IN THE MAGISTRATES’ COURT OF VICTORIA
AT MELBOURNE
CIVIL DIVISION
Case No.Y00989239
MARAT PERLICH (a bankrupt) and
Plaintiffs
PERPLAT INVESTMENTS PTY LTD
ACN 006 887 805
V
RAISA GELMAN
Defendant
---
MAGISTRATE:
F.J. HOLZER
WHERE HELD:
Melbourne
DATE OF HEARING:
DATE OF DECISION:
28 October 2009; 2, 5, 6 and 26 November 2009; and 5, 6
and 7 July 2010
2 September 2010
CASE MAY BE CITED AS:
Perlich & Anor v Gelman [2010] VMC
REASONS FOR DECISION
Catchwords: Purchase and development of property; no written agreement; major domestic
building contract; Section 31(2) of Domestic Building Contracts Act 1995; claim by noncontracting party; application of Lumbers’ case: unconscionability; quantum meruit;
restitutionary relief.
--APPEARANCES:
Counsel
Solicitors
For the Plaintiffs
J. R. Gurr
Lewenberg & Lewenberg
For the Defendant
M. J. Kenny
Kalus Kenny
!Undefined Bookmark, I
HIS HONOUR:
INTRODUCTION:
This proceeding was heard over 8 days between October 2009 and July 2010 inclusive.
1.
The dispute arises as a consequence of an arrangement made some time in or
around March or April 2008 for the purchase and development of a property at 637
Blackburn Road, Clayton.
2.
The Firstnamed Plaintiff (“Mr Perlich”) and the Defendant (“Mrs Gelman”) emigrated,
separately, to Australia from Russia in the mid 1970’s, Mr Perlich arriving a year or
so before Mrs Gelman. The Firstnamed Plaintiff and the Defendant had known each
other from about September 1976 through the Russian community, and their
daughters attended the same school, but they were not close friends. They knew
each other to speak to. Mrs Gelman was aware of Mr Perlich’s reputation as a
builder and developer. In about 1990, Mr Perlich had helped out with some painting
and renovation works at Mrs Gelman’s house.
3.
The Firstnamed Plaintiff is a builder and property developer. He has over the years
since about 1984 bought, renovated, developed and sold many properties. He was
at all relevant times the sole director of the Secondnamed Plaintiff, Perplat
Investments Pty Ltd (“Perplat”).
4.
The Defendant, too, was said to have had some experience in property
development. Through a company in which she had been a long term director and
shareholder, Yanaran Pty Ltd, she was allegedly engaged in a 6-unit property
development at 36 Scott St in Elwood in 2007.
5.
As at March 2008 the Defendant had available in excess of $100,000.00, and was
looking to become involved in an investment. The Firstnamed Plaintiff was at this
time busy with a property development in Hampton.
6.
In around March 2008 the Firstnamed Plaintiff and the Defendant met, fortuitously, at
the Aldi supermarket in East St Kilda. The Defendant expressed her interest in
becoming involved in a renovation project. The Firstnamed Plaintiff indicated that he
was not particularly interested at that time, but would keep an eye out.
The
Defendant placed her mobile phone number in the Firstnamed Plaintiff’s phone.
1
DECISION
7.
A few weeks later, in late March 2008, the Firstnamed Plaintiff found what he
considered to be a suitable property – a four-unit development at 637 Blackburn
Road in Clayton.
8.
The units were very run down and in poor condition. The Firstnamed Plaintiff saw
the possibility of buying, renovating and selling at a profit. The Firstnamed Plaintiff
negotiated terms with the vendor, and invited the Defendant to come and inspect the
property.
9.
The Firstnamed Plaintiff and the Defendant went and inspected the property. Only
one unit was then available – the remainder were still tenanted. The unit was in poor
condition. The Firstnamed Plaintiff estimated it would cost around $25,000.00 per
unit, based on a very basic renovation aimed at the student market. Mrs Gelman
said that Mr Perlich “talked the property up”.
10.
Arrangements were made to purchase the property. Each of the units was registered
in a different person’s name. It was agreed that Mrs Gelman would be responsible
for payment of the renovation costs incurred in respect of Units 1 and 2.
11.
The purchase price for the four units was $980,000.00. There is no dispute that the
contracts were executed on 10 April 2008 and that the Defendant paid the whole
$98,000.00 deposit. There is a serious conflict between the evidence of Mr Perlich
and Mrs Gelman as to the basis upon which this deposit was paid. Whilst Mr Perlich
accepts that the payment was to form part of Mrs Gelman’s contribution to the cost of
the works, he does not accept Mrs Gelman’s contention that an agreement was
reached between them that $49,000.00 would constitute the entirety of the
Defendant’s payment for the works. There was also a dispute about whether a
management fee would be payable.
There was no evidence that Perplat was
mentioned at this time.
12.
There is a direct conflict between what was allegedly discussed and agreed at an
inspection on Sunday 6 April 2008 at about 3pm at the Clayton property, and during
a meeting at the Defendant’s home on the evening of Thursday 10 April 2008. It is
however common ground that a joint account was subsequently opened with the
National Australia Bank on about 14 April 2008, ostensibly on the basis that
Mr Perlich and Mrs Gelman were “partners”.
2
DECISION
13.
There is an additional conflict as to what happened when the price of the renovation
was increased to $30,000. Mrs Gelman said that there was a conversation on a
Thursday afternoon or early evening in her kitchen in about mid-July 2008 in the
presence of Mrs Irene Perlov, an acquaintance of hers. Mrs Gelman’s evidence-inchief was that Mr Perlich committed to a position whereby if the costs were more
than this amount, he would bear the cost. Mr Perlich denied that Mrs Perlov was
privy to any relevant conversation.
14.
On 30 November 2008, Mrs Gelman said that she received in her mail box a yellow
envelope containing 5 invoices from the Plaintiffs in respect to the Clayton works,
and following which she said that she telephoned Mr Perlich and put to him that they
had a deal at $30,000. Her evidence was that Mr Perlich responded by saying that
he could charge her what he liked, and that “you don’t have anything in writing with
me”.
Mr Gurr cross examined Mrs Gelman about this issue, and relied on the
absence of any reference to it in her lawyer’s written communications prior to the
commencement of proceedings.
SCOPE OF THE DISPUTE:
15.
There was extensive argument and interlocutory rulings required during the hearing,
particularly in respect to waiver of privilege and the admissibility of portions of an
expert report relied upon by the Defendant, but it is not necessary to here recite
those events.
16.
I also had the benefit of extremely detailed and comprehensive written submissions
from Mr Gurr dated 2 August 2010, and from Mr Kenny dated 19 July 2010 and
9 August 2010. Each were professionally drawn to a very high standard, and I thank
both lawyers for their assistance.
17.
At the commencement of the case, Mr Gurr in opening, advised me that the dispute
that I needed to determine was “how much money my client is entitled to be paid in
respect of the works that he carried out and co-ordinated”. It is important to note that
at that time, the Firstnamed Plaintiff was the sole named Plaintiff, and equally
important to note that the initial letter of demand from Lewenberg and Lewenberg
addressed to both the Defendant and her husband dated 18 December 2008 (and
repeated on 7 January 2009) referred to both the Plaintiffs ultimately named as
claimants. Notwithstanding this, the Complaint when issued on 7 April 2009, only
3
DECISION
named Mr Perlich as Plaintiff. It was asserted that Mr Perlich and Mrs Gelman were
business partners pursuant to a joint agreement between them, and in respect of
which Mr Perlich was to be the project manager.
18.
