Oueik v Girgis t/as Smartcam Security

The Plaintiffs' Case

1. From the perspective of Oueik, the terms of the contract are set out in paragraph 7 of the Second Further Amended Statement of Claim as follows: "[Girgis] offered to arrange for the purchase and installation of the 41 cameras, and their integration into [an] existing security system, on that basis that: 1. he would charge Oueik the cost of the purchase of the cameras plus the cost of payments to electricians and labourers for their installation; 2. he would charge Oueik an additional amount between 10% and 15% of those costs depending on the amount of time spent by him sourcing and acquiring the cameras and organsising and supervising electricians/labourers; 3. he would charge a maximum of $50,000.00 plus GST for all of his work notwithstanding whatever the actual costs of (a) and (b) above may have been."
2. Oueik alleged that Girgis accepted the terms of the offer on 12 December 2015.
3. It is further alleged that, on 21 December 2015, Girgis again attended the premises of Oueik at which time Girgis told Oueik that he was ready to commence the work under the contract and requested the payment of $10,000.00 as a deposit on account of the final contract sum.
4. On that occasion, Oueik provided Girgis with two credit cards and authorised Girgis to use them to charge the deposit of $10,000.00. Girgis took down the numbers and other details on the credit cards.
5. Oueik maintained that at no stage did he authorise Girgis to debit his credit card for more than the original deposit sum of $10,000.00. This is a disputed fact which is determined below.
6. The initial dispute between the pair arose from the use of the credit card by Girgis.
7. Oueik claimed and the records confirm that on or about 21 December 2015 being the date upon which the authorisation for debit of $10,000.00 was given Girgis in fact debited the following sums to Oueik's credit card: 1. $8,200.00; 2. $7,200.00; 3. $2,400.00; 4. $2,200.00, being a total sum of $20,000.00.
8. Further, it is alleged that between 23 December 2015 and 23 February 2016, further amounts were debited to Oueik's credit card by or on behalf of Girgis which totalled the sum of $60,577.00.
9. Oueik alleges that those transactions and the transactions exceeding $10,000.00 on 21 December 2015 were done by Girgis (via the merchant facility referred to above) using the personal credit card of Oueik without the latter's authorisation or approval.
10. Oueik claims repayment of those amounts, together with interest.
11. The situation was further confused when, on 29 January 2016, Girgis gave Oueik a tax invoice addressed to the second-named plaintiff, BBC Developments ('BBC'), a company of which Oueik was the sole director and shareholder.
12. That invoice was said to relate to amounts paid or payable to electricians and labourers who had worked on the installation of the security cameras and was in the sum of $11,350.63, including GST.
13. On or about that day, that is, 29 January 2016, Oueik or alternatively BBC gave Girgis a cheque in the sum of $11,350.63 in payment of the tax invoice.
14. On or about 16 February 2016, Girgis issued a tax invoice to BBC in the sum of $92,844.95.
15. On or about 1 March 2016, Girgis issued a further tax invoice in the sum of $36,663.00.
16. On 11 July 2016, Girgis filed proceedings in the Local Court against BBC seeking orders under s 15(2) Building and Construction Industry Security Payment Act 1999 ('the Act') for payment of the unpaid balance of its tax invoices in the sum of $48,935.95 plus costs and interest.
17. On 29 July 2016, Girgis obtained judgment in the sum of $49,174.95, inclusive of costs.
18. It is agreed that, pursuant to s32 of the Act, the judgment is not binding in these proceedings.
19. On a date subsequent to 29 July 2016, BBC paid Girgis the sum of $49,174.95, being the amount the subject of the Local Court judgment. It was said that payment was not voluntary and/or was made under protest. In any event, it is without prejudice to these proceedings.
20. These proceedings arise because Oueik maintains that Girgis was not entitled to any amount in excess of the agreed sum of $55,000.00 inclusive of GST.
21. Further, it is said that Girgis is in breach of the contract in that he has charged prices that were more than the 15% margin on costs for the purpose of the purchase of the cameras, the services of the electricians and labourers. In addition, it is claimed that Girgis charged a project management fee which had not been agreed between the parties.

The Defendants' Case

1. In the further amended defence, Girgis essentially denied the allegations made by Oueik. He said that in early October 2015 he attended Oueik's residential address at Kenthurst to conduct an inspection of the existing security system.
2. Further, he says that, in or about early to mid-October 2015, he attended the Kenthurst property and installed sample security cameras.
3. It is alleged in the defence filed on behalf of Girgis that on 7 December 2015, he attended the property and Oueik identified 21 locations for the installation of new cameras.
4. On 14 December 2015, Girgis claimed to have again attended the property and that it was agreed between Girgis and BBC that Girgis would not charge BBC any more than $150,000.00 in connection with the works.
5. Girgis maintained that, on or about 21 December 2015, he was engaged by BBC to supply and install a new video surveillance system at the Kenthurst property. It is said that contract was wholly oral and that the terms were agreed as between Girgis and Oueik (on behalf of BBC Developments) during site visits on 7 December 2015, 14 December 2015 and 21 December 2015.
6. Girgis maintained that it was an express term of the contract that Girgis would: 1. facilitate the supply and installation of an initial 21 video cameras (and necessary ancillary equipment) at the Kenthurst property; 2. charge BBC Developments an amount not exceeding $150,000.00 in connection with the contracted works; and 3. issue to BBC Developments (not Oueik directly) invoices in respect of the contracted works.
7. In complete contrast to the evidence of Oueik, Girgis maintained that on or about 21 December 2015 he requested an initial payment of $20,000.00 from Oueik.
8. In relation to the credit cards, Girgis says that, on 21 December 2015, Oueik provided him with two credit cards and authorised Girgis to make payments using either credit card in respect to amounts owing under the contract.
9. Girgis admitted that he used the credit cards to effect the transactions resulting in the amounts debited, referred to by Oueik.
10. In relation to the invoice, in the sum of $11,350.63, it would appear that Girgis admits that such an invoice was issued to BBC developments and paid by way of cheque.

