Aussie Blinds and Canvas Products Pty Ltd v Smith - [2015] SADC 154

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Application for Review)
AUSSIE BLINDS AND CANVAS PRODUCTS PTY LTD v SMITH AND ANOR
[2015] SADC 154
Judgment of His Honour Judge Barrett
6 November 2015
TORTS - NEGLIGENCE - APPORTIONMENT OF RESPONSIBILITY AND DAMAGES
CONTRACTS - BUILDING, ENGINEERING AND RELATED CONTRACTS - PERFORMANCE OF WORK - REMEDIES FOR BREACH OF CONTRACT - DAMAGES - OTHER MATTERS
LIMITATION OF ACTIONS - CONTRACTS, TORTS AND PERSONAL ACTIONS - WHEN TIME BEGINS TO RUN - PARTICULAR CAUSES OF ACTION
The applicants seek a review of a Minor Civil Decision finding them negligent in erecting a sail cloth in the respondent's back yard. The respondents sued some 8 years after the sail cloth was erected, but only 4 years after damage was caused to the sail cloth by high winds. The Learned Special Magistrate found that the claim was not statue barred because the claim was of loss suffered as a result of defective building work under the Development Act where the time limit is 10 years. The Learned Special Magistrate found the applicants negligent and he awarded the respondents damaged of $6,000.
Held: The application should be allowed but only on the ground that the Learned Special Magistrate had inadvertently included an item in the quantum of damages which he had, correctly, found should not be included. There was no error in any other aspect of the judgment.
Magistrates Court Act 1991 s 38(7)(b), s 38(7)(e), s 38(8); Limitations of Actions Act 1936 s 35; Development Act 1993 s 73; Building Act 1993 (Vic) s 134, referred to.
Brirek Industries Pty Ltd v McKenzie Group Consulting Pty Ltd [2014] VSCA 165, considered.

AUSSIE BLINDS AND CANVAS PRODUCTS PTY LTD v SMITH AND ANOR
[2015] SADC 154

This is an application to review a Minor Civil Decision delivered by a magistrate on 30 January 2015. The case concerns the erection of a sail cloth in the backyard of the respondents’ house at Novar Gardens. The applicants are professional sail cloth installers. They put up the sail cloth in January 2005. The Learned Special Magistrate found that the applicants had been negligent in erecting the sail cloth. His Honour awarded $6,000, being slightly reduced from the amount he would have ordered by reason of the jurisdictional limit on Minor Civil Decisions.
Grounds for review
Both the applicants and the respondents were unrepresented at the hearing before the Learned Special Magistrate and before me. Broadly speaking the applicants seek a review on three bases:
The Learned Special Magistrate was in error in holding that the respondents’ claim was not lodged out of time.
The Learned Special Magistrate was wrong to find the applicants negligent.
The Learned Special Magistrate was wrong to find that the respondents were not guilty of contributory negligence.
That the Learned Special Magistrate erred in fixing the quantum of damages.
Criteria on review
The right to seek a review to this court is pursuant to s 38(6) of the Magistrates Court Act 1991. On a review this court “may inform itself as it thinks fit and, in doing so, is not bound by the rules of evidence” (s 38(7)(b)).
Section 38(7)(e) provides:
(e) in hearing and determining the review, the Court must act according to equity, good conscience and the substantial merits of the case without regard to technicalities and legal forms.
A decision in this court on a review is final and not subject to further appeal (s 38(8)).
Background
Before turning to the grounds of appeal I set out the background to the action.
In January 2005 the applicants installed a sail cloth in the respondents’ back yard. The principal discussions about the purchase and installation of the sail cloth were between the male householder, Mr Smith, and the male supplier and installer, Mr Grimaldi. There is some dispute about a critical conversation on the topic of whether the sail cloth should be fixed at all points to posts or whether at one of the points it should be fixed to the fascia of the house. I will return to that dispute later.
In the event, the sail cloth was fixed at one point to the fascia rather than to a post. In 2005 when the sail cloth was put up, it was not necessary for the householder to apply to the local council for development or building approval. Later it did become necessary to apply for planning approval.
In the years after the sail cloth was installed, the respondents would dismantle it during winter so as to prolong its life. They would reassemble it in the warmer months.
In 2009, high winds caused the sail cloth to become detached at the point where it was fixed to the fascia of the house. This caused some damage to the fascia and to the cloth itself.
In 2010 the respondents were told by a council building inspector, Mr Peter Jankovic that the sail cloth should not have been fixed to the fascia and that planning regulations now required planning application to be made for the re-erection of the sail cloth. Such an application had to be accompanied by an engineer’s report.