The case thereafter proceeded on the basis that Mr Perlich and Mrs Gelman were
the contracting parties, albeit that nothing was reduced to writing.
19.
It was only on 26 November 2009, when I granted leave in Court, that the
Secondnamed Plaintiff was joined to the proceeding. After hearing some of the
evidence, I raised the issue of who, if anyone, may have suffered loss in this
proceeding. This was despite the fact that Mr Gurr himself early on the first day of
the hearing raised with me that Mr Perlich owed a debt for the monies allegedly
owed to him to the Secondnamed Plaintiff. Even in that amended pleading, there
was no assertion that the Secondnamed Plaintiff had any contractual relationship
with Mrs Gelman, merely that the Secondnamed Plaintiff was entitled to restitution on
a quantum meruit for the fair and reasonable value of the works.
20.
On a date after that, and perhaps significantly after that, I was advised that
Mr Perlich had voluntarily declared himself bankrupt, with the agreed result pursuant
to Section 60(2) of the Bankruptcy Act 1966 that he could no longer maintain any
claim himself. I note that Section 62 of that legislation does not appear to apply,
because Perplat was not a joint contractor.
21.
There were many documents tendered before me with reference to the
Secondnamed Plaintiff, some with no ABN, some with an ABN of 006 887 805, and
some with an ABN of 157 145 201.
22.
This all seems to demonstrate that there may have been at least some doubt about
how this claim was being put.
23.
24.
At the commencement of the case, it was common ground that:
(a)
There was no written contract;
(b)
Mr Perlich was not a registered builder;
(c)
There was no building insurance in place; and
(d)
The case of Dover Beach Pty Ltd v Geftine Pty Ltd [2008] VSCA 248 applied.
In my view, the Dover Beach case is authority for the proposition that where there is
a major domestic building contract which is found to be void or of no effect as
4
DECISION
between the parties to such contract, the builder may nonetheless be entitled to
restitutionary relief, unless the interpretation of the statute specifically bars such relief
(See, for example, paragraphs 62, 70, 101, 132 and 133 of the Court of Appeal’s
decision).
25.
Such an approach is entirely consistent with Sopov & Anor v Kane Constructions Pty
Ltd (No 2) [2009] VSCA 141, and another decided case to which I was referred by
Counsel for the Plaintiffs.
26.
That dispute was between the Dimitriou and De Pasquale families, which in several
respects has parallels with the general dispute before me, and is reported at both
Depas Pty Ltd v Dimitriou & Ors [2006] VSC 281 and PACD Pty Ltd v Depas Pty Ltd
& Anor [2007] VCC 1683.
27.
In the later judgment, His Honour Judge Anderson, in a careful and considered
analysis, sets out the relevant statutory regime and his reliance upon Pavey &
Matthews Pty Ltd v Paul (1987) 162 CLR 221, and especially the decision of
Deane J. Critically however, the judgment was not predicated upon any agreement
being substantiated with a non-contracting party.
THE PLEADINGS:
28.
This proceeding is now only a claim by Perplat against Mrs Gelman.
29.
It is common ground between the parties that Mrs Gelman entered into an oral
agreement with Mr Perlich, the Firstnamed Plaintiff, for the purchase, development,
and renovation of the villa units at Clayton.
30.
Mr Perlich has since become bankrupt. No claim is being pursued on his behalf
against Mrs Gelman in the proceeding.
31.
The oral agreement was entered into in March or April, 2008. The renovation works
took place between April and the end of October 2008.
32.
Perplat was, at the time of the agreement and renovation works, Mr Perlich’s
company. It became a party to the proceeding on 26 November 2009. There has
never been any allegation that Perplat was at material times the agent of Mr Perlich.
33.
No contract is alleged by Perplat to exist between it and Mrs Gelman.
5
DECISION
34.
The claim made by Perplat against Mrs Gelman can be found at paragraph 24 of the
Amended Statement of Claim dated 26 November 2009.
35.
The claim made by Perplat is that Perplat is entitled to restitution on a quantum
meruit for the fair and reasonable value of the works. Paragraph 24 states:
“24.
36.
Alternatively to paragraphs 2 – 23:
(a)
the works were carried out at the request of the defendant;
(b)
the defendant had freely accepted the benefit of the works;
(c)
the defendant had been enriched by the performance of the works to
the detriment of the plaintiff, further or alternatively to the detriment of
the second plaintiff;
(d)
it would be unjust, alternatively unconscionable, for the defendant to
retain the benefit of the works without paying the plaintiff, further or
alternatively the second plaintiff, a fair and reasonable sum for the
performance of the works;
(e)
in the premises the plaintiff, further or alternatively the second plaintiff,
is entitled to restitution on a quantum merit for the fair and reasonable
value of the works.”
The particulars subjoined to paragraph 24 include reference to a document called
“Plaintiffs’ Particulars of Quantum” as amended on 2 November 2009.
That
document has a column headed “Admitted”. Under that column a number of the
invoices claimed in the proceeding are admitted and a number are not admitted.
37.
Mrs Gelman’s defence is:
(a)
she admits that she entered into an oral agreement with Mr Perlich. The
agreement claimed by Mrs Gelman is set out in Paragraph 14 of the Amended
Defence dated 11 December 2009;
(b)
she has paid Mr Perlich the agreed price of $30,000.00 per Unit;
(c)
she has not unconscionably accepted a benefit from Perplat;
(d)
Perplat did not incur costs in excess of $30,000.00 for Units 1 & 2;
(e)
alternatively, the fair and reasonable value of the works did not exceed the
amount already paid by Mrs Gelman; and
6
DECISION
(f)
As a matter of law, Mrs Gelman also relies on the decision of the High Court in
Lumbers & Anor v W Cook Builders Pty Ltd (in liquidation) [2008] HCA 27
(“Lumbers”).
38.
I accept Mr Gurr’s submission that I need not necessarily resolve the disputes on the
contractual issue due to the operation of Section 31(2) of the Domestic Building
Contracts Act 1995. Any agreement reached in this case was as a matter of law “of
no effect”.
LUMBERS CASE:
39.
The applicable law is set out in Lumbers. The High Court dealt with a situation
similar to this case.
40.
In that case, the Lumbers entered into an oral contract with W Cook & Sons Pty Ltd
(“Sons”) under which Sons was to build a house for the Lumbers. A company related
to Sons called W Cook Builders Pty Ltd (in liquidation) (“Builders”) claimed that it
entered into arrangements with Sons, pursuant to which Builders was to build the
house and the benefit of Sons’ contract with the Lumbers was transferred to
Builders. That occurred without the knowledge or approval of the Lumbers.
41.
Most of the work required by the contract, which included the engagement of building
subcontractors and supervision of their work, was performed, not by Sons, but by
Builders. That also occurred without the knowledge or approval of the Lumbers.
42.
Builders and Sons were members of the same corporate group, but their
shareholders and directors were not identical, and at some stage, for reasons that
were not made clear in the evidence, their interests diverged.
43.
The claims made by Builders included claims for reimbursement of amounts paid to
various subcontractors, and a fee for supervision.
44.
The Lumbers made progress payments to Sons, as requested, at intervals over the
period from April 1994 to May 1995. Without the knowledge of the Lumbers, Sons
paid those amounts to Builders. Builders claimed that a balance remained due and
unpaid.
45.
The Lumbers had paid all amounts requested by Sons.
7
DECISION
46.
After the construction of the house was completed the liquidators of Builders made a
claim to the Lumbers alleging that the Lumbers had not paid all that should have
been paid for building the house. The Lumbers refused to pay Builders the amount
claimed.
47.
