Hoare v McCarthy [1916] HCA 65

High Court of Australia|1916-07-01|Before: Cussen J

HOARE 5 ' ' . Z : . ApPE DEFENDANT, AND McCARTHY . . B 3 ' 5 : . REsPONDE

H.C. or A. Building Contract - Certificate for payment - Authority of architect - Terminatio

authority - Refusal to act - Knouledge of contractor - Estoppel. 7a By a building contract made between the defendand anda Oct, 20, 23, the latter, in consideration of a specified sum to be paid to him at tl
times and in the events mentioned in the general conditions, agreed Grimth 0.3, do all the works, matters and things mentioned and referred to Barton and specification and general conditions in the manner thereby respecti

required, and to observe, abide by and perform the general condit By the general conditions, which were in a printed form, it was provided that throughout the general conditions, the specification and the contract the wo "architect " should mean "the architect for the time being employed by

the contract price should be made except on a written certificate of the tect. In the heading of the general conditions the name of A was writ ' followed by the printed word " architect," and in the heading of the specifi

particular building, "to the entire satisfaction of" A, "architect, or his representative." Held, that the naming of A as the architect did not override the provi in the general conditions, and, therefore, that when he ceased to be employe by the defendant ae the architect he had no longer authority to give cates entitling the plaintiff to payments.

Held, further, that, on the evidence, at the time when a certain certificate wae given by A he had refused to act any longer as, and had therefore ceased to be, the architect, and that, as the plaintiff had not acted to his prejudice on the faith of the certificate, the defendant was not estopped from asserting that 'A had ceased to be the architect.

Decision of the Supreme Court of Victoria (Cussen J.) reversed.

EAL from the Supreme Court of Victoria. "An action was brought in the Supreme Court by Francis James hy against Mary Hoare in which it was alleged that by a build- contract dated 28th April 1914 the plaintiff agreed to do certain k and labour and provide certain materials in connection with erection of a hotel for the defendant and that the defendant dto make payment for the same in the manner set out therein, the plaintiff had completed the contract and that the defen- had paid only portion of the amount due in respect of the act. The plaintiff claimed payment of £814 14s, as being the nce due and, alternatively, for work and labour done and materials supplied. By her defence the defendant alleged (inter ) that no certificates had been given by the architect for any ums exceeding the amount which had been paid by the defendant. An order was made by Madden C.J. that the question whether any and which of the documents dated 27th March 1915 and 23rd il 1915, purporting to be certificates under or in relation to the and to have been made by W. A. Dalton, were valid cer- s and binding upon the defendant, should be first tried.

uring argument reference was made to Clarke v. Murray (1) ; (1) 11 V.L.R., 817.

Hudson on Building Contracts, 4th ed., vol. 1., pp. 414, 606 ; Hals- bury's Laws of England, vol. 11., p. 221; vol. xim., p. 384; Iya v. Fergerson (1); Dudgeon v. Pembroke (2); Murray v. Cohen (3); Trueman v. Loder (4); - - v. Harrison (5).

Grirriru C.J. This is an action upon a building contract cor taining the usual condition under which the builder is to be pai on certificates given by the architect. The contract was to buil a hotel at Traralgon for the price of £2,650. Tenders were invited in the usual way, and the plaintiff was the successful tenderer. When the formal contract was signed it embodied by referen 7 what are called " general conditions," such as are usually found building contracts, and specifications of the particular work to done. By the contract the contractor agreed to do the work - mentioned and referred to in the specifications and general conditio1 and in the manner thereby respectively required, and to abide by and perform those general conditions. The general conditions were in a printed form with a blank space at the beginning, apparently intended to be filled up with some contractual words. Then fol- lowed the words "in conformity with the following specifications : and accompanying drawings numbered 1 to inclusive, and such other detail drawings as may be hereafter given in further illustration of those above referred to." Then appeared the printed - words "' C. H. Pattison, Architect," the name being in large capitals, evidently showing that the general conditions had been prepared - and were used by an architect of that name in respect of any works - of a like nature carried out under his supervision. The name " H. Pattison " was struck through, and the name " W. A. Dalton was written in its place, also in capital letters. Then came the general conditions, including one that the works were to be done to the "entire satisfaction of the architect," and another, No. 27, which was as follows : - '' Throughout these general conditions, and throughout the specification and contract, unless repugnant to the

