Isabella Shop Fitout & Design Pty Ltd v Tan Republic Pty Ltd

The corporate and business entities 4It is convenient to begin by identifying the corporate and business entities that were relevant to this appeal, namely:

• Isabella Australasian Pty Ltd;
• Bella Retail Design Pty Ltd;
• Isabella Shop Fitout & Design Pty Ltd. 5Isabella Australasian Pty Ltd was an incorporated entity with ACN 128 689 314 and ABN 78 128 689 314. It was placed into liquidation on 1 February 2011. Mr Issa was its sole director. There is no registered corporation with the name Bella Retail Design Pty Ltd. However, as at 19 November 2010, Isabella Australasian Pty Ltd was the holder of the registered business name Bella Retail Design. 6Isabella Shop Fitout & Design Pty Ltd was an incorporated entity with ACN 147 193 815 and ABN 93 147 193 815. It was incorporated on 4 November 2010, however did not commence business until 5 February 2011. Mr Issa was never a director of Isabella Shop Fitout & Design Pty Ltd.

The letter of appointment 7The trial judge held that one of the key contractual documents was a letter received by the principal of the respondent on 19 November 2010 (the letter of appointment). For ease of identification, the various entities referred to in the letter of appointment are in bold print. 8The letter of appointment was sent following a meeting between the principal of the respondent and Mr Issa on 13 November 2010. It was addressed "Dear Valued Client" and signed by Mr Issa, thanking the client for appointing "Bella Retail Design to your new project". It stated that the "total amount of design fee less the GST will be credited to your build offer if Isabella Australasia is awarded the fit out". 9The header of the document, which her Honour described at [142] of her judgment as "bogus", bore the following details of the sender: "Bella RETAIL DESIGN PTY LTD 3/44 Smithfield Road, Smithfield NSW 2164 p. 9757 2221 f. 9757 1223 acn. 128 689 314 abn. 46 602 142 945" 10The letter also gave directions how to pay, as follows: "BY DIRECT DEBIT PAYMENT NAB Business Cheque account Account name: Isabella Shop Fitouts & Design BSB No: 082-366 Account No: 183238679" 11In fact, the ACN set out in the details on the front page of the letter of appointment below the name Bella RETAIL DESIGN PTY Ltd was the ACN of Isabella Australasia Pty Ltd. Isabella Shop Fitouts & Design, to whom payment was directed, was neither an incorporated company nor a registered business name. Isabella Shop Fitout & Design Pty Ltd (that is, without the pluralised version of "Fitout") was an incorporated entity, but at the date of the letter of appointment had not commenced business operations. Further, the holder of the account listed in the letter was, at that time, Isabella Australasian Pty Ltd. Attached to the letter was a document headed "Architectural & Design Offer", which bore the same details as were on the letterhead of the letter of appointment. 12Her Honour found, at [139], that the company Bella Retail Pty Ltd, with which the plaintiff had purportedly entered into a design contract, was fictitious, and so in reality the contract was with Mr Issa. This finding was the basis for her Honour's subsequent findings that Mr Issa was liable in his personal capacity for the breach of contract, negligence and misrepresentations.

