Conduit Advertising Pty Ltd v Anderson - [2011] FCA 978

FEDERAL COURT OF AUSTRALIA
Conduit Advertising Pty Ltd v Anderson [2011] FCA 978

Citation: Conduit Advertising Pty Ltd v Anderson [2011] FCA 978

Appeal from: Conduit Advertising Pty Ltd v Anderson [2010] FMCA 962

Parties: CONDUIT ADVERTISING PTY LTD and ROBERT AUGUSTE v ANDREW BURT ANDERSON and ANDERSON EARTHMOVING PTY LTD AS TRUSTEE FOR THE ANDERSON EARTHMOVING TRUST

File number: WAD 417 of 2010

Judge: BARKER J

Date of judgment: 25 August 2011

Catchwords: APPEAL AND NEW TRIAL - appeal by way of rehearing from Federal Magistrates Court - whether misleading and deceptive conduct in relation to future acts - whether breach of earthmoving contract - whether negligence - appeal dismissed

Legislation: Federal Court of Australia Act 1976 (Cth) s 24
Trade Practices Act 1974 (Cth) s 51A, s 52, s 82, s 87
Fair Trading Act 1987 (WA) s 9, s 10

Cases cited: Conduit Advertising Pty Ltd v Anderson [2010] FMCA 962
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Fubilan Catering Services Limited (Incorporated in PNG) v Compass Group (Aust) Pty Ltd [2008] FCAFC 53
Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd [1988] FCA 40; (1988) 39 FCR 546
McDonald v Dennys Lascelles (1933) 48 CLR 457
Slinger v Southern White Pty Ltd [2005] SASC 267
Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620
Western Australia v Ward (2002) 213 CLR 1

Date of hearing: 16 May 2011

Place: Perth

Division: GENERAL DIVISION

Category: Catchwords

Number of paragraphs: 140

Counsel for the Appellants: Mr AP Rumsley

Solicitor for the Appellants: Mr AP Rumsley

Counsel for the Respondents: Mr RL Hooker

Solicitor for the Respondents: Robert Grayden Legal

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 417 of 2010

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:
CONDUIT ADVERTISING PTY LTD
First Appellant

ROBERT AUGUSTE
Second Appellant

AND:
ANDREW BURT ANDERSON
First Respondent

ANDERSON EARTHMOVING PTY LTD AS TRUSTEE FOR THE ANDERSON EARTHMOVING TRUST
Second Respondent

JUDGE:

BARKER J

DATE OF ORDER:

25 AUGUST 2011

WHERE MADE:

PERTH

THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellants to pay the costs of the respondents to be taxed if not agreed.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 417 of 2010

ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA

BETWEEN:
CONDUIT ADVERTISING PTY LTD
First Appellant

ROBERT AUGUSTE
Second Appellant

AND:
ANDREW BURT ANDERSON
First Respondent

ANDERSON EARTHMOVING PTY LTD AS TRUSTEE FOR THE ANDERSON EARTHMOVING TRUST
Second Respondent

JUDGE:

BARKER J

DATE:

25 AUGUST 2011

PLACE:

PERTH

REASONS FOR JUDGMENT
APPEAL FROM DECISION OF FEDERAL MAGISTRATE

The first applicant, which is controlled by the second applicant (Mr Auguste), commenced a proceeding in the Federal Magistrates Court of Australia at Perth by application dated 14 October 2008 against the first respondent (Mr Anderson), who was a director of Anderson Earthmoving Pty Ltd, the trustee for the second respondent.
By a statement of claim filed with the application, the applicants claimed against the respondents damages relating to work they said they were required to do following the earlier inadequate performance of that work by or on behalf of the respondents.
Putting the matter relatively simply, the applicants are land developers. They had over a number of years dealt with the respondents, who were earthmovers. Mr Auguste and Mr Anderson were well acquainted with each other. The dispute is all about what happened or what did not happen when Mr Auguste engaged Mr Anderson to conduct site works on a proposed residential subdivision of land at 20 Hardey Road East, Wattle Grove, Western Australia.
In the statement of claim, the applicants allege that Mr Anderson for the respondents represented to the applicants through Mr Auguste that the respondents would do the following things:
·Carry out earthworks to prepare the site for a 25 lot residential subdivision with roads and public open space.
·Remove three long concrete pads on the site and outbuildings.
·Remove septic tanks and backfill and compact with clean sand.
·Remove all trees and topsoil and any other building materials and rubbish from the site.
·Stockpile the topsoil and concrete to be reused for road base.
·Remove any rubbish to the tip.
·Dig out clean virgin sand from the public open sand to be used for fill for the proposed house pads.
·Place topsoil from the development site on Nicholson Road, Canning Vale, in the pit in the public open space.
·Complete the earthworks in accordance with standard practice and to the requirements of Structerre Engineers, the project engineer.
·Ensure the work was carried out and supervised by Mr Anderson personally.
The statement of claim alleged that these representations were made at a meeting between Mr Auguste and Mr Anderson at the site in or about early January or early February 2006, and in the course of the representations being made, Mr Auguste provided Mr Anderson with copies of the subdivision plan and septic tank plans.
The applicants allege a written project trade contract was then made between the first applicant and the second respondent on about 23 February 2006.
The applicants then allege that from about March 2006 to about 12 March 2007, the respondents carried out works on site and in doing so:
·Lifted the lids of the septic tanks and filled them with sand without removing the septic tanks.
·Deposited material other than clean sand fill on the southern part of the site (identified as the site of the house pads on the subdivision plan) which material included pvc pipes, tree roots, wood and organic materials, building materials and rubble and other materials.
·Acted contrary to the representations, breached the trade contract and acted negligently.
The first cause of action pleaded in the statement of claim was that the representations pleaded were in respect to future matters for the purposes of s 51A of the Trade Practices Act 1974 (Cth) (TP Act) which applied at material times. The applicants therefore relied on the deeming provision in s 51A that unless the respondents were to adduce evidence to the contrary, the pleaded representations were deemed to be misleading or deceptive.
Additionally, the applicants claimed that Mr Anderson was directly or indirectly knowingly concerned in or a party to the contravention of s 52 of the TP Act.
The applicants claimed loss or damage under both s 82 and s 87 of the TP Act.
The damage claimed under this cause of action, as well as under the other pleaded causes of action, was itemised as:
·The cost of having the material from the southern part of the site dug up and loaded into trucks, being $74,679.
·The cost of transporting and depositing the material to landfill sites, being $88,320.
·The cost of providing clean sand fill to replace the material removed from the southern part of the site, being $74,049.
·The cost of having the clean sand fill spread and compacted, being $31,625.
These various costs total $268,673.
The applicants then pleaded breach of the Fair Trading Act 1987 (WA) (FT Act) in terms similar to the plea made under the TP Act.
Under s 10 of the FT Act, the pleaded representations are deemed to be misleading or deceptive unless the representor establishes that there were reasonable grounds for them.
The applicants then pleaded breach of the trade contract, alleging:
·The second respondent would carry out bulk earthworks – rubbish removal, site cleanup and level to engineer requirement at 20 Hardey Road East, Wattle Grove (the Trade Works).
·The second respondent must carry out the Trade Works (cl 1(a)):
·       To the reasonable satisfaction of the first applicant; and
·       In accordance with the plans, specifications and the law; and
·The second respondent must supply everything necessary to carry out the Trade Works (cl 1(c)).
·The second respondent warrants that (cl 4):
·       The Trade Works will be carried out in a proper and skilful manner; and
·       Materials supplied by will be free of defects.
The applicants pleaded by going about the works in the manner described above, the second respondent engaged in conduct in breach of cl 1(a) and cl 4 of the trade contract.
The same loss and damages noted above was claimed for breach of the trade contract.
Finally, the applicants claimed that the respondents breached a duty of care to the second applicant, as owner of the property, not to damage the property, which duty was breached and caused the costs of rectification to the damage set out above.
The respondents by their defence in the proceeding admitted the meeting between Mr Auguste and Mr Anderson in about January or early February 2006, and that Mr Auguste gave Mr Anderson a basic subdivision plan, but otherwise deny the allegations made against them.
Rather, the respondents say that between mid-2005 and early 2006 there were a number of communications and meetings between Mr Auguste and Mr Anderson during which they orally agreed that:
·the second respondent would complete earthworks for and on behalf of the first applicant as directed from time to time by the applicants and/or Mr Pujianto, who was a site supervisor for the works to be carried out on the property engaged by the first applicant and/or the second applicant;
·the scope of the earthworks at the property would include:
·       filling and compacting septic tanks and leach drains to permit building works;
·       removing standing trees and stockpiling the same for future burning;
·       stockpiling of top soil and overburden for future use;
·       clearing and stockpiling rubbish from outbuildings as directed from time to time by Mr Auguste and/or Mr Pujianto;
·       clearing and stockpiling the contents of the outbuildings and unusable overburden emanating from the site for future dumping as directed from time to time by Mr Auguste and/or Mr Pujianto;
·       excavating clean sand from the public open space (POS) for use as fill in the proposed house pads in stage 1 of the development;
·       transporting and filling the excavation in the POS with such material as directed from time to time by Mr Auguste and/or Mr Pujianto; and
·       levelling the site to obtain engineering approval;
·Mr Anderson would personally supervise the works.
The respondents also admit that they entered into the trade contract on or about 23 February 2006, but otherwise deny the allegations as to the terms of the contract.
In essence, the respondents say that the works were carried out and completed in accordance with the directions of the applicants and/or Mr Pujianto and to their satisfaction.
The respondents in [11] of the defence, nonetheless:
·Admit that the septic tank located by the second respondent was filled with sand and compacted.
·Say the work carried out in this respect was in accordance with the term of the contract.
·Say that the work was carried out to the satisfaction of the applicant and/or Mr Pujianto.
The respondents further say that insofar as the second respondent deposited material, other than clean fill on the site, it was:
·supplied with such material; and
·directed to do so by the applicants or Mr Pujianto.
As to the claims under the TP Act and the FT Act, the respondents deny the representations made but say that if they were then at the time of making the representations they had reasonable grounds for making them.
In relation to the breach of contract claim, the respondents plead that:
·The terms pleaded by the applicants in the statement of claim comprise some of the material terms of the trade contract.
·Say that there was a further material term that the second respondent observe all directions given by the first applicant under the agreement (cl 17(ii)).
·Say that the applicants and/or Mr Pujianto directed the second respondent:
· to use all materials supplied by the applicant to complete the works; and
· which of those materials supplied by the applicant had to be used when completing different sections of the work.
·Say that the works were carried out and completed in accordance with the directions of the applicants and/or Mr Pujianto.
In relation to the negligence claim, the respondents:
·Admit that the second respondent owed the first applicant a duty of care to carry out the trade works in a proper and skilful manner.
·Say that to the extent the respondents used contaminated or defective materials, those materials:
· were supplied by the applicants; and
· were used at the direction of the applicants.
The respondents therefore denied they were obliged to pay any damages to the applicants.
In their reply to the defence, the applicants pleaded that the Shire of Kalamunda at material times had issued a requirement that:
The septic tanks and leach drains are required to be removed in their entirety.
The applicants further pleaded that the site was “a development site” for the purposes of reg 16A of the Environmental Protection Regulations 1987 (WA), that burning vegetation or other materials was an offence under reg 16A and so the conduct of the respondents pleaded in the defence was in breach of cl 1(a)(ii) of the trade contract.
APPEAL IN RESPECT OF THE TP ACT AND FT ACT CLAIMS
The Federal Magistrate in his reasons for decision (Conduit Advertising Pty Ltd v Anderson [2010] FMCA 962 at [15]‑[24]) considered the evidence relating to the meeting at which the applicants alleged the representations were made. His Honour set out the affidavit evidence given by Mr Auguste. He then considered the evidence that came out during the cross‑examination of Mr Auguste. His Honour then considered the affidavit evidence of Mr Anderson. His Honour, significantly, noted that Mr Anderson was not cross‑examined on what occurred at the meeting with Mr Auguste. This is of considerable importance because during the cross‑examination of Mr Auguste, Mr Auguste had no recall of the site meeting in January 2006. Rather, Mr Auguste, having dealt with Mr Anderson over the years, believes that he asked him to do things along the lines of what he ordinarily in the past had asked him to do. For example, he stated:
Whenever I asked Andy Anderson to attend a site, I asked him to dig holes and to have a look and see what the state of the ground is.
He could not remember more than that.
In those circumstances, the Federal Magistrate analysed the evidence, principally based on what Mr Anderson had said and which was unchallenged in any cross‑examination, as follows [19]‑[24] of the reasons for decision:
19.When the alleged Representations are examined it can be seen that there appears to be only one express alleged Representation, namely that Mr Anderson said that he would carry out the work as required or would personally supervise the work. The remainder of the purported Representations were in fact in the nature of discussions with Mr Anderson, about what Mr Auguste thought might need to be done, and were not in the nature of Representations, either expressly or by silence, by Mr Anderson to do particular things. In any event, based on Mr Auguste’s cross-examination, which is set out above, and the essence of which is that he recalled nothing of what was said, or of any alleged Representations made by Mr Anderson, it is very difficult to place any, or any significant, weight on the affidavit evidence of Mr Auguste. The Court therefore prefers the evidence of Mr Anderson, upon which he was not cross-examined, in relation to the alleged Representations. Mr Anderson’s evidence indicates that the Representations Meeting was a discussion about what might be done in terms of work on the Site. It was a discussion which was clearly exploratory in nature, and consisted of Mr Anderson being asked to examine the Site by Mr Auguste. In the Court’s view there were therefore no Representations concerning what work would be done by Anderson Earthmoving, and save for a Representation which can be implied from Mr Anderson’s belief in Mr Auguste’s lack of expertise in earthworks, that any work to ultimately be performed would be carried out or be personally supervised by Mr Anderson, no Representations as alleged by Conduit Advertising were made.
20.As to supervision, the Representation that Mr Anderson would personally supervise the work was complied with by Mr Anderson. Although he was not constantly present, he did personally supervise any work carried out on Site by Anderson Earthmoving.
21.To “supervise” is to “oversee, superintend execution or performance of … work of (person)”. To “oversee” is to “superintend (workers, doing of work, etc.)”. To “superintend” is to “have the management (of), arrange and inspect working (of)”.
22.Supervision does not therefore require the constant physical presence of the supervisor, but rather requires the supervisor to “attend to supervise the work whenever and so often as its progress required … supervision.” It is therefore within the bounds of supervision to supervise by managing, arranging and inspecting work, which, on the evidence, is what Mr Anderson did in relation to work on the Site.
23.It is reasonable in the circumstances of the generalised representation that Mr Anderson would personally supervise the work, to expect that supervision does not require constant on-site presence. Therefore, the Representation made by Mr Anderson that he would personally supervise work on the Site was fulfilled, and was not misleading or deceptive.
Conclusion – Representations and Trade Practices Claim
24.The Court therefore concludes that Conduit Advertising’s Trade Practices Claim fails because there were no Representations (save as to supervision), and, therefore, no conduct which was misleading or deceptive as alleged by Conduit Advertising. As to supervision, the Representation made was not misleading or deceptive. The same conclusions follow insofar as claims are made under the FT Act.
By the notice of appeal the appellants claim, in short:
1.The Court erred in finding that “no Representations as alleged by Conduit Advertising were made”.
2.The Court erred in not finding that the respondents had breached s 52 of the TP Act in circumstances where the representation was made and was false in circumstances where the respondents’ evidence was that they spread material on the southern part of the property, contrary to the engineer’s requirements.
In the appellants’ outline of submissions, the appellants draw attention to the then operative terms of s 52 of the TP Act to the effect that it prohibits misleading or deceptive conduct or conduct likely to mislead or deceive.
They say that actionable misleading or deceptive conduct is found by asking and answering the question whether in light of all the relevant circumstances constituted by acts, omissions, statements or silence there has been conduct which answers that description.
Accordingly, it is not necessary for the conduct to convey express or implied representations and it suffices if the “conduct” leads or is likely to lead into error.