Builders commenced proceedings against the Lumbers and against Sons. Builders’
claims were in contract and also in restitution / unjust enrichment.
48.
Builders did not proceed with its contract claim against Sons in that proceeding
because Builders did not provide security for Sons’ costs. So Builders proceeded
only against the Lumbers.
SIMILARITIES BETWEEN LUMBERS AND THIS CASE:
49.
In this case, Mrs Gelman entered into an oral contract with Mr Perlich.
50.
Perplat paid some of the money to subcontractors for the renovation works to units 1
and 2 pursuant to a contract or arrangement with Mr Perlich, however informal that
was.
51.
Mrs Gelman was not aware of the arrangements between Mr Perlich and Perplat or
that payments to suppliers or subcontractors were coming from Perplat’s bank
account.
52.
Mrs Gelman paid every amount asked of her by Mr Perlich, and paid additional
moneys directly to suppliers at the end of the works in late October 2008.
53.
It was not until after the works were over that Perplat made a claim for funds, on
30 November 2008.
54.
Perplat’s claim against Mrs Gelman is for restitution. It has not made any claim
against Mr Perlich.
THE HIGH COURT’S RULING IN LUMBERS:
55.
In dismissing the claim for restitution made by Builders against the Lumbers, the
Court unanimously found that:
•
The contract was between the Lumbers and Sons.
8
DECISION
•
The Lumbers accepted no benefit at the expense of Builders which it would be
unconscionable to retain.
•
The Lumbers made a contract with Sons which either was fully performed by
both parties or was not.
•
Sons made an arrangement or agreement with Builders which again was either
fully performed or it was not.
•
If either the agreement between Sons and the Lumbers or the arrangement
between Sons and Builders was not fully performed (because all that is owed by
one party to the other has not been paid) that is a matter between the parties to
the relevant agreement.
•
A failure of performance of either agreement is no reason to conclude that
Builders should then have some claim against the Lumbers, parties with whom
Builders had no contract.
•
Because Builders had no dealings with the Lumbers, Builders had no claim
against the Lumbers for the price or any work and labour Builders performed or
for any money that Builders may have paid in relation to the construction.
•
Builders had no such claim because it can point to no request by the Lumbers
directed to Builders that Builders do any work it did or pay any money it did.
•
Reference to whether the Lumbers accepted any work that Builders did or
accepted the benefit of any money it paid was irrelevant.
•
It is irrelevant because it distracts attention from the legal relationships between
the three parties, the Lumbers, Sons and Builders.
•
To impose on the Lumbers an obligation to pay Builders would constitute a
radical alteration of the bargains the parties struck and of the rights and
obligations which each party thus assumed.
•
Identification of the rights and obligations of the parties, in any matter, requires
close attention to the particular effects and circumstances of the case.
Necessarily that requires close attention to what contractual or other obligations
each owes to the other.
9
DECISION
56.
The Defendant relies on the High Court’s decision and makes reference in particular
to the following passages:
57.
-
Gleeson CJ from paragraphs 45 to 54, and
-
The reasons of Gummow, Hayne, Crennan and Kiefel JJ at paragraphs 124 to
128.
Builders claim in restitution against the Lumbers failed. In so finding, the Court
rejected arguments based on equitable assignment.
58.
Applying Lumbers to the facts of this case:
•
The contract was between Mrs Gelman and Mr Perlich. The evidence for that
conclusion is set out below.
•
Mrs Gelman accepted no benefit at the expense of Perplat which it would be
unconscionable to retain.
•
Mrs Gelman made a contract with Mr Perlich which has been fully performed by
both parties or has not. If it was not, Mr Perlich might have a claim against Mrs
Gelman if there were no other obstacles to that claim.
•
The evidence was that Mr Perlich was just using Perplat’s cheque book, and the
funds paid were his funds. However, if Mr Perlich made an agreement or
arrangement with Perplat, and there was no evidence about that, that agreement
has either been fully performed or has not. If the agreement between Mr Perlich
and Perplat has not been performed, then those parties have rights against each
other.
•
Even if there was a failure of performance by Mrs Gelman in her agreement with
Mr Perlich, that is no reason to conclude that Perplat should then have some
claim against Mrs Gelman, a party with whom Perplat has no contract.
•
Because Perplat had no dealings with Mrs Gelman, Perplat has no claim against
her for the price of any work and labour that Perplat performed or for any money
that Perplat may have paid in relation to the renovation.
•
Perplat has no such claim because it can point to no request by Mrs Gelman
directed to Perplat that Perplat do any work it did or pay any money it did.
•
Reference to whether Mrs Gelman “accepted” any work that Perplat did or
“accepted” the benefit of any money Perplat paid is irrelevant. It is irrelevant
because it distracts attention from the legal relationships between the three
10
DECISION
parties, Mr Perlich, Mrs Gelman, and Perplat.
•
To now impose on Mrs Gelman an obligation to pay Perplat would constitute a
radical alteration of the bargains the parties struck and of the rights and
obligations which each party thus assumed. There is no warrant for doing that.
PERPLAT’S SUBMISSIONS ON LUMBERS:
59.
The Secondnamed Plaintiff submitted that in order to obtain restitutionary relief, a
Plaintiff must demonstrate that:
60.
(a)
the Defendant was enriched;
(b)
the Defendant’s enrichment was at the expense of that Plaintiff;
(c)
the enrichment was unjust; and
(d)
no restitutionary or other defences would preclude restitution being made.
Perplat suggested that the Defendant’s reliance upon the High Court’s decision in
Lumbers as a complete defence to the Secondnamed Plaintiff’s claim was
misplaced, and that the decision was little more than an orthodox application of
established principles of restitution.
61.
It was argued that a claim in restitution pre-supposes the absence of a valid and
enforceable contract, and that it is precisely because there is no valid and
enforceable contract that a claim in restitution can be maintained.
62.
Mr Gurr argued that in Lumbers, the Court found the existence of two valid and
enforceable contracts – one between Lumbers and Sons and one between Lumbers
and Builders. Because these two contracts regulated the rights and obligations of
the parties to them, including the allocation of risk, there was no room for a claim in
restitution which claim, of necessity, pre-supposes the absence of a valid and
enforceable contract. Such a submission appears at paragraph 36 of his written
outline.
63.
This submission however was not in my opinion either factually or legally correct.
64.
The two contracts identified in fact were one between Lumbers and Sons, the other
between Builders and Sons.
11
DECISION
65.
There was, critically, no contract between Lumbers and Builders. It was the
liquidators of Builders who ultimately made a claim against Lumbers. At first instance
before the District Court of South Australia, Builders failed. On appeal, the Full Court
of the Supreme Court of South Australia overturned the original decision. Finally, the
High Court restored the original judgment.
66.
It is said that because, and perhaps despite, the fact that the contract between Mr
Perlich and Mrs Gelman was of no effect, Perplat was free to make a restitutionary
claim against Mrs Gelman.
67.
I disagree.
68.
If the claim for restitution had been made by the builder or the party with whom an
ineffectual contract was made, the situation might be different. However, in my view,
Lumbers establishes that where a party that did not have any contractual relationship
with the owner, but instead had an arrangement or contractual relationship with the
builder, that party is not able to make a claim against the owner for restitution.
69.
The argument of Perplat in this regard also fails upon an analysis of the facts.
Mr Perlich gave evidence that :
•
he did not use Perplat for this job, which was consistent with his other evidence
that he did not use Perplat after 2006;
70.
•
the money paid by Perplat was his money, and
•
he only used Perplat’s bank account, because it had a cheque book.