The proceedings before this Court 13A preliminary observation needs to be made as to the manner in which the matter proceeded before the Court. On 20 March 2014, in oral argument on the hearing of the summons seeking leave to appeal, Mr Issa narrowed the basis upon which he challenged the trial judge's decision, by submitting that he would be content to conduct the appeal if leave was granted only on the question whether there was a contract with him or with Isabella Australasian Pty Ltd. 14Mr Issa's oral submission was disarmingly simple. Under the corporations legislation, a company is relevantly identified by its ACN. He argued that her Honour failed to recognise that the sender of the letter of appointment was the entity with the ACN 128 689 314, namely, Isabella Australasian Pty Ltd, notwithstanding that a differently named company appeared in the header of the letter. It followed that the respondent entered into the contract with Isabella Australasian Pty Ltd. 15It followed, on this submission, that if the contract was entered into between the respondent and Isabella Australasian Pty Ltd, any representations made by Mr Issa were made in his capacity as its sole director and therefore on behalf of the company. As no accessorial liability had been pleaded against him, there was no basis upon which he could be held to be personally liable. 16The appellant's change in argument resulted in the Court directing Mr Issa to file an amended draft notice of appeal and an amended summary of argument, with the summons seeking leave to appeal to be heard on the papers. These documents were filed on 3 April 2014. 17The draft amended notice of appeal contained the following proposed ground 1 of appeal: "The learned it Trial Judge any circumstances [sic] of the pleaded case against the defendants in the Court below having identified the valid existence of Isabella Shop Fitout and Design Pty Ltd as: (a) having been incorporated on 1 February 2010 with ACN 128 689 314 ... (b) being the holder of the business name 'Bella Retail Design'... (c) directions as to payment of all monies under the design contract were required to be paid to the account of Isabella Shop Fitout and Design ... erred in determining as she did that the design contract was entered into with a fictitious company ... and ought to have determined that the design contract was in fact entered into between the respondents and Isabella Shop Fitout and Design Pty Ltd and, on the pleaded case ought to have dismissed the contractual claim maintained against the Appellant." (emphasis added) 18Ground 2 of the draft amended notice of appeal pleaded that any representations were made in Mr Issa's capacity as director of Isabella Shop Fitout and Design Pty Ltd, rather than in a personal capacity. 19This was a substantial departure from the case advanced in oral argument, where it was asserted that Isabella Australasian Pty Ltd was the contracting party to the design contract. In the first place, there is no company registered as Isabella Shop Fitout and Design Pty Ltd, as opposed to Isabella Shop Fitout & Design Pty Ltd. Assuming the latter name to have been intended, paragraphs (a) and (b) of ground 1 and the assertion in ground 2 that Mr Issa was a director of Isabella Shop Fitout & Design Pty Ltd are all factually incorrect. Presumably, Mr Issa's change in position as to who the relevant contracting party was results from a typographical error. However, it has caused confusion about which the respondent has rightly complained. 20The respondent, in opposition to the grant of leave, addressed both the case put by Mr Issa in oral argument and the case in their amended notice of appeal. If the grounds in the amended draft notice of appeal are correct and Mr Issa intended to refer to Isabella Shop Fitout & Design Pty Ltd, then the respondent submitted that there is no evidence to support a finding that it was the contracting party. In particular, there was no name recognisable as being referable to that entity in the contractual documents, which the trial judge held were the letter of appointment on 19 November 2010 and the Architectural & Design Offer. Further, those documents did not include an ACN or ABN number of Isabella Shop Fitout & Design Pty Ltd, or the ABN number of a trust of which Isabella Shop Fitout & Design Pty Ltd was a trustee, or a business name, registered or otherwise, under which Isabella Shop Fitout & Design Pty Ltd traded. Finally, neither document indicated that Mr Issa was the managing director of Isabella Shop Fitout & Design Pty Ltd. 21The respondent submitted that there were further factual matters that make the case that Mr Issa now seeks to present untenable. First, Mr Issa was not a director of Isabella Shop Fitout & Design Pty Ltd. Secondly, Mr Issa conceded in his evidence that he had been trading under the corporate entity named Bella Retail Design Pty Ltd, which he knew did not exist. Thirdly, Isabella Shop Fitout & Design Pty Ltd did not commence to trade until 5 February 2011, long after work under the design contract had been completed, which was on 18 December 2010 with the completion of the construction plans. Fourthly, Mr Issa conceded in his evidence that the only company with which he traded as at the date of entry into the design contract was Isabella Australasian Pty Ltd. Next, Mr Issa had conceded that the only entity that operated a bank account with the National Australia Bank into which payments relating to the design contract were made was Isabella Australasian Pty Ltd. Finally, Mr Issa conceded that he had represented to the respondent that it would be contracting with Isabella Australasian Pty Ltd. 22Alternatively, if the amended notice of appeal was intended to refer to Isabella Australasian Pty Ltd, the respondent submitted that at trial Mr Issa denied that the respondent had contracted with that entity. This submission is returned to below.