(2) 2 App. Cas., 284, at p. 293. (5) 12 Mod. Rep., 346. (3) 9 N.S.W.LR. (Eq.), 124.

se or context, words importing the singular number shall include e plural number, and words importing the plural number only hall include the singular number. The word architect shall mean e architect for the time being employed by the proprietor in rela- ion to the works above referred to." As a matter of construction think that the last sentence governs the whole condition. It follows i throughout the general conditions, and throughout the specifi- cations and contract, the word " architect " bears that meaning. _ The specifications, which contained a detailed list of the work to be done, are headed in this way: " Specification of the various orks required, labour and all materials, except where otherwise ially mentioned below, for a two-storied brick hotel at Traralgon Miss Hoare, and according to the accompanying plans, and to the entire satisfaction of W. A. Dalton, Architect, 325 Collins Street, bourne, or his representative." The first point taken by the plaintiff is that, construing these documents together, they meant that Dalton, as a persona designata, was to be the architect throughout the contract, and that no one _ else could be appointed in his place except by the mutual consent _ of the parties, that is to say, that the words "to the entire satis- ction of W. A. Dalton" in the heading of the specification are so trary to condition No. 27 as to override it, with the result that the name "W. A. Dalton" should be substituted throughout the general conditions where the word "architect " is mentioned. In support of that argument it is urged that while the general con- ditions are printed the specifications are type-written, and that in 'such a case the doctrine stated in Dudgeon v. Pembroke (1) that, where parties using a printed form agree to a written term which inconsistent with some of the printed words, effect should be given to the written words rather than to the printed words, should be applied. In my opinion, the doctrine has no application to the present case. The general conditions and specifications were both part of an invitation to tender drawn up by the defendant or her _ agent, and whatever they meant under those circumstances is their ' "meaning in the contract. In my opinion, the naming of the architect _ in the heading of the specifications did not override or qualify the in (1) 2 App. Cas., 284, at p. 293.

Dalton would be the architect until he ceased to be employed by the proprietor. The term " architect," therefore, means the p who is for the time being employed by the proprietor.

one on 27th March 1915, and the other on 17th August 1915, a he must show that at those times Dalton was the architect for the time being employed by the proprietor. The defendant in her defence alleged that "certain documents purporting to be such certificates given by one Dalton were and each of them was not

notice thereof." The learned Judge who heard the case was o opinion that on the proper construction of the contract Dalton and x no one else was the architect for the purpose of the contract, and - for that reason he held that both the certificates were good whate' might have happened in the meantime to terminate Dalton's employ- ment. I am unable to agree. But another question remains to be determined, which is a qu tion of fact, namely, whether on 27th March, when the first of the two certificates was signed by Dalton, he was the architect within the meaning of the contract. Upon that question the facts appear to be these : - Some time before 22nd March there had been some friction between the defendant and Dalton, who claimed ar instal- ment of his architect's fees, which the defendant refused to pay. We have nothing to do with the merits of that dispute. But the ia matter culminated about 22nd March, five days before the first - certificate was given. On the 20th and 22nd Dalton had conversations with Mr. Byrne, a clerk of the defendant's solicitors. Somewhat € different versions of those conversations are given by Byrne and Dalton. According to Byrne's account, on 20th March Dalton, who was claiming £50 or £70, said that unless he got what he asked _ he would not go near the work again; Byrne then said that if _ Dalton took up that position the defendant would be forced to appoint another architect, and that Dalton might disentitle himself - to any remuneration; Dalton then asked if the defendant would -

lvance him £50, and Byrne said that he would obtain instructions let Dalton know. According to Byrne's account of the inter- of 22nd March, he offered Dalton £25 on accourt of his fees; upon Dalton said : "I won't take it, and I'll have nothing more do with the job;" Byrne replied: "If you take this course nother architect will at once be appointed in your place;" Dalton m said: "I don't care; you can do as you like; I wash my s of the whole matter, and this is final." On the same day e had an interview with Mr. Dye, who was the defendant's sentative in Melbourne, and Dye engaged another architect, Klingender. Dalton gives a different account of the conver- tion of 22nd March. He says that he did not make any definite to go on as architect.

