Crowe v Beams

[2003] TASSC 43

[2003] TASSC 43

CITATION:           Crowe v Beams [2003] TASSC 43

PARTIES:  CROWE, Peter
  v
  BEAMS, Craig
  BEAMS, Henry

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  Appellate
FILE NO/S:  LCA 21/2002
DELIVERED ON:  26 June 2003
DELIVERED AT:  Launceston
HEARING DATE/S:  4 April 2003
JUDGMENT OF:  Crawford J

CATCHWORDS:

REPRESENTATION:

Counsel:
             Appellant:  R W Pearce
             Respondents:  In Person
Solicitors:
             Appellant:  Douglas & Collins
             Respondents:  In Person

Judgment ID Number:  [2003] TASSC 43
Number of paragraphs:  27

Serial No 43/2003

File No LCA 21/2002

PETER CROWE v CRAIG BEAMS and HENRY BEAMS

REASONS FOR JUDGMENT  CRAWFORD J
  26 June 2003

1. The respondents sued the appellant in the Magistrates Court (Civil Division) for $14,127.79 for the cost of supplying and installing a ducted heating system for the appellant into premises at 190 Charles Street, Launceston, after giving credit for a payment made by the appellant.  The claim was defended.  The appellant claimed that it was an express or implied term of the agreement that the system to be installed by the respondents would be capable of heating and cooling the building, but in breach of the agreement, it was not capable of doing so.  The appellant also claimed that it was an express or implied term of the agreement that the respondents would perform all work and labour in a proper and workmanlike manner and in accordance with good work practices and specifications, but in breach of the agreement, they failed, refused or neglected to do so.  The appellant claimed to be entitled to set off against the respondent's claim $18,000, for the cost of making good the respondents' breaches of the agreement.  The appellant also counterclaimed $18,000. 

1. A defended hearing was conducted by a magistrate on 18 September 2002.  On 23 September the magistrate gave oral reasons for finding in the respondents' favour and ordering that they have judgment against the appellant for $12,965.92 and that the appellant's claim to a set off and counterclaim be dismissed. 

1. The appellant has appealed on a number of grounds alleging error by the learned magistrate.  He seeks to have the orders set aside and the proceedings reheard before a different magistrate. 

1. The only witness called by the respondents was their sales representative, Ms Jodie Anthony.  The appellant gave evidence and he also called an expert witness, Mr Miles Harrison.  However, Mr Harrison's evidence had little relevance to the issues on the hearing of the appeal. 

1. The learned magistrate found that the respondents were the proprietors of a business trading as Duo Air and the appellant was a proprietor of a restaurant business trading as Fee & Me at 190 Charles Street, Launceston.  Ground 1 of the appeal attacks the second of those findings.  The appellant's counsel submitted that it should have been found that the respondents contracted with either ACN009 581 364 Pty Ltd or Fee & Me Pty Ltd (or perhaps Me & Fee Pty Ltd), rather than with himself.  However, I regard it too late, at the appeal stage, to be raising such an argument.  It was not one that was addressed to the learned magistrate, nor was it raised in the defence. 

1. The critical issue at the trial concerned the terms of the agreement entered into by the parties and under which the heat pump system was supplied and installed by the respondents.  The evidence of Ms Anthony and the appellant, together with many of the exhibits, were relevant to that issue.  Mr Harrison's evidence emphasised what was not in dispute at the trial, that the installed system was incapable of heating and cooling the whole of the ground floor of the premises at the same time, let alone the first and second floors of the building as well.  The learned magistrate preferred Ms Anthony's evidence where it was in conflict with the appellant's evidence.  In fact his Worship said that he rejected the appellant's evidence. 

1. It was not in dispute that Ms Anthony was originally asked by the appellant's partner, Ms Fiona Hoskin, to give advice about a heat pump system for the restaurant kitchen of Fee & Me.  On 18 January 2001, she provided a written quotation for $3,111.43 to supply and install a 6 kw Daikin wall mounted heat pump.  Ms Hoskin's main concern was excessive heat in the kitchen in summer time. 