Agreed Chronology

1. A document said to be a joint chronology together with the references for each event became exhibit "A". It reads as follows: Date Event Reference Early August 2015 Oueik said to have met Girgis (at Salim's house) Oueik Affidavit of 26 July 2016 (Oueik July Affidavit) at [12]. Late September 2015 Mr Oueik asks Mr Girgis for a quote to install security cameras at his residential home. Oueik Affidavit 22.02.2017 ("Oueik Affidavit") at [7]. 14 September 2015 Oueik state colleague, Mr Younan, informed Oueik that he had received a quote from Girgis to complete camera installation work at the Auburn property Oueik Affidavit at [17] Mr Girgis attends Mr Oueik's property along with Bruce McElroy from Seadan. Oueik Affidavit at [8]-[9] Early October 2015 They discuss installing 21 "Pelco" branded security cameras. Girgis Affidavit of 26 May 2017 ("Girgis Affidavit") at [7]-[8] Mr Girgis claims Mr Oueik offered to charge a 15% margin on his costs. Mr Girgis attends Mr Oueik's property and installs two test cameras (2nd visit). Mr Oueik claims they agreed to: Oueik Affidavit at [10], [13] Mid-Late October 2015 (a) Install a further 21 cameras; Girgis May Affidavit at [8]. (b) Use Dahua cameras rather than Pelco cameras; and (c) A price of "$50,000 tops." Early December 2015 Mr McElroy receives telephone call from Girgis regarding new job Girgis May Affidavit at [4]. 7 December 2015 Girgis and McElroy say they attended the property for a "walk around" on 7 December 2015, rather than in October 2015 (3rd visit). Girgis Affidavit at [10], [11] Mr Girgis alleges that he offered to install 21 cameras costs "around $200,000." 12 December 2015 Mr Girgis alleges that he attended the property to discuss with Mr Oueik equipment and quotes from Seaden. Girgis Affidavit at [14] & MG-1 at 7-10. Mr Girgis alleges he gave Mr Oueik a quote for 25 Pelco cameras for $105,199 plus GST, indicating that his fees to install 10-15 Pelco cameras would be around $200,000. 14 December 2015 Mr Girgis claims that he returned to the property with McElroy and a quote for 29 Dahua cameras for $72,566.67. Mr Girgis claims he agreed to try to charge less than $150,000 for 21 cameras. Girgis May Affidavit at [15] & MG-1 at 11-14. 14 December 2015 SparkPro commenced work at the property Girgis May Affidavit at [18]. Mr Girgis and Mr Oueik attend the property to discuss the deposit. 21 December 2015 Mr Girgis alleges a deposit of $20,000 was discussed. Girgis May Affidavit at [19-20]. Mr Oueik provides Mr Girgis with two credit cards. Mr Oueik alleges he provided Mr Girgis with his credit card and authorises him to take a $10,000 deposit. Oueik Affidavit at [15] 21 December 2015 Mr Girgis withdraws $20,000 on that day across four withdrawals of $8,200, $7,200, $2,400, $2,200 on an account of Abba Teji Pty Ltd. Abba Teji Pty Ltd went on to withdraw a total of $80,572.00 on the credit card. Oueik July Affidavit at [26] Mr Girgis alleges that he was authorised to take a $20,000 deposit and to use the credit card for any future costs. 22 December 2015 Girgis attempts to process a $20,000 deposit on the BBC Developments Pty Ltd card which was declined Girgis May Affidavit at [25] 24 December 2015 Girgis conversation with Mr Taleb (SparkPro) concerning Mr Oueik's request for additional cameras (10 days after work had started) Girgis May Affidavit at [30] 25 December 2015 Installation of the 21 cameras was completed Girgis May Affidavit at [27] 29 January 2016 Mr Girgis issues a tax invoice to Mr Oueik for $11,350.60 (the amount of SparkPro's first invoice) (First Invoice). Oueik February Affidavit at [18], [21], [23] At that time Mr Girgis had taken $50,828 on Mr Oueik's credit card, which is not credited on the account. Girgis May Affidavit at [39] 2 February 2016 Girgis sent to BBC Developments SparkPro's First Invoice Girgis May Affidavit at [3] 3 February 2016 Mr Girgis says that he received a call from Mr Girgis' solicitor demanding return of money paid on the credit card. Girgis May Affidavit at [56] 8 February 2016 Mr Oueik met with Girgis and gave him a cheque for payment of the First Invoice in the amount of $11,350.63. Oueik Affidavit at [25] At this time Mr Oueik was unaware of the charges to his credit card. 9 February 2016 Mr Girgis met with Mr Oueik at the Kenthurst property to discuss Channel 7 reporters and installation of PTZ cameras Girgis May Affidavit at [35] 16 February 2016 Second invoice in the amount of $92,844.95 (Second Invoice) Girgis Affidavit of 20 October 2017 (Girgis October Affidavit) at [3] Mr Girgis issues the Second Invoice to BBC Developments dated 16 February 2016 17 February 2016 Mr Oueik claims that a few days after receiving the invoice he telephoned Mr Girgis to accuse him of using his credit card without authority. Oueik Affidavit at [26]-[31] Mr Oueik claims that the following day they met at his home to complain about the tax invoice and the credit card. Girgis May Affidavit at [42] Mr Oueik says that Mr Girgis did not return to the site thereafter. 25 February 2016 Mr Girgis attended the property and met with Oueik to discuss charges on the second invoice Girgis May Affidavit at [44-48] 1 March 2016 Mr Girgis issued a tax invoice in the amount of $36,663.00 (Third Invoice) Girgis October Affidavit at [3]. March/April 2016 Oueik arranged "for a security contractor…NSW Alarms to attend…to replace some of the cameras" Oueik February Affidavit at [36] 11 July 2016 Mr Girgis commenced proceedings under the Building and Construction Industry (Security of Payment) Act 1999 in the Local Court to recover the balance of his Second Tax Invoice and Third Tax Invoice, less the $80,572.00 which had been withdrawn on Mr Oueik's Credit Card. Oueik Affidavit at [33] 28 July 2016 Girgis was awarded $49,174.95 in the Local Court against BBC Developments. BBC Developments subsequently paid this amount. Girgis Affidavit at [66] 13-14 December 2016 Scott Myles attends the Kenthurst property (and with the assistance of Mark West (West Technology Security) takes photographs of faulty cameras and equipment. Page 3 of Myles Expert Report dated 23 February 2017 16 December 2016 Oueik arranges for Scott Myles of IACS group to attend Kenthurst property to take photographs of the security equipment in preparation for a report Oueik February Affidavit at [38].