In 2010 the respondents commissioned engineers (Conceptio Pty Ltd) to report on the adequacy of the erection of the sail cloth. In a report dated 26 January 2011 the engineers reported that the sail cloth should not have been fixed to the fascia. That report was tendered before the Magistrate and marked “P3”. For the purposes of the litigation in the Magistrates Court the applicants also commissioned an engineer’s report. Magryn and Associates Pty Ltd provided a report dated August 2013 (“D1”). That report also said that the sail cloth should not have been connected to the fascia. That report went on to say that a fourth post connection rather than a fascia connection had been offered by the applicants but not accepted by the respondents.
The report referred to the applicants offering to have the fascia fixing “engineered” at additional costs, but the owner (the respondents) declined. That fact was never asserted by the applicants before the Magistrate.
On the basis of assumed facts, the engineers concluded:
It can be strongly argued that responsibility for the structure and damage to the fascia connection which subsequently occurred, should be the owners.
The respondents issued their proceedings on 7 February 2013, some 8 years after the sail cloth was erected and some 4 years after the damage to the fascia was allegedly caused by the negligence. The matter first came on for hearing on 3 September 2013. During the course of that hearing the Learned Special Magistrate recognised that there arose a question as to whether the respondents’ claim was statute barred. If the claim was construed as a claim in contract, or tort, the Limitation of Actions Act barred proceedings after 6 years. If the claim was construed as one in the tort of negligence, then the proceedings should have been brought within 6 years of the damage first becoming obvious. If the claim was one for damages arising from building work as contemplated by the Development Act, then the limitation period was 10 years. His Honour was aware of the Victorian case of Brirek Industries Pty Ltd v McKenzie Group Consulting Pty Ltd which had been heard in the Victorian County Court but the matter had proceeded on appeal to the Full Court. Judgment had not yet been handed down. His Honour therefore adjourned the matter to await the judgment in the Full Court of Victoria because there appeared to be no local authorities on the subject. The judgment of the Full Court was handed down on 6 August 2014.[1]
[1] [2014] VSCA 165.
On 12 August 2014 his Honour delivered an interim ruling that the respondents’ action was not commenced out of time. He did so bearing in mind the Full Court decision in Brirek. His Honour found that s 73 of the South Australia Development Act should be interpreted in the same manner as the Victorian Full Court had interpreted s 134 of the Victorian Building Act 1993. It should be interpreted to the effect that claims for defective building work in South Australia should be commenced within 10 years of the completion of the work.
In the alternative, his Honour held that the action was based on the tort of negligence and that the time at which the action accrued within the meaning of the South Australia Limitation of Actions Act was 2009. Accordingly the action was also within time on that construction.
The matter was called on again on 27 November 2014. The evidence and submissions were completed that day and judgment was reserved. The judgment was published on 30 January 2015.
Issues on the review
Time limitations
The first ground of review is that the respondents’ claim was lodged out of time and the Learned Special Magistrate was in error in finding that it was not. In my view his Honour was not in error. I explain why.
Section 35 of the Limitation of Actions Act provides:
35—Actions on simple contract and in tort
The following actions namely:
(a) actions founded upon any simple contract express or implied, or upon any award where the submission is not by specialty;
...
(c) actions founded on tort;
If the respondents’ action is considered to be an action in contract, then the 6 year time limit within which to commence proceedings began to run from the formation of the contract in about January 2005. That time limit had expired by January 2013 when the respondents commenced their action.
If the action is considered to be an action in the tort of negligence, as the amended Statement of Claim says it is, the time began to run when the cause of action “accrued”. In tort, no cause of action accrues until damage occurred. The damage to the fascia occurred in 2009. On that construction, the time limit began in 2009 and had not expired in 2013.
In the cases of contract or tort, s 48 of the Limitation of Actions Act provides for a discretion in the court to extend the time for commencing proceedings upon being satisfied of certain criteria. I need not pause to consider the question of extending the time.
There is a third possible time limit. If the respondents’ action was construed as an action for damages for defective building work within the Development Act, s 73 of the Act provides and unextendible time limit of 10 years. Section 73 provides:
(1) Despite the Limitation of Actions Act 1936, or any other Act or law, no action for damages for economic loss or rectification costs resulting from defective building work (including an action for damages for breach of statutory duty) can be commenced more than 10 years after completion of the building work.
(2) This section does not affect an action to recover damages for death or personal injury resulting from defective building work.
(3) The period prescribed by subsection (1) cannot be extended.
