Advanced Communications Pty Ltd v Kooyoo Holdings Pty Ltd T/as The Codemaster Systems [2001] NSWSC 315

New South Wales Supreme Court

CITATION : Advanced Communications Pty Ltd v Kooyoo Holdings Pty Ltd T/as The Codemaster Systems [2001] NSWSC 315 CURRENT JURISDICTION: Common Law FILE NUMBER(S) : SC 11453/00 HEARING DATE(S) : 9 April 2001 JUDGMENT DATE : 27 April 2001

PARTIES : Advanced Communications Pty Ltd - Plaintiff Kooyoo Holdings Pty Ltd T/as The Codemaster Systems JUDGMENT OF : Simpson J

LOWER COURT Local Court JURISDICTION : LOWER COURT FILE NUMBER(S) : LOWER COURT Mr Milson JUDICIAL OFFICER :

COUNSEL : Mr G M Mcgrath - Plaintiff Mr D J Brogan - Defendant SOLICITORS : Dominic David Stamfords- Plaintiff Noyce Lawyers - Defendant LEGISLATION CITED : Local Courts (Civil Claims) Act 1970 CASES CITED : Pavey and Matthews Proprietary Limited v Paul (1987) 162 CLR 221 at 256 DECISION : Appeal dismissed with costs.

THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

SIMPSON J

27 April 2001 11453/00 ADVANCED COMMUNICATIONS PTY LTD V KOOYOO HOLDINGS PTY LTD T/AS CODEMASTER SYSTEMS Judgment HER HONOUR : 1 Pursuant to s 69 of the Local Courts (Civil Claims) Act 1970 the appellant appeals against the decision of a magistrate of the Local Court of 12 May 2000. Such an appeal lies to this court on a question of law only. 2 The Local Court proceedings were commenced by statement of liquidated claim. The then plaintiff (Kooyoo Holdings Pty Ltd, to whom I refer as "Kooyoo") was a company engaged in the business of creating and supplying accounting software systems. The defendants, Advanced Communications Pty Ltd (to whom I will refer as "Advanced Communications") was a company engaged in the supply of mobile telephones. 3 Kooyoo's claim was that, sometime in the first half of 1996, it had agreed to supply a computer and software system to Advanced Communications, and modify it as necessary in order to make it suitable for Advanced Communications' needs. No specific contract price was then agreed upon. 4 Kooyoo did supply and install software, and its employees consulted from time to time with employees of Advanced Communications to effect modifications to the product. Kooyoo eventually sent a number of invoices amounting to $4,970 to Advanced Communications, who did not pay. Kooyoo accordingly instituted the Local Court proceedings. 5 The claim came on for hearing before Mr Milson, Local Court Magistrate, and proceeded over three non consecutive hearing days. On the first day of hearing, 20 August 1999, Kooyoo filed in court an amended statement of claim. In this document Kooyoo claimed, for the first time, on a quantum meruit. This was pleaded as an alternative to the principal claim which was essentially framed in contract. 6 Advanced Communications had earlier filed a defence, putting in issue all matters that had been alleged in the original statement of claim. Because of the timing of the filing of the amended statement of claim, Advanced Communications had not expressly pleaded to the quantum meruit claim. The magistrate observed that the late filing of the amended statement of claim precluded Advanced Communications having the usual, and statutory, opportunity expressly to plead to that assertion. Counsel for Advanced Communications orally denied the claim made in that form. (This has some significance, which will be mentioned below.) 7 The legal representatives of the parties put before the magistrate an agreed statement of facts. Essentially, the facts stated were to the effect that the parties had agreed to the provisions by Kooyoo to Advanced Communications of a software system, that that system had in fact been supplied and modified and expanded from time to time at the request of Advanced Communications, and that the system had been removed in October or November 1997. The precise date of installation was not disclosed. 8 Two particular paragraphs of the statement of agreed facts should be extracted in full. They are: 3. The Plaintiff and Defendant entered an agreement whereby the Plaintiff would provide an accounting software system that would meet the Defendant's specific needs. 4. These specific needs were discussed extensively by the Plaintiff and Defendant and an arrangement was reached whereby the Plaintiff would modify their system and loan it along with a computer to the Defendant. If this test system proved satisfactory, then the Defendant would purchase the system and the computer." 9 Affidavit and quite lengthy oral evidence was given in addition to the facts contained in the statement of agreed facts. I was referred only to limited parts of the oral evidence. This concerned, firstly, a meeting that took place on 12 February 1996. Mr Terrence Jones (described as a director and the owner of Kooyoo) regarded this meeting as having "crystallised" the arrangements. The second piece of evidence to mention was a series of invoices totalling $4970 that had been sent by Kooyoo to Advanced Communications which had not been paid, but which had not been the subject of any protest by or on behalf of Advanced Communications. 10 A week after this meeting (on 19 March 1997), Mr Mike McCullen, on behalf of Kooyoo, wrote to Advanced Communications. The letter was in the following terms: "Following our recent discussion with yourself, Terry Jones and me, I have established the rental costs of systems and the utilisation of our resources in providing you the computer system. As you said at the meeting, the system has been put to some commercial use over the last nine months and I have raised an invoice for a value that represents the lower end of the scale. As you know Terry and Ka have recently spent time examining your use of the system and I know Terry visited last Wednesday but you were in Melbourne. Perhaps you can give me a call so I can discuss your future needs."