1. The appellant then became involved in discussions with Ms Anthony.  At an early stage he was interested in having a heat pump system that would heat and cool the kitchen, the washroom off the kitchen, a bar and the main dining room of the restaurant.  Those four rooms were toward the rear of the ground floor of the building.  To provide the system for all of those rooms required a different concept involving ducting and a heat pump of much greater capacity.  It was not possible to provide a ducted system from a wall unit, in any event.  It was beyond Ms Anthony's ability to determine or advise what would be needed and she called in Duo Air's technicians, who were the respondents, the proprietors of the firm.  The appellant provided a downstairs plan of the building.  The first respondent, Mr Craig Beams, drew onto the plan a sketch of what the respondents proposed, showing (inter alia) ducting to and between the four rooms and 10 down vents (that is downward directed ceiling vents), four in the kitchen, four in the main dining room and one in each of the washroom and bar.  The advice of the respondents was that the system should be driven by a Daikin outdoor 16.7 kw unit.  There was no evidence leading to a conclusion that the appellant designed or specified what was required to provide heating and cooling in the four rooms.  It was not Ms Anthony's evidence that he did so.  The only conclusion open on the evidence was that at that point in time, he was reliant on the respondents to advise him what would be required.  However, the learned magistrate made no mention of that before coming to his finding that with respect to what was finally installed in the building, the appellant relied on his own skill and judgment. 

1. The respondents provided the appellant with a written quotation dated 24 January 2001, for the supply and installation of the system for those four downstairs rooms for $10,625.11.  It specified (inter alia) the 16.7 kw unit and the 10 down vents. 

1. It was Ms Anthony's evidence that the appellant changed his mind and decided that he wanted the entire ground floor ducted.  I understand that it is now common ground that the 16.7 kw unit was only adequate to provide heating and cooling via 10 vents.  Ms Anthony's evidence was that she was not aware of there being any discussion with the appellant about increasing the power of the unit.  The learned magistrate noted in his reasons for judgment that she said that she was pretty sure that she did not tell the appellant that the 16.7 kw unit could do even more for other parts of the building. 

1. The respondents drew on the building plan down vents for the other three dining rooms at the front of the building.  The plan in evidence indicates that they proposed three down vents in the largest of the three front rooms, two in the next largest room and one in the smallest room, making a total of six down vents in addition to the original 10 proposed for the rear ground floor area.  However, it was Ms Anthony's evidence, and there does not seem to be any dispute about it, that there were eight vents provided for the front of the ground floor. 

1. According to Ms Anthony, the appellant proposed to use a damper, the purpose of which was to close off air to particular vents.  In that way he could block off some of the vents, because the 16.7 kw system was not big enough to provide heated or cooled air to all of the ground floor vents at the same time. 

1. The evidence of the appellant was that Ms Anthony assured him that the 16.7 kw unit was powerful enough to do the whole building, which included the first and second floors, in addition to the ground floor.  He said that as a result of that advice, he asked Ms Anthony to provide a quote for doing the whole building. 

1. The learned magistrate preferred the evidence of Ms Anthony to the evidence of the appellant.  He therefore found that the next quotation of the respondents was to provide heating and cooling for the ground floor only and not for the whole building as claimed by the appellant.  The quotation was dated 7 February 2001 and was for $16,301.06.  It does not support the learned magistrate's finding, and it appears that his Worship did not consider its contents.  It does not do so for the following reasons:

1The quotation first referred to the "original quote of bottom story of your premises $9,562.60".  That was a reference to the quotation for the four rooms at the rear of the ground floor, less the GST component, which was added back later on in the quotation.  10 down vents were provided for in that earlier quotation.  Next, in the quotation of 7 February 2001, materials to be supplied for the additional work to be done were specified and costed.  Included were four 250 mm down vents, 12 150 mm down vents and two floor registers or boots, or what may conveniently be described as two floor vents.  If the additional work only extended to the three front dining rooms on the ground floor, only six or perhaps eight down vents at the most would have been specified.  The specification of 16 down vents and two floor vents clearly established that the quotation was not intended for the ground floor only, as maintained by Ms Anthony and as found by the learned magistrate.  It must have been intended to include the upper floors of the building as well.  That is made even more clear by a hand drawn sketch that was made by the first respondent, Mr Craig Beams.  It shows that there were to be eight down vents on the first floor and two floor vents on the second floor.  When added to the eight down vents required for the three dining rooms at the front of the ground floor, the additional 16 down vents and two floor vents referred to in the quotation make it clear that it was for the whole building and not the ground floor alone.  The point is even clearer when it is understood that the next quotation, dated 13 February 2001, which it is agreed related to ducted heating and cooling to all three floors, was identical so far as the number of vents were concerned. 