Furthermore, Counsel for Mr Perlich made it clear to the Court that Mr Perlich owes a
debt to Perplat for the money said to have been paid by Perplat. The transcript
records the following exchanges:
(a) “That the works were carried out by Mr Perlich in his personal capacity, that is at
page 18 in the Points of Claim and that is something which is admitted by the
defendant. There is no issue raised on the pleadings certainly not in relation to
whether Perplat is the relevant contracting party or anything along those lines,
Sir.”;
(b) “See Mr Perlich’s use of the company’s letterhead is not as ideal as it ought to
be….”; and
12
DECISION
(c) “There is no issue put in place that this was in fact works organised or arranged
by Perplat Investments. Certainly there is evidence to the fact that payments
have been paid through Perplat Investments but that’s a matter that Your Honour
will need to determine at the end of the day. But it is not suggested and it has
never been suggested on the pleadings that in fact this was a contractual
arrangement or works were carried out by Perplat Investments.”
71.
There is therefore ample evidence that Perplat has not suffered any loss, or paid any
expenses in its own right. I accordingly do not accept the submission by Perplat that
by no later than August 2008, the Defendant was aware that Perplat was the entity
responsible for the management and funding of the project. This submission is at
best an inference that is not supported by the totality of the evidence. Nor is the
submission that Perplat was the source of the money for payment of invoices
consistent with the totality of the evidence.
THE EVIDENCE THAT SUPPORTS THE ABOVE:
72.
The contract was between Mr Perlich and Mrs Gelman.
73.
The original Statement of Claim dated 7 April 2009 claimed that Mr Perlich and
Mrs Gelman entered into an agreement for the renovation of the units. Mrs Gelman
took issue with some of the terms of that agreement, but admitted that her
agreement was with Mr Perlich.
74.
The Amended Statement of Claim is dated 26 November 2009. Perplat was by then
a party to the proceeding.
That Amended Statement of Claim claimed that the
contract was between Mr Perlich and Mrs Gelman. No contract between Perplat and
Mrs Gelman is alleged by any party in this case.
75.
The Plaintiffs claim that the contract was a joint venture contract.
76.
The Plaintiffs should be left to bear the effect of their pleading.
STATUTORY DEFENCES:
77.
In Lumbers case, the High Court ruled that given its findings at paragraphs 124, 125
and 126 it was not necessary for the Court to consider the Lumbers’ defences
13
DECISION
founded in Section 39 of the Builders Licensing Act 1986 (SA) or the Building Work
Contractors Act 1995 (SA).
78.
Similarly in this case, in my view it is not necessary for the Court to consider
Mrs Gelman’s statutory defences.
DID MR PERLICH MAKE AN ARRANGEMENT OR AGREEMENT WITH PERPLAT?:
79.
In his opening on the first day of the hearing on 28 October 2009, Mr Gurr informed
the Court:
“A large amount of money was provided or paid initially by the Plaintiff’s company,
Perplat Investments Pty Ltd, and Your Honour saw at the commencement today that
was the company in respect of which the Notice to Produce was served in part. That
money has not been repaid by the Plaintiff and it is a debt that he owes to Perplat
Investments in that sense, Your Honour.”
80.
During Mr Kenny’s opening on day one of the hearing, he told me that repayment of
the $18,000.00 loan, was by cheque from Perplat. I then enquired:
“It just occurs to me as you are talking about these things, Perplat was Mr Perlich’s
vehicle, whether or not there is any loss suffered directly by Mr Perlich or whether the
loss in truth is that of Perplat. I note that the contracts are in the name of Mr Perlich
or at least one of them is but I just.
Mr Kenny - He was the purchaser of Unit 4.
I said ”Throw that into the mix, I don’t know whether it’s relevant or not.”
Mr Kenny “It’s one of the issues we might have to work out Your Honour but”
Mr Gurr then said:
“Just on that point Your Honour again I go back to the pleadings and the allegation
was that the works were carried out by Mr Perlich in his personal capacity, that is at
paragraph 18 in the Points of Claim and that is something that is admitted by the
Defendant. There is no issue raised on the pleadings certainly not in relation to
whether Perplat is the relevant contracting party or anything along those lines, Sir.”
I then said to Mr Gurr:
“Well it is curious that Perplat appear on the Notice to Produce and I am hearing
about it now, isn’t it?”
14
DECISION
Mr Gurr said:
“It is, Sir, and certainly they weren’t intimately involved in the works and perhaps Mr
Perlich’s use of the company letterhead is not as ideal as it ought to be, that that is –
it is contended for by the Defendant in this particular case.”
81.
Mr Perlich gave evidence that he was the sole director of Perplat.
82.
During cross examination of Mr Perlich, Mr Kenny asked him about repayment of the
$18,000.00 loan. Mr Perlich said that he deposited $50,000.00 into the bank and
repaid the loan. Mr Kenny then asked Mr Perlich if that was the $60,000.00 deposit
referred to in the Perplat bank statement at page 283 of the Plaintiff’s Court Book,
being the deposit that occurred on 8 August 2008. Mr Perlich agreed that was the
deposit.
83.
During re-examination, Mr Gurr asked Mr Perlich what the source of the funds was,
that he had deposited into Perplat’s account. Mr Perlich gave sworn evidence that
84.
•
he had borrowed $350,000.00 from the Commonwealth Bank,
•
he had placed the funds in his personal bank account, and
•
he had then transferred $90,000.00 to the Perplat account for this job :
•
$50,000.00 from the Commonwealth Bank account, and
•
$30,000.00 from his Bank West account, and
•
A further $10,000.00 from his Bank West account, and that was all his
money.
The evidence tendered by the Plaintiffs included the Perplat bank statements which
demonstrate the $60,000.00 deposit made on 8 August 2008 and on 4 July 2008 the
sum of $51,450.00 was deposited into the Perplat account.
85.
During examination in chief, Mr Perlich also confirmed that the $20,000.00 which he
had paid to Mr Fishman on 9 July 2008, was paid by Perplat. Mr Kenny asked Mr
Perlich where the money that went into Perplat came from. Mr Perlich’s answer was
that he borrowed the money from the Commonwealth Bank using his wife’s house as
security and that he transferred the funds to Perplat. Mr Perlich said Perplat was the
trustee of his family trust company and he said “and I usually don’t use this for
business. I don’t use it for business at all now.”
15
DECISION
86.
Mr Gurr questioned Mr Perlich about his tax return for Perplat for 2008. Mr Gurr
asked Mr Perlich to tell the Court why there was no tax return prepared. Mr Perlich
said “Tax return only for my personal. This company haven’t prepared tax. It’s my
family trust and wouldn’t use this one.”
87.
During cross examination Mr Kenny asked Mr Perlich:
“You said before that you usually don’t use Perplat Investments for building jobs but
you used it in this job?”
Mr Perlich - “In 2007 I organised family trust and I stopped using Perplat, why not?”
Mr Kenny -
“So you stopped using it after this job?”
Mr Perlich - “For building purposes I stopped using Perplat”.
Mr Kenny -
“So you were using Perplat up to 2007?”
Mr Perlich - “Yes.”
Mr Kenny -
“And after 2007 you stopped using it?”
Mr Perlich - “Not 7-6, 2006 was the last year when we sort of …”
Mr Kenny -
“Why did you use Perplat for this job then?”
Mr Perlich - “Because how was I going to organise (indistinct) I need a cheque book
to run the job. I have a cheque book different, one for (indistinct), one I
have as a company, this case I decided to …”
88.
