Defendi v Eden Hill Plasterers [No 2] - [2009] WASCA 222

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: DEFENDI -v- EDEN HILL PLASTERERS [No 2] [2009] WASCA 222

CORAM: McLURE P
MILLER JA
NEWNES JA

HEARD: 20 JULY 2009

DELIVERED : 15 DECEMBER 2009

FILE NO/S: CACV 55 of 2008

BETWEEN: SILVANO DEFENDI As Trustee For THE DEFENDI FAMILY TRUST
Appellant
AND
EDEN HILL PLASTERERS
Respondent

ON APPEAL FROM:
Jurisdiction              :  DISTRICT COURT OF WESTERN AUSTRALIA
Coram  :COMMISSIONER HERRON
Citation  :DEFENDI ATF THE DEFENDI FAMILY TRUST -v- EDEN HILL PLASTERERS [2008] WADC 70
File No  :APP 32 of 2006

Catchwords:

Contract - Appeal to District Court from decision of Magistrates Court - Appeal against decision of District Court dismissing appeal - Whether decision of magistrate open on the evidence - Whether open on respondent's case - Whether issue fully litigated at trial - Purpose of notice of contention - Whether open to primary judge to find for respondent on ground argued on appeal but not subject of notice of contention

Legislation:

District Court Rules 2005 (WA), Pt 6 r 53

Result:

Appeal dismissed

Category: B

Representation:

Counsel:

Appellant: Mr J R Ludlow
Respondent: Mr I A Morison

Solicitors:

Appellant: Kitto & Kitto
Respondent: SRB Legal

Case(s) referred to in judgment(s):

CSR Ltd v Maddalena [2006] HCA 1; (2006) 80 ALJR 458
David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416
Defendi atf the Defendi Family Trust v Eden Hill Plasterers [2008] WADC 70
Fox v Percy [2003] HCA 22; (2003) 214 CLR 118
Lackovic v Insurance Commission of Western Australia [2006] WASCA 38; (2006) 31 WAR 460
Water Board v Moustakas (1988) 180 CLR 491
Whisprun Pty Ltd v Dixon (No 2) [2004] HCA 2; (2004) 204 ALR 22

JUDGMENT OF THE COURT: This is an appeal against a decision of Commissioner Herron in the District Court, dismissing an appeal against a judgment in favour of the respondent in the Magistrates Court: Defendi atf the Defendi Family Trust v Eden Hill Plasterers[2008] WADC 70.

Background

At the relevant time, the appellant was the owner of a house in Hovea which was in the course of construction. The respondent was a partnership comprising Mr Dennis Mercuri and his wife, who carried on a plastering business under the name Eden Hill Plasterers.
In or about January 2001, the respondent entered into an oral agreement with the appellant to render the external walls of the house with a product called Monorustic. Monorustic was a new product the appellant had imported from Italy and neither the respondent nor the appellant had any experience in its use. It consisted of a powder that was to be mixed with water. Once the rendering had been completed, the appellant intended to use the house to promote sales of Monorustic, which he intended to import.
A dispute subsequently arose as to the quality of the work carried out by the respondent. The appellant said that the work was so defective that the render would have to be removed, or rectified so far as it could be rectified.
The respondent denied that the work was defective and sought payment of the sum of $5,136.40 still owing in respect of the work.

