?

O'NEAL, MR: Did you see anything wrong with that?---Well, if I'm told to do it, I don't see anything wrong."

36 In that context, I understood Mr Kessler to be saying that he had been told by Singvests Holdings Pty Ltd to submit the different tenders.

37 The evidence satisfies me that the plaintiff, in the person of Mr Kee, and Mr Kessler, were parties to the submission to the first defendant of two tenders, submitted in the names of Claymore Holdings Pty Ltd (exhibit 20), in the amount of $2,602,000, and of E3 Consultants Pty Ltd (exhibit 21), in the amount of $3,071,000, respectively, both being designed to have the first defendant award the subcontract to Singvests Holdings Pty Ltd. Both Claymore Holdings Pty Ltd and E3 Consultants Pty Ltd are companies owned or controlled by Mr Kessler. The evidence suggests that both Messrs Ng and Kiat were parties to the deception, but I make no finding in that respect in the absence of those parties.

38 While the aforegoing facts might well entitle the first defendant to repudiate the contract between it and Singvests Holdings Pty Ltd, it is not directly relevant to the alleged contract between plaintiff and the first defendant. I have, in any event, found that the plaintiff has failed to establish the existence of such a contract.

39 Although, as framed, the 4th issue appears to be concerned with a contract between Singvests Holdings Pty Ltd and the plaintiff, the paragraphs of the statement of claim referred to allege an agreement between the plaintiff and the first defendant. For the detailed reasons, which I have set out above in relation to the first issue, I find that there was no contract between the plaintiff and the first defendant. Accordingly, I answer this issue in the negative.

The second issue: whether there was a contract between the first defendant and Singvests Holdings Pty Ltd.

40 Singvests Holdings Pty Ltd did not appear at the hearing of this matter, but the evidence seems quite plain that the first defendant awarded the subcontract to Singvests Holdings Pty Ltd by its letter dated 26 February 1997 (exhibit 36), accepting the quotation by Singvests Holdings Pty Ltd at a price of $2,136,300.

The third issue: whether there was a contract between Singvests Holdings Pty Ltd and the plaintiff.

41 The plaintiff's submissions in this regard were:

"21. There is conflicting authority in Australia as to the legitimacy of the use of post-contract conduct in construction of the contract. Evidence of such conduct was held to be inadmissible (sic) in The Administration of the Territory of Papua New Guinea [1973] HCA 59; (1973) 130 CLR 353 at 405, 446, 459; FAI Traders Insurance Co Ltd v Savoy Plaza Pty Ltd [1993] VicRp 76; [1993] 2 VR 343 at 347 - 51, 353, 354-5; Re Homfrey Carpets Australia Pty Ltd v Hycraft Carpets Pty Ltd [1996] VicRp 67; (1996) 14 ACLC 555 at 557-8, 576-7; Sportsvision Australia Pty Ltd v Tallglen (1998) 44 NSWLR 103 at 114 - 6.

22. On the other hand, evidence of clear and mutual conduct has been held to be admissible as part of the factual matrix for the limited purpose of resolving ambiguities in the language of the contract (White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 267 at 271, 281; Hide & Skin Trading Pty Ltd v Oceanic Meat Traders Ltd (1990) 20 NSWLR 310 at 315; Boranga v Flintoff (1997) 19 WAR 1 at 6; Spunwill Pty Ltd v BAB Pty Ltd (1994) 36 NSWLR 290 at 304-312 and the references to Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337 therein (at 307-8)."

42 In so far as evidence of post-contract conduct may be admissible, and it is unnecessary for me to endeavour to resolve the alleged conflict, it was consistent with the existence of a contract between plaintiff and Singvests Holdings Pty Ltd, but all the evidence, including written documents signed by Mr Kee for the plaintiff, tends to establish the existence of such contract.

43 I have already mentioned the variations to the contract signed by Mr Kee on behalf of the plaintiff, expressly referring to a contract between Singvests Holdings Pty Ltd and the plaintiff.

44 I am satisfied that the evidence has established the existence of a contract between the plaintiff and Singvests Holdings Pty Ltd.