1. Whilst the chronology is said to be agreed between the parties, it is plain from reading the document that, in respect of most events, there is in fact no agreement. Exhibit A sets out, in chronological form, what it is that each party says occurred. Nevertheless, it is a useful summary of what would otherwise be voluminous evidence directed to establishing those facts. It does not, however, assist in making factual findings.

THE EVIDENCE

1. The evidence-in-chief by witnesses called in the proceedings was provided by way of affidavit which was, to say the least, burdensome and not at all times pertinent to the facts in issue. The two principal parties (Oueik and Girgis) relied upon two affidavits each (Oueik - exhibits B and C; Girgis - exhibits 1 and 2).
2. There was also detailed expert evidence from Scott Myles who was retained and called on behalf of Oueik.
3. Rather than summarise the documentary evidence which comprises in excess of 850 pages, I will focus my reasons on the evidence given by the respective parties in court, with only necessary references to the affidavits.
4. Once the evidence was completed, I made specific directions requiring the parties to prepare schedules of costs reflecting mark-ups of 15 and 30%. For reasons which will be provided in full, below, those documents have assisted in narrowing the issues between the parties.
5. To simplify the cases of the respective parties, Oueik maintained that the agreement was that Girgis would charge a mark-up of 15% on the wholesale prices up to a maximum of $50,000.00. The case for the defendants was that Girgis would charge no more than $150,000.00 (including an unspecified mark-up). In most respects, the facts in issue in the proceedings can be determined by an acceptance or rejection of the respective primary witnesses.
6. After dealing with objections which are noted on the transcript I then read the material which comprises exhibit B, C, 1 and 2.
7. After that material had been read I suggested to both counsel that the accounts provided by Oueik and Girgis could not be reconciled by error or mistake. I stated "somebody is lying and somebody is telling the truth. Do you agree?" (T20 - 21). Both counsel agreed.

Oueik's Oral Evidence

1. In his brief evidence-in-chief, Oueik told the Court that, since the installation by Girgis, he had caused 9 or 10 of the cameras to be replaced as they were very poor.
2. That, together with his affidavits, comprised his evidence-in-chief.
3. In cross-examination, Oueik gave evidence that Girgis, Mr McElroy and he met at the latter's house in or around October 2015 in order to inspect the premises with the view to making and assessment as to how many cameras would be installed. It seemed that initial inspection was undertaken by McElroy who suggested some 21 sites based on an installation of what is referred to as Pelco cameras.
4. The evidence then turned to a "walkthrough" on 7 December 2015, referred to in the affidavit of Oueik. There was some confusion directed to paragraph [8] of exhibit B as to whether the first meeting occurred in "early October 2015" as stated or on some later date. The effect of the evidence of Mr Oueik on this question was that he could not recall whether the meeting took place in October or November 2015. His reaction to this apparent error was candid and apologetic.
5. There was extensive evidence as to the make and models of cameras to be used, including the Dahua Camera referred to by stock number DHU and a Pelco Camera referred to by PEL. In cross-examination, Mr Oueik attempted to describe the terms of the agreement with Mr Girgis in the following way: "Q. You've given evidence that you had a discussion with Mr Girgis that he'd charge fifty thousand tops? A. Yes. Q. You understand what I'm referring to in terms of "tops", that is, he would charge a maximum or a ceiling price of fifty thousand dollars. A. Plus the installation, which was I pay directly to electrician [sic]. Q. You're saying there was another term to it now. I don't understand that. A. Fifty thousand dollars, like the cameras itself work out to be, with all the system, about thirty thousand dollars, the, the, the electrician will charge between ten to - between ten and twelve thousand, that was the discussion and then the fifteen per cent on top of that, so whatever the charge is, work out to be fifty, fifty something thousand dollars." [T 29.33 - 45]
6. The evidence of Mr Ouiek was that he originally agreed with an order of 21 cameras from McElroy, the representative from Pelco, but later added an additional 20 cameras to the order.
7. After reference to several quotes which exceeded the $50,000.00 cap, it was put to Oueik that the cap was in fact $150,000.00. He denied that it was [T34.45].
8. Then followed a series of questions concerning the quotations for various cameras without going to the detail of the evidence, the effect of it was that he was overcharged by Girgis.
9. Oueik explained the reason for the need for security arose from his role as the mayor of Auburn Council and following what he described as media attention, including bullying of his wife.
10. He wanted the security system set up as soon as possible as they were planning to move into the new house over Christmas 2015.
11. Oueik agreed in cross-examination that when they met on or about 21 December 2015, he gave Girgis two credit cards. One a St George credit card issued to BBC and the second a Visa card in his own name.
12. Although the evidence is unclear it appears that Girgis first attempted to debit the BBC credit card unsuccessfully before then turning to Oueik's personal card which was then used for all credit card transactions.
13. It was suggested to Oueik that the reason for using the BBC credit card was that he stood to benefit by recouping GST credits. That is a matter which he denied and about which there is no evidence. In any event, the credit card statements in evidence are the personal credit cards of Oueik.
14. The evidence of Oueik in cross-examination was uninformative as to the central matters in dispute. The questioning was directed to a number of specific topics by which the cross-examiner sought to attack the credit and reliability of the witness.
15. The effect of the evidence was that the witness at all times maintained that the cost of the work for which Girgis had been contracted was capped at about $50,000.00, inclusive of a margin of about 15%.
16. It is also apparent that upon receiving his credit card statements showing multiple transactions in the name of ABBA TEJI Pty Ltd Drummoyne commencing 21 December 2015 and ending 23 February 2016, Oueik was outraged. He told the Court and I accept that he opened both credit card statements at the same time. He said: "… but I opened both at the same time. I didn't have one before and then after. This is the one I was referring to. That's why I call - when I said, I went cuckoo. I called the bank straight away. I said there's other transaction. I called Mr Girgis. He's denied it completely. I said "If you don't tell me who the ABBA TEJI is, I'm calling the police." [T 88.31 - 35.]
17. There was considerable, repetitive cross-examination about when the first credit card statement for the period 10 December 2015 to 8 January 2016 was received and, more importantly, read by Oueik. The evidence extracted in the course of that cross-examination was confusing and inconclusive. What I do accept, however, is that upon realising that Girgis had been debiting the credit card via the entity ABBA TEJI Pty Ltd, Oueik immediately contacted Girgis seeking an explanation. Their relationship then deteriorated.
18. The reason for the confusion in the evidence of Oueik was a combination of imprecise questioning and confused answers. It was plain that the witness did not understand what was being asked of him by the cross-examiner throughout most of the cross-examination. I formed the opinion that Oueik was doing his best to answer questions honestly. He impressed as a credible and reliable witness.