During cross examination Mr Kenny asked whether Mr Perlich or Perplat was out of
pocket for the building works. Mr Gurr objected and said:
“Sir, again there is an issue on the pleadings as to the allegation at paragraph 18 of
the Points of Claim or 19 of the Points of Claim which is admitted by the Defendant,
is that Mr Perlich arranged the works pursuant to the agreement. Paragraph 18 “In
accordance with the terms of the agreement and at Gelman’s specific request from in
or about April 2008 to October 2008, Perlich arranged the following works”. Perlich
is a defined term in the pleadings. That’s a term that is admitted Sir, there is no
issue put in place that this was in fact works organised or arranged by Perplat
Investments. Certainly there’s evidence to the fact that payments have been paid
through Perplat Investments but that’s a matter that Your Honour will need to
determine at the end of the day. But it is not suggested and it has never been
suggested on the pleadings that in fact this was a contractual arrangement or works
were carried out by Perplat Investments.”
89.
Mr Perlich’s evidence was that he had another company called RMV Investment Pty
Ltd, which he ordinarily used for business after 2006. Accordingly, the evidence is
16
DECISION
consistent with the proposition that Mr Perlich simply used Perplat’s cheque book for
convenience, that Perplat did not do or arrange the building works, that any money
paid by Perplat was in fact his money, and that Mr Perlich did not use Perplat for this
job.
90.
On this basis, Perplat’s claim also fails.
DID MRS GELMAN ACCEPT A BENEFIT AT THE EXPENSE OF PERPLAT WHICH
WOULD BE UNCONSCIONABLE TO RETAIN?
91.
If the funds paid by Perplat were not its funds because Mr Perlich used his own
funds and only used Perplat’s bank account because it had a cheque book, Perplat
did not confer any benefit on Mrs Gelman.
92.
If however Perplat, acting in its own capacity, and using its own funds, conferred a
benefit on Mrs Gelman, then it is open to find there was no windfall gained by Mrs
Gelman, nor has she obtained a benefit from Perplat that would be unconscionable
for her to retain, as follows.
93.
The agreement Mrs Gelman reached with Mr Perlich was that the works to Units 1
and 2 would cost about $25,000.00. Both Mrs Gelman and Mr Perlich agreed that
was the original estimate. The Amended Statement of Claim dated 26 November
2009 pleads that Mr Perlich gave that estimate and the Defence to the Amended
Statement of Claim pleads that the same estimate was given. Both Mr Perlich and
Mrs Gelman also agreed in their evidence that the $49,000.00, paid by Mrs Gelman
for the deposit for the purchase by Mr Fishman and Mr Perlich of Units 3 and 4,
would stand as Mrs Gelman’s payment for the renovation works. Mrs Gelman said
that agreement was reached on 22 April 2008. Mr Perlich agreed that the agreement
was entered into, but he did not specify when the agreement was reached. In cross
examination by Mr Kenny of Mr Perlich, Mr Kenny said:
“Mrs Gelman will say that instead of you paying it back to her at the end, she said to
you “well that will be my payment for the renovation” and you said okay.”
Mr Perlich replied: “Yes on the subject I agree with you.”
Mr Kenny then said: “You agree with that?”
Mr Perlich - “Yes of course I agree.”
Mr Kenny -
“You agree you had a conversation with her on about 22 April?”
17
DECISION
Mr Perlich - “I don’t know what day it was because I am intending to go place every
morning I was (indistinct) site.
94.
Mrs Gelman gave evidence that in mid July, Mr Perlich told her that the price for
Units 1 & 2 had gone up to $30,000.00 and told her that if there was any additional
expense, he would pay it himself. Mrs Gelman gave evidence that she agreed. Mrs
Irene Perlov gave evidence that she was present in Mrs Gelman’s house, in the
room with Mrs Gelman and Mr Perlich, when they had that conversation.
Ms
Perlov’s version of the conversation was the same as Mrs Gelman’s, although Mrs
Perlov gave evidence that she felt uncomfortable and excused herself before Mrs
Gelman answered and she therefore did not hear Mrs Gelman agree to the
increased price of $30,000.00 for Units 1 & 2.
Mr Perlich denied that the
conversation took place. However, even if Mrs Gelman obtained some benefit, she
could not have done so in relation to Unit 2. Unit 2 was owned by Janina Gelman,
and no claim has been made against her.
THE DOMESTIC BUILDING CONTRACTS ACT 1995 (“THE ACT”):
95.
I am satisfied that that the arrangement between Mr Perlich and Mrs Gelman was a
major domestic building contract within the meaning of Section 3(1) and by reference
to Sections 54(1) and 5(1) of the Act.
96.
Section 31(1) of the Act obliges a builder to refrain from entering into a major
domestic building contract unless the arrangement is in writing and otherwise
complies with the conditions proscribed in that sub-section.
97.
Section 31(2) of the Act provides that a major domestic building contract is of no
effect unless it is signed by the builder and the building owner.
98.
There is no dispute in this case that the relevant signatories would have been
Mr Perlich and Mrs Gelman. There is similarly no dispute in this case that neither of
these parties reduced their agreement to writing. It follows that Section 33 of the Act
has no application.
99.
Section 133 of the Act provides that a failure by a builder to comply with any
requirements in the Act in relation to a domestic building contract does not make the
18
DECISION
contract illegal, void or unenforceable unless the contrary intention appears in the
Act.
100.
This provision appears to me to be entirely consistent with the Dover Beach case.
101.
Parliament has intended and expressly provided that a failure to comply with Section
31 would have the result of the builder being exposed to a financial penalty and of
any contract being of no effect. It would not have the effect of the builder being
precluded from any potential restitutionary relief, because if Parliament had intended
that consequence, it would have legislated accordingly.
102.
On the facts of this case, one question that arises is whether Perplat can properly be
regarded as “the builder” rather than, and perhaps in addition to, Mr Perlich for the
purposes of the Act?
103.
A “builder” is defined in Section 3(1) of the Act, and includes a person who either
carries out or manages or arranges the carrying out of domestic building work, or
intends to do so.
104.
On the evidence before me, I am not satisfied that Perplat comes within any part of
this definition, and its reliance upon Dover Beach is accordingly in this respect
misconceived. That is fundamentally because the management works were
performed by Mr Perlich rather than Perplat.
ASSESSMENT OF WITNESSES:
105.
Although I was not particularly impressed with either Mr Perlich or Mrs Gelman as
witnesses upon whom I could rely, I regarded Mr Perlich as particularly
unsatisfactory. I had the opportunity to carefully observe and assess him whilst in the
witness box over the first three days of the hearing. I considered him at times to be
evasive, at times to selectively give evidence most favourable to him, and at other
times to give evidence that was simply inconsistent, vague and unreliable. I am
mindful that the Plaintiffs bear the onus of proof in this proceeding. Where there was
a conflict in evidence, I generally preferred the evidence of Mrs Gelman to that of
Mr Perlich.
106.
For example, Mrs Gelman gave evidence that in late October 2008 she asked
Mr Perlich for an invoice. She gave evidence that Mr Perlich came to her house and
19
DECISION
gave her the handwritten document that appears at Page 76 of the Defendant’s
Court Book. That document is also Exhibit P13. Mrs Gelman gave evidence that Mr
Perlich did not give any explanation to her about the document and did not explain
why there were different figures above the line or below the line. The document has
a total of $60,600.00.
107.
If Mrs Gelman’s evidence is accepted, and that document was Mr Perlich’s attempts
to give her an invoice, then the invoice was for $60,600.00, which is roughly the
same as the $30,000.00 per unit agreement said to have been reached in mid July
2008.
108.
There was no evidence that Mr Perlich asked Mrs Gelman for more money when he
gave her that document.
109.
Mr Perlich’s evidence about Exhibit P13 was in my view therefore implausible.
