Victorian Civil and Administrative Tribunal|2008-06-18

For the reasons set out above I am satisfied that the naming of KCA in the contract is the best available evidence in determining the identity of the contracting party and thereby, the builder. The extrinsic evidence has been of little assistance, and rather than clarifying issues has only served to confuse them more. The comments by Wright, Walton and Hungerford JJ in Manpac Industries Pty Ltd v Work Cover Authority of New South Wales [2001] NSW IRComm 190; (2001) 106 IR 435 are apposite. At [29] they said:

The said maxim [falsa demonstration non nocent] , literally meaning that a false description does not vitiate a document, has application in law to the effect that if a description of something is partly true and partly false then, if the true part describes the subject with sufficient certainty, the false part will be ignored. In conceptual terms, it seems to us the maximum is apt to apply in the present case because the identification of the defendant was correct in the name but where an incorrect ACN was added ... We should not be seen as holding that the maxim falsa demonstratio non nocent is decisive of the issues as it is but a guide, to be utilised in appropriate circumstances, where a false description may sensibly be rectified if it is in the interests of justice to do so. (emphasis added)

In any event this application must be considered in light of the tribunal having previously determined 'it was satisfied the amount certified as due is due to the builder (whichever entity that properly is) and is unpaid'. I cannot now look behind the certificate to determine if it was validly issued and I am satisfied the certified amount is due and payable to the applicant - KCA.
Although the contracts were prepared by Russell Barrett of Russell Barrett Pty Ltd, the architect appointed to administer the contract, Mr Barrett was not called to give evidence, and has not filed a witness statement. Mr Whitten said this was because Mr Barrett was reluctant to become involved in this proceeding. It seems to me that as the person who prepared the contracts and subsequently made the alterations when requested to do so, and issued the progress certificates to KC although the progress claims were made by KCA, his evidence could well have helped explain the anomalies. However, he was not called, and I have no alternative but to apply the rule in Jones v Dunkel (1959) 101 CLR 29 and draw a negative inference from the owners' failure to call him - whether by him attending voluntarily or in response to a subpoena.

Even if I were persuaded that KC was the contracting party, and for the reasons set out above, I am not, I am satisfied that the owners are estopped from denying KCA is entitled to payment of the certified sum.
In January 2005 Mr Worsfold sent the following email to Wayne Krongold:

Wayne, it is my intention that we pay amounts due to your company on a monthly basis and I intend to keep doing that...

On another issue, I am confused about which company holds my contract and the status of that company and its financial viability as the contract we have together shows a different company name to the ACN number. If I could have that point clarified it would greatly assist.

The last point, we never did receive the number of the warranty insurance.

On 31 January 2007 Wayne Krongold responded by email:

'The ACN: on the contract was incorrectly recorded by Russell's Office [Russell Barrett], this was changed and the details were sent to Russell's office early in January 2006. The current position of the company is very strong and I am happy to sit down and discuss with you at a later date the background behind ACN: 007 117 026[KC]'

'thank you for the insurance certificate. I would still like to catch up with yourself, and Jon and Wayne to see if we can have a frank discussion and get resolutions to the outstanding issues between ourselves. I have sent Jon my list of issues and had requested yours. Also what is the ACN number we should have had by the contract'

Apart from raising the issue, Mr Worsfold does not appear to have pursued his concerns about the identity of the contracting party. Having received the email from Mr Krongold of 31 January 2006 and the second certificate of warranty insurance he continued to make monthly payments variously to 'Krongold' and 'Krongold Constructions' except for the final certified payment which is the subject of this application. It seems it was not until the parties fell into dispute towards the end of the project that this issue was formally raised.

Being satisfied KCA is entitled to payment of the certified sum I will order that the sum of $56,406.53, which was paid into the Domestic Builders' Fund pursuant to the tribunal's order of 11 October 2007, be paid to KCA. I will reserve the question of costs. As the parties agreed that the hearing of the application for payment of the certified sum should proceed before the hearing of the owners' counterclaim, I will order that the proceeding be listed for a directions hearing to consider the further conduct of the proceeding and any application for costs.