That section is to be compared with s 134 of the Victorian Building Act which provides:
Despite anything to the contrary in the Limitation of Actions Act 1958 or in any other Act or law, a building action cannot be brought more than 10 years after the date of issue of the occupancy permit in respect of the building work (whether or not the occupancy permit is subsequently cancelled or varied) or, if an occupancy permit is not issued, the date of issue under Part 4 of the certificate of final inspection of the building work.
In my view the two sections are materially the same, at least for the purposes of this case. The Full Court of Victoria explained the reason why the new provision had been made in its Building Act. It also referred to comparable legislation in other states and territories including s 73 of the South Australia Development Act. The Full Court said the following:
[103] The background to the introduction of s 134 of the Building Act is well known and not controversial.
[104] Under the Limitation of Actions Act, causes of action are barred at a given time after they accrue. Claims arising from breach of contract accrue at the time of the breach.²⁶ Proof of damage is not an element of a claim for breach of contract.²⁷ Negligence is only actionable on proof of damage. Claims arising from breach of a duty of care accrue when damage caused by the breach is sustained.²⁸
[105] In building actions it can be unclear when the damage is sustained. For many years there was controversy as to when time ran for claims arising out of the negligent design and construction of buildings.²⁹ Concealed or latent defects may not be discovered for some time. Further, the loss and damage sustained may not be physical so much as “pure economic loss“.³⁰ Those involved in designing, surveying and building found that their ability to get insurance was affected by the spectre of long-tail claims. In Woolcock Street Investments Pty Ltd v CDG Pty Ltd (Woolcock), McHugh J said:
The now accepted doctrine is that, in the case of defective premises, damage does not occur until the defect manifests itself. No cause of action arises in tort until the plaintiff suffers damage. Consequently, those concerned with the design and construction of a building may be required to defend themselves against an action in tort many years after completing the task that now gives rise to the claims against them. On the other hand, a cause of action in contract arises when the contract is breached. Time runs from the breach, not the sustaining of damage. This creates the paradox that those involved in the design or construction of a building may be sued in tort years after the time has expired for suing on the contract that gave rise to the duty. Of course, since Donoghue v Stevenson, a similar anomaly arises in the case of goods and chattels. But in that area, the time lag between breach of contract and sustaining damage will ordinarily not be as long as in the case of defective buildings. Goods and chattels are usually consumed or used before the expiration of the contractual limitation period.³¹
[106] Legislation has since been enacted in various jurisdictions to provide some relief from the problem.³² The terms of the legislation varies between jurisdictions.
In my view the reasoning of the Full Court of Victoria in Brirek was applicable to the case before the Learned Special Magistrate. His Honour was correct to interpret the South Australian s 73 in the way that he did. Accordingly on that basis, and on the alternative basis, the respondents did not commence their proceedings out of time.
The finding of negligence
The applicants submit that the Learned Special Magistrate was in error in finding that they were negligent in fixing the sail cloth to the fascia. There are several limbs to that submission. They say that the respondents contributed to the damage because they took the sail cloth down and re-erected it each year. In doing so they failed to properly re-tension the cloth. That is a claim of contributory negligence which I will discuss shortly.
They say further that Mr Grimaldi suggested that the fourth point of attachment be to a pole rather than to the fascia. Mr Smith said he did not want that to happen because it would obstruct the lawn or footpath. The respondents do not dispute that Mr Smith said he would rather the fourth point of connection not be to a pole.
His Honour held that, even if the respondents had wanted the cloth to be fixed to the fascia, the applicants had a professional responsibility to either refuse to do so if they could not do so safely, or they should secure the cloth to the fascia in such a way that it did not cause damage.
On the topic of the suitability of the attachment to the fascia, the engineers for both parties were of the same view. The cloth should not have been attached to the fascia. In those circumstances the evidence before the learned Special Magistrate was really unequivocal. His finding of negligence inevitable. The applicants say that at that time it was common to fix sail cloths to fascias. While that may be so, the evidence before the magistrate was such that his finding of negligence was inevitable, and in my view, correct. His Honour made no error in the finding of negligence.
Contributory negligence
The applicants submit that the respondents have contributed to the failure of the fascia connection by failing to properly re-tension the sail cloth each time it was re-erected after being dismantled for winter. It appears the respondents were not aware that they had to do so. They say that they were never told that they had to do so. While the applicants assert that the failure to re-tension the sail cloth contributed to the failure of the fascia connection, they adduced no evidence in support of that contention. Neither of the engineer’s reports addresses that issue. The respondents’ engineers made no reference to the topic at all. The only reference made by the applicants’ engineers is to the fact that the removal and replacement occurred each year and that the re-installation was not undertaken or checked by the builder. The evidence before the magistrate was quite insufficient to make a finding on the topic of contributory negligence. That is what his Honour said. In my view, that finding was not erroneous.