110.
Firstly, he gave evidence that he prepared the document in Mrs Gelman’s presence
at her house, on a piece of paper that Mrs Gelman had given to him.
111.
That could not be true. The original of the document showed that on the reverse side
of the handwritten note, appears to be a facsimile printout of the date 15 September
2008 and there is another date underneath that stating 9 September 2008. The print
at the top of the faxed side of the page has the name of two companies, CR & SB
Walenton Pty Ltd and Quickform Construction Pty Ltd.
112.
Mrs Gelman was overseas between 24 August 2008 and 17 October 2008. She
gave evidence that she was visiting her daughter in the United States. Mr Perlich
gave evidence that he was familiar with Quickform Constructions.
113.
Mr Perlich also said of the line halfway down the handwritten side of the page, and
which divided the items above the line, he said were things he had already paid, and
the things below the line, he said were things he had not yet paid. But Mr Perlich’s
evidence about that could not have been true, if his other evidence was accepted.
114.
For example, above the line Mr Perlich had written carpet $1,200.00 and wardrobes
$2,500.00. There is no item below the line for carpet or wardrobes.
115.
The evidence was that Mrs Gelman herself paid for the carpet and wardrobes for
Units 1 & 2 in late October 2008.
20
DECISION
116.
Also on Exhibit P13, above the line Mr Perlich had written painting $9,000.00. There
is no item below the line for painting. In cross examination of Mr Perlich, Mr Kenny
put to him that his evidence was that he had paid the painter as follows:
•
on 2 July a deposit of $5,000.00;
•
on 8 July $1,900.00;
•
on 10 July $1,800.00;
•
on 27 August $14,000.00; and
•
on 1 September $1,300.00, which Mr Perlich described as the final payment.
Those payments total $24,000.00.
117.
Mr Kenny put to Mr Perlich that by the time he prepared Exhibit P13 in September
2008 he had paid the painter in full. Mr Perlich was then evasive in his answers.
118.
Mr Kenny asked Mr Perlich to look at Page 79 of the Defendant’s Court Book (Exhibit
P23) which was an invoice for painting from Mr Kuznetsov for $26,000.00. Mr Kenny
put to Mr Perlich that half of $26,000.00 is $13,000.00 and therefore the figure for
painter contained in Exhibit P13 (which was $9,000) was incorrect.
Mr Perlich
answered that the document from Mr Kuznetsov (Exhibit P23) was a quote that he
obtained at the beginning of the job. I considered this explanation as implausible.
119.
Another such example was in respect of Exhibit P8.
(a) Mr Perlich’s denial that he had signed the 22 April 2008 proposed agreement
and brought it to Mrs Gelman was equally implausible.
(b) The four documents that have the same type face and paper (Exhibits P39, P40,
P23 and P24) were most likely prepared by the same person at the same time.
Mr Perlich gave evidence that his son prepared P39 and P40 and that he
received P23 (the quote from Mr Kuznetzov) in April 2008, and the other 3
documents were prepared in November 2008. This was a critical issue on credit
in the case. Mr Perlich did not call his son to give evidence and no explanation
was given as to why he was not called. The Court is prepared to draw a Jones v
Dunkel (1959) 101 CLR 298 inference from that omission. Mr Perlich also said
initially he definitely did not prepare document P8, but further said at different
times in his evidence-in-chief, that “I signed the document”, but later that it was
“not my signature”, and later still “I’m not sure if it’s my signature”.
21
DECISION
120.
Additional issues of credit arose from the lack of supporting documents from the
Plaintiffs. I have some fundamental concerns over the extent of the adherence with
the Plaintiffs’ income tax, GST compliance and reporting obligations.
121.
Finally, in relation to the particulars subjoined to paragraph 15(h) of the Amended
Statement of Claim, Mr Perlich asserted that he did not give his lawyers those
instructions. I find such an assertion most improbable.
122.
Mr Gurr properly argued that Mr Gelman and Ms Anna Faiman, a legal secretary at
Alan Snyder & Co, could and indeed should, have been called to support Mrs
Gelman’s version of events when arrangements were made for the payment of the
deposit. Even if I also draw an adverse inference from this unexplained omission on
a key disputed fact, I still on balance prefer the Defendant to the Plaintiffs on this
issue. I note that Mr Nikolay Fishman curiously had no specific recollection of the
surrounding discussions when asked on behalf of the Plaintiffs, merely that he had
allegedly been informed by Mr Perlich that Mrs Gelman wanted to be a partner with
both of them.
123.
There were also other witnesses that could have been called by either party to assist
the possible resolution of conflicting evidence. They were Ms Lana Jeruzalski and
Ms Larisa Kalowvskaya. I was not favoured with any explanation for their absence.
QUANTUM:
124.
Given my earlier findings, it is probably unnecessary that I discretely deal with this
issue, but there are a number of matters which I consider I ought record.
125.
Mr Gurr submits that the proper approach to an assessment of either a quantum
meruit or restitutionary claim is to assess the fair and reasonable value of the works
actually performed or benefit conferred. This is set out particularly at pages 13 to 16
inclusive of his written submissions.
126.
It is said that the best evidence of that value is the actual costs reasonably and
necessarily incurred in performing the works, together with a reasonable margin for
overheads and profit: Sopov & Anor v Kane Constructions Pty Ltd (No 2) [2009]
VSCA 141.
127.
A management fee of a builder in a restitutionary claim is said to be encompassed by
this authority.
22
DECISION
128.
I accept the approach suggested by Mr Gurr, but do not accept that the approach is
supported by the evidence in this proceeding.
129.
For reasons stated earlier in these reasons, there is no acceptable evidence that
Perplat was the builder. Any management works were in fact performed by Mr
Perlich, and even if I were to accept that Perplat managed or arranged the works,
there is no evidence that Perplat has paid Mr Perlich that fee, and therefore no
evidence that Perplat has any foundation for restitutionary relief, because it is not
“out of pocket”.
130.
Perplat’s Counsel criticized the approach of the Defendant as to the issue of
quantum.
131.
In essence, Mr Faifer’s report was challenged because it was not predicated upon
the value of works or reasonableness of the costs actually undertaken, did not
incorporate the condition of the units as at purchase or before refurbishment works
began, and did not value the whole of the works undertaken. Rather, the report
proceeded upon the basis of several “assumed” or “accepted” facts.
132.
As such, Mr Faifer’s opinion is in these respects strictly speaking not admissible,
and, so far as it is admissible, of diminished weight: Heydon JA (as he then was) in
Makita (Aust) Pty Ltd v Sprowles (2001) 52 NSWLR 705 at 743-744.
133.
As stated, I may not need to make any determination as to quantum, and the matters
contained at paragraph 95 of Mr Gurr’s written submissions may accordingly be
irrelevant for present purposes. I will however make the following further
observations.
134.
135.
I accept that Mrs Gelman has paid $65,784.68 made up as follows:
•
items paid for directly $9,784.68; and
•
payments made to Mr Perlich $56,000.00;
The Plaintiff’s Particulars of Quantum dated 2 November 2009, as updated, list a
number of invoices which have been admitted by the Defendant. The total of the
invoices which have been admitted is $85,311.40.
23
DECISION
136.
The 11 invoices not admitted by the Defendant are:
No.
1.
2.
3.
4.
5.
49.
50.
51.
52.
64.
65.
