Supreme Court of WA|1999-06-24|Before: Mr P, White J

Great City Pty Ltd v Kemayan Management Services (Australia) Pty Ltd & Ors [1999] WASC 70 (24 June 1999)

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : GREAT CITY PTY LTD -v- KEMAYAN MANAGEMENT SERVICES (AUSTRALIA) PTY LTD & ORS [1999] WASC 70

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

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

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

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');

(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.

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."

Great City Pty Ltd v Kemayan Management Services

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (400 paragraphs)

Great City Pty Ltd v Kemayan Management Services (Australia) Pty Ltd & Ors [1999] WASC 70 (24 June 1999)

Parties

Legislation Cited (3)

Cases Cited (19)