29 Thus, the adjudicator concluded, she was "satisfied that a contract exists between the Claimant ... and the Respondent ... for the provision of the construction work and related goods and services ...". She was also "satisfied that both Dimitrious [sic] Levadetes and John Levadetes have both acted as representatives of the Respondent".
30 As to the second issue, the adjudicator reasoned as follows. She noted that Mr John Levadetes was the owner of the property, and the evidence that the parents intended to live in the property on completion. She referred to her conclusion that Mr Jim Levadetes was not the contracting party. She said that the relevant issue "is whether John Levadetes as the owner resides or proposes to reside at" the property. Since he did not, she said that s 7(2)(b) would not apply, at least so far as he was concerned. Further, she said, since the contracting party was the company, and it could not be a "residential occupier of a building", s 7(2)(b) would not apply.
The parties' submissions
31 Mr Ashhurst of Senior Counsel, who appeared with Mr Folino-Gallo of counsel for the company, submitted that the key error in the adjudicator's reasoning lay in the paragraph that I have quoted above, when she said that the contract was formed on 7 March 2008 by acceptance of the quotation. He submitted that the contract could only be formed by acceptance of a quotation where the acceptance was given by the persons to whom the quotation was addressed. Further, he submitted, there was no acceptance in any event because the term of each quotation - that the specified deposit be paid - was not met.
32 Based on his first submission, Mr Ashhurst put that it was clear that the acceptance had been effected by the company or by Mr John Levadetes (or perhaps for both) as an agent for Mr Jim Levadetes (or perhaps for him and his wife together). Alternatively, he submitted, if there had been no disclosure of the agency, it was nonetheless a contract made by that agent for an undisclosed principal.
33 On either view, Mr Ashhurst submitted, what followed was referable to a contract in which either Mr Jim Levadetes or he and his wife together were parties.
34 If the first view were correct - that the contract was made as an agent for a disclosed principal - then there was simply no contract between the parties to the adjudication. Thus, the first of the "basic and essential requirements" set out in the Act "for the existence of an adjudicator's determination" - the existence of a construction contract between the parties to which the Act applies - had not been demonstrated. This of course is a reference to the well-known passage in the reasons of Hodgson JA (with whom Mason P and Giles JA agreed) in Brodyn Pty Ltd v Davenport (2004) 61 NSWLR 421 at 441 [53].
35 On the second analysis - agent for undisclosed principal - Mr Ashhurst submitted that both the agent and the principal (whoever the principal might be) were parties to the contract. Thus, since it appears to be common ground (as the adjudicator accepted) that Mr and Mrs Levadetes did intend to reside in the property on completion, and since they were parties to and liable under the contract, s 7(2)(b) of the Act applied.
36 Ms Clark of counsel, for Iberian, submitted that the adjudicator's reasoning was correct. Alternatively, she submitted, even if the adjudicator erred in holding that a contract had been formed by acceptance of the quotation, nonetheless the evidence overall suggested that a contract had been made between the company and Iberian, under which Iberian agreed to carry out work for the company.
37 Ms Clark submitted that there was no evidence to support the proposition that Mr John Levadetes or the company (as the case may be) contracted as agent for a principal (disclosed or undisclosed).
38 Alternatively again, Ms Clark submitted, there was an arrangement to which all relevant actors were parties. She noted, correctly, that in s 4 of the Act, the expression "construction contract" is defined to mean "a contract or other arrangement under which one party undertakes to carry out construction work, or to supply related goods and services, for another party". She referred to the decision of Rein J in Olbourne v Excell Building Corp Pty Ltd [2009] NSWSC 349 to support the proposition that there could be an arrangement whereby someone not a party to a construction contract (strictly so-called) nonetheless entered into an arrangement with the builder that he or she would make payment to the builder, so that the arrangement between that person and builder became one caught by the Act.
39 Ms Clark relied in particular on the form of the invoices and the fact that in each case the payment was made by the company. She submitted that it did not matter that two of the payments were made by the company in its capacity as trustee of some family trust.
Decision
First issue: contract or arrangement?
40 In my view, it is clear that the relevant paragraph in the adjudicator's reasons cannot be supported in its terms. I repeat that the adjudicator found that the contract was formed on 7 March 2008 when Mr John Levadetes accepted Iberian's quotation and paid the deposit "consistent with [Iberian's] terms of trade."