Invoice description
E & J Painting Services
Nikolay Fishman
Weismann Carpets
Bayside shower screens & built-in robes
Marat Fishman
Moreland Plumbing
Roof – Tiles recycled
Gottlieb’s Builders’ Supplies
Gottlieb’s Builders’ Supplies
MS Adler and DI Adler
Perplat Investments Pty Ltd / M. Perlich
Total
Amount
$26,000.00
$19,200.00
$ 1,960.00
$ 3,500.00
$16,731.00
$ 7,500.00
$ 700.00
$ 846.00
$ 1,480.00
$ 9,600.00
$15,740.00
$103,257.00
(1) Painting:
137.
The invoice is from Mr Kuznetsov for painting in the sum of $26,000.00. Two
subcontractors by the name of Uri and Sergi were apparently utilized, but no written
records of this arrangement were ever produced.
138.
Mr Perlich gave Mrs Gelman that invoice on 30 November 2008 after the works had
finished. In his evidence he claimed it was a quote he received in about April 2008.
139.
He had previously advised her that the cost of painting for Units 1 & 2 was
$9,000.00.
140.
Mr Kenny put to Mr Perlich in cross examination that in his Answers to
Interrogatories dated 7 September 2009, Mr Perlich had sworn that he had paid the
painter $18,028.00 on 11 June 2008, $2,000.00 on 8 July 2008, $3,000.00 on 4 July
2008, and $3,000.00 on 9 September 2008. All of those payments were different to
the evidence Mr Perlich had given during examination in chief as to the payments he
had made to the painter.
141.
Mr Perlich answered that “I have other jobs and other painter find are good for me,
few jobs in Chelsea. They’re doing another job for me. In this case I don’t recall.”
142.
Mr Kenny put it to Mr Perlich:
“I will put it to you, Mr Perlich, that you can’t tell this Court that you were sure that
these payments went for this job, to this painter for the job because you’ve got no
idea and that’s why we’re getting different answers all over the place because you
24
DECISION
have made no notes on your cheque butts?”
143.
Mr Perlich responded that “This is one answer.”
144.
Mr Kenny said to Mr Perlich:
“You gave some evidence of the other jobs that this painter was doing for you. Can
you tell us what those other jobs were?
Mr Perlich said: “It’s a few jobs what I’m doing him at the moment.”
Mr Kenny said: “In 2008 what other jobs did this painter do for you?
Mr Perlich said: “I have job in Bentleigh.”
(2) Carpentry and Plastering:
145.
The invoice is from Mr Nikolay Fishman for $19,200.00 (Exhibit P24).
146.
The invoice is for carpentry at $3,000.00 per Unit totalling $12,800.00 and plastering
at $1,600.00 per Unit, totalling $6,400.00.
147.
Mr Fishman was evasive when asked if he had paid GST. He could not say one way
or the other.
148.
Mr Fishman was Mr Perlich’s partner and was himself the purchaser of Unit 3.
149.
One therefore would have expected that Mr Fishman might give his services either
free of charge, or he did not expect payment, particularly in respect to his own Unit
and possibly also Mr Perlich’s Unit.
150.
It would also be somewhat incredible to expect Mr Perlich to have paid Mr Fishman
for the works conducted by Mr Fishman for Mr Fishman’s own Unit.
151.
Further, Mr Kenny asked Mr Perlich about the deposit of $15,000.00 on 27 June
2008 which appears on the bank statement for the joint account. Mr Perlich said that
was his own money. The exchange was as follows:
Mr Kenny -
“Where did the money come from?”
Mr Perlich - “From my bank account.
Mr Kenny -
“Would you like to show us – well, let’s have a look.”
Mr Perlich - “One of my accounts.”
25
DECISION
Mr Kenny -
“Let’s look at your bank account. From Perplat Investments?”
Mr Perlich - “Perplat or another – I can tell you exactly one second. It’s come up
from Suncorp.”
Mr Kenny -
“It came from a Suncorp account?”
Mr Perlich - “Yes.”
Mr Kenny -
“I know my learned friend’s instructing solicitor is not present but I
would call for the bank statement from the Suncorp account.”
His Honour - “Has it been discovered?”
Mr Kenny -
“It hasn’t been discovered and if my learned friend hasn’t got it in Court
which I expect, I’d like to call for it and perhaps when we resume.”
His Honour - “Mr Gurr, do you have it?”
Mr Gurr
- “I don’t have it Sir and as far as I am aware it’s not in Court, so I’ll seek
some instructions in relation to it.”
His Honour - “Thank you very much. We’ll come back to it …”
Mr Kenny - “My instructions are that the $15,000.00 was from Mr Fishman, not
from you?”
Mr Perlich - “Doesn’t matter.”
Mr Kenny -
“Let’s have an answer please. Was the money - $15,000.00 from you
or from Mr Fishman?”
Mr Perlich - “It was from Mr Fishman.”
Mr Kenny -
“It was from Mr Fishman.”
Mr Perlich - “Yes.”
Mr Kenny -
“So when you told your barrister that you put that $15,000.00 in, that
wasn’t true, was it.”
Mr Perlich - “What’s not true? We’re partners with Mr Fishman who put money
in…..”
Mr Kenny -
152.
“That money from Mr Fishman was a deposit in the account on 27 June
and the payment that you made to Mr Fishman of $20,030.00, that was
on 9 July, wasn’t it – yes.”
Mr Kenny then asked Mr Perlich why Mr Fishman would give Mr Perlich $15,000.00
on 27 June and Mr Perlich would then give Mr Fishman $20,000.00 less than two
weeks later.
26
DECISION
153.
Mr Perlich responded:
“Mr Fishman left for holiday and he asked me for $20,000.00, send it to him. I sent it
to him. He want to help his late parents. This I done. We’re partners with him, if I
need the money I ask him for the money, he needs money, I ask him and I give it to
him.”
154.
Mr Fishman in his evidence however said that he asked for the money from Mr
Perlich because he wanted to help his brother, not his parents.
155.
Mr Fishman also gave evidence that he paid for a number of the expenses incurred
for the renovation works. He paid $44,150.51 in total.
156.
It is therefore highly doubtful that the $20,000.00 paid to Mr Fishman on 9 July 2008
was payment to Mr Fishman for his work on the carpentry and plastering.
157.
Further, the invoice/handwritten document that Mr Perlich gave to Mrs Gelman in late
October (Exhibit P13) states below the line “plaster and carpentry”.
158.
Mr Perlich gave evidence that the items below the line were items that he had not yet
paid.
159.
Plastering and carpentry were performed by Mr Nikolay Fishman.
160.
It is open to infer then that Mr Perlich has not paid Mr Fishman, and certainly had not
paid him by late October 2008, which means that the $20,000.00 paid on 9 July
2008, was most likely a loan to Mr Fishman, and not payment for services.
(3) Perplat’s invoice:
161.
The invoice is Exhibit P39 and Exhibit D2, and is at page 77 of the Defendant’s Court
Book.
162.
The evidence was that this document was provided by Mr Perlich to Mrs Gelman on
30 November 2008 together with documents that appear at page 78, 79 and 80 of
the Defendant’s Court Book.
163.
This document, and the document that appears at Page 78, were the first documents
provided by Mr Perlich to Mrs Gelman with the name Perplat Investments Pty. Ltd.
on it, other than the cheques used to repay the $18,000.00 loan and the $2,000.00
loan in August 2008. In respect to those two cheques, Mrs Gelman’s evidence was
that she did not notice that the cheques were from Perplat until she was depositing
27
DECISION
the cheques into her bank account, and she paid little attention to it, as she did not
care who had repaid the money to her, so long as it was repaid. I accept that
evidence.
164.
It is not clear what Exhibit P39 is intended to be. If it was intended to be a Tax
Invoice, then it would have to record an amount for GST.
165.