The appellants say that in looking at where the conduct is misleading or deceptive there is a qualifying requirement for the relevant conduct to be capable of misleading or deceiving another person.
Thus, the objective standard for testing whether conduct is misleading or deceptive is the ordinary man of average or perhaps below average intelligence (but not exceptionally stupid) who may be trusting and gullible: Slinger v Southern White Pty Ltd [2005] SASC 267 at [64].
The appellants emphasise that the object of the Act is to enhance the welfare of Australians through the promotion of competition and fair trading and consumer protection: Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd [1988] FCA 40; (1988) 39 FCR 546.
Notwithstanding that Mr Auguste could not recall anything of the relevant meeting as the appellants alleged at which the pleaded representations were said to have been made, the appellants submitted that the Court on appeal is entitled to look at all of the contemporary evidence in deciding whether or not the pleaded representations are made out on the evidence. In that the appellants refer to Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 (Fox v Percy) at [31] to suggest that contemporary written materials, objectively established facts and apparent logic of events might overwhelm other evidence to the contrary.
Thus, despite Mr Auguste’s total inability to recall anything that was said at the meeting that the parties agreed they had, the appellants say that their case should be considered made out by reference to the following other evidence:
·The appellants had an engineer’s report prepared in relation to the earthworks on 21 August 2005.
·Mr Auguste’s evidence was that he gave Mr Anderson a copy of the report and said that the respondents’ work was to be done as set out in the engineers reports.
·Mr Auguste’s evidence was that as Mr Anderson was experienced in earthworks and Mr Auguste had dealt with him for more than a decade, he was relying on his experience and expertise in relation to carrying out the earthworks to prepare the site to the engineer’s specifications.
·Mr Anderson’s evidence was that he had considerable experience and expertise in conducting bulk earthworks and Mr Auguste relied on him.
·Mr Anderson’s evidence was that he worked independently in accordance with the engineers requirements to prepare the land for development.
·Mr Anderson signed a trade contract which materially provided that the respondents would carry out the work to “engineer requirement”.
The appeal to this Court from the decision of the Federal Magistrate is in the nature of a rehearing (s 24(1)(d) Federal Court of Australia Act 1976 (Cth); Western Australia v Ward (2002) 213 CLR 1 at [70]‑[71]). In Fox v Percy, in their joint judgment, Gleeson CJ, Gummow and Kirby JJ at [22] noted that a rehearing does not involve a completely fresh hearing with all the evidence and that the Court proceeds on the basis that the record and any fresh evidence that exceptionally it admits. Their Honours noted, at [23], that the foregoing procedure shapes the requirements and limitations of an appeal. While on the one hand, the appellate court is obliged to give the judgment which in its opinion ought to have been given at first instance, on the other, it must of necessity observe the natural limitations that exist in the case of any appellate court proceeding wholly or substantially on the record. Their Honours noted that those limitations included the disadvantage that the appellate court has when compared with a trial judge in respect of the valuation of witnesses’ credibility and the “feeling” of a case which an appellate court, reading a transcript, cannot always fully share.
Their Honours, nonetheless, at [24] accepted that mistakes, including serious mistakes, can occur at trial in the comprehension, recollection and evaluation of evidence and in part it was to prevent and cure the miscarriages of justice that can arise from such mistakes that the appeal procedure was introduced. Accordingly, appellate courts are not, as their Honours noted at [25], excused from the task of weighing conflicting evidence and drawing their own inferences and conclusions, although they should always bear in mind that they have neither seen nor heard the witnesses and make due allowance in that respect. Their Honours, at [28], further emphasised that there will be those cases where incontrovertible facts or uncontested testimony will demonstrate that a trial judge’s decision was erroneous, even though it appears to be or is stated to be based on credibility findings.
Their Honours, at [29], also accepted that there may also be cases where the appellate court will reach a different conclusion, even where the facts fall short of being incontrovertible, that the decision at trial is “glaringly improbable” or “contrary to compelling inferences”. Even in those cases the appellate court should not shrink from giving effect to its own conclusion.
Taking all of that advice into account, this is not a case where in fact the appellants say that the judicial officer got a credibility finding wrong. This is a case where the appellants simply argue that the actual evidence of the key actor of the appellants who attended a meeting can be ignored, and that the Court can, in effect, draw inferences from other evidence as to what must have been discussed at the meeting and what representations must have been given. That is a long way from the type of situation in which their Honours in Fox v Percy thought that an appellate court might, depending on the circumstances, come to a different conclusion on a rehearing than did the primary decision‑maker.
The circumstances of this case are simply that, for very good reason, the Federal Magistrate was obliged to decide what representations, if any, were made at the meeting in January 2006 in circumstances where the only person who had any recollection about what happened, and whose evidence was totally unchallenged, was Mr Anderson. Unfortunately for the appellants and Mr Auguste – although to his considerable credit – Mr Auguste did not have any recollection and admitted so. He did not try to reconstruct his evidence. In effect the appellants on appeal seek to reconstruct a case and have the Court find what must reasonably have happened by looking at all the documents. In my view, on the rehearing of this case on appeal, in light of the evidence I have just recounted, the only proper findings of fact can be those that were in fact made by the Federal Magistrate. I repeat his findings above, endorse them and adopt them, with one important qualification.
The important qualification is this. The one representation that I agree on the evidence was made by Mr Anderson at the meeting in January with Mr Auguste, was that he (Mr Anderson) would personally supervise the earthworks when they were carried out on the site. That was not a representation as to present fact – not at least in the way it was pleaded. It was a representation as to a future matter. That is to say, it was a promise made by Mr Anderson as to something he would do when the earthworks were carried out by the second respondent. Thus the question whether that representation was misleading or deceptive is not answered simply by looking at what later happened. Proving that something that did not later happen when it had earlier been promised that it would, does not mean of itself that the promise was misleading: Fubilan Catering Services Limited (Incorporated in PNG) v Compass Group (Aust) Pty Ltd [2008] FCAFC 53 at [9]. Ordinarily the promise will only be shown to be misleading or deceptive if it can be established there were no reasonable grounds for it when it was made. That is why s 52A of the TP Act and s 10 of the FT Act, as they applied at material times, were important. Section 51A has the effect of deeming a representation as to a future matter, not to have been made on reasonable grounds unless the promisor adduces evidence to the contrary. Section 10 goes further, under the State legislation, and imposes a legal onus on the promisor to establish that they had reasonable grounds for the promise when they made it. See McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2; (2008) 165 FCR 230, especially at [162] – [197] Allsop J (with whom Emmett J agreed).
As I say, evidence of what a representor later did, does not of itself provide a basis for finding that the promise when made lacked reasonable grounds. Thus, it is necessary to have regard to all of the evidence, not just whether a promise was fulfilled, to decide whether or not a promise as to a future matter was misleading or deceptive in terms of the fair trading provisions of the TP Act and the FT Act, at material times. Primarily it is important to see what the person who made the representation had to say about its basis.
Here, having regard to the whole of the evidence, including the fact that Mr Auguste and Mr Anderson and the first applicant and second respondent had a long term relationship by virtue of which the respondents had done work for the appellants before, that Mr Anderson, in the course of the discussion with Mr Auguste, at the site on the day in question, seems to have earnestly indicated that he would personally supervise the works, and then the finding made by the learned Magistrate about what Mr Anderson actually did on site, there can be little doubt that on the evidence as a whole that the respondents have established that they had reasonable grounds for the making of the representation as to the future matter made at the meeting on site. Accordingly, the evidentiary onus imposed by s 52A has been discharged and the legal onus imposed by s 10 of the FT Act has been met. There is no basis therefore to conclude that the representation actually made, as found by the Federal Magistrate, with which I agree, was misleading or deceptive under either the TP Act or the FT Act.
This first ground of the appeal necessarily fails.
BREACH OF TRADE CONTRACT CLAIMS
The Federal Magistrate went on to consider the breach of trade contract claims by reference to the particular allegations of the appellants that the second respondent had:
·Lifted the lids of septic tanks, filled them with sand and did not remove them.
·Deposited material other than clean sand fill on the southern part of the site.
In doing this, the Federal Magistrate was responding directly to the impugned conduct of the respondents pleaded in [9] of the statement of claim and referred to in outline above.
The Federal Magistrate considered the evidence of the parties. His Honour noted, at [26], that the second respondent said it carried out the works on site in accordance with instructions of the first appellant or Mr Pujianto and to their satisfaction.
His Honour also noted that the second respondent said it was a term of the scope of the earthworks under the trade contract that it would fill and compact septic tanks to permit building work and therefore it admitted that the septic tank located by it was filled with sand and compacted.
The Federal Magistrate noted that the second respondent said that any material that it had deposited on the site was what it was supplied with and directed to deposit by the first appellant and/or Mr Pujianto and thereby denies breaching the agreement in any respect.
The Federal Magistrate noted that the trade contract was signed by Mr Auguste and by Mr Anderson and that it had a start date of 20 February 2006, all of which is obviously correct and not in dispute.
The Federal Magistrate noted the scope of the trade works clause as follows:
Scope of the Trade Works:     Bulk earthworks – rubbish removal, site clean up, level up to engineer requirement.
1        TRADE WORKS
(a)       The trade contractor must carry out and complete the Trade Works:
(i)        to the reasonable satisfaction of the principal contractor;
(ii)       in accordance with the plans, the specifications and the law; and …
(c)the trade contractor must supply everything necessary to carry out the Trade Works.
4.        WARRANTIES
The trade contractor warrants that:
(i)       the Trade Works will be carried out in a proper and skilful manner;
(ii)      materials supplied by it will be available, new and free of defects; and …
His Honour noted that the appellants claimed that the clauses 1(a) and 4 were breached.
His Honour further noted cl 17 of the trade contract as follows:
The trade contractor or its representative must:
…
(ii)observe all directions given by the principal contractor under this trade contract; and …
His Honour further noted that under the trade contract, Mr Anderson had written that the payments “Will have to be progressive” and that this was not a matter in dispute.
Septic tank removal: In relation to the septic tank removal question, the Federal Magistrate dealt with Mr Auguste’s evidence in examination in chief and in cross‑examination at [37] and [38] as follows:
37.As to the removal of the septic tanks, Mr Auguste’s affidavit evidence was as follows:
a)in about January 2007 he discovered that Anderson Earthmoving had removed the lids from the septic tanks for one of the houses and filled them in, and the septic tanks for the other house had not been dealt with at all;
b)his instructions to Mr Anderson were for both sets of septic tanks to be removed and back-filled, as required by the Shire of Kalamunda;
c)that he asked Mainline Water and Drainage to remove the septic tanks, backfill and compact them, which they did; and
d)that he believed a reasonable estimate of the cost for removing the septic tanks to be $1,000, based on a review of the time costs charged by Mainline.
38.Cross-examined at hearing, Mr Auguste gave the following evidence:
…Let’s move onto the septic tanks, Mr Auguste. How many tanks do you say weren’t removed by Mr Anderson? --- We located one that he didn’t remove.
So there was one he didn’t take out? --- Yes.
Only the one? --- I only identified one by accident.
How did you identify it? --- When Mr Mason was putting the sewer into the house, he located the septic tank.
So Mr Mason found the septic tank? --- Yes.
Not you? --- Not me, I don’t operate a machine.
How often were you on site? --- Probably once a week.
In December 2006, how often were you on site? --- Well, I don’t recall.
But you were probably there once a week. Did that change at any time, or is it always once a week? --- I go there periodically, I have quite a few jobs going, and I can’t recall specifically.
Did Mr Mason give you an invoice in relation to taking out the septic tank? --- No.
Have you ever paid Mr Mason anything for taking out that one septic tank? --- Yes.
Without there being an invoice? --- The work involved was not isolated to that septic tank. It was part and parcel of the other work he was doing.
So you just received an invoice for all of the work that he did? --- Mr Mason rendered periodic invoices, at different stages of his job.
Well, you see, I don’t know that, Mr Auguste, because they haven’t been annexed to your affidavit. But he gave you a number of invoices? --- Yes.
Did he – and he didn’t separately invoice you for taking out the septic tank? --- No.
The Federal Magistrate dealt with Mr Anderson’s evidence in [39] as follows:
39.In relation to the septic tanks, Mr Anderson’s affidavit evidence was that:
a)Anderson Earthmoving did remove four septic tanks and three leech drains;
b)one septic tank which had not been decommissioned had wiring travelling across the top of it, and because of this wiring the septic tank lid could not be removed until the wiring had been redirected;
c)the wiring had not been redirected by the time that Anderson Earthmoving left the Site in December 2006, and had Anderson Earthmoving completed the work this septic tank would have been removed;
d)the area with this septic tank had been proof-rolled and the tank did not collapse, suggesting that it was filled with sand;
e)by way of facsimile dated 15 March 2006, Mr Pujianto, who was an employee of Mr Auguste:
i)told Anderson Earthmoving that work on the north section would be done in two stages; and
ii)said that:
We will connect the sewer and decommission the septic;
f)to decommission the septic tanks would involve locating them and, as far as Mr Anderson was aware, the septic tanks were not located by the time Anderson Earthmoving left the Site;
g)in May 2006, prior to commencing work on the road, he told Mr Auguste and Mr Pujianto that he could not locate the septic tanks with a 20 tonne roller, and that it was their responsibility to decommission the tanks so that Anderson Earthmoving could remove them, and suggested that they would need to engage a plumber to find them;
h)Mr Auguste was aware that he had not been able to locate the septic tanks;
i)he asked for a plan showing the location of the septic tanks, and as far as he knew they were never located or decommissioned; and
j)at the time of leaving the Site, Anderson Earthmoving had not yet completed work within the boundaries of the houses on Site, but if the septic tanks had been located by Anderson Earthmoving they would have been removed at the appropriate stage of the work, as four of them had been, and Mr Auguste would have been charged for their removal.
Again, significantly, his Honour at [40] noted that Mr Anderson was not cross‑examined concerning the septic tank removal, which is correct.
The Federal Magistrate then evaluated all of this evidence, at [40]‑[42], as follows:
40.Mr Anderson was not cross-examined concerning the septic tank removal. There was nothing incredible or unconvincing warranting rejection of, or doubt about, Mr Anderson’s evidence concerning the septic tanks, and, in the circumstances, it would be unfair not to accept the evidence. Furthermore, and in any event, Mr Auguste’s evidence:
a)revealed conflict between his affidavit evidence and his oral evidence, especially as to how many septic tanks were removed, namely:
i) his affidavit evidence that “the septic tanks” for the second house had not been dealt with at all; and
ii) his oral evidence that there was only “one …[septic tank] …that he didn’t remove” (with this evidence that there was only one septic tank not removed corroborating Mr Anderson’s evidence that there was a septic tank that had not been removed);
b)revealed that he only went to the Site “periodically,” – “[p]robably once a week”, and there is no evidence, apart from what he was told by Mr Mason who was operating machinery, that he had any direct involvement in the septic tank issue.
41.In the circumstances, Mr Anderson’s evidence as to the removal of the septic tanks is to be preferred to that of Mr Auguste.
Conclusion – septic tanks
42.The Court concludes on the evidence that:
a)decommissioning was a pre-requisite to removal of the septic tanks;
b)it was the responsibility of Conduit Advertising to locate and decommission the septic tanks in preparation for their removal;
c)there was one septic tank located by Anderson Earthmoving that had electric wiring running across it which had not been removed and had not been decommissioned;
d)there was no, or insufficient, evidence on which to find that there were septic tanks which had not been removed (except for the septic tank with wiring referred to above); and
e)if there were any septic tanks which had not been removed (in addition to the septic tank with wiring referred to above) they had not been located and decommissioned by Conduit Advertising; decommissioning being the responsibility of Conduit Advertising, and a pre-requisite to removal.