45 There is no need for me to repeat the extracts from the evidence which support this conclusion. The plaintiff took instructions from, claimed and received payment from and dealt at all material times with Singvests Holdings Pty Ltd. It is clear from the evidence of Messrs Kee and Kessler and also of Mr Low (to whom Mr Kee was introduced as Kiat's "subbie"), that Singvests Holdings Pty Ltd engaged the plaintiff as a subcontractor.

The fifth issue: whether the contract between the plaintiff and the first defendant was terminated as pleaded in par 12 of the statement of claim.

46 The expression of this preliminary issue proceeds on the assumption that there was a contract between the plaintiff and the first defendant, and I have held that there was not. It should therefore fall away. However, I shall nonetheless deal with the issue in the following way:

47 Mr Kee gave evidence concerning this issue (T60):

"Can you tell me what happened concerning the contract works after October 1997?---We continued on until the end of November. There was still no payment.

In what amount? What amount were you owed by then?---Around about $270,000 by then. We had a meeting then. It was arranged with Kiat, KK, Andrew, (sic) Kessler and myself.

Where was that meeting?---That was at the Inntown Hotel. We discussed initially my progress claim for 270.

When you say you discussed the progress claim, do you recall what was said?---I went through it item by item to clarify what had been done, what the variations were, where we were at, and the amount of money owed. It was then suggested that there was only $60,000 or thereabouts left in the kitty.

Sorry, could I just ask you - we would like to know what was said, not what was suggested, if you could

WHITE J: And by whom it was?---Sorry. I can't remember who exactly said it but what was said was that they needed the hotel entrance to be finished to further their claim to the bank. "

"Mr Kee, if you could continue?---Where am I up to?

You were giving evidence about the meeting?---The front entry needed to be finished up for a further claim by Kemayan to their bankers to be paid. I was told that this claim was to the value of around $600,000. I said that I wasn't prepared to put any more money in, I was owed too much as it was, so they asked me - and I can't remember exactly who it was said, 'Look, can we use another contractor to finish off the front entry so that we can make this claim? When this claim is made then we can settle your account.' I agreed to that and I was asked to finish off the two floors. By this time we was on the first and second floor, the last two floors of the hotel. The rooms were 90 per cent completed. There was bits of finishing off to do. I said I would stay and finish off those two floors so there wasn't a crossover with the new contractor. The front entry could be easily defined as a separate thing. So I continued on with a very reduced workforce, basically just plodded along and kept a presence on site, awaiting payment.

When did you leave site?---In December I met Kiat on site and asked what was happening to our agreement and my payment and he said I wasn't due any more money.

When did this meeting occur?---I think it was late December or - in December at some time. I can't remember exactly when. He said he wasn't going to pay any more money, that was it, and I said, 'What happened to our agreement?' and he just shrugged his shoulders and I says, 'Okay, I'll see you in court if that's your attitude,' and we never spoke again after that.

You left site at that time?---I left site at that time."

49 Mr Kee's evidence, set out above, does not establish the allegations in par 12 of the statement of claim. He does not say that the first defendant undertook to make any payment to the plaintiff. He could not remember who had made any of the statements to which he deposed. In any event, in the light of my finding that there was no contract between the plaintiff and the first defendant, I find that no such contract was terminated as pleaded. I find that it was the plaintiff's sub-contract with Singvests Holdings Pty Ltd that was terminated.

The sixth issue: whether section 4 of the Builders Registration Act WA (1939) on its correct construction:

"(i) bars the plaintiff from making the contract as pleaded in the statement of claim;

(ii) precludes the plaintiff recovering from the first defendant payment for work done under the contract, if proved; or

(iii) precludes the plaintiff recovering from the first defendant payment for work done in restitution based on principles of unjust enrichment."

50 This issue has become academic in view of the finding that the evidence does not establish any contract between the plaintiff and the first defendant. However, in case I am wrong in that regard and this matter goes further, I shall nonetheless deal with this issue.

51 The resolution of this issue involves two separate questions. Firstly, as to whether the work undertaken by the plaintiff was work of the nature referred to in s 4(1) of the Act. Secondly, if it was, does the Act preclude a claim by a builder who has carried out construction work to be paid on the basis of a quantum meruit.