Girgis' Oral Evidence

1. The next witness to give evidence was Girgis. It was agreed between the parties that all lay evidence would be adduced before the expert evidence of Mr Myles was called. Further evidence-in-chief was permitted with leave. Mr Girgis said that there was an agreement between himself and Oueik.
2. Girgis stated: " … simply that we discussed the job at hand and then what the two parties were going to be, what was I basically invoicing the other side. So Mr Oueik wanting it in his company name. He benefits of credits and company tax deductions by doing so.. I was asked to put it into his company name BBC Developments which is not an unusual request for people I deal with. I just ask them what they want, what the invoices should be written into, but he also gained the benefit in doing so. He said he would get GST credits and company tax deductions. So it was as simple as that. I didn't think twice about it." [T129.27-41].
3. In cross-examination, it was put to Girgis that, in an earlier affidavit in the Local Court sworn 11 July 2016, he stated that the contract job at Kenthurst was with BBC Developments. He agreed with the proposition that the legislation under which he was seeking relief in the Local Court would not be invoked if the work had been done from individual at their home.
4. He also agreed that nowhere in the affidavit which references the conversations with Oueik concerning the identity of the contracting party did Girgis refer to the fact that Oueik wanted to obtain some tax advantage by having the contract in the name of his company.
5. In his evidence, Girgis stated that the first meeting he had with Oueik regarding the Kenthurst job was in October 2015 at the site. After that meeting, he came out to install sample cameras which were set up on an existing infrastructure.
6. Girgis recalled that he went overseas in November and the discussions with Oueik resumed in December as to the types of cameras that were available and suitable for the job. Mr McElroy was present at one of those occasions, perhaps the second or third meeting.
7. Girgis agreed that, as a security license holder, he was able to obtain security cameras cheaper than members of the public. He agreed the discount was in the order of 30%, sometimes more, sometimes less. That is, the trade price.
8. Girgis agreed that he quoted for work at an Auburn site where Oueik's company was engaged in property development. He did not obtain that work and said: "I don't want to work with you" [T135.23].
9. Nevertheless, Girgis took on the Kenthurst job.
10. The cross-examination of Girgis continued with questions about the make and model of cameras to be installed. The sample cameras were installed, however, those cameras were later removed.
11. Girgis was cross-examined about the fact that on the invoices issued to Oueik there were items included for which expenses had not been incurred by Girgis. Whilst he initially denied that (T147.44) he later seem to suggest that it was appropriate charge for expenses not yet incurred as he could "make a provision for it" (T148.16).
12. It also became apparent that Girgis attempted to charge Oueik for license fees in respect of cameras that were never installed (T148.31).
13. It was further put to Girgis that a conversation took place with Oueik in which the latter accused Girgis of putting credit card debits on his account at which time Girgis stated "I'm sorry about the credit card. I'll put it all back in your account". Girgis denied that that conversation occurred.
14. He further denied that Oueik said to him "how could you do this to me I trusted you". He denied the fact that he was reversing the charges because he in fact had not been authorised to use the credit card to the extent which he had the first place.
15. In relation to the schedule of charges to the credit card which was prepared on behalf of Oueik, Girgis accepted that they were accurate in (T149.35). As it turned out, the directors of ABBA TEJI Pty Ltd were Girgis and his wife Isabel Girgis. Apparently, at the time, it was a dormant company that his wife was using.
16. Despite earlier, contrary evidence Girgis agreed that he had charged most of the expenses to Oueik's credit card even before issuing an invoice (T150.36).
17. Girgis denied that he was given the credit card to process a deposit. He denied that the agreement was he would put through a deposit of $10,000.00. He maintained that it was, in fact, $20,000.00 for equipment purchases and not a deposit. When further questioned about this matter, he stated that he is happy to quote "use either terminology" (T151.46). That is, either deposit or a payment towards equipment.
18. Girgis' evidence concerning the initial payment and whether it be for equipment or by way of deposit was inconsistent and vague.
19. Girgis was further cross-examined about the purchase of the DAHUA cameras. He told the court that the final decision to use that make of camera was made on 22 December 2015. He agreed, however, that he had ordered 14 DAHUA cameras from Seadan on 18 December giving a reference of "Kenthurst". In yet another confusing aspects of his evidence, Girgis stated "that doesn't mean it was for Kenthurst" (T157.40).
20. Cross-examination then turned to the margin which Girgis applied to equipment purchased for jobs. He stated "no nobody knew my margins". (T158.11) and "I never disclose my costs" (T158.15). Girgis was then cross-examined about representations he made in the Local Court to recover what he said was a balance of monies owing to him by Oueik. That included the amount thought by way of invoice 129, which appears at page 82 of Exhibit D. It agreed that what he was saying to the Local Court was that the amount set out in that invoice were payable by BBC Developments to him.
21. In evidence which caused concern as to the credibility of Girgis, he agreed that the invoice which formed the basis of the claim in the Local Court included a number of items which had never been supplied to Oueik. They included a monitor, a license support Ultra package for 5 cameras, and a Spark Pro item. The following exchange then occurred: "Q: So what you're saying to the Local Court there is that the whole amount in that interim invoice is properly payable to me. That's what you're saying isn't it? A: Okay, I understand what you're saying. So you're saying that did I accept the 92,000.00 was completely due and payable to me at that moment. Q: That's what you're asserting this affidavit isn't it? A: I guess so, yes. Q: And that's false, isn't it? A: That amount is, if I didn't deduct the amounts, but I corrected with the $36,000.00". (T169.3-14)
22. And further: "Q: What you've said in the affidavit is "I summarise below the amounts presently due and payable by me to BBC Developments" That's your evidence that you have given in the Local Court, do you see that? A: Yes, so I- Q: It's wrong isn't it? A: Yes." (T169.18-24)
23. Following that evidence, an adjournment was sought for Girgis to be advised of his rights under s 128 of the Evidence Act. That is, privilege against self-incrimination and the issuance of a certificate to protect the evidence from being used against him. A certificate was issued.
24. In further evidence: Q: Just dealing with my question and just dealing with the tax invoice at page 83… A: Yeah. Q: … you've already agreed that those 3 items are irregular? A: They should - though the 5 channels should have been removed. The 4K monitor should have been removed and then the final number of Spark Pros, the credit of 200 should be adjusted. Then I- Q: To put in your affidavit in the Local Court proceedings that you were owed $92,844.95 pursuant to an invoice of 17 February 2016 is false. Correct? A: Yes (T171.10 - 21).
25. Questioning continued about the invoices issued by Girgis and which were the foundation for the claim in the Local Court. Girgis agreed that evidence he gave before me about reversing undue charges was false (T175.40).
26. Cross-examination of Guirgis continued the next day.
27. Girgis was cross-examined about the comparison between the amounts charged by him and the cost of various items to him. It was apparent that on many occasions, he applied significant mark-ups to the cost or trade price. By way of example, after agreeing that he paid $526.00 for a particular item (T181.36) and then on sold it to Oueik for $1540.00 (T181.43), he declined to agree that it made some pretty substantial mark-ups by saying "it's not substantial, it's a mark-up" (T181.50).
28. Upon further questioning, it became apparent that the use of mixed credit card by Girgis was not simply to cover the cost of a deposit, staff or equipment as previously stated but also included his "margins" after telling the Court with the amounts charged the credit card also include included his "selling costs". Girgis went on to state: "So they weren't all pure costs. Just like if I got a-continued payments, 30%, 30%, 30%, for example as the jobs get more and more completed I get progress payments. Doesn't that make sense that I would continue processing the card? This was in lieu of - I was using a methodology because Mr Oueik told me, "process the card as you need". That's the only reason that it's continued as I progressed with the job and as I had to purchase more cameras. The job would have been completed at the 21 cameras that he originally asked for and there wouldn't have been continued credit card payments, but as you can see in my affidavit every few days you'd ask for more cameras. So have to buy more cameras." (T182.29 - 38).