In the notice of appeal, the appellants in ground 3 say in respect of this finding that the Court erred in finding there was no breach of contract in relation to the septic tanks, where:
·the respondents admitted locating a septic tank, filling it with sand and compacting it, in [11.1] of the defence; and
·the only evidence before the Court was that the conduct was contrary to the local authority requirements and the contract.
In the appellants’ outline of submissions they again note that by the defence the respondents admitted they located the septic tank, filled it with sand and compacted it.
They further contend that the respondents were directed to remove the septic tanks in compliance with the Shire of Kalamunda requirements and that the trade contract required the work to be carried out in accordance with the plans, specifications and “the law”.
The appellants contend that the Shire requirements are for the removal of septics on development sites, and this was a development site. Accordingly, the respondents’ conduct was in breach of the requirements of the Shire and therefore the contract.
I note that the Shire requirements referred at footnote 33 of the written outline of submissions of the appellants to (being document “RA11”, p 100) is entitled “Decommissioning Septic Tanks and Leach Drains”. It provides in part:
Where a premises is connected to a sewer, the owner of those premises shall decommission any apparatus when –
•         there is a change in use of the premises;
•         the property is sold (within 60 days of change of ownership);
•         extensions to the property encroach on set‑back requirements for the system.
The document further advises concerning how to decommission in the following terms:
• To decommission an apparatus you must either:
•pump out and remove the tanks and leach drains from the ground; OR
•pump out, break the base of the tanks, break the lids of the leach drains and backfill with clean compactable fill.*
*please note that when decommissioning effluent disposal systems as part of a subdivision application the septic tanks and leach drains are required to be removed in their entirety.
The respondents in their written outline of submissions respond to the ground of appeal by noting that the findings made by his Honour were findings he was entitled to reach on the evidence and no appellable error is demonstrated.
As noted, the appellants develop this ground by first pointing to the admission in [11.1] of the defence to the effect that they located a septic tank and filled it with sand and compacted it. The appellants’ argument is that under the trade contract it was to be removed and indeed “by the law” it was to be removed. Counsel for the appellants contended that “the law” includes “the planning law” and that the relevant planning authority was the Shire of Kalamunda which had published its requirements for decommissioning septic tanks and leach drains, as noted above.
In answer to the question, in the course of argument, whether there was any more evidence about the Shire’s document, counsel for the appellants indicated that the only evidence was that Mr Auguste attached it to his affidavit. Counsel contended that the evidence showed that a direction had been given to the appellants at one point to decommission the particular leach drain which imposed an obligation on the developer.
When the Court pressed counsel to identify the statutory or other legal source of the alleged requirement affecting the decommissioning of this particular septic tank, counsel for the appellants was unable to locate the Shire’s decommissioning document within the broader local government regulatory setting and was therefore unable to indicate whether it had in fact had any relevant statutory or legal support. One might assume that such a document is a manifestation of a power of a local government under town planning legislation or environmental legislation or environmental health legislation or generally under local government legislation, but in the absence of any such evidence it is difficult to conclude that the document relied upon was a requirement of “the law” as that expression is used in the trade contract.
In response to that proposition counsel fell back on arguing that the document constituted a “specification” as referred to in the trade contract, being a specification by “Mr Auguste at least”.
When the issue was pressed as to how Mr Auguste made the document a specification, counsel for the appellants said that the only way he could deal with that issue was by suggesting that he would identify what, in the town planning scheme, makes the document a requirement. That never happened.
In my view, the decommissioning document of the Shire has not been demonstrated to be part of “the law” for the purposes of cl 1(a)(ii) of the definition of Trade Works in the trade contract.
What one then falls back on, as the Federal Magistrate discovered, was the evidence of the parties about the septic tanks. It was understood by Mr Anderson that septic tanks were to be removed. As explained in his affidavit evidence, and accepted by the Federal Magistrate, the second respondent did in fact remove four septic tanks that it found. When it came across a further tank that had wiring across it, the question was how it was to be dealt with.
Mr Anderson at [38] of his affidavit made 20 March 2009 and received into evidence, explained that he received from Mr Pujianto a facsimile communication on 20 February 2006 asking him to concentrate on the north side (stage 1) of the site and locate bores as indicated in the attached plan. The facsimile communication from Mr Pujianto noted that “we understand there’s a bore next to the garage in between the two houses”.
At [39] of his affidavit, Mr Anderson noted that there was an existing bore on the property that he had located. He said he had no idea how to start it. Mr Auguste had an electrician wire it up so that it could be used. There was wiring travelling across the top of the septic tank. That septic tank had not been decommissioned. Because of the electrical wiring travelling to the bore, the septic tank lid could not be removed until the wiring had been redirected. That had not happened at the time that the second respondent left the site in December 2006. Had Anderson Earthmoving completed the works, Mr Anderson said, this septic tank would have been removed and Mr Auguste would have been charged for the work.
Then later, as Mr Anderson explained at [49] of his affidavit, he received a facsimile communication dated 15 March 2006 from Mr Pujianto in which he instructed the second respondent to work on the north section in two stages and advised that the appellants would connect the sewer and “decommission the septic”. There is no doubt about that (see attachment “ABA19” to Mr Anderson’s affidavit).
In these circumstances, the plea made in [11.1] of the defence must be put in context. The direction given by the appellants was fairly and squarely within cl 17 of the trade contract that the second respondent was obliged to observe “all directions given by the principal contractor under this trade contract”.
In these circumstances, I consider the findings actually made by the Federal Magistrate to the septic tank claim to be correct.
Accordingly, ground 3 of the appeal must fail.
Mixed fill claim: As noted above, the claim also made is that a variety of contaminated and otherwise unrequired material was used to fill parts of the site.
The Federal Magistrate noted the evidence concerning mixed fill on the southern part of the site given by Mr Auguste in both his affidavit and in cross‑examination, including as to what remedial work was required, at [44]‑[46] of his reasons for decision:
44.As to the mixed fill on the southern part of the Site, Mr Auguste gave affidavit evidence that:
a)in about January 2007, he discovered that the public open space and the area for the proposed lots in the south west corner of the Site had mixed fill materials on them;
b)he commissioned Structerre, who are chartered consulting engineers, to carry out a Site investigation in January and February 2007 and produce a report;
c)Structerre produced a short one and a half page report dated 16 February 2007, prepared by a geotechnical engineer, Santiago Abueva Jr;
d)on 12 April 2007, Mr Pujianto sent a facsimile to Anderson Earthmoving, attaching the Structerre February 2007 Report; and
e)he wrote to Anderson Earthmoving, on receiving a claim for payment from them, advising of his estimate of the amount of mixed fill material that needed to be removed from the Site.
45.In cross-examination, Mr Auguste:
a)said that:
i)      he commissioned the Structerre February 2007 Report as part of his standard practice; and
ii)     the Shire of Kalamunda had closed the Site in December 2006 due to the condition of the public open space, because the material that Mr Auguste had instructed Anderson Earthmoving to import from the Canning Vale site was unsuitable, as indicated in the following extract from the transcript:
The shire had closed the site in December 2006, hadn’t they?---Yes.
That was because of the condition of the public open space ---Yes.
Because the material that you’d instructed to be imported from Canning Vale was unsuitable?---Yes.
b)claimed that he could not recollect:
i)      any further details on the condition of the Site from January 2007; or
ii)     whether or not he had raised the issues in the Structerre February 2007 Report with Anderson Earthmoving prior to Mr Pujianto sending it to Anderson Earthmoving on 12 April 2007.
46.As to the remedial work on the southern part of the Site, and the removal of uncontrolled fill, Mr Auguste deposed that:
a)by 3 July 2007, Mr Anderson had not started doing the remedial work he had agreed to at a meeting in June 2007 involving Mr Auguste, Mr Anderson, and Mr Purich, an employee of Structerre;
b)he instructed Mainline to strip the southern part of the Site and by 17 July 2007 they had finished stockpiling the fill;
c)he engaged Ronald Baker, a civil design consultant, to attend the Site and report on the fill material as it was being stripped;
d)he wrote to Anderson Earthmoving on 17 July 2007, asking them to remove the stockpiled material starting from 18 July 2007, which Mr Anderson refused to do;
e)Mainline removed the uncontrolled fill to landfill sites, using trucks subcontracted by Empire Special Projects;
f)as fill was being removed, some of the stormwater pipes were damaged;
g)he arranged for Empire to deliver controlled fill to replace that which had been removed; and
h)he engaged Road Maintenance Australia to spread and compact the controlled fill.
The Federal Magistrate then accounted for the affidavit evidence of Mr Anderson, at [47]‑[48]:
47.Mr Anderson gave affidavit evidence that:
a)the condition of the Site was that:
i)      in early November 2006, Anderson Earthmoving was requested to commence work on the south section, or Stage 2, which work was to clean up areas of the Site in readiness for the plumber, and at that stage:
AStage 2 had not been stripped and still had grass on it;
Bthe procedure involved required that the grass and overburden be stripped from the area and either dumped or stockpiled for dumping;
Cin this case most of the overburden and rubbish on the Site was to be buried in the borrow pit on the public open space; and