52 The first question arises from the plaintiff's contention that the word "construct" in s 4(1) of the Act is to be construed as confined to structural work and not to embrace work of the nature of that done by the plaintiff.

53 The word "construct" is defined in s 4(1b) of the Act as follows:

"'construct' includes add to, alter, improve, renovate and repair."

54 Counsel for the plaintiff referred to Builders Registration Board of Western Australia v Roroka Pty Ltd, unreported; SCt of WA; Library No 8776; 25 March 1991 (Owen J) at 13, where his Honour said:

"Firstly, the terms 'build' and 'construct' are almost interchangeable. It is not appropriate to read anything into the fact that the draftsman used the term 'construct' in the first part and the word 'build' in the second part of the section."

55 He submitted further that the prohibition appeared to be aimed at work of a structural nature and that the inclusive definition of "construct" ought to be interpreted in that light, so that only additions, alterations, improvements, renovations and repairs of a structural nature should be included. He submitted that it would be an absurd result if the prohibition included non-structural works. Every sub-contractor involved in additions, alterations, improvements, renovations and repairs would then need to be registered. Such an interpretation, he contended, should be eschewed.

56 The term "build" is not defined in the Act. The word "Building" is defined as follows in s 2 of the Act:

"'Building' means any building of a permanent nature used or intended to be used for residential, professional, manufacturing, trading, commercial, hospital, institutional, assemblage, or public purposes, but does not include a farm building, and the term used as an abstract noun means the erection or structural alteration of any such building."

57 Section 2 of the Act contains also the following definition of the expressions "Builder" and "Person trading as a builder":

"'Builder' means a person trading as a builder.

'Person trading as a builder' means any person who, or any partnership or any company or other body corporate that, is engaged in constructing, altering, repairing, adding to or improving the walls and structural parts of buildings for a fixed sum, percentage, or valuable consideration, or reward other than wages."

58 The latter definition is of particular interest in its reference to "walls and structural parts" of buildings. Moreover, the definition refers not only to "constructing" but also to "altering, repairing, adding to or improving" the walls and other parts of buildings. Those latter expressions are included within the definition of "construct" in s 4(1b) of the Act.

59 I think that there is merit in the plaintiff's submission that the terms "construct" and "build" should be construed as applicable only to work of a structural nature. However, at least some of the plaintiff's work fits that description.

60 Mr Kee described the nature of the work in fact done or to be done by the plaintiff as follows (T42-44):

"Could you just shortly describe what the work actually involved in the sense of what was involved in doing this work in the hotel?---Initially the work was to strip out the existing fixtures and fittings to a bare room and then reinstall wardrobes, cabinets, carpets, light fittings.

That was in relation to each hotel room?---That was in relation to each hotel room. The restaurant was - - -

If I could stop you there. How many rooms were there to your recollection?---96.

96. Apart from what you have described in each room what else?---Each corridor had to be refurbished, doors had to be refurbished. There's a regulation that if you leave the existing doors on - it was something I was unfamiliar with. If you take doors off, you have to change frames and all that sort of thing. So we did a design on each individual door to the room so each door was sort of upgraded with a feature panel in them and the corridors were recarpeted, repainted, dados, new cornice. So basically it was a case of you were coming into a newly refurbished hotel.

Was the work to be carried out similar for each floor?---Each floor was a repetition of the other.

Did any of the work on each of those floors involve the removal of walls?---There were no walls removed at all. It was all concrete construction.

Did it involve any alteration of the walls in the sense of demolishing or building on?---No. Every room was as is. We didn't alter the rooms. . . .

Each room was a shell basically. The shell was stripped out and then refurbished as before. No windows or anything like that were touched. Hotel corridors were left as is. They weren't partitioned in any way. There was talk of a phase 2 which was due to fire regulations if - I'm not too sure how the regulation worked because I wasn't fully involved in that but apparently if you did certain things - if you refurbished the stairwells, then you had to put fire doors and things in, but that was never carried out under this particular contract. I believe it was to be a phase 2. The restaurant again was a strip out and new furnishings, new windows across the front, new reception desk. There was nothing of major construction work in the hotel at all.