Mr Perlich admitted in evidence that neither he nor Perplat have paid GST and
neither he nor Perplat have lodged any BAS Statements.
166.
Document 77 is also strange because it appears to be a charge for all four Units.
167.
If the invoice was genuine, then one might wonder why Mr Perlich would need to
render an invoice to himself for works conducted to Unit 4. Also, Mrs Gelman is on
any basis not liable for the costs for units 3 or 4, so why would the costs of those
works be incorporated within this document?
168.
If the invoice is genuinely an invoice from Perplat for work that it did, then the fact
that Perplat has rendered an invoice that would partly be payable by Mr Perlich in
respect to Unit 4, indicates that in that case, there most likely was an arrangement or
contract between Perplat and Mr Perlich in respect to Unit 4.
(4) Marat Fishman:
169.
The invoice that Marat Fishman claims to have prepared, seeks the sum of
$1,584.00 for GST.
170.
No GST has been remitted and Mr Fishman has not lodged a BAS Statement. Mr
Fishman agreed with Mr Gurr that he was not registered for GST and had not paid
GST in respect of the works.
171.
The invoice provides very little detail as to exactly what Marat Fishman did.
172.
The invoice was provided by Mr Perlich to Mrs Gelman on 30 November 2008 with
the four other documents.
173.
Mrs Gelman gave evidence that in October, Mr Perlich had provided her with a
bundle of all invoices he said had been incurred in respect to the four Units. The
invoice from Marat Fishman was not among them. The invoice from Marat Fishman
28
DECISION
was only provided 1 month later on 30 November 2008 after the relationship
between Mr Perlich and Mrs Gelman had broken down.
174.
Mr Perlich gave evidence that he had paid Mr Fishman $16,731.00, not $15,840.00,
and that he made payments to Mr Fishman as the job progressed.
175.
176.
Mr Perlich said he had made payments to Mr Fishman as follows:
•
$1,000.00 on 27 May 2008;
•
$5,920.00 on 30 August 2008; and
•
$9,811.00 on 5 December 2008.
Mr Fishman said that he prepared the invoice one or two months after 25 September
2008.
177.
The invoice must have been prepared by 30 November 2008 because that is when
Mr Perlich gave it to Mrs Gelman.
178.
When Mr Perlich gave it to Mrs Gelman, the invoice read “Paid in full”.
179.
However, Mr Perlich said that one of the payments he made to Mr Fishman in
respect of this invoice was on 5 December 2008 in the sum of $9,811.00 (Exhibit
P30).
180.
So it could not be possible that the invoice had been paid in full on the Plaintiffs’ own
evidence.
181.
Exhibit P30 is a cheque butt that has no notation on it. It is therefore impossible to
determine who received that cheque.
182.
Mr Fishman said he kept daily records of the hours he worked on his phone but has
not retained those records or the phone.
183.
Mr Fishman said the invoice was addressed to Perplat at the request of Mr Perlich.
184.
Mr Fishman did not provide any bank statement to prove cheques deposited into his
account that he received from Mr Perlich.
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DECISION
(5) Carpets and wardrobes:
185.
Mr Gurr properly conceded in his written submissions that the carpet claim was being
abandoned.
(6) Electrical works:
186.
The Plaintiffs’ claim includes an invoice from Ms Adler and DI Adler for electrical
work for $9,600.00. The invoice is at page 516-518 of the Plaintiff’s Discovery Book.
The invoice is for a total of $8,928.90, not $9,600.00, and its contents were not
challenged.
187.
The Defendant’s share is equal to $4,464.00 for units 1 and 2.
188.
In the handwritten document that Mr Perlich gave Mrs Gelman at the end of October
2008 (Exhibit P13 - page 76 of the Defendant’s Court Book), Mr Perlich recorded
that the costs of electrical work was $3,500. No item appears below the line for
electrical works. The Adler invoice is dated 1 September 2008 so the evidence
suggests that Mr Perlich had it by the end of October when he gave Mrs Gelman the
handwritten document.
(7) Plumbing:
189.
The Plaintiffs’ claim includes an invoice from Moreland Plumbing in the sum of
$7,500.00. The invoice is Exhibit P41, and appears at page 230 of the Plaintiff’s
discovery book. The invoice is in fact for $2,500, not $7,500, which casts doubt upon
the reliability of the Plaintiffs’ evidence.
(8) Roof tiles:
190.
The Plaintiffs’ claim includes an invoice for roof tiles for $700. The invoice is Exhibit
P32 and is at page 231 of the Plaintiffs’ Court Book.
191.
The invoice has been altered. It should on its face be for $100, not $700, as the
invoice states that it is for 20 tiles at $2 per tile, ($40.00) and 30 tiles at $2 ($60.00).
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DECISION
SUMMARY AND CONCLUSION:
192.
Mr Kenny concluded his written submissions by taking the words from paragraphs
124, 125 and 126 of the Lumbers decision and substituting the names of the parties
in this case, as follows:
[124] When account is taken of the contractual relationship between the Lumbers
Mrs Gelman and Sons Mr Perlich, several observations may then be made.
[125] First, the Lumbers Mrs Gelman accepted no benefit at the expense of Builders
Perplat which it would be unconscionable to retain. The Lumbers Mrs Gelman made
a contract with Sons Mr Perlich which either has been fully performed by both parties
or has not. Sons Mr Perlich made an arrangement or agreement with Builders
Perplat which again has either been fully performed or it has not. If either the
agreement between Sons Mr Perlich and the Lumbers Mrs Gelman or the agreement
or arrangement between Sons Mr Perlich and Builders Perplat has not been fully
performed (because all that is owed by one party to the other has not been paid) that
is a matter between the parties to the relevant agreement. A failure of performance of
either agreement is no reason to conclude that Builders Perplat should then have
some claim against the Lumbers
Mrs Gelman , parties with whom Builders Perplat
has no contract.
[126] Because Builders Perplat had no dealings with the Lumbers Mrs Gelman,
Builders Perplat has no claim against the Lumbers Mrs Gelman for the price of any
work and labour Builders Perplat performed or for any money that Builders Perplat
may have paid in relation to the construction. Builders Perplat has no such claim
because it can point to no request by the Lumbers Mrs Gelman directed to Builders
Perplat that Builders Perplat do any work it did or pay any money it did. Reference to
whether the Lumbers Mrs Gelman "accepted" any work that Builders Perplat did or
"accepted" the benefit of any money it paid is irrelevant. It is irrelevant because it
distracts attention from the legal relationships between the three parties: the
Lumbers Mrs Gelman, Sons Mr Perlich and Builders Perplat. To now impose on the
Lumbers Mrs Gelman an obligation to pay Builders Perplat would constitute a radical
alteration of the bargains the parties struck and of the rights and obligations which
each party thus assumed. There is no warrant for doing that.
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DECISION
193.
I accept and adopt that approach. Mrs Gelman accepted no benefit at the expense
of Perplat which it would be unconscionable to retain. Perplat had no claim against
Mrs Gelman because it could not point to any request by Mrs Gelman that it do any
work or pay any money. Reference to whether Mrs Gelman “accepted” any work or
benefit of any money paid by Perplat is irrelevant, because of the legal relationships
between the various parties. There was no contractual relationship between Perplat
and Mrs Gelman, and therefore no basis for restitutionary relief.
194.
It follows that the Secondnamed Plaintiff’s claim accordingly must fail.
ORDERS:
The claim by Perplat is dismissed. I will hear Counsel as to the question of costs, which I
propose to fix if practicable pursuant to r.26.01(1) of the Magistrates’ Court Civil Procedure
Rules 2009.
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DECISION