ii)     by 4 December 2006:
AStage 2 had been stripped of vegetation in readiness for proof rolling but that the proof rolling had not yet occurred and the uncontrolled fill had not yet been removed;
Bpipe work on this stage was started after the area had been stripped of vegetation, but before it had been proof rolled or passed by an engineer; and
CMr Auguste and Mr Pujianto were aware that the area was not ready, and that Mr Pujianto asked Mr Anderson to cover the pipe work that was above the ground to protect it from damage, which was done.
b)he received a facsimile from Mr Auguste on 9 May 2007 alleging that the work completed on the south section was unsuitable;
c)the work had not been completed and a strip of temporary fill was supporting a road on the Site;
d)Mr Abueva had tested the shoulder of the road which consisted of material placed to support the road, which material would be removed later when that part of the Site was to be filled and compacted;
e)in the June 2007 Meeting:
i)      Mr Purich agreed that tests completed by Mr Abueva had been done in the shoulder of the road and that they should have been done towards the centre of the Site; and
ii)     it was agreed that clean fill would replace the existing temporary fill that was supporting the road;
f)Mr Auguste agreed that there had been a misunderstanding and requested that Mr Anderson return to the Site;
g)Mr Anderson said that he would not return to the Site until he had been paid, as invoiced payment was seven or eight months in arrears; and
h)Mr Auguste wrote a letter to Mr Anderson on 6 June 2007 in which Mr Auguste:
i)      confirmed that there had been a misunderstanding as to the standard of the fill;
ii)     withdrew his comments and apologised for any discomfort he had caused; and
iii)     wrote that he would discuss ‘the financial side of this with’ Mr Anderson ‘in due course’.
48.In relation to the mixed fill, Mr Anderson gave affidavit evidence that:
a)any contaminated material came from either the Site itself, or from the Canning Vale site on the instruction of Mr Auguste and with the approval of the engineers;
b)Mr Auguste had arranged for a small amount of material to be brought onto the Site at night by another contractor;
c)Anderson Earthmoving brought six loads of sand onto the Site to use as fill. It was 98% clean sand with a minimal amount of reticulation piping in it that would have been removed prior to spreading that sand;
d)there was a significant amount of rubbish and debris which was in the uncontrolled fill that would have been removed had Anderson Earthmoving completed the work;
e)Anderson Earthmoving had already collected a ten cubic metre truck load of rocks, timber, roots, rubble and other debris from the area; and
f)the photographs included in the report of Mr Baker showed the sort of material that would have been found in the uncontrolled fill and which would have been removed had Anderson Earthmoving completed the work.
As to the extent there was any conflict in the evidence of Mr Auguste and Mr Anderson in relation to the mixed fill, the Federal Magistrate at [49] preferred the evidence of Mr Anderson. In this regard, at [49], the Federal Magistrate added:
49.Mr Anderson was on Site more often than Mr Auguste, who was only there periodically, or at best, once a week. Further, Mr Auguste has no specific recollection of the condition of the Site from January 2007 onwards. Mr Anderson evidenced better knowledge of the condition of the Site until the time that he finished work on the Site in December 2006 by the giving of specific, detailed evidence as to what Anderson Earthmoving had done, and what had occurred, on Site. By contrast, and necessarily perhaps because of his more general and periodic involvement, Mr Auguste’s evidence lacked specificity and was affected by his inability to recall significant detail.
The Federal Magistrate then dealt with the following topics concerning the mixed fill issue:
·Evidence as to the state of the site as at February 2007, according to the Structerre February 2007 report, the purpose of which was to assess the type and extend of mixed fill materials in the POS or proposed parkland and adjacent lots as shown on a site plan. His Honour noted that the investigation work was carried out on 18 January 2006 and 14 February 2007 and was said to consist of:
…7 machine/hand auger boreholes to a depth of 1.60m for tactile investigation of the sublayers and soil profiling…
His Honour noted that it was said that the bore hole locations were shown on a site plan attached to the Structerre February 2007 report.
·The results of the investigation and its conclusions and recommendations were set out in the Structerre February 2007 report, and his Honour set out those passages at [51], which included the observation that:
Based on the results of the investigation, the POS and the adjacent lots are presently overlain with mixed-fill materials containing sand, clay lumps, gravel, limestone rubbles, fragments of building materials (up to 60mm) and organic materials, and underlain with natural sand (Bassendean) materials to a depth of 1.20m. .
·Cross-examination of Mr Abueva, whose preliminary report prepared dated 31 January 2007 was tendered into evidence.
·In the Structerre January 2007 report, the field investigation was said to consist of three hand auger boreholes.
·In the Structerre February 2007 report, the field investigation was said to consist of seven machine/hand‑auger boreholes, but under cross-examination, Mr Abueva admitted that he could not remember if he drilled all of the auger boreholes himself, or whether he personally saw the holes drilled. In relation to the mapped locations of the boreholes he admitted that he was unaware of the precise location of the boreholes and that the location of the boreholes on the map had been approximated, and had been measured by pacing and the map was not to scale.
·Mr Abueva, in re‑examination, however, noted that when on site, a copy of the site plan is there, and he or a technician approximate the location of the boreholes based on the existing site boundaries.
·Mr Baker, a civil engineer, gave evidence that in July 2007 he attended the site to inspect and report on the state of fill material as it was being stripped and stockpiled and he observed material on the southern part and took photographs of material that was indicative of that part of the site.
·In cross-examination, Mr Baker said that he was on site for 20‑30 minutes but he was not there during the stripping, that he inspected the stockpile and there had been work carried out that day, before he was there.
·The Federal Magistrate considered Mr Baker’s evidence to be of no assistance as he came to the site seven months after the second respondent had last performed work on the site and other work had been performed on the site prior to Mr Baker attending on 10 July 2007.
·Mr Purich gave affidavit evidence. He was a consulting chartered engineer. In June 2007 he wrote to Mr Auguste in relation to remedial work required. The Federal Magistrate considered the evidence of Mr Purich, like that of Mr Baker, and for the same reasons, was of limited assistance to the Court.
·Mr McDonald, a demolition contractor, gave unchallenged evidence that in mid‑2006, he was requested by Mr Auguste to demolish two brick and tile houses on the site at lots 20A and 20B, which he did and that included the rear verandah to 20B, the rear garage to 20A, all of the trees along the side and rear of 20B, all trees between 20A and 20B and 13 palm trees from the front of 20A and 20B. He loaded all material and took it off-site to a landfill site. He did not carry out any other work.
·The Federal Magistrate found that Mr McDonald’s evidence was of limited relevance as he is unable to give evidence as to the state of the site as it was left in December 2006 by Anderson Earthmoving.
The Federal Magistrate, at [62]‑[65], formed conclusions on the topic of mixed fill and the alleged repudiation of the trade contract by the alleged conduct of the second respondent, as follows:
62.The evidence establishes that:
a)it was a term of the Project Trade Contract that payment would be made progressively upon the tender of an invoice by Anderson Earthmoving;
b)payments had been made progressively by Conduit Advertising until the tendering of an invoice dated 6 December 2006, which was not paid upon;
c)Anderson Earthmoving thereafter refused to provide services to Conduit Advertising, and:
i) the Site was closed by the Shire of Kalamunda at about the same time; and
ii) although there is a dispute about precisely when Anderson Earthmoving ceased to provide services, and accepted the repudiation by Conduit Advertising consequent upon non-payment of the 6 December 2006 invoice, it is clear that the repudiation was accepted by Anderson Earthmoving at some time in December 2006 or early January 2007; and
d)Conduit Advertising did not ever pay on the 6 December 2006 invoice.
63.In those circumstances, Anderson Earthmoving has established repudiation of the contract by Conduit Advertising from sometime in December 2006 or January 2007. It follows that there was no obligation on Anderson Earthmoving to complete the works on Site.
64.With respect to the mixed fill the Court concludes that:
a)at the time work ceased on the Site in December 2006, Anderson Earthmoving’s work was not complete, but had Anderson Earthmoving completed the work in the normal course the fill complained of by Conduit Advertising would have been removed, particularly that used for the road shoulder and covering pipes;
b)the evidence of the borehole tests in the Structerre February 2007 Report cannot be relied upon, Conduit Advertising having failed to establish that the boreholes were not drilled in the shoulder of the road, which, as it has said above, was incomplete work which would have been removed, and replaced with clean fill, had Anderson Earthmoving completed the work in the normal course;
c)to the extent that there was uncontrolled fill in the public open space, it had been placed there at the direction of Conduit Advertising, and in particular at the instruction of Mr Auguste, and Anderson Earthmoving was obliged to comply with that direction by reason of clause 17(ii) of the Project Trade Contract; and
d)following the closure of the Site and the refusal of Conduit Advertising to pay on an invoice dated 6 December 2006, Anderson Earthmoving carried out no further work at the Site.
65.In the circumstances, there had been no breach of the Project Trade Contract by Anderson Earthmoving at the time the work finished in December 2006. Subsequently, there was no breach because, by reason of its refusal to pay on the 6 December 2006 invoice, Conduit Advertising repudiated the Project Trade Contract and Anderson Earthmoving was entitled to provide no further services under the Project Trade Contract. With respect to the fill in the public open space, there was no breach of the Project Trade Contract because Anderson Earthmoving was complying with directions given by Conduit Advertising under clause 17(ii) of the Project Trade Contract, but was also using materials supplied by Conduit Advertising, and not by it, hence there was no breach of clause 4(ii) of the Project Trade Contract.