Consideration 23The grant or refusal of leave to appeal lies within the discretion of the Court. It is ordinarily only appropriate to grant leave where the appeal would raise a question of principle, or a matter of public importance is involved, or it is reasonably clear that there has been an injustice in the sense of going beyond it being reasonably arguable that the primary judge was in error: Lee v New South Wales Crime Commission [2012] NSWCA 262 at [12] per Bathurst CJ; Hudson v State of New South Wales [2012] NSWCA 319 at [5] per Meagher JA. It should be noted that Mr Issa relies only on the last-mentioned of these reasons for granting leave. In oral argument, counsel for Mr Issa stated: "We say her Honour got it wrong to the extent that she found that Mr Issa entered into, what I might call 'the design fitout contract' [which] we say would support at least on a leave application, being allowed to have leave." 24Mr Issa further submits in his written submissions that the errors of law and fact that he has identified have caused substantial injustice to him. 25If it is assumed that the amended draft notice of appeal is correct, such that we understand Mr Issa's submission to be that the relevant contracting party was Isabella Shop Fitout & Design Pty Ltd, then the respondent's submissions should be accepted. There are insurmountable factual barriers to accepting that contention. 26If, as is more likely, Mr Issa intended to submit that the relevant contracting party was Isabella Australasian Pty Ltd, as contended in oral submissions, it is necessary to refer to the cross-examination of Mr Issa at trial as follows: "Q. ... As at 19 November, Mr Issa, the company that was carrying out the design works was Australasian, correct? A. Bella, wasn't it? Q. Well Bella doesn't exist, does it? A. Sure. Q. It doesn't exist, does it? A. Bella's for Isabella, obviously." 27We understand the reference to "Isabella" to be to Isabella Shop Fitout & Design Pty Ltd, which was how the various companies were referred to at trial. The significance of that exchange is that Mr Issa would not accept that the design contract was with Isabella Australasian Pty Ltd. 28Mr Issa's refusal to accept that the design contract was with Isabella Australasian Pty Ltd is consistent with his responses in further cross-examination in relation to another document, entitled "Terms and Conditions of Design Offer", which he submitted was part of the design contract. That document was apparently relied on to support a submission that the design contract was with Isabella Shop Fitout & Design Pty Ltd. That position was maintained by Mr Issa in cross-examination despite it being put to him that the document contained numerous inconsistencies, including, relevantly, that its title referred to Isabella Australasian Pty Ltd. The following further exchanges occurred in cross-examination: "Q. And you say at that time you concede the only company trading at that time was Australasian, correct? A. Yes. Q. So with that concession in place, how is it that you are able to introduce into this document matters concerning a company [Isabella Shop Fitout & Design Pty Ltd] which you weren't trading in? A. I'm not sure. Q. I am going to give you one opportunity sir. Would you like to retract your evidence regarding this document? A. No." And later: "Q. So this document provide [sic] an accurate description of the company Australasian, correct? A. Correct. Q. It does not provide any correct description of a company Isabella Shop Fitout & Design Pty Ltd does it? A. No. Q. I am going to suggest to you one last time sir, this document's been fabricated by you to be included in your evidence to create a false bit of evidence for her Honour to make a decision on. That's the case isn't it? A. Disagree." 29There is some merit in the submissions put by counsel for Mr Issa in oral argument that a company should be identified by its ACN and ABN. However, we are of the opinion that, even if counsel for Mr Issa identified an arguable mistake in the reasons of the primary judge, this would be insufficient reason to grant leave to appeal. More is needed. Mr Issa did not establish that there had been an injustice in the sense of going beyond being reasonably arguable that the primary judge was in error: see at [23]. Mr Issa has suffered no injustice where his own evidence at trial was that the design contract was not with Isabella Australasian Pty Ltd. 30Accordingly, the summons seeking leave to appeal is dismissed with costs.

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