29. I consider that answer to a simple question to be evasive and convoluted. It was plain that the witness was attempting to confuse the court and the questioner, and resisting providing a direct answer to a simple question.
30. Cross-examination continued in which Girgis again agreed that the credit card transactions were charged amounts that were somehow preferable to expenses being incurred. He accepted that proposition, notwithstanding his previous answer (T182.44).
31. It became obvious that the witness had changed his evidence.
32. In further cross-examination, it became clear that Girgis used the credit card of Oueik without authority to include things such as his own profit margin which he failed to disclose to the client. His response to that suggestion was "Didn't need to disclose it. Didn't want to know them." (T184.29).
33. Counsel for Oueik prepared a table correlating the expenses incurred by Girgis as they were incurred and comparing them to the charges debited to Oueik's credit card by Girgis. There were significant discrepancies. For example on 11 January 2016 Girgis had charged the credit card for $10,742.26 more than the expenses which had been incurred at that time (T189.25). He attempted to explain that on the basis that he was paying down his progress payments.
34. It seems that Girgis not only uses Oueik's credit card to pay for expenses as they are incurred but also pay for unincurred expenses and his own profit margin. That is, a profit margin on top of the substantial mark-ups which he had applied to the trade price of the equipment.
35. Girgis was then cross-examined as to the contents of his first affidavit in Exhibit 1. In paragraph 19 of his affidavit, Girgis stated that he requested a deposit of at least $20,000.00 from Oueik. In his evidence (T151.17) he denied that the purpose of obtaining the credit card at that time was to secure a deposit for the job. When that inconsistency was pointed out to the witness, he was unable to satisfactorily explain it in (T192.33 - 40).
36. Attention in cross-examination then turned to the fact that as at 29 January 2016, Girgis had charged somewhere in the order of $54,000.00 to Oueik. He agreed that the first invoice which he issued in relation to the job was dated 29 January 2016 (exhibit D page 80) though that invoice related to installation costs and totalled $11,350.63. He was then shown an email which he had sent to Mr Oueik. He agreed in the email that he had not informed Oueik that he had charged approximately $54,000.00 for the credit card. Girgis was then asked the following question: Q: When you sent this email without that mention of the credit card payments, you are deliberately trying to gain a financial advantage, by deceiving Mr Oueik, that's right, isn't it?
37. Objection was taken to that question. I found that there were reasonable grounds for objecting and indicated that a certificate would be issued in respect of his evidence if he chose to answer the question. After some discussion and the issuance of a certificate, the question was again asked and Girgis denied the allegation as put.
38. It was then put to Girgis that at the time he sent the email chasing payment he already charged around $54,000.00 to Oueik's credit card, some $12,000.00 more than the costs which had been incurred.
39. He was then asked whether he told Oueik when he was pressing for payment of the Spark Pro invoice that he had in fact put another credit card transaction through that very day. Girgis replied "I didn't tell him on any of the occasions" (T198.39).
40. The cross-examiner then expressly put to Girgis that he was in fact engaging in fraud. Girgis denied that accusation (T199.25).
41. Girgis agreed that at one stage he was director of a company called ABBA TEJI Pty Ltd which had a merchant facility. He understood that when you obtain a merchant facility from the bank, the bank imposes some terms and conditions on the way in which you can be used. When asked whether he received from the ANZ Bank a general merchant facility document his response was "I don't want to answer any more questions" (T201.31). He was reminded that his evidence was protected by a section 128 certificate.
42. Girgis agreed that his solicitors had produced a document from the ANZ Bank. Included in the document was a definition of "recurring transactions" the following definition appeared: "Transactions that occur where a merchant has an ongoing signed authority from the cardholder to process transactions against the cardholder's credit card, scheme debt or charge card is applicable" (T202.47)
43. Girgis was then asked whether he had been placing ongoing or recurring transactions on Oueik's credit card. He denied that they were occurring and stated: "… The definition of recurring for credit cards of the same amount each month, recurring payments, recurring on a set date, set period, because of a set-for example, it could be a phone bill every month that's…" (T203.20).
44. When asked where he obtained that definition from the ANZ documentation, he "went through the statement" and said that it was just his understanding.
45. The following exchange that occurs in cross-examination: "Q: You were putting through a number of transactions over a period of time, do you agree with that? A: Over the period of the project, yes. Q: You never had Mr Oueik or BBC's signed authority to produce any of those transactions? A: Correct. Q: You did not obtain from Mr Oueik his authority to make each one of the individual transactions did you? A: No, I did not." (T204.4 - 14).
46. In an attempt to clarify the situation the Court asked Girgis the following question: "Q: Did Mr Oueik ever authorise ABBA TEJI to use his credit card for payments? A: No, authorised me" (T204.45).
47. Girgis was further cross-examined in relation to the ANZ document (Exhibit E): "Q: You'll see that one of the things that's stipulated in this document is that the merchant, you may take it that that's ABBA TEJI, must not split the value of any processed credit transaction into two or more separate credit transactions which would, when added together be in excess. A: Yes. Q: Of the authorised floor limit. Do you see that? A: Yes. Q: That is in fact what you did when he purported to process the deposit in this matter isn't it answer? A: Yes (T205.14 - 25).
48. Girgis was then cross-examined about contact he had with a Mr Zreika, solicitor for Oueik apparently, Mr Zreika told Girgis that Oueik intended to reverse all the transactions on his credit card save for the initial $10,000.00 which had been authorised which, according to Oueik, had been authorised.
49. Girgis told the Court that after the day upon which he met with Oueik concerning the ABBA TEJI transactions on his credit card, he received a phone call from Mr Zreika who said "you didn't have authority to use his credit card".
50. He was asked to recall the date upon which he met with Oueik concerning the credit card. After checking his affidavit, he recalled that the meeting took place on 19 February 2016. Girgis stated: "…It was a key date because Mr Oueik called me. As he said yesterday, he was frustrated about he wanted to see what was the credit card expenses, what was the credit card expenses and he said to me-I said, "I'm waiting for an intercom to be delivered at my home. Would you like me to wait for the intercom or …" (T207).
51. In referring to the discussion about the use of a credit card, Mr Girgis stated "… He was concerned that processing the credit card on his personal statement, he wouldn't be able to handle it through his business" (T208.10).
52. Attention then returned to the conversation between Girgis and Mr Zreika on 3 March 2016 before references made to a meeting between Girgis and Oueik on 19 February 2016 when Oueik accused Girgis of lying. Girgis accepted that occurred (T209.20). In his evidence, Girgis denied that he was offended by what Oueik had said until he was reminded of the contents of his affidavit in which he stated he was quite offended by it.
53. The cross-examiner returned to asking questions about the heavy duty wall brackets charged at $175.00 each. Girgis denied that he paid $24.00 each for them. He pointed to a record from Jaycar Electronics which indicated that he had paid about $135.00 for 2.
54. In re-examination, Girgis explained his mark-up or margin policy. For items of equipment under $1,000.00 he would mark-up the cost by minimum of 100%. For items over $1,000.00 he would charge a minimum mark-up of between 50 to 100%.
55. Girgis agreed that he never made Oueik aware of his mark-up policy: "he didn't want to know about it (T222.14).
56. In further cross-examination, with leave, Girgis was asked about a further conflict in his evidence between the statements in cross-examination (T158.15), that "I never disclose my costs" with the evidence in re-examination that he attempted to speak to Oueik about his costs regime. Girgis agreed that the evidence he gave about never disclosing his system of margin is correct (T227.46).
57. Nevertheless, he denied that the evidence he gave in re-examination was false in (T229.5). Upon further questioning, Girgis apparently revised his earlier evidence in re-examination and denied that he ever disclosed the actual trade cost of equipment. He attempted to explain the discrepancy by stating that he tried to discuss with Oueik the selling price of the equipment to the customer. He further attempted to explain the obvious inconsistency by stating "I answered too quickly'" (T231.20).