The appellants in the notice of appeal challenge these various findings in grounds 4, 5 and 6 to the following effect:
·The Court erred in finding there had been no breach of the contract by Anderson Earthmoving at the time work finished in December 2006, when:
·       the only evidence before the Court was that the respondents did place fill on the site that was contrary to the contractual requirements; and
·       found the material had to be removed but was not.
·The Court erred in finding that Anderson Earthmoving had established repudiation of contract by the first appellant in that:
·       the act relied upon to establish the repudiation occurred after the respondents had finished work under the contract;
·       the only evidence before the Court is that the invoice relied upon by the respondents was not payable until 30 days after issue;
·       the respondents had spread materials on the site that was contrary to the contractual requirements;
·       the material had to be removed;
·       the respondent refused to remove the material; and
·       repudiation was not pleaded by the respondents.
·The Court erred in finding the appellants “the evidence of borehole tests in the Structerre February 2007 Report cannot be relied upon, Conduit Advertising having failed to establish that the boreholes were not drilled in the shoulder of the road”, as stated in [64(b)] of the reasons for decision, where the only admissible evidence before the Court was that the report contained the details of tests carried out as a consulting engineer of 28 years experience directed where he was not cross‑examined on the issue.
The nub of the appeal is to be found in these grounds of appeal. Put very simply, the appellants say that the evidence actually showed that borehole tests were conducted beyond the shoulder of the road, on portions of the southern site that the respondents were responsible for levelling and that they showed contaminated material. That evidence was given by Mr Abueva and there is no reason to doubt his evidence and the Magistrate misconstrued the evidence in finding that any contamination was only in the shoulder of the road.
The appellants again note that the trade contract required the Trade Works to be carried out in accordance “with engineering requirement” and by cl 1(a)(ii) in accordance with the plans, the specifications and the law.
The appellants say the specifications were provided in the engineers’ reports provided to the respondents, including compliance with Australian Standard AS3798‑1996 which classified what material was unsuitable for use for structural fill.
The appellants say Mr Anderson admitted placing fill on the southern part of the lot, which he called “uncontrolled fill”. The appellants say this was material included in the boreholes identified in the specification of Mr Abueva, particularly at the Structerre February 2007 report “RA12” at p 103. The appellants say the use of unsuitable material was independently confirmed by a Shire officer.
The appellants say that the Federal Magistrate found that the material had to be removed but when requested, the respondents refused to do so. Thus, the first appellant attended to the work.
In short, the appellants say that by spreading fill on the site that contained “unsuitable materials” as defined by the relevant Australian Standard, the respondents breached the requirement to do their work in accordance with “engineers requirements” thus, they breached the trade contract.
So far as the finding that there was repudiation of the trade contract, the appellants say that the breach occurred before the respondents finished work on the site on 4 December 2006, which was before the second respondent issued its invoice dated 6 December 2006. That invoice was payable 30 days later. Accordingly, the respondents cannot rely on a refusal to pay an invoice that was not due and payable until over a month after their conduct and breach of contract had occurred, as a repudiation allowing them to terminate the contract and avoid the consequences of their own breach of contract.
The appellants note that the Federal Magistrate found, correctly, that the trade contract provided for progressive payments.
The appellants say that cl 10(c) of the agreement provides that any payment other than final payment is payment on account only.
The appellants say that a failure to make a progressive payment cannot amount to a repudiation of the contract unless it evinces an intention no longer to be bound by the contract or intends to fulfil the contract only in the matter substantially inconsistent with the obligation in it: Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620 (Shevill) at 625‑626.
Again the appellants say that Mr Abueva carried out the investigations and prepared the report, which identified a number of bore holes and the contents of the bore holes. He reported on the state of the POS and adjacent holes, identifying the site of bore holes as in the building locations of four lots. In cross‑examination he gave evidence that the location had been measured by pacing and in re‑examination gave evidence that the approximate location was based on the existing site boundaries of the site plan. He was not cross‑examined to suggest that the bore holes were located on the “shoulder of the road” or that they were anywhere other than the relevant building envelopes. Accordingly, the finding that the appellant did not establish that they were not on the shoulder of the road was not open to the Federal Magistrate.
The appellants note that Mr Anderson’s evidence that the bore holes were on the shoulder of the road was in a context where his evidence was that he was not present at the site after 4 December 2006 when the bore holes were drilled in January and February 2007. Thus, his evidence is speculation without foundation and there is no admissible evidence to support the finding.
In respect of grounds 4 and 5, the respondents say that the finding in respect of mixed fill were open as was the finding in respect of repudiatory conduct and no appellable error has been demonstrated.
In relation to the finding and repudiation, the respondents say that the common intention of the parties that progressive payments be made was open and his Honour referred to McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 at 476-477 in concluding that the failure to make the progressive payment was capable of evincing the intention no longer to be bound by the contract and supported the finding his Honour made. The appellants submit that Shevill identifies the same principle his Honour adopted.
The evidence of Mr Anderson, some of which has been set out above in relation to the septic tank issue and also in the Federal Magistrate’s account of the evidence, was to the following effect:
·On 20 February 2006, Mr Pujianto sent Mr Anderson a facsimile concerning the work to be done, which I will set out in full:
Andy,
•Would you please concentrate on the northside. [Hand drawn maps show where the north side was with a triangular portion of land depicted below it and another longer and thinner triangular strip of land depicted to the right with Hardey East Road noted at the top of that drawing].
•We engaged you with the understanding that you personally will be doing the job. Should anyone else replaces you, please advise us as we would like them work under your supervision.
•Please make sure that the top 600 is clean of all rubbish. The builder has not accepted the top soil in Canning Vale. They are charging us $1500/lot to resurrect the problem.
•Please locate the bore as attached. We understand there’s a bore next to the garage in between the two houses. The plan attached shows the bore further down the site.
•Do you have any penetrometer?
·There was an existing bore on the property that the respondents located, and they had no idea how to start it. Mr Auguste had an electrician wire it up so it could be used. There was wiring travelling across the top of a septic tank. The septic tank had not been decommissioned because of the electrical wiring travelling to the bore, and the septic tank lid could not be removed until the wiring had been redirected. That had not happened at the time Anderson Earthmoving left the site in December 2006.
·On 20 February 2006, Mr Anderson responded to Mr Pujianto advising that he had not got the big machine back together yet, so would not be on site that morning. He stated:
I will be assisting mechanic to get the machine working then go to site I need a copy of benchmark for relative heights on site. Has concrete body crushed. Will call you when going. Other copies done and faxed. We have no level for roadways, will they flow from block heights.
·The next day 21 February 2006, Mr Anderson sent a further facsimile transmission to Mr Pujianto advising:
We can start northside no problems as soon as machine ready to go. I will supervise siteworks personally. Canning Vale fill is all the only material we had so couldn’t make it any cleaner than was laid on site. I will locate bore when starting cleanup and yes we do have penetrometer for testing.
·On 27 February 2006, Mr Pujianto sent Mr Anderson another facsimile as follows:
Andy, have you done your onsite and payment programmes for us?
Please fax.
Also, please find attached a copy of Geotech indicating the uncontrolled fill.
We would like you to identify them and dig them up.
I am trying to make arrangement with Structerre to inspect it.
The attached materials included advice concerning removal of topsoil and uncontrolled fill and advised that all organic rich soils and uncontrolled fill should be stripped and stockpiled. It is plain enough on the evidence that Mr Anderson understood these requirements in any event.
·On 28 February 2006, Mr Pujianto faxed Mr Anderson a document showing part of the site plan with the notation:
Andy, please find the indicated benchmark for your RL onsite.
·The same day, Mr Pujianto sent a facsimile to Mr Anderson asking him to have the penetrometer with him at all times and asking him again whether he had worked out the onsite and payments programs.
·Mr Anderson says that the second respondent commenced works on the site on 1 March 2006 and during March completed works primarily on the POS. They involved demolishing the outbuildings, cleaning up the area and carting material to the POS and stockpiling near the intended borrow pit. He produced his invoice for that work for a total, including GST, of $17,314, which also showed that amount had been paid that day – 1 March 2006 – so that the balance due was nil.
·On 9 March 2006, Mr Pujianto provided him by facsimile with a plan showing the measurements that he had requested. That document was marked with a notation:
Andy, please set out the site as measured.