[1] Krongold Constructions (Australia) Pty Ltd v Worsfold [2008] VCAT 837

Krongold Constructions (Australia) Pty Ltd v Worsfold (Domestic Building) [2008] VCAT 1003 (18 June 2008)

By contract dated 12 October 2005 the respondent owners entered into a contract for the construction of a new home. The applicant ('KCA') seeks payment of the final certified payment due under the contract. In October 2007 the Tribunal found that the builder, 'whichever entity that properly is', was entitled to payment of the final certified sum of $56,406.53 and ordered payment of that amount into the Domestic Builders' Fund pending determination of the identity of the builder. The parties have agreed that KCA's claim for payment of that sum should be determined prior to the hearing of the respondent's counterclaim (which includes claims of alleged defective and incomplete works).
The owners' dispute that KCA is entitled to payment contending that notwithstanding it is named as the contractor in the building contract, it is not the contracting party. The owners contend there is some confusion resulting from various copies of the contract containing different ABN's - none of which are that of KCA and that the contracting party is Krongold Constructions Pty Ltd. I have previously ruled[1] that this creates a degree of uncertainty/ambiguity and that it is appropriate to consider the extrinsic evidence in determining the identity of the builder.
The relevant ACN/ABN's are:
- Krongold Constructions (Aust) Pty Ltd (KCA) (ABN 44 103 839 149) ('44')
- KCA as trustee for the Krongold Constructions (Aust) Trust (KCA Trust') (ABN 15 254 937 154) ('15')
- Krongold Constructions Pty Ltd (KC) (ACN 007 117 026) ('007')
- KC as trustee for the KH Contractors Trust ('KHC Trust') (ABN 46 100 861 717) ('46')
By reference to the Historical Details Search included at PD[2] 94, Krongold Constructions has been a registered trading name of KCA since registration of KCA as a company in February 2003.
The owners' copy of the contract includes the ABN for KC as trustee for the KHC Trust (46). The architect's reference copy includes the ABN for KCA (44) and on the contractor's copy the ABN has been whited out and replaced with the ABN for KCA as trustee for the KCA Trust (15). The owners' and the architect's copies of the contract have been written in, what appears to be, the same hand but on the architect's copy it looks as though a 'P' has been altered to an 'A' at the beginning of 'Aust'. The architect's reference copy is not signed by the contractor. The ABN for KCA as trustee for the KCA Trust (15) has been written in on the contractor's copy.
The owners' and the contractor's copies of the 'Introduction' page are signed by Wayne Krongold under the heading 'If the contractor is an individual or partnership' rather than under the heading 'If the contractor is a corporation'. Nothing turns on this for current purposes and my attention was not drawn to it by counsel for either party.
Ms Porter of counsel appeared on behalf of the applicant, and Mr Whitten of counsel appeared on behalf of the owners. The parties agreed that the witness statements which had been filed would be tendered but that there would be no cross examination. Although not formally tendered at the hearing, in light of counsels' confirmation that this was the agreed course I have had regard to the witness statements, although they have been of little assistance in determining the issue. I accept the 'evidence' of each of the witnesses, it not having been tested. I am unable to conclude, as suggested by counsel for the owners that Wayne Krongold's statement, that KCA did not have its own letterhead until 2006, is ridiculous.
My earlier ruling was made in circumstances where I was satisfied that there was a degree of uncertainty/ambiguity as to the identity of the builder because of the four different versions of the Introduction Page of the Contract, all naming the contractor as KCA but each with different ABN's. At that time I had not considered the extrinsic evidence. Having now heard and considered the very careful and helpful submissions made on behalf of each of the parties, the witness statements and the documents contained in the parties book of documents, I think the comments by Kirby J in Royal Botanic Gardens & Domain Trust v South Sydney Council [2002] HCA 5; (2002) 76 ALJR 436 at [105]: 'in the end, it is the written text that governs the rights of parties' are apposite. The naming of KCA as the contractor is the most reliable source of determining the identity of the contracting party. The extrinsic evidence does not assist. If anything it only serves to confuse the issue - this applies equally to the pre-contractual and the post-contractual conduct/'evidence'. As will become apparent, there is no consistency in the use of KC, KCA or KC Constructions by what I will call the 'Krongold Group'. They appear to be used interchangeably.
It is helpful to set out a short chronology by way of background by reference to the chronology prepared by Mr Whitten, and the folder of parties' documents handed up at the commencement of the hearing.

Although it is rare that the post-contractual conduct of the parties will be admissible in interpreting the contract (Collins Hill Group Oty Ltd v Trollope Silverwood & Beck Pty Ltd [2002] VSCA 205, in this case, even if admissible, it does not assist in identifying the contracting party. However, for the sake of completeness I will discuss the various issues raised in relation to the pre-contract and post contract conduct of the parties.

Krongold Constructions (Australia) Pty Ltd v Worsfold

At a glance

Court

Decision date

Source

Judgment (13 paragraphs)

Parties

Cases Cited (6)

Krongold Constructions (Australia) Pty Ltd v Worsfold (Domestic Building) [2008] VCAT 1003 (18 June 2008)