Oral Evidence of Expert - Mr Myles

1. Scott Myles was a director of Independent Consultancy Services and called as an expert in the plaintiff's case.
2. There was initially some controversy as to his expertise which was determined on the voir dire. Attached to his report was a detailed outline of his qualifications, including various security licenses which he held. His qualifications based on experience are derived from a career in the security industry which commenced in 1988. Since that time, he has held numerous positions in security-based employment including as an installation contractor, sales, state operations manager for a security company, business development manager for a company involved with CCTV products and, since 2016 as the principal consultant for Independent Consultancy Services which appears to cover a wide variety of security-focused activities.
3. He was cross-examined by counsel for the defendants as to his experience which included security installation contractor, sales of security equipment and the other roles referred to above.
4. Given that his evidence was directed to the costs of installing a security system, including the sale of security cameras and the like, I was satisfied that his experienced qualified him appropriately as an expert to provide an opinion in respect of such matters in this case.
5. The cross examination of the expert mostly focused on margins applied to trade prices by contractors. The opinion expressed in his report, however, was much broader. For example, he stated in his report that a tradesperson could expect a discount on equipment of 30%. He also made enquiries of the suppliers referred to by the first defendant and included references to their catalogue prices.
6. Mr Myles expressed a view as to the labour costs associated with the installation of security cameras including cabling. He estimated the labour rate for tradesmen to run cables and fit cameras and equipment to be in the order of $70.00 per hour plus GST. After analysing the labour costs charged by the first defendant to the plaintiffs, Myles reached the view that the amounts charged were excessive "when compared to industry norms".
7. Mr Myles undertook a careful analysis of the invoices issued by the first defendant to the plaintiffs. He identified some thirteen items which had been charged the plaintiffs which were not found on the property at the time of Mr Myles' inspection.
8. Despite the extensive nature of his report and the multiple criticisms which he made about the costings in this particular case; the cross examination was extremely limited dealing only with margins. At the end of the cross examination, the court asked counsel appearing for the defendants whether it was intended to challenge the expert's opinion. Despite initially declining that invitation the cross examiner went on to ask a few more questions about margins. As for the 15% claimed by the plaintiffs to have been agreed between the parties, the expert, demonstrating his impartiality, stated "it is definitely low".
9. Overall, the expert presented as a qualified and experienced witness who demonstrated both knowledge and impartiality. I have no hesitation in accepting his opinion.