WILENSKI, MR: So there was the restaurant area?---Yes.

There is presumably a lobby area?---There was a restaurant, a front entry lobby and a snack bar and that was it basically.

And a reception area?---The reception area was off the main front lobby.

What about the entrance to the hotel?---The entrance to the hotel again was to be refurbished with a new front door design and entry.

Was there to be any alteration to the external facade of the building?---There were drawings for a fancy sign and front facade but that became too expensive and I never actually got involved in that at the end. That was carried out after I had left so I really don't know much about that.

But you weren't involved in any work on the external facade?---No, apart from the set of windows in the restaurant ...

We took out the existing windows and replaced those with new.

In the same situation?---The same hole, basically the same.

WILENSKI, MR: When you stripped out the existing fixtures, whatever you found in the rooms or in the hotel areas, what did you do with what you stripped out?---Initially in the restaurant area we stripped the ceilings out for investigation of what was above. So everything was stripped out, carpets were rolled up. It was quite a large area so everything was stored in there. A lot of the stuff was either to be sold off, i.e., carpets, chairs, tables, so that was all rolled up and kept in storage. The ceilings were all good, reusable stuff so that was all stored inside. We had a problem initially with skips to remove the rubbish because there was no access and you had to get licences for skips out on the main road which we didn't really want to do."

The Builders Registration Act, 1939, s 4

61 Section 4 of the Builders Registration Act, 1939 ("the Act") provides:

"Prohibition against unregistered builders carrying on business

4. (1) Subject to this section, a person who is not registered under this Act shall not -

(aa) construct for himself any building other than a dwelling house or a building comprising 2 dwellings on ground level, each being complete and self-contained, whether or not the building is so designed as to give an external appearance of a single dwelling;

(b) enter into any contract or engagement to construct any building, or build any building for another in pursuance of any contract or engagement;

(c) be entitled to recover in any court any fee or charge under any such contract or engagement;

(d) hold himself out as trading as a registered builder, or, as the case may be, a journeyman builder,

(i) the total fee or charge payable in respect of the carrying out of the same does not exceed $6 000 or such other amount as may be prescribed by regulations made under section 24; or

(ii) under subsection (2) he is a person exempted from the necessity of obtaining registration;

(B) assume, take or use (either alone or in combination with any other word, letter or device) the name or title of 'registered builder' or, as the case may be, 'journeyman builder', or any name, title or description calculated to lead others to believe he is so registered, or by words or conduct hold himself out as being so registered.

(1aa) A person who contravenes subsection (1) commits an offence and is liable to a penalty of -

(a) for an offence against subsection (1) (A) (b), $10 000 and a daily penalty of $100 for a continuing offence; and

(b) for an offence against any other provision of the subsection, $400 for a first offence and a minimum of $400 and a maximum of $2 000 for a later offence.

(1a) Notwithstanding anything in subsection (1), the Board may, on the application in writing in the form approved by the Board of a person who is not registered under this Act, authorize in writing that person to construct for himself a building -

(b) which is not a dwelling house or a building referred to in subsection (1) (A) (aa).

'construct' includes add to, alter, improve, renovate and repair.

(2) The persons exempted from the necessity of obtaining registration under this Act as mentioned in subsection (1) (A) (ii) are -

(iii) an officer or servant of the Crown or of any Crown instrumentality, or of any local government, in so far as he directs or supervises the carrying out of any contract or engagement in the performance of his duties as such officer or servant;

(3) The provisions of this section apply notwithstanding that a number of distinct contracts or engagements to perform work or render services are entered into in connection with the same building by the same person, where -

(i) the moneys payable in respect of the performance of the contracts or engagements exceed $6000 or such other amount as may be prescribed by regulations made under section 24, in the aggregate but some or all of such contracts or engagements taken severally do not exceed that sum; or

(ii) in any case where the Board is satisfied that they are substantially in respect of the one undertaking or that they were entered into with a view to evading the provisions of this Act."

62 It is common cause that the plaintiff is not registered under the Act. Nor is the first defendant or Singvests Holdings Pty Ltd so registered.