On the same 22nd March Dalton wrote a letter to Mr. Dye, who represented the defendant in Melbourne. The learned Judge thought that that Jetter was written after the second conversation between Dalton and Byrne. In that letter, after complaining that he could get money from the proprietor, and stating that he wanted £75 account of his fees, he said : - ' As my first request " (that was or £50 or £60 on account of his fees) " has not been met I will not v accept less than the above. It has only to be paid once. If t paid I decline to spend more time or money over the matter recially as suggested I may not get any. This is my final decision, [without any offence to you. It will be no use trying to communi- 'ate with me, as I shall be away in the country till Saturday " (that vould be 27th March). '' Further I have not heard from contractor, and am now going to inform him that he must send his account to Miss Hoare as I expert to be dismissed." The learned thought that that letter did not amount to an absolute refusal ct further, and that it was written after the conversation of March. But from the internal evidence of the letter itself Dalton's own account of the conversations, it is apparent that s written after the conversation of 20th March and before that 22nd. The learned Judge, being of the opinion that the letter itten after the conversation of 22nd March, thought that that ion should not be construed as such a positive refusal by

Iton to continue to act any longer as Byrne said had been given \ 2

in the conversation. There is no reason to suggest that Byrne' evidence is not truthful or accurate, but the learned Judge his conclusion on the letter being written after the conversation o 22nd March. 1, on the other hand, come to the conclusion the internal evidence of the letter that it must have been written after the conversation of 20th March only and before that of the 22nd. One is very reluctant to differ from the opinion of a Ju who has heard the evidence on a question of fact, but that reluctance is less when no doubt is thrown on the credibility of the witnesses. Then, looking at the terms of the letter I come to the conclusion - that this meaning is at any rate open : - ' Understand that unl you agree to the conditions 1 now impose, I will have nothing more to do with the matter. That is my final decision." That is to say "T will not act further in the matter until you tell me you agree to 3 my conditions, and it is no use your telling me whether you agree to them until next Saturday as I shall be in the country." Early on that Saturday morning, which was 27th March, the defendant's solicitors wrote a letter to Dalton acknowledging hi: letter of 22nd March, and saying: " We have delayed replying unt now, 2s in your letter you say ' It will be no use trying to communi- cate with me as I will be away in the country till Saturday." You recently requested that Miss Hoare should advance

you £50 against fees coming to you on completion. This Mi Hoare refused to do, but we verbally informed you she was willing to advance £25, which you refused to accept. We have now to intimate to you that in view of your refusal to act further in the matter, Miss Hoare has been forced to appoint another architect - in your stead." ' I have already pointed out that after the conversation of 22nd March Mr. Dye had acted on the assumption that Dalton had directly refused to act further for the defendant and had accord- - ingly engaged another architect. The letter from which I have just quoted shows that the defendant's solicitors interpreted Dalton's letter of 22nd March in the same sense. his letter was sent to Dalton's office in Melbourne and delivered there not later than 10.30 in the morning of the 27th, which was the day which Dalton h mentioned as the earliest day on which an answer to his letter

22nd would reach him. In the meantime, earlier on the same day, Dalton had written out the certificate of 27th March, and left it n his office in an envelope addressed to the plaintiff. Some time ng the morning, probably between 11 and 12 o'clock, and after defendant's solicitor's letter had been delivered, the plaintiff in and received the envelope containing the certificate. The ion is whether when that certificate wag given Dalton was the hitect. within the meaning of the contract. I come to the con- ion that at that time Dalton had ceased, by his own action, to be architect within the meaning of the contract. It is then said it that does not matter, because notice of his ceasing to be the rchitect had not been given to the plaintiff. I do not think that it is a correct view of the law. A person who alleges the ity of another to bind a third person must prove the existence e authority at the time when the act in questionis done. That be done either by showing express authority existing at that ne or by showing that the alleged principal held the alleged agent t as his agent to do the act. But the foundation of the doctrine holding out is estoppel - that the principal has by his conduct pped himself from denying the authority of the agent. Nothing sted here that can amount to estoppel. The plaintiff went Dalton's office and there found a letter addressed to him con- the certificate, but, unfortunately for him, the authority of ton to give the certificate had ceased. If anything had been 1e by the plair tiff on the faith of the certificate to his prejudice, » case would have been different. For the reasons I have given I am of opinion that at the time when certificate" of 27th March was given Dalton was no longer the hitect within the meaning of the general conditions. It follows that at certificate is inoperative. The certificate of 17th August suffers me fate. As to the latter certificate, indeed, the case is hope- 8, for long before that time everyone concerned knew that Dalton s no longer employed as architect under the contract. these reasons, I think the answer to the question referred to

Chief Justice. In view of the way in which he has dealt with

whole of the matter, it does not suggest itself to me that there is anything more I can say which would not be a superfluity. therefore content myself by saying that I agree that the ap, should be allowed.