SUBMISSIONS

1. At the conclusion of the evidence on 23 November 2017, the proceedings were stood over to 30 November 2017 for addresses. Both parties provided a written outline of submissions.

Plaintiffs' Submissions

1. The plaintiffs' submissions started with an assessment of the credibility of the respective witnesses. It was submitted that Girgis had "committed credit card fraud". It was said that he included outrageous mark-ups on products and, of his own evidence, charged a management fee for which there was no contractual basis in his third invoice.
2. Further, it was submitted that "he plainly gave misleading evidence to the Local Court when it suited his financial interests to do so. He accepted that that evidence was false." These submissions continued and identified a number of specific aspects in respect of which the evidence of Girgis was, to say the least, unsatisfactory. Most of those matters are referred to in the analysis of his evidence, above.
3. Schedule 2 to the plaintiffs' written submissions is a running sheet as to amounts debited to Oueik's credit card. The schedule provided a graphic illustration of a fundamental inconsistency in the evidence of Girgis. He initially told the Court that he charged the credit card, referable to expenses, as they were incurred. He later changed his evidence in that respect. Schedule 2 demonstrated the extent to which his evidence, as first given, was misleading. At the time of the last credit card transaction on 23 February 2016, over $80,000.00 had been debited to Oueik's card, almost $40,000.00 of which was not referable to equipment or other expenses incurred at the time.
4. The written submissions for the plaintiffs set out a helpful analysis of the law in respect of contracts. Leaving to one side whether a contract was formed and its terms, the plaintiffs submitted that they had a cause of action for money "had and received" by the defendants. Reference was made to the High Court decision of Australia & New Zealand Banking Group Limited v Westpac Banking Corp (1988) 164 CLR 662 in which it was stated: "the basis of the common law action of money had and received for recovery of an amount paid under fundamental mistake of fact should now be recognised as lying not in the implied contract out in restitution or unjust enrichment… In other words, receipt of a payment which has been made under a fundamental mistake is one of the categories of case in which the facts give rise to a prima facie obligation to make restitution, in the sense of compensation for the benefit of unjust enrichment, to the person who has sustained to the countervailing detriment."
5. It was further submitted on behalf of the plaintiffs that an action for money had and received would also arise in circumstances where payments were unauthorised or where the wrong amount has been paid.
6. It is submitted that Girgis has clearly charged beyond any contractual entitlement. I accept that submission. Examples are then given of what 100% mark-up on labour, a "license fee" for services which he knew would never be provided and a 729% mark-up on a wall bracket.
7. At the conclusion of oral addresses the parties were asked to prepare a schedule of equipment and labour costs with the option of a 15% and 30% mark-up. Specifically the plaintiffs were ordered to serve on the defendants a schedule setting out the actual costs incurred by the first defendant in relation to the works performed and, in the event, that such information was not available, then to estimate same by reference to the expert opinion of Mr Myles.
8. This resulted in further short submissions on behalf of the plaintiffs in which the court was urged not to accept the receipts issued by the first defendant as evidence of the actual cost. It was submitted that the court should be reluctant to accept the first defendant's receipts at face value, for reasons, including the following: "(a) Mr Girgis was not a credible witness. He gave false evidence in the Local Court proceedings and his unauthorised use of the Mr Oueik's credit card was tantamount to fraud; (b) in his schedule, Mr Girgis has claimed the costs of a total of 63 cameras, whereas he only claimed to have installed 42 cameras…; (c) …; (d) at appendix D, Mr Myles assessed the site and estimated that all of the cameras, hardware and miscellaneous items on the site should have cost Mr Girgis $38,976.94, excluding mark-up. That opinion was not challenged. However, Mr Girgis has claims (sic) that his costs were $51,473.11;"
9. Other reasons were provided but the ones extracted above are the most pertinent.
10. In any event, after undertaking the process of analysis requested by the court, the plaintiffs determined that the best evidence of total costs (that is, equipment and labour costs) were an actual cost of $47,015.82, a cost with a 15% margin of $54,068.49 and a cost with a 30% margin of $61,120.90, plus GST.

Defendants' Submissions

1. The defendants' submissions were approached in the same way. A written outline of submissions was provided followed by a schedule of "actual costs".
2. The defendants contended that the proceedings ought to be dismissed as the plaintiffs had failed to make out either a case in contract, as money had not been received or conversion had not occurred. I do not consider the latter cause of action to have been pressed by the plaintiffs.
3. The defendants submitted that the plaintiffs' contract claim must fail for lack of certainty. I agree and, for that reason, I will not further address the submissions on that topic.
4. In respect of the money received claim which has its roots in restitution from just enrichment, the following submission was made on behalf of the defendants: "boiled down, the plaintiffs' pleaded case in relation to money had and received claim (sic) relies on the plaintiffs claim in contract, and it i, therefore, must also fail."
5. I regard that submission as illogical. It's only in the event of an enforceable contract not being established on the evidence that the court would turn to consider a quantum meruit claim as part of determining the question of unjust enrichment.
6. As to the matter generally and the defendants' cross-claim in particular it was submitted that the court should reject Oueik's evidence as he was "inherently unreliable". It was submitted that it would be "unsafe" to accept his evidence. I, respectfully, disagree. As already mentioned, I found Oueik to be a reliable and impressive witness. I do not accept the criticisms made of his evidence in the written submissions for the defendants.
7. Further, it is submitted on behalf of the defendants that Girgis "was an impressive witness who gave truthful, considered evidence that should be accepted". I, respectfully, disagree. In the course of evidence, the first defendant agreed that he had made false representations in his affidavit in the Local Court, that he had charged the plaintiffs for work not performed and he also on occasions changed his evidence when confronted with compelling, contradictory evidence as to the same matter.
8. It was submitted that the court ought to accept the evidence of the first defendant and find in his favour. That is, that the only term of the agreement between the parties was for costs to be capped at $150,000.00.
9. The submissions then go on to address the question of the defendants' quantum meruit claim. On that topic, it was submitted, on behalf of the defendants, that the evidence of Mr Myles cannot be relied upon and that the Court ought to accept the invoices issued by Mr Girgis on their face as the "best evidence" of the fair value for the work performed. I reject that submission. On his own evidence, the first defendant demonstrated his invoices to be unreliable.
10. In contrast, I considered the expert opinion of Mr Myles to be fair, rational and reasonable.
11. The balance of the outline of written submissions provided to the court on behalf of the defendants proceeded on an assumption that the first defendant would be accepted as a reliable witness.
12. The defendants were asked to undertake the same exercises as the plaintiffs in preparing a schedule of actual costs. In the result, the defendants came up with a total base costs of $73,787.30 (inclusive of GST), a base cost plus 15% mark-up which came to $84,855.41 (inclusive of GST), a base cost plus 30% mark-up which came to $95,923.50 (inclusive of GST).
13. I note that the defendants' schedule of costs was the subject of review by the plaintiffs. A copy of the defendants' schedule of costs with the plaintiffs' comments was attached to the plaintiffs' further submissions. The notations made by the plaintiffs identify that the first defendant claim the cost of some 63 cameras in circumstances where he claimed to have installed just 42 cameras. This illustrates the unreliability of the defendants' approach.