·On 14 March 2006, Mr Anderson received from Mr Pujianto by facsimile showing proposed pad levels on the site. The notes to Mr Anderson on this document included:
Please have all of the site tidy up to these approximate level by the end of the month.
This plan was for the southern portion.
·On 14 March 2006, a further copy of that plan was sent with a notation:
Andy, when I did the sum the figure doesn’t add up to the overall. The length (199) is less 1m and the width (89) is (0.3) short. Please let me know if this could be a problem.
That plan showed an overall boundary of 179,040 and other measurements. The plan itself showed the lots bordered by Hardey East Road to the north, the Promenade to the east, with POS of 4076m² to the east of the Promenade.
·On 15 March 2006, Mr Pujianto sent a letter by facsimile to Mr Anderson advising:
We will be doing this in two stages (north strata).
Stage 1 – flatened (sic) and tidy up the north strata site. Can we cut the road and spread the concrete? Dateline: 3rd April 2006.
Stage 2 – We will connect the sewer and decommission the septic. – Spread the site works on the backyard. (see attached).
And then attached the plan referred to in the last passage.
·Mr Anderson said he had spoken to Mr Pujianto a number of times telling him he had not been able to locate the septic tanks. He told him that once they had been pumped out (decommissioned) then he would remove them. He said that if he could not locate them, then he could not remove them. He requested Mr Pujianto to engage a plumber to locate the septic tanks so they could be removed, and as far as he knows that was never done. Despite proof rolling the northern section, Mr Anderson says Anderson Earthmoving did not locate the septic tanks, but did locate a leach drain which was removed. They did not lift the lids and fill the septics of one of the houses as Mr Auguste said in [51] of his affidavit.
·Mr Anderson goes on at [51] of his affidavit, to say that if the septic tank referred to in Mr Auguste’s affidavit at [51] is the septic tank he referred to at [39] of his affidavit earlier – the one with the wiring on it – then it would have been removed at the time they had completed the works, if they had remained on the job.
·Mr Anderson then went on in his affidavit to note the issuing of invoices in the months that followed.
·Later, on 27 September 2006, Mr Anderson said he received a facsimile showing where the septic tanks were supposed to be located. He was unable to locate any of them. He added, however, at [71], that any septic tank that was located, except for the one referred to at [39] was removed. Any septic tanks that were within the boundary of existing houses could not be removed until access could be gained.
·Mr Anderson, at [72], says the road base had to be rolled in preparation for the concrete that had been stockpiled to be used on the road. The concrete could not be moved until the base had been approved by the engineers.
·On 8 November 2006, Mr Anderson said he received a further facsimile from Mr Pujianto requesting that they commence work on the south section or stage 2. These works were to clean up areas of the site in readiness for the plumber. At that stage, stage 2 had not been stripped and still had grass on it. The work required in stripping involves moving the overburden and rubbish on the site, which was to be buried in the borrow pit on the POS to cut costs. If it was to be dumped there would be cartage fees and tipping fees payable by the applicants and there would be costs of purchasing and carting in other fill. For that reason, a great deal of material was stockpiled.
·Mr Anderson says, at [78], that after stripping the area, it is proof rolled to identify areas of uncontrolled fill that need to be removed or compacted prior to filling and levelling with clean fill. The engineer then rates the base after the uncontrolled fill is removed and the required compaction has been reached.
·On 20 November 2006, Mr Anderson received a letter from Mr Pujianto in relation to the possibility of bringing sand in from the St John site to the property.
·The second respondent issued a invoice on 6 December 2006 for work that included stripping stage 2 and carting the material to the borrow pit and cleaning up the site. That invoice was not paid.
·Mr Anderson says the last work completed on the property was on 4 December 2006. At that stage, stage 2 had been stripped of its vegetation in readiness for proof rolling but that had not yet occurred. Nor had the uncontrolled fill been removed. At [84], Mr Anderson says that pipe work on stage 2 was started by the plumber after the area had been stripped of vegetation. The area had not been proof rolled or passed by an engineer. Mr Pujianto and Mr Auguste were aware that the area was not ready to go. He says that Mr Pujianto asked him to cover the pipe work that was above the ground to protect it from damage, which they did. That was as far as they got before the works stopped.
·Mr Anderson says, at [85], that apart from the fill deposited on the road verge area, to protect the road base and a small amount of fill that deposited above the pipe works to protect them, Anderson Earthmoving had neither removed uncontrolled fill from stage 2, nor placed clean fill on stage 2. If it had it would have invoiced for those works.
·Mr Anderson further says, at [86], that had Anderson Earthmoving completed the works it would have removed the uncontrolled fill that was deposited on the road verge to protect the road base prior to filling and compacting stage 2. Similarly, any uncontrolled fill covering the pipe work would have been removed.
·Mr Anderson says that had Anderson Earthmoving filled stage 2 it would have engaged subcontractors to bring in the fill and would have charged Mr Auguste to spread and compact it. The amount of fill required would have been significant, some 4,500 cubic metres and the cost would have been substantial.
·Mr Anderson met Mr Pujianto on site on or around 4 December 2006 when he was advised that the site had been shut down by the Shire. Mr Pujianto did not know why.
·Mr Anderson says the respondents then left the site and did not return, but did complete other works for Mr Auguste on other sites.
·Mr Anderson says that he then received from Mr Pujianto, for Mr Auguste, a letter dated 12 April 2007 advising that a Geotech engineer has condemned the site as unacceptable:
They are not accepting the quality of sand and work you put in on the southern lot.
Please advise what to do within 7 days.
·Mr Anderson replied by facsimile the same day as follows:
The engineer has condemned the site? The soil spread on this part he has condemned has all come from site. The loads that have been put at rear of site came from borrow area (POS). Trees came from Canning Vale. Approx 10 loads supplied by others. Some from me, 4 loads other by phantom dumper. Whoever was given okay to dump on stage 1 by Robert. All this material hasn’t been spread yet. All material has been taken from box out of road. So engineer has already rated this material previously. We need this problem sorted out soon. The site does not solely become my problem.
·Mr Anderson then received a further letter from Mr Auguste, dated 9 May 2007, confirming that the bulk earthworks which he had completed to the south portion had been certified by the engineers as being unsuitable for a building site and must be removed or sieved. He was asked to advise what he could do to assist.
·On 10 May 2007, the second respondent, by Mr Anderson, wrote to Mr Auguste responding to the Structerre February 2007 report which he had been provided. He made the following points:
(1)Bore holes 1, 2 and 3 are in POS and sure enough material was backfilled in here from Canning Vale. Sand from POS to compensate for rubbish was all placed on stage (1), which is complete and passed by engineer?
(2)Bore holes 4, 5, 6 and 7 are in an area that has only been stripped of vegetation and some filling has been placed on this area, but only from Road box out because the concrete spoils were stockpiled on this area.
(3)There are approx 10 loads fill with some piping in them but 98% sand, engineer has dug into the natural ground and has nearly the same soil conditions as POS area which I find hard to understand. As already stated this area 4, 5, 6, and 7 holes has only been stripped and requires average of .800mls to get to finished RLS, Are(sic) you sure you made the engineer aware that’s the case.
(4)The fill was always being brought from your other site around the corner when you settled. Some loads were stacked at rear and along Northern Boundary where from POS area to lose remaining stripping of site and stockpiled material. This fill is the same as used on Stage 1 and that Stage in(sic) completed.
(5)If the POS has to be reinstated back to natural ground I can’t see that as being my problem as this area was designated by you to lose the material from Canning Vale and overburden from front and rear of Hardey Rd site.
(6)The engineer may think that the natural level where Bore Holes4, 5, 6 and 7 were taken That the site is finished, not the case, this area needs 2,500m³ of fill on it. You had employed myself to do the Earthworks under your instructions and that is what has been done on this site.
(7)As far as the POS being revamped I’m not sure how to tackle that situation, if you cannot sort out your reason for not paying me for doing what you ask me to do’(sic) as you’re project manager, I was just following instructions.
·By further letter from Mr Auguste to the second respondent, dated 15 May 2007, amongst other things, the appellants alleged that:
3.Clearly you have mixed in organic matter to the clean fill material from the borrow pit which has caused the Engineer to classify it as a P class site, which cannot be built on even if you add more clean fill because of the voids left from decomposition of the material.
Mr Auguste then insisted that time was of the essence and the works needed to be rectified. The letter indicated that the volume for the southern portion which had not been completed was calculated at 1,700m³ and allowing for machine usage and tip fees and cartage, involved an amount of $48,450.
·By letter dated 6 June 2007, Mr Auguste wrote to the second respondent confirming that there had been a misunderstanding in the volume and the standard of fill placed on the southern super lot and withdrawing comments and apologising for “any discomfort” he had caused and saying he would discuss the financial side with Mr Anderson in due course. But he then said to move forward he must comply with strict Shire requirements.
·Mr Auguste then wrote to Mr Anderson, by facsimile on 18 July 2007, confirming a conversation the two of them had had on 17 July, that Mr Anderson would not remove the uncontrolled fill.