63 Counsel for the plaintiff submitted that whether s 4(1)(A)(c) of the Act precludes a claim in restitution turns upon the proper construction of the Act. A statute should not be construed as removing a claim in restitution, which is a severe result, unless the words used admit of no other sensible meaning: Pavey & Matthews Pty Ltd v Paul [1987] HCA 5; (1986) 162 CLR 221 at 229 per Mason and Wilson JJ; 245, 262 per Deane J; per Dawson J at 269. The Act proscribes that a person who is not registered shall not, relevantly, enter into any ''contract or engagement" to construct any building, or build any building for another in pursuance of any "contract or engagement" s 4(1)(a)(b). There are two distinct limbs to the prohibition: Builders Registration Board of Western Australia v Roroka (supra) at 8. The words "contract or engagement" are a composite term, and "engagement" should be read subject to "contract": Gifford, Statutory Interpretation, 1990 pp.78 - 80 (the noscitur a sochs rule).

64 The plaintiff submitted that, where the Act precludes recovery of "any fee or charge under any such contract or engagement" s 4(1)(A)(c), it goes only to the first limb of the prohibition ("contract or engagement"), not the second limb (the performance of construction or building works). The words "fee or charge" do not have technical legal meanings, but are nevertheless terms of contract: Tea Tree Gully Builders Co Pty Ltd v Martin (1992) 59 SASR 344 at 349; Mostia Constructions Pty Ltd v Cox [1994] 2 Qd R 55 at 58 - 9; Steelhomes (1985) Pty Ltd v Hutts (1993) 9 SR(WA) 143 at 144 - 5.

65 A claim in restitution is based not in contract, but in unjust enrichment on the basis of the defendant's acceptance of the benefit of the plaintiff's performance of work: Pavey & Matthews v Paul (supra) per Mason and Wilson JJ at 227; per Deane J at 263

66 Section 4(1)(A)(c) therefore does not prohibit recovery in restitution based upon the performance and acceptance of the work: Steelhomes (supra). This result was conceded and assumed to be correct in Heathersage Nominees Pty Ltd v Pineview Holdings Pty Ltd, unreported; SCt of WA; Library No 8478; 14 September 1990 (Wallwork J) at 8, 10.

67 Legislation in other states in similar terms to s.4(1)(A)(c) has been construed as not precluding recovery in restitution:

68 (a) Queensland : J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413 at 424-5;

69 (b) New South Wales: Lee Gleeson Pty Ltd v Sterling Estates Pty Ltd (1991) 23 NSWLR 571 at 584 - 587; O'Connor v Leaw Pty Ltd (1997) 42 NSWLR 285 at 291 - 295;

70 (c) South Australia: Tea Tree Gully (supra) at 347-350.

71 The first defendant's counsel contended in response that no court will lend its aid to a man who founds his cause of action upon an illegal act: Holman v Johnston [1775] EngR 58; (1775) 98 ER 1120.

72 He submitted that no court ought to enforce an illegal contract or allow itself to be made the instrument of enforcing obligations alleged to arise out of a contract or transaction which is illegal, if the illegality is duly brought to the notice of the court and if the person invoking the aid of the court is himself implicated in the illegality: Scott v Brown Doering McNab & Co [1892] 2 QB 724 (CA) Lindley LJ at 728.

73 Counsel submitted that, in the decision of Heathersage Nominees Pty Ltd v Pineview Holdings Pty Ltd (supra) Wallwork J held that building contracts entered into contrary to the provisions of s 4 of the Act were illegal and that an arbitration clause in such an agreement was therefore unenforceable. In that case, the building customer had applied for an injunction to drop arbitration under the terms of the building contract, and in the course of those proceedings plaintiff's counsel conceded that a claim for quantum meruit may lie. The first defendant in these proceedings makes no such concession.

74 Most recently, counsel said, in Zullo Enterprises Pty Ltd & Ors v Sutton [1998] QCA 417 (15 December 1998) the Court of Appeal for Queensland held that legislation comparable to s 4 of the Act prohibited the recovery by an unregistered builder of both money due under a building contract and claims in quantum meruit.