1. The quotation referred to it as being for "the central heating/cooling of your premises", and did not refer to it as being for the ground floor only. 

2. The quotation included:

"Installation (1.5 weeks approximately top floors) 2500.00".

Although the ducting to the ground floor down vents was to be installed via the first floor of the building, the reference to the top floors, in the plural, supports a conclusion that the quotation was for the whole building and not merely for the ground floor. 

1. The learned magistrate made no mention of those matters in his reasons, nor did he refer to another aspect of the quotation, which also supported the appellant's evidence that she represented to him that the 16.7 kw unit was powerful enough to do the whole building.  Toward the end of the quotation, there appeared the following"

"This system is economical but also powerful enough to allow comfortable and affordable heating throughout the winter period and also cooling in the summer months.
Based on your hydro account and the amount of Kilowatts you are using throughout the cooler months I have completed a heating evaluation, which shows costs and savings for the 3 main winter months.

Using your existing heating which totals 36.4kws amounts too [sic]
Cost of using Daikin 16kw with 5kw input amounts too [sic]
Total over 5 years using direct electric
Total over 5 years Reverse cycle air-conditioning
Total saving over the 5-year period is

$2,555 / quarter

$351    / quarter
$12,775
$2,255
$10,520

Based on running costs your investment in our system will have paid for your system in under 7 years."

On the balance of probabilities, it had to be inferred that the respondents had compared the appellant's past cost of heating the entire building for the three months of winter, with the likely cost of running the 16.7 kw unit.  Even allowing for the taking into account of "5 kw input amounts too [sic]", as referring to a possible need to run a level of direct heating to supplement the new system to some extent (whether it did so I do not know), the comparison inferred a representation that the new system would largely replace the previously used direct heating system.  It was inconsistent with the fact that only 10 of 28 vents would be operable at any one time. 

1. A further and final quotation dated 13 February 2001 was provided by the respondents.  It was accepted by the appellant.  It was in the amount of $22,538.06.  Subject to necessary GST recalculations, it was virtually identical to the previous quotation, except that there was added:

"Dampers
Dampers
Dampers 3^rd Storey x 3
2^nd Storey x 8
1^st Storey x 10  810.00
2160.00
2700.00"

It specified the same number of vents and contained the same comparison of past heating costs with the likely future heating costs as had appeared in the previous quotation.  There was no dispute that the quotation provided for the system to be installed throughout the whole building, to every floor. 

1. In the course of her evidence, Ms Anthony could not say which of the quotes had been accepted by the appellant, although she was "pretty sure" he accepted the last one. 

1. The misunderstanding of the learned magistrate about the system proposed by the quotation of 7 February 2001 coloured his understanding of evidence given by the appellant.  Evidence by him that Ms Anthony gave an assurance that the 16.7 kw unit was powerful enough to do the whole building was interpreted upon the basis that the appellant was referring only to the ground floor.  Evidence by him that his understanding, with reference to the quotation of 7 February 2001, was that the unit would cool the whole building, was said by the learned magistrate not to be clear as to whether the appellant meant to refer to the ground floor. 

1. There is no doubt that a total of 21 dampers were installed for the purpose of enabling the appellant and his partner, Miss Hoskin, to close off particular vents when they wished to do so.

1. The learned magistrate found that in accordance with the evidence of Ms Anthony, the appellant took it on himself, using his own knowledge and judgment, to direct that the ducting from the heat pump be extended to the front of the ground floor and later to the other two floors of the building.  His Worship found that the appellant was told and understood that if the system was so extended, it would be necessary to have dampers fitted so that only a part of the building would be heated or cooled at the one time.  His Worship accepted Ms Anthony's evidence that if the system was extended to the whole building, it had to be zoned by the use of dampers and that there would then have to be back-up heating in addition to the system.