In cross‑examination (transcript 73 onwards), Mr Anderson was taken to a chain of events that appeared to include the laying of fill about which his evidence above provided some detail. It was put to him that a Kalamunda Shire officer had conducted a random site inspection on the property and discovered that a contractor had commenced laying pipe. The contractor was about to commence backfilling, apparently without prior Council approval. In order to backfill the pipes he had to dig a ditch. To that factual scenario Mr Anderson said that that was in stage 1, because in stage 2 (the relevant southern portion) the pipe was simply being laid on top of the ground.
Mr Anderson was then shown a contour map and identified level 19.3 as the level of the ground at that point, near where LCP22 was marked on it. He identified by reference to the brackets next to it, that was the height, at 19.69. He confirmed his evidence that the pipe had been laid at 300mm above the ground. He confirmed (transcript 74) that he then covered that pipe with fill in accordance with the instructions he received from Mr Pujianto. When challenged that that was not right, because the Shire was concerned about the fill that had been put on the southern portion, Mr Anderson responded that that was not right and it would have been the northern section they were referring to because the other pipe work was laid above the ground. He confirmed it was “dead right” that 300mm of material was required underneath the pipe to support it. He said he only put material on top to protect it because “they were worried about the pipe getting damaged when we brought the fill in”. He confirmed that a large machine travelling across the pipe could do that if the fill were not there. In response to a question about damage being caused to the pipe, Mr Anderson responded (transcript 74):
It shouldn’t have been – it shouldn’t have been even placed. The plumber wanted to put it in there, and it was put above ground, and we put a mound of sand from the end of the LCP22 out to the road, as like a wigwam, to cover the pipe to protect it.
When counsel challenged Mr Anderson with a proposition that he had not adverted to any of that in his earlier evidence, to the effect that he had put sand on top of the pipes, Mr Anderson replied: “Yes”. He there probably meant he had said this earlier. Counsel then, assuming this is what he meant, challenged him that he had not said “Sand”: “You said you put uncontrolled fill on top of the pipes”. Mr Anderson responded: “Well, it’s uncontrolled until you control it” and soon after said that it had to be removed, because it was not controlled underneath and that he did not do the plumbing.
Mr Anderson then added (transcript 75) that he did not do any filling underneath the pipe. The plumber had done all of that. The pipe was produced to him above the ground. So that when he first saw the pipe, the plumber had already put 300mm of fill under it. He then covered the pipe as per Mr Pujianto’s instruction, in accordance with the fax, as he wanted the pipe to be secured because he was worried about it getting damaged.
Counsel for the appellants put it to Mr Anderson again that what he had said about the plumber laying the pipe and putting the fill under it, was not the case, to which Mr Anderson replied: “Yes, well I was there. It was the case”.
Counsel then suggested that the problem with that answer is that Mr Anderson had identified someone saying there was back filling occurring after the event and the problem with having to build up the ground, that this was not a matter of laying the pipe on top of the ground, it had to be built up, so he had again said to the witness, that it just did not happen. However, Mr Anderson insisted that “Yes, it did”.
Counsel then moved to the question of the evidence of Mr Abueva. Mr Anderson was aware of Mr Abueva’s evidence as to where the bore holes had been drilled and that they identified “mixed fill”. Mr Anderson accepted that that was a correct statement of Mr Abueva’s evidence. Counsel then put it to Mr Anderson that: “That’s different to ‘uncontrolled fill’, is it?” to which Mr Anderson responded:
That mixed fill was put there as a shoulder. It was always to come back out.
Counsel then asked Mr Anderson:
So the shoulder that you put to support the road contains sand, clay lumps, gravel, tree roots, wood, decaying fibres organic, and otherwise as described in those bore hole logs?
To which Mr Anderson responded:
That’s right.
When counsel asked him (transcript 76) whether that was the same sort of material he had placed over the pipes, Mr Anderson said that it was not and the sand over the pipes came from the POS. He further indicated that the material from the POS came from the box of the road at the front, and it was positioned on the base of the road, plus the shoulder of the road.
Counsel then put it to Mr Anderson that the bore holes identified by Mr Abueva were some distance in, that is to say in from the shoulder of the road. Mr Anderson, however, insisted:
No, those bore holes are – that was taken on the shoulder of the road, and when we had the discussion with the engineer, it’s sort of – it comes to the conclusion that they were done right down the shoulder, and Gervase agreed to that. We needed to fill out about 6 metres so we could turn the machine from that part of it. The only way we could do it is build it up – build it up so it contained the road itself. That always had to be removed to get the building’s proof compacted underneath. We couldn’t get that area ready because we had 400 cubic metres of crushed concrete on the southern section.
Counsel then sought to clarify that evidence by putting it to Mr Anderson that his evidence was that when Mr Abueva decided where to drill his bore holes to indicate what the material was under the building lots, he did not know he was just boring a hole in the shoulder of a road. To that Mr Anderson answered:
Obviously [he] didn’t. He said that his technician done it and he didn’t know where it was.
Counsel pointed out that that was not quite his evidence, but sought to confirm with Mr Anderson that he understood that Mr Abueva bored those holes apparently under the building lots but that Mr Anderson thought they were on the shoulder of the road. To that Mr Anderson again responded:
They appeared to be on the shoulder of the road, the way I look at this plan and that’s where they tested it.
When counsel suggested they appeared to be at the end of the driveway, Mr Anderson responded:
That’s relevant to the material that was spread there. If he had have done a bore hole test, perhaps over in the centre of it, we would have a different outcome.
Mr Anderson insisted that material he spread was not across the whole of the site, it was the shoulder of the road.
When it was put to him by counsel that it was certainly further than the shoulder of the road on that plan, Mr Anderson, by clear inference, rejected that proposition because, “We wouldn’t have had the material”.
At that point his Honour raised some question concerning the difficulty with the question that had been put by counsel and observed that if one looks at the bore holes on the right hand side of the plan produced, they were not much further back than the car parking bays and if you translate that to the other side, the bore holes are still not that much further back than the car parking bays or the end of the driveway and we do not know how far back that is on that plan.
Counsel responded by saying that the bore holes identified in the POS are accepted to be in the POS and they appear to be about the distance of those on the left but they are held to be in the shoulder of the road. Counsel said he could not understand how the scale can change from someone indicating where they are drilling holes from one side to the other. The end of the driveway of those buildings is in some distance more than five or six metres, considerably more than five or six metres.
His Honour then made it plain that he was concerned that was an assumption about the map being drawn to scale.
It is in the light of all of this evidence that his Honour drew the conclusions with respect to the mixed fill that I set out above in [64].
Particular exception is taken on the appeal to the finding in [64(b)], that the evidence of the bore hole tests in the Structerre February 2007 report can not be relied upon, Conduit Advertising “having failed to establish that the bore holes were not drilled in the shoulder of the road, which, as it has said above, was incomplete work which would have been removed, and replaced with clean fill, had Anderson Earthmoving completed the work in the normal course”.
I have to say that having reviewed the evidence in some detail, bearing in mind that this appeal is a rehearing of the nature described in the joint judgment of Fox v Percy, that I am totally in agreement with the conclusion reached by the Federal Magistrate. This is a case where, so far as the breach of contract claim is concerned, the appellants, as applicants in the preceding below, carried the legal and evidentiary burden of proving, on the balance of probabilities, that the second respondent placed contaminated fill within the southern portion (stage 2) of the subdivisional area. While on the face of it the evidence of Mr Abueva seems to address the point directly, in the course of evidence, particularly cross‑examination by counsel for the appellants of Mr Anderson, the question as to just what fill had been the subject of the bore hole investigation became, to say the least, uncertain. Mr Anderson’s evidence raised a real question whether the appellants had established, on the balance of probabilities, that the contaminated or mixed fill had been improperly, in breach of the contract, placed on the southern portion of the land.
There was indeed much evidence to suggest that that could not have been the case. The Federal Magistrate was not so satisfied and nor am I. Mr Anderson had no particular reason to place mixed fill under the levelled portion of the southern area. He was awaiting further developments. The only fill he used was, as directed, from the site and to place it about the above ground piping. The fill under the pipes, which were initially 300mm above ground, was put there by the plumber. Mr Anderson’s concern was to place clean fill on top of the pipes, to enable large machinery to get across without damaging the pipes.
In all the circumstances, as I do not believe that, despite the evidence of Mr Abueva, the appellants have established, on the balance of probabilities, that the respondents in breach of the contract, placed contaminated fill on the site, and find that the work done in fact was done with the concurrence of the appellants.
In these circumstances, grounds 4, 5 and 6 of the notice of appeal must fail.
Repudiation: So far as the Federal Magistrate’s decision on the basis of repudiation is concerned, it became clear to me when considering the materials that there can have been no repudiation by the appellants as of about 6 December 2006. That is when the invoice for the work conducted earlier by the second respondent was issued to the first appellant. The work on the site generally came to a stop at around 4 December 2006, following notification by the Shire to the appellants to stop work. As the above account of the evidence discloses, the appellants obtained expert engineering advice as to the circumstances they found themselves in. The appellants then endeavoured to place the responsibility for the contaminated soil at the feet of the respondents. The respondents refused to accept that responsibility. They were then not paid. Only at the point that the first appellant insisted that the respondents rectify the contamination complained of at their own expense and so showed an unwillingness to pay the invoiced work done prior to 6 December 2006, did the first appellant evince an intention to repudiate the agreement.
It is not to the point that in such circumstances that it was only a progress payment. The circumstances of the dispute at that point were so considerable that the refusal to pay the progress payment in respect of the work that had been done in light of the dispute that had arisen about contaminated soil, would fully justify the view that the contract was repudiated by the first appellant at that point. Plainly by its conduct the second respondent accepted the repudiation, for it refused to do any further work.
Accordingly, the issue concerning repudiation is something of a side issue as raised by the Federal Magistrate. The question of repudiation was not actually pleaded. It arose simply because the Magistrate, at [65], having found that there was no breach of the trade contract at the time the work finished in December 2006, with which I agree, then went on to say there was no breach subsequently, because the first appellant repudiated the trade contract by not paying that account. That, as I say, is correct. The point of the Federal Magistrate making that finding, as I understand it, was not to rule on a matter in issue, but to make the point that the second respondent, in those circumstances was entitled to provide no further services under the trade contract in mid 2007. Accordingly, he said, with respect to the fill and the public open space section, there was no breach of the trade contract because the second respondent had complied with directions given to it by the first respondent, pursuant to cl 17(ii) of the trade contract and was using materials supplied to it, and not by it, and accordingly there was no breach of cl 4(ii) of the trade contract either.
I find the applicants have failed to establish on the evidence that the second respondent breached the trade contract in respect of the work done concerning mixed fill.
Accordingly, grounds 4, 5 and 7 must fail.
NEGLIGENCE CLAIM
Ground 7 of the notice of appeal states that:
•The Court erred in finding the negligence claim fails because there was no breach of duty of care by Anderson Earthmoving.
In light of my findings in respect of grounds 4, 5 and 6 it follows that, while there was a duty of care owed by the second respondent to the first appellant of the type pleaded, there was no lack of care or skill or breach of that duty.
For those reasons, ground 7 must fail.
CONCLUSION AND ORDERS
For the reasons given above, the appeal fails.
The Court orders:
1.The appeal be dismissed.
2.The appellants to pay the costs of the respondents to be taxed if not agreed.