41 There are two difficulties with that reasoning. The first is that the better view of the law appears to be that a contract cannot be formed when someone who is not the addressee of a quotation or offer purports to accept it. The authority usually cited in support of that proposition is the decision of the House of Lords in Reynolds v Atherton (1922) 127 LT 189. Jones J, in the Supreme Court of Queensland, referred to that position as settling the proposition "that an offer can only be accepted by the person to whom it is addressed": TW Hedley (Investments) Pty Ltd v Richardson Plant Hire Pty Ltd [2005] QSC 099 at [13].
42 On that analysis - which, as I have indicated, I think is correct - whatever it was that Mr John Levadetes did or purported or attempted to do on 7 March 2008, it was not the acceptance of an offer by the person to whom the offer was directed. There can be no doubt that each of the three quotations was addressed either to Mr Jim Levadetes or to him and his wife. There is no mention of the company, or for that matter Levadetes Property Group, in either of them.
43 The second reason why this aspect of the adjudicator's reasoning cannot be accepted is that, when one looks at what happened on 7 March 2008, even putting aside the point that I have just discussed, it cannot be regarded as the acceptance of an offer. I have set out above the deposits stipulated in each of the quotations. I have also set out the term of each quotation that payment should include "payment of deposit, mandatory with order ...". The deposits stipulated were not paid and it is impossible to reconcile what was paid to the required deposits in any meaningful way. There is no evidence of any discussion between Iberian and anyone representing the Levadetes' interest to suggest that the offer comprised in the quotations was varied to provide only for deposits in the two amounts that were paid.
44 On the first analysis (the "Reynolds" approach), two possibilities follow. One is that there was no acceptance at all, but rather a separate offer, or an invitation to enter into contractual relations, from the company. The other analysis is that for which Mr Ashhurst contended - that what was done should be understood as having been done on behalf of the person or persons to whom the quotation was addressed.
45 On the second analysis (non-correspondence of offer and acceptance) then the fresh offer or invitation to enter is in terms different to the initial offer. Alternatively, should it be viewed as something done by an agent on behalf of a principal, then of course it is not an acceptance but a counter-offer.
46 The complicating factor in all this is the form of the tax invoice. It suggests very strongly that Iberian regarded the party chargeable as the "Levadetes Property Group". Although we know that the persons who carried on that business included not only the company but also Mr John Levadetes, there is no evidence that this was known to Iberian. On the contrary, the form of the fax of 7 March 2008 was such as to suggest very strongly that "Levadetes Property Group" was the business name used by the company.
47 However, the invoice of 7 March 2008 does not lose sight of the fact that the work was to be carried out for Mr Jim Levadetes. In my view, the reference to "Lim Levadetes" is clearly intended to link the tax invoice back to the quotations. Thus, I think, when one views the matter objectively, what Iberian should be regarded as doing was entering into what was at least an arrangement whereby the work was to be done for Mr Jim Levadetes (either the sole addressee or one of the addressees of the quotation) in circumstances where the entity chargeable with payment was the company, under the name "Levadetes Property Group".
48 If that analysis is correct then it is unnecessary to decide whether what resulted from this mess was a contract or merely an arrangement.
49 As I have already noted, the definition of "construction contract" includes an arrangement whereby work is performed. Nicholas J pointed out in Okaroo Pty Ltd v Vos Constructions and Joinery Pty Ltd [2005] NSWSC 45 at [40] that, in the context of the definition of "construction contract", the reference to an arrangement "is apt to describe something less than a binding contract or agreement". His Honour said at [41] that an "arrangement" would include "transactions or relationships which are not legally enforceable".
50 In my view, at the very least, there was between all the parties involved in this situation an arrangement, for the purposes of the definition of "construction contract", under which Iberian agreed to carry out construction work for Mr and Mrs Levadetes on terms that the company would be liable to make payment.
51 On that analysis, then subject to the second issue, the adjudicator's decision could be sustained although not for the reasons she gave. But of course, that analysis makes it necessary to consider the second issue.
Second issue: s7(2)(b)
52 Section 7(2)(b) of the Act provides that the Act does not apply to
"a construction contract for the carrying out of residential building work (within the meaning of the Home Building Act 1989) on such part of any premises as the party for whom the work is carried out resides in or proposes to reside in".