75 In Steelhomes (1985) Pty Ltd v Hutts (supra), Chief Judge Heenan, as he then was, held that, under s 4 of the Act, an unregistered builder could not recover under the building contract itself, but that an action by the plaintiff on a quantum meruit or for unjust enrichment did not arise from the agreement and was not barred by the Act. His Honour applied the decisions in J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413 (supra) (per McPherson J.) and in Nugent Investments Pty Ltd v Sweeney, unreported; DCt of WA; Judge White; 2 October 1987.

76 Section 4 of the Act, provides that an unregistered builder shall not

"(c) be entitled to recover in any court any fee or charge under any such contract or engagement".

77 In relation to Steelhomes (1985) Ply Ltd v Hutts, counsel for the first defendant respectfully submitted that His Honour Chief Judge Heenan was in error in his findings for the following reasons:

(1) he failed to take into account the fact that the Queensland Act only prohibited recovery of a fee or charge under a contract to perform building construction, while the Western Australian Act prohibits the recovery of any fee or charge under any contract or engagement;

(2) in holding that a claim in quantum meruit or unjust enrichment was not an action for a recovery of an amount "under an engagement" on the grounds that it is "based rather upon a moral obligation" he failed to give effect to the primary and ordinary meaning of "engagement" being "a legal or moral obligation": New Shorter Oxford English Dictionary; and

(3) he wrongly took into account the contention that "as the legislature cannot have intended to prohibit the building owner from recovering compensation from the unregistered builder for faulty workmanship ... it cannot have intended to prohibit the builder from recovering reasonable remuneration ... " at page 145. The relevant prohibition in the act is directed at the builder, not the customer.

78 It is necessary to examine those submissions in some detail.

79 J C Scott Constructions v Mermaid Waters Tavern Pty Ltd (supra) dealt with the position under the Queensland Act then in force, the Builders' Registration and Home-owners' Protection Act 1979 ("the Queensland Act"). Section 53(2) of the Queensland Act provided, relevantly:

"53(2) A person who is not a registered builder shall not -

(c) tender for or offer to perform building construction for another;

(d) enter into a contract to perform building construction for another; or

(e) be entitled to recover by action in a court a fee or charge under a contract to perform building construction for another,

80 McPherson J, at first instance, having referred to the provisions of s 53(2)(c) and (d), said, at 424:

"On the assumption that the plaintiff was not registered, the contract in the present case contravened in its formation both these statutory prohibitions, with the prima facie consequence that it is not enforceable even by the first defendant as principal: Re Mahmoud & Ispahani ([1921] 2 KB 716). The same consequence would also ensue if the first defendant had at the time of contracting been aware of the assumed absence of registration because the parties would then have been agreeing to do, or to promote the doing of, an act prohibited by statute; that is, the performance contrary to s. 53(2)(b) of the building construction by an unregistered builder. It seems most improbable that the legislature intended in either of these cases, and particularly the former, to visit these consequences of illegality upon the building owner. That this is so seems to me to be demonstrated by the express prohibition in s. 53(2)(e), which precludes only the builder from recovering his fee or charge under the contract. The subsection also imposes a penalty, and, taken together, these two provisions appear to be intended as an exhaustive statement by the legislature of the consequences (whether for the builder or the building owner) that are to ensue from a contravention of any or all of the prohibitions contained in s. 53(2): cf Yango Pastoral Co Pty Ltd v First Chicago Australia Ltd [1978] HCA 42; (1978) 53 ALJR 1, 3 . . ."

81 On appeal to the Full Court, their Honours did not find it necessary to express a view on the aforegoing reasons of McPherson J.

82 Counsel submitted that the distinction between the Queensland Act (as it was when J C Scott Constructions v Mermaid Waters Tavern Pty Ltd was decided) and the Act is that the former barred a claim for "a fee or charge under a contract to perform building construction" for another whereas the Act bars a claim for "any fee or charge under any such contract or engagement" (emphasis added). Accordingly, the first defendant's submission that the reasons of McPherson J in J C Scott Constructions v Mermaid Waters Tavern Pty Ltd are inapplicable to the Act is predicated upon the proposition that the expression "or engagement" in the Act suffices to debar a claim in indebitatus assumpsit.