I certify that the preceding one hundred and forty (140) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Barker.

Associate:
Dated: 25 August 2011

Citation:		Conduit Advertising Pty Ltd v Anderson [2011] FCA 978
Appeal from:		Conduit Advertising Pty Ltd v Anderson [2010] FMCA 962
Parties:		CONDUIT ADVERTISING PTY LTD and ROBERT AUGUSTE v ANDREW BURT ANDERSON and ANDERSON EARTHMOVING PTY LTD AS TRUSTEE FOR THE ANDERSON EARTHMOVING TRUST
File number:		WAD 417 of 2010
Judge:		BARKER J
Date of judgment:		25 August 2011
Catchwords:		APPEAL AND NEW TRIAL - appeal by way of rehearing from Federal Magistrates Court - whether misleading and deceptive conduct in relation to future acts - whether breach of earthmoving contract - whether negligence - appeal dismissed
Legislation:		Federal Court of Australia Act 1976 (Cth) s 24 Trade Practices Act 1974 (Cth) s 51A, s 52, s 82, s 87 Fair Trading Act 1987 (WA) s 9, s 10
Cases cited:		Conduit Advertising Pty Ltd v Anderson [2010] FMCA 962 Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 Fubilan Catering Services Limited (Incorporated in PNG) v Compass Group (Aust) Pty Ltd [2008] FCAFC 53 Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd [1988] FCA 40; (1988) 39 FCR 546 McDonald v Dennys Lascelles (1933) 48 CLR 457 Slinger v Southern White Pty Ltd [2005] SASC 267 Shevill v Builders Licensing Board [1982] HCA 47; (1982) 149 CLR 620 Western Australia v Ward (2002) 213 CLR 1
Date of hearing:	16 May 2011
Place:	Perth
Division:	GENERAL DIVISION
Category:	Catchwords
Number of paragraphs:	140
Counsel for the Appellants:	Mr AP Rumsley
Solicitor for the Appellants:	Mr AP Rumsley
Counsel for the Respondents:	Mr RL Hooker
Solicitor for the Respondents:	Robert Grayden Legal

IN THE FEDERAL COURT OF AUSTRALIA
WESTERN AUSTRALIA DISTRICT REGISTRY
GENERAL DIVISION	WAD 417 of 2010

JUDGE:	BARKER J
DATE OF ORDER:	25 AUGUST 2011
WHERE MADE:	PERTH

JUDGE:	BARKER J
DATE:	25 AUGUST 2011
PLACE:	PERTH