1. The quotation of 7 February 2001 included no dampers, other than to refer as an optional extra to a 150 mm motorised damper at a cost of $250 plus installation.  As I have pointed out, that quotation was substantially increased by the inclusion, in the quotation of 13 February 2001, of provision for 21 dampers.  The appellant explained the decision to include dampers as having been made for a number of reasons. He and his partner, Ms Hoskin, had different temperature likings.  She felt the cold and he felt the heat.  She was concerned that in summertime he would want the air-conditioning on and she would want it off, and with dampers they would be able to choose what they wanted.  In that connection, I note that Ms Hoskin worked in the kitchen area and the appellant worked in other areas.  There was evidence that the kitchen became quite hot because of cooking and heating appliances, and other equipment, creating different demands with regard to temperature than other sections of the building demanded.  Because of their different likes and requirements concerning temperatures, the appellant said that they decided that dampers would be desirable.  He also explained that in the restaurant dining rooms, if they had different crowds such as 30 people in one room and only 10 in another, the dampers would provide a capability to shut off a room from the system, if required. 

1. The learned magistrate referred scathingly to the appellant's evidence about why the dampers were installed and to his evidence that he was ignorant about matters relating to heat pump systems and therefore relied wholly on the skill and judgment of the respondents with regard to the system that was installed.  The learned magistrate said that "I do not believe that he was either so ignorant or naive as he would have it".  His Honour referred to it as being "convenient for him" to refer to the differing requirements of himself and his partner and rejected it as a true reason.  His Worship's stated conclusions about those matters supported his preference for Ms Anthony's evidence over that of the appellant. 

1. A particular reason given by the learned magistrate for rejecting the appellant's evidence was prominent in the reasons for judgment.  His Worship said:

"Furthermore, it says something of the defendant that he should have persuaded Miss Anthony to use a form of terminology she would not normally use in her quotes for the purpose only of making them more palatable to his partner, Fiona, the evidence being that she would not, that is Fiona would not then be likely to demur to paying half the bill.  A man most willing to disarm his own partner by resort to subterfuge is not a man in whom the court could have confidence."

1. That adverse finding concerning the appellant's credit was unjustified.  It was based on evidence given by Ms Anthony that he requested that the words "central heating/cooling" appear in the quotations.  Ms Anthony said that the appellant's partner was to foot half the bill and the appellant wanted the words to appear in the quotation so that she would accept what it said and pay half the bill.  The proposed system was in fact designed to both heat and cool the building.  Although in the respondents' minds it may not have been correctly described, technically speaking, as a central heating and cooling system, the average person would be justified in calling it that.  The statement that subsequently appeared in the quotations that they were pricing "the central heating/cooling of your premises" was not incorrect.  It did not amount to a subterfuge on the part of the appellant to want his partner to believe that the proposed system was designed to both heat and cool the building. 

1. At least three of the grounds of appeal have been made out.  They are grounds 6, 7 and 10.  They complain respectively that the learned magistrate erred when he found that the appellant's reference in his evidence to "the whole building" meant "the ground floor of the building", that the learned magistrate erred when he made findings adverse to the credit of the appellant based on a finding that he intended to deceive his partner and that the learned magistrate erred by failing to give sufficient weight to the documentary evidence concerning the contract for installation of the system.  There may also be merit in the eighth ground, which complains that the learned magistrate erred by failing to take into account that neither of the respondents gave evidence and that the learned magistrate should have drawn an adverse inference arising out of that failure.  The issue was the question of responsibility for the design of the system.  Ms Anthony confessed to having no ability to recommend a system, other than the simple system for the kitchen area driven by an indoor, wall mounted 6 kw unit.  The appellant's case was that the respondents designed the system that was installed and that he did not have the knowledge or ability to do so himself, as a result of which he relied on the respondent's skill and judgment.  Neither of the respondents, who were plainly responsible for much of the design of the system that was eventually installed, gave evidence.  There is merit in the appellant's argument that the rule in Jones v Dunkel (1959) 101 CLR 298 should have led to the drawing of an inference that the respondents' evidence would not have assisted their case. However, it is unnecessary for me to take that aspect of the appeal any further.

1. The errors made by the learned magistrate, which are complained of in grounds 6, 7 and 10, were substantial ones.  The only just result that is compelled by those errors is that the case must be reheard by another magistrate. 

1. Accordingly, there will be an order setting aside the judgment for the respondents on the claim and the dismissal of the appellant's claim to a set-off and counterclaim.  There will also be an order that the claim and counterclaim be retried before a different magistrate.