Citation: Oueik v Girgis t/as Smartcam Security [2018] NSWDC 164
Court: District Court of New South Wales
Date: 22 June 2018
Judge(s): Wilson SC DCJ
Background
The dispute arose from a wholly oral arrangement for the supply and installation of security cameras at a residential property in Kenthurst, New South Wales. The plaintiff (a property owner) engaged the defendant (a security camera installer) in or around December 2015. There was no written contract, and the parties gave sharply conflicting accounts of what had been agreed, including the price cap, the scope of work, and who had authorised what payments.
The central factual flash point involved the defendant's use of credit card details provided by the plaintiff. The plaintiff said he authorised a deposit of $10,000. The defendant charged $20,000 on the same day, then continued charging the card over the following months. In total, the defendant received approximately $140,862.95 from the plaintiff through a combination of credit card debits, cheque payments, and a Local Court judgment obtained under the Building and Construction Industry Security of Payment Act 1999.
The plaintiff commenced proceedings in the District Court claiming repayment of amounts charged beyond what had been authorised, together with interest. The defendant cross-claimed, asserting the full invoiced amounts were contractually due.
Legal Issues
- Whether a binding contract was formed between the parties and, if so, on what terms
- Whether the alleged price cap of $50,000 (plus GST) was agreed, or whether the defendant's version of a $150,000 cap applied
- Whether the defendant was authorised to debit the plaintiff's credit card for amounts beyond the initial $10,000 deposit
- Whether the contract, if formed, was void for uncertainty
- What amount the defendant was entitled to recover on a quantum meruit basis (a claim for reasonable remuneration for work actually performed, independent of any contract)
Decision
The court found that neither party's version of the alleged contract could be accepted in full. Both accounts were treated with significant scepticism, particularly the defendant's, whose credibility was seriously undermined. The court found the defendant had used the plaintiff's credit card without authorisation to charge amounts well beyond what the plaintiff had approved, and had provided false evidence in earlier Local Court proceedings.
Because neither version of the contract could be established with sufficient certainty, the court found no enforceable contract had been formed. A contract alleged to contain terms that are too uncertain to identify or enforce cannot be given legal effect, and that was the conclusion reached here given the irreconcilable disputes about price, scope, and terms.
In the absence of a binding contract, the court turned to quantum meruit to assess what the defendant was legitimately entitled to recover for work actually done. Expert evidence established that the reasonable cost base for equipment was approximately $33,095.82, with total costs of around $47,015.82. Applying an industry norm margin of 30%, the court valued the quantum meruit entitlement at $61,120.90 plus GST, or $67,233.00 in total.
Setting that figure against the total of $140,862.95 already received by the defendant, the court found the plaintiff was entitled to recover the difference of $73,630.58, plus interest and costs. The court also found that the arrangement was solely between the two individual parties and not their associated companies, and dismissed claims involving the corporate entities accordingly.
Orders Made
- Judgment for the first plaintiff against the first defendant in the sum of $73,630.58, plus interest to be agreed
- The first defendant to pay the first plaintiff's costs as agreed or assessed
- The second plaintiff's claim dismissed with no order as to costs
- The claim against the second defendant dismissed with no order as to costs
- The first cross-claim dismissed with no order as to costs
- The Registrar directed to refer the pleadings, exhibits, and transcript to the Office of the Director of Public Prosecutions for consideration of charging the first defendant in respect of:
- Fraud, being obtaining a financial advantage by the unauthorised use of another's credit card (s 192E, Crimes Act 1900)
- Swearing an affidavit in the Local Court knowing it to be false (s 29, Oaths Act 1900)
- Perjury (s 329, Crimes Act 1900)
Key Takeaways
- Where both parties to an oral contract give irreconcilably conflicting accounts of its terms, and neither account can be accepted as reliable, a court may find no enforceable contract was formed due to uncertainty.
- In the absence of a binding contract, quantum meruit remains available to compensate a party for work actually performed; the court's valuation will be informed by expert evidence of reasonable industry costs and margins, not by either party's self-serving account.
- A judgment obtained under the Building and Construction Industry Security of Payment Act 1999 does not bind a court in subsequent proceedings: the District Court treated the Local Court judgment as having no preclusive effect here, consistent with s 32 of that Act.
- Serious adverse findings on credibility can have consequences beyond the civil proceedings themselves. The District Court directed referral to the Director of Public Prosecutions after finding the defendant had made unauthorised credit card charges and given false evidence, both in affidavit form and orally.
- Corporate entities nominally involved in a transaction may be found to have no legal standing in the dispute where the court determines the underlying arrangement was between the individuals alone, not the companies.
Legislation and Cases Referenced
Legislation
- Building and Construction Industry Security of Payment Act 1999 (NSW), ss 15(2), 32
- Crimes Act 1900 (NSW), ss 192E, 329
- Oaths Act 1900 (NSW), s 29
Cases
- Meehan v Jones (1982) 149 CLR 571
- Australia & New Zealand Banking Group Limited v Westpac Banking Corp (1988) 164 CLR 662
- Toyota Motor Corp v Ken Morgan Motors [1994] 2 VR 106
- Zomojo Pty Ltd v Hurd (No 2) [2012] FCA 1458