83 I do not find that submission persuasive. Counsel for the first defendant submits that it is appropriate to construe those words as meaning "a legal or moral obligation", a definition within the New Shorter Oxford Dictionary. With respect, it is, in my opinion, not enough to point to a dictionary definition in construing a statute. The words in question must be considered in the context in which they appear and in the light of the provisions of the statute generally. The provision in s 4(1)(A)(b) forbids an unregistered person to "enter into any contract or engagement to construct any building . . .". In my opinion, the words "or engagement" as there used are to be construed as meaning an agreement or undertaking falling short of constituting a binding contract but, nonetheless, analogous to a contract. This construction is supported by the expression in s 4(1)(A)(c) of the phrase "any fee or charge under any such contract or engagement".

84 In the circumstances, I do not consider that the addition of the words "or engagement" in the Act are sufficient to render the reasons of McPherson J in J C Scott Constructions v Mermaid Waters Tavern Pty Ltd inapplicable to the provisions of the Act.

85 In my opinion, those reasons are compelling and are relevant to the issue before me. I would adopt them accordingly.

86 Counsel for the first defendant referred to the decision of the Court of Appeal of the Supreme Court of Queensland in Zullo Enterprises Pty Ltd v Sutton (supra) as supporting his submission that the Act prohibits an unregistered builder from receiving any remuneration, whether based on contract or on quantum meruit or unjust enrichment. However, that decision was concerned with the effect of the Queensland Building Services Authority Act, 1991 which, unlike the Act (or the Queensland Act), contains the express provision in s 42(3) that:

"A person who carries out building work in contravention of this section is not entitled to any monetary or other consideration for doing so."

87 Accordingly, the current Queensland legislation is directed to remuneration for the work as opposed to the entering into of a contract. As the Queensland Act differs in the aforegoing respect from the Act, I do not think that Zullo Enterprises Pty Ltd v Sutton assists in the construction of the Act.

88 Tea Tree Gully Builders Co Pty Ltd v Martin (supra) was concerned with the provisions of the Builders Licensing Act, 1986 (SA), s 39, which provided that:

"39. An unlicensed person who performs building work in circumstances in which a licence is required under this Act shall not be entitled to recover any fee or other consideration in respect of the building work unless the Tribunal or any Court hearing proceedings for recovery of the fee or consideration is satisfied that the person's failure to be licensed resulted from inadvertence only."

"Fee or other consideration are words of contract. They mean quite simply the entitlement of the builder for his reward under his contract. It would be a strained meaning of those words to embrace restitution, which is now clearly the basis for a quantum meruit claim. On the plain meaning of s 39 it does not preclude a quantum meruit claim but merely is a statutory bar to enforcement by the builder of his entitlement to 'fee or consideration' under his contract."

90 Nonetheless, the carrying out of the work by the unlicensed builder was itself an offence and, accordingly, illegal. Section 9(2) of the Queensland Act provided:

"9(2) No builder shall perform, or claim or purport to be entitled to perform, building work of a particular kind unless the person holds a licence authorising the performance of work of that kind. Penalty $10 000."

91 In that respect, the situation dealt with in Tea Tree Gully Builders Co Pty Ltd v Martin (supra) is not entirely dissimilar to the present case. Despite that, Bollen J allowed a claim for quantum meruit in respect of the building work carried out.

92 However, the South Australian legislation differed in a significant respect from the Act, in that s 39 precludes an unlicensed builder obtaining any fee or other consideration "in respect of the building work", whereas the Act precludes an unlicensed builder recovering "any fee or charge under any" contract or engagement to construct or build a building. Put simply, the South Australian legislation bars payment for the work whereas the Act bars payment under the contract or engagement. It is this point which caused White J in Mostia Constructions Pty Ltd v Cox (supra) to decline to follow Bollen J's decision in Tea Tree Gully Builders Co Pty Ltd v Martin.

93 In my opinion, adopting the reasoning of McPherson J in J C Scott Constructions v Mermaid Waters Tavern Pty Ltd, the imposition of the penalty and the prohibition against the recovery of any fee or charge under a contract or engagement are provisions intended as an exhaustive statement by the legislature of the consequences which are to ensue from a contravention of any or all of the prohibitions contained in s 4 of the Act. Accordingly, in my opinion, the Act does not prohibit the recovery by an unregistered builder, who has entered into a building contract or engagement, of an amount based upon a quantum meruit although it does prevent such a builder from recovering any fee or charge under any such contract or engagement.