Isaacs J. read the, following judgment : - As to construction The contract is the document signed and sealed by the parties The other documents have importance here only so far as they are adopted by the contract itself.

The contract first identifies the specifications and general con- ditions; it states the consideration, £2,650, and says of it & to be paid to the contractor at the times and in the events men- tioned in the general conditions," and in that connection specifications are not referred to. Then the contractor's dutie are described ; he is to do "all and: singular the works matt and things mentioned and referred to in the said specification and general conditions and in the drawings respectively referred to and in the manner thereby respectively required." In connection, it must be remembered that the primary function of a specification, as its name denotes, is to describe the work, nature, materials and method and extent. The primary functi of the general conditions is to prescribe the mutual obligations i relation to the performance of the contract on both sides. documents may in certain respects overlap, but their primary fune- tions must not be lost sight of. I attach importance to the w "respectively." Then the contract definitely declares that each - of them the contractor and the employer " shall and will observe, abide by, and perform the said general conditions on his part." The contract seems to me broadly to look to the specifications for the work to be done and to the general conditions for the obligations of the parties. .

Then we have also to remember that the heading of the specifi- cations was originally framed for the purpose of obtaining tenders ; to some extent its purpose was exhausted when the contract w made. The heading I take as a rough introduction to the nai of the works to be tendered for, leaving the precise terms of # e

in to be ascertained from the description of the work, the and the general conditions. The 27th condition makes is reference to the specification, as well as the other two ents, and with all three in view says expressly as a condition contract : " The word architect shall mean the architect he time being employed by the proprietor in relation to the above referred to."

nust confess I am unable to see any difficulty. In my opinion,

son of the heading to the specifications as to the governing

e, then Dalton's representative would have the same power, se the heading puts the representative in the same position ton.

Ther as to whether Dalton was in fact the architect for the time

on 27th March, when McCarthy received the certificate, I

of opinion he was not. He had distinctly withdrawn by his letter,

employer's represertatives had accepted that withdrawal.

tion worked a dismissal, or was in itself a renunciation by

There was a second conversation, as is admitted, and I is clear at all events that the letter of 22nd March was not y respect withdrawn or weakened by it. By that letter Dalton initely abdicated unless and until he received a promise which was given, and which he knew from the telephone conversa- en as he relates it would not be given. He was not in fact hitect for the time being when he wrote and when McCarthy ved the certificate of 27th March, and @ fortiori the other cer- f 23rd April and 17th August.

isputing McCarthy's right to regard the certificate as that of itect for the time being. The onus lies on the party to prove in reliance on the continuous employment of Dalton was to act to his prejudice. Action in that sense includes

opinion, it is here McCarthy fails. All that happened was that (1) 8 Ch. D., 807, at p. 817.

H.C. or A. he obtained a certificate from an unauthorized person, who, ieee bond fide believed - so we must assume for present purposes, - was Hoare authorized. He knew within two or three days that Dalton had gi

MoCarruy, the certificate without authority. He had not altered his position

in the least degree. The principle of estoppel in favour of the person induced to act is stated by the Privy Council to be " that it would be most inequitable and unjust to him that if another, by representation made, or by conduct amounting to a representation, has induced him to act as he would not otherwise have done, person who made the representation should be allowed to den) repudiate the effect of his former statement, to the loss and injury of the person who acted on it " (Sarat Chunder Dey v. Gopal Chun

Taha (1) ). But there must be the loss and injury. Here there

fails to produce the certificate agreed on. He must apply to the architect for the time being. I agree that the appeal should be allowed.

declaring that both certificates are invalid and by directing that the costs of the trial o the question be the defendant's costs of the action. Respondent to pay costs of appeal.

Solicitors for the appellant, Whiting & Aitken. Solicitors for the respondent, Madden & Butler for G. H. Wise

Sale. . 'Bele (1) L.R. 19 Ind. App., 203, at p. 215.

At a glance

Court

Decision date

Before

Source

Judgment (48 paragraphs)

Cited By (1)