The quantum of damages
On the basis of the evidence before him, the Learned Special Magistrate found that the respondents would have to fix a new sail cloth to the three existing poles and a new fourth pole. The existing cloth would not fit the four pole configuration. The first head of damages was the cost of the new sail cloth and pole. The only evidence of the cost of a new sail cloth was a quote from suppliers called Shadeform dated 18 March 2011 (Exhibit P2). The quote was for two types of material – one costing $4,425 and the other costing $5,150. The quote was given almost 4 years before the assessment by his Honour. His Honour concluded that it was likely that the cost had increased in that time. In my view he was entitled to take a broad axe approach. He awarded a notional $6,000 for the cost of a new sail. I say “notional” because his Honour then halved that figure to allow for the fact that the respondents had had the use of the existing sail cloth for about half of its anticipated lifespan of 10 years. The respondents were not entitled to the full cost of a new sail cloth.
His Honour found that he should make no allowance for the erection of the new fourth post. He did so because he found that if the fourth post had been erected in the first place, the cost of that would have been added by the applicants to their quote.
At the hearing of the appeal, Ms Grimaldi raised for the first time that the quote by Shadeform for the new sail cloth included the erection of the fourth post. If that is correct his Honour has inadvertently and mistakenly included the cost of the fourth post in the assessment. Ms Grimaldi thought that she had included that as a ground of appeal but that is not so. The respondents had not been alerted to that claim before the appeal.
In support of that claim Ms Grimaldi draws attention to the notes at the bottom of the first page of the quote by Shadeform which says that the above pricing includes “steel posts, galvanised and powder coated to your colour choice”.
After reserving judgment and considering the matter I decided I should give each party the opportunity to file written submissions directed only to the topic of whether in fact the learned Special Magistrate had inadvertently included the supply and installation of the fourth pole and what proportion of the cost of the new sail would be for the pole.
There was some misunderstanding by both parties about my request for further submissions on that topic. The applicants provided submissions on matters unrelated to the pole question. The respondents had difficulty communicating their submissions through the Registry and ultimately did not submit one because they believed they had exceeded the time limit I had imposed.

Having not really been assisted by either party, I had the matter called on again so that each party could make oral submissions. The respondents acknowledge that it appears that the Learned Special Magistrate inadvertently included the cost of the fourth pole even though he had determined that it should not be allowed for the reasons already indicated.
On the resumed date, the respondents supplied me with a quote from a supplier who separated the costs of the sail from the cost of the fourth pole. That is the submission I sought. The quote was at current prices, but the quote helped me because I could determine the pole component. The quote was for $4,970 of which $1,570 related to the supply and installation of the pole. On that quote the proportion relating to the pole is about a third.
On the resumed date the applicants submitted orally, without any documentary support, that the pole is the most expensive item of the construction. They submitted that they could get the whole construction done for $2,100 of which the pole would be $1,550.
I prefer to rely on the written quote provided by the respondents. That quote separates the two components and the total figure more closely approximates the overall figure found proved by the learned Special Magistrate. I will therefore fix the same notional figure of $6,000 for the construction but I will reduce it by a third to $4,000 to make allowance for the pole. I will then halve that figure, as the learned Special Magistrate did, to take into account the fact that the respondents have had the use of the sale for half of its likely life.
In my view the other elements of the assessment of damages are reasonable and do not disclose error.
His Honour accepted the quote of the licensed builder to repair the fascia. He awarded that amount in full. It was $1,680.
His Honour awarded the respondents the full cost of providing their engineer’s report. That was $1,320.
His Honour awarded the respondents half the cost of their application to the council for development approval. That application became necessary because the requirement was introduced in about 2008. It had not been necessary in 2005. His Honour may have discounted the figure because, unbeknown to the respondents, it became necessary to apply for approval to re-erect the sail every time they took it down after 2008. His Honour fixed the item at $70, half of $140.
I would allow this appeal but only for the purpose of correcting the inadvertent inclusion of the cost of the pole in the assessment of damages. Apart from reducing the cost of the new sail from $3,000 to $2,000, all other heads of damage remain in place. That means a total of $5,070.
Conclusion
I allow the appeal and order the applicants to pay the respondent $5,070. There will be no order as to costs. Each party was self-represented.