94 It was pointed out in Pavey & Matthews Pty Ltd v Paul (supra) by Mason, Wilson, Deane and Dawson JJ (Brennan J dissenting), that the provisions of the Builders Licensing Act 1971 (NSW) which provided in effect that a building contract not in writing and not otherwise complying with the requirements of that Act was unenforceable, had no application to the action which was on a quantum meruit. Mason and Wilson JJ said that the appellant's action on a quantum meruit did not amount to a direct or indirect enforcement of the oral agreement and that the true basis of an action on a quantum meruit is the execution of work for which the "unenforceable" contract provided and its acceptance by the other party. Dawson J said that to allow the plaintiff to succeed in its action would achieve not the enforcement of the contract, but of an obligation which, while arising from the performance of the contract, was separate and distinct from it.

95 In Pavey & Matthews Pty Ltd v Paul, the Court was concerned with a situation in which the oral contract between a licensed builder and a building owner was unenforceable - not illegal.

96 In Queensland, the Building Services Authority Act, 1991 has gone further than the Act in precluding a claim by an unlicensed builder not only pursuant to a building contract but also for work carried out by him.

97 In the result, I am of the opinion that s 4 of the Act, on its correct construction:

(i) bars the plaintiff from making the contract pleaded in the statement of claim;

(ii) precludes the plaintiff recovering from the first defendant on a contractual basis payment for work done under the contract;

(iii) does not preclude the plaintiff from recovering from the first defendant payment for work done in restitution based on principles of unjust enrichment.

98 In saying that, I am concerned only with the effect of s 4 of the Act. I have already indicated that I am not satisfied that there was any contract between the plaintiff and the first defendant. There is no evidence that the first defendant has been enriched as the result of the plaintiff's work and the absence of any such contract would, of course, preclude the plaintiff from recovering any payment from the first defendant by way of a quantum meruit. It is not suggested that the plaintiff has any claim against the first defendant on any other basis than the alleged contract or, alternatively, the work done pursuant to such contract. It appears that the first defendant effected payment to Singvests Holdings Pty Ltd of the moneys due for the work done on the hotel by the plaintiff. It may well be that Singvests Holdings Pty Ltd failed to pay the plaintiff for such work as was done by it. That fact does not mean that the first defendant has been enriched by the work of the plaintiff for which it has paid Singvests Holdings Pty Ltd. Accordingly and for the sake of clarity, I find that, while the plaintiff is not barred by s 4 of the Act from making such a claim, there is, as a matter of fact, no claim which could validly be made by the plaintiff against the first defendant on the grounds of unjust enrichment.

99 I answer the preliminary issues, therefore, as follows:

(1) The plaintiff and the first defendant did not enter into a contract as pleaded in paragraph 3 of the statement of claim.

(2) There was a contract between the first defendant and Singvests Holdings Pty Ltd.

(3) There was a contract between Singvests Holdings Pty Ltd and the plaintiff.

(4) The terms pleaded in paragraphs 3 and 5 of the statement of claim are alleged to be the terms of a contract between the plaintiff and the first defendant and I have found that there was no such contract.

(5) This issue assumes the existence of a contract between the plaintiff and the first defendant. As I have found that the plaintiff has not proved such a contract it follows that this issue is to be decided in the negative. I have found that the contract between the plaintiff and Singvests Holdings Pty Ltd was terminated.

(6) Section 4 of the Act, on its proper construction,

(i) bars the plaintiff from making the contract pleaded in the statement of claim;

(ii) precludes the plaintiff recovering from the first defendant on a contractual basis payment for work done under the contract;

(iii) does not preclude the plaintiff from recovering from the first defendant payment for work done in restitution based on principles of unjust enrichment.

100 In relation to par (iii) above, I find that, as a matter of fact, the plaintiff does not have a valid claim against the first defendant on the basis of unjust enrichment.