ANALYSIS

1. I find that the terms of the contract are not sufficiently precise or certain to be binding on the parties (Meehan v Jones (1982) 149 CLR 571 at 589, per Mason J). There is no doubt that the parties intended to form a contract whereby, for money paid by Oueik, Girgis would install a security system. The Court, in the circumstances, is to give effect to the intentions of Oueik and Girgis by overcoming the difficulties resulting from uncertainty (Toyota Motor Corp v Ken Morgan Motors [1994] 2 VR 106 at 130).
2. Courts strive to uphold commercial bargains wherever possible. I am confident that this outcome can be achieved in this case in a way which is fair and just.
3. In approaching the task of determining the agreement between the parties, I have had regard to the principles of construction identified by Gordon J in Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458 at [496], helpfully summarised by counsel for the plaintiffs: (a) the construction of commercial contracts is to be determined by reference to what would be understood by a reasonable person having background knowledge of the circumstances which were common to both parties in the situation they were in at the time of the contract; (b) the construction requires consideration not only of the text of the contract, but also the surrounding circumstances known to the parties, and the purpose and object of the transaction; (c) the contract will be interpreted in a way which will result in a sensible and businesslike meaning; (d) where two constructions are open, the Court will avoid consequences that are unreasonable, unjust or inconvenient; (e) where there is doubt about the meaning of a clause in a contract, it will be construed against the person for whose benefit it was inserted. However, that presumption only applies if the Court cannot reach a conclusion as to the construction of the provision in question. Generally, any ambiguity will be construed against the person who drafted the agreement. The last principle is wider than the contra proferentum rule, and is applied generally to circumstances where a party tenders a printed form.
4. In my opinion, any contract between Oueik and Girgis must be void for uncertainty. Whilst I prefer the evidence of Oueik, his evidence as to the contract was imprecise and not permitting of any confident identification of its terms, essential or otherwise.
5. As for Girgis, I found him to be a wholly unimpressive witness and reject his assertion as to what the contractual terms were said by him to be. It is clear that Girgis fraudulently used Oueik's credit card, swore a false affidavit in the Local Court and lied under oath in these proceedings.
6. I intend to achieve an outcome by equitable set-off between the amount paid by Oueik and Girgis' entitlement as determined by the quantum meruit claim.
7. The amount paid by Oueik was $140,863.58, comprising: (a) Credit card debits: $80,577.00; (b) Cheque: $11,350.00; and (c) Local Court judgment: $48,935.95.
8. Next, I must determine the value of the quantum meruit claim.
9. I accept the opinion of the expert, Mr Myles, as to what is a reasonable amount to be charged in the circumstances.
10. His opinion, included the following: 1. that a person in the trade of Girgis could expect a discount on retail (or a net trade price) of 30%; 2. that, although mark up or margins could range from 10% to 50%, 30% mark-up is the industry norm; 3. that the labour costs would be in the order of $13,956.00, without margin; 4. that the combined estimate of equipment costs is $33,095.82, without margin; 5. that is, the total cost base ought to have been approximately $47,015.82 plus margin and GST; 6. applying the industry norm margin of 30% would result in a total cost of approximately $61,120.90, plus GST or $67,233.00.
11. I accept the plaintiffs' submissions as to the best evidence of costs and value the quantum meruit claim by Girgis in the sum of $61,120.90, plus GST or $67,233.00.
12. Applying that sum to the amount paid by Oueik results in an entitlement in damages of $73,630.58 plus interest.

DISPOSITION

1. Oueik is entitled to a judgment calculated as follows: 1. total paid amount to Girgis - $140,862.95; 2. less the value of the quantum meruit claim - $67,233.00.
2. After set off, there will be judgment for the plaintiffs against the defendants in the sum of $73,630.58 plus interest and costs to be agreed or assessed.
3. A further complication arises by reason of the named parties. I find that the arrangement was between the first plaintiff and the first defendant. The involvement of the other named partied was through misunderstanding or convenience. I propose to dismiss the claims for/against the second plaintiff and second defendant. I find that they were not parties to the agreement. I consider all payments made by the plaintiffs to have been made by Oueik and all monies received by the defendants to have been received by Girgis.

ORDERS

1. I propose to make the following orders: 1. judgment to the first plaintiff against the first defendant in the sum of $73,630.58 plus interest to be agreed; 2. the first defendant to pay the first plaintiff's costs as agreed or assessed; 3. the claim brought by the second plaintiff is dismissed with no order as to costs; 4. the claim against the second defendant is dismissed with no order as to costs; 5. the first cross claim is dismissed with no order as to costs; 6. I direct the Registrar of this Court to refer the pleadings, exhibits and transcript to the Office of the Director of Prosecutions for the consideration of charging Michael Girgis in respect of potential criminal conduct referred to in these reasons, including: 1. fraud, being obtaining a financial advantage by the unauthorised use of another's credit card (per s 192E of the Crimes Act 1900); 2. swearing an affidavit in the Local Court which he knew to be false (per s 29 of the Oaths Act 1900); and 3. perjury (per s 329 of the Crimes Act (1900).

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 25 June 2018