The proceedings in the Magistrates Court

In 2002, the respondent brought proceedings in the Magistrates Court claiming the balance of $5,136.40 owing under the agreement. The appellant did not dispute that that sum remained unpaid, but sought to set off the amount of $56,783.63 which he counterclaimed.
In his particulars of counterclaim, the appellant alleged that the oral agreement contained (among others) terms that the respondent would comply with the instructions supplied by the manufacturer of Monorustic regarding the mixing of Monorustic and its application, and that the respondent would follow instructions given by the appellant and/or Mr Franco Fiore, his site supervisor.
The appellant alleged in par 9 of the particulars of counterclaim that the respondent had breached the agreement in a number of respects. It is unnecessary to canvass all of the alleged breaches. Relevantly for present purposes, the appellant alleged that the respondent had not followed his instructions or those of Mr Fiore (albeit, it is not alleged in what respects the respondent had not done so), and that it had not followed the instructions provided by the manufacturer of Monorustic with regard to the amount of water to be mixed with the Monorustic.
The appellant alleged that the breaches of the agreement by the respondent had caused the rendering to be unsatisfactory and defective. He claimed by way of damages the sum of $56,783.63 as the cost of rectifying the work.
In its defence to counterclaim, the respondent admitted that it agreed to use Monorustic to render the exterior walls of the house but otherwise denied the alleged agreement. The respondent pleaded that if there were any deficiencies in the rendering they were caused by the failure of the appellant to follow the respondent's advice concerning the preparation of the surface of the walls.
As the amount still owing to the respondent under the agreement was not in dispute, the trial concerned only the appellant's counterclaim. It occupied 12 days in late 2005 and early 2006. A number of witnesses were called, including several expert witnesses, and the trial ranged over a substantial number of issues. It was, however, clear from the evidence that Mr Fiore had the effective day to day supervision of the rendering work on behalf of the appellant.
It is unnecessary to canvass the proceedings at trial in any detail. The greater part of the trial involved matters that are not the subject of the present appeal. A central issue at the trial, however, was whether the respondent had failed to follow the manufacturer's instructions in relation to the preparation and application of the Monorustic. The manufacturer had provided with the Monorustic some written instructions as to its preparation and application. It appears, however, that the instructions were not exhaustive.
At the trial, Mr Fiore gave evidence that he contacted the manufacturer by telephone on several occasions to get a better understanding of what was required in the mixing and applying of the Monorustic. He then passed on the information to Mr Mercuri and Mr Mercuri's assistant, Mr Mullumby (ts 36 ‑ 38). An instance dealt with at the trial concerned the equipment used to mix the Monorustic. According to the appellant, it was an express term of the agreement that the respondent would use a handheld mixer. Mr Fiore said that he spoke to the manufacturer of Monorustic and was told that a cement mixer could be used. Mr Fiore then informed the respondent that it could use a cement mixer (ts 43). We should mention that his Honour rejected an allegation by the appellant that the respondent was in breach of the agreement in failing to use a handheld mixer.
It was not in issue that the amount of water to be mixed with the Monorustic was stated on the containers of Monorustic. The question of whether Mr Fiore gave instructions to the respondent to add more water was the subject of evidence from Mr Mercuri, Mr Mullumby and Mr Fiore. The question of whether it was open to the magistrate to make a finding that Mr Fiore gave instructions for the addition of more water was the subject of detailed challenge by counsel for the appellant on this appeal. In particular, it was submitted that the evidence of Mr Mercuri was inconsistent with the evidence of Mr Mullumby on this issue. It is therefore necessary to set out the relevant parts of that evidence.
In his evidence in chief, Mr Mercuri said that when the Monorustic was mixed in accordance with the manufacturer's instruction 'it wasn't workable. You couldn't push it onto the walls … it just was too hard to work it in' (ts 32). He went on to give the following evidence:
So what did you do when you began having these problems?‑‑‑Well, we told [Mr Fiore] and we said we'd have to‑‑had to put more water into it to make it workable so you could push it on to the wall, make it stick on to the wall.
And about how long after you began experiencing these problems did you draw that attention to [Mr Fiore]?‑‑‑Well, as soon as we started to mix it to push on the‑‑the first big wall that we started that, yeah, we were having problems with it and that‑‑and we had to add more water to it.
And what did [Mr Fiore] say to that?‑‑‑Well, [Mr Fiore] said we have to put more water in there to make it workable. We had to put more water in there.
Okay. So did you alter the water ratio?‑‑‑Yeah. We added more water to it, yes.
Okay. And what happened then?‑‑‑Well, then it became more‑‑it mixed better. It was more workable, so you could use it on to the‑‑push it on to the walls with your trowel (ts 32).
Mr Mercuri was cross‑examined on the topic:
Mr Fiore and [the appellant] told you that you must strictly adhere to the mix of water and product?---They told me that it had to be mixed, like, the way on the bag on the bag --
Yeah?--- but like - but then I - the problem arose where [Mr Fiore] was there and I told him that--
No, just a moment. Sorry? --- Okay
I just want to go through what they told you? --- Okay (ts 52)
…
But didn't [Mr Fiore] say to you, 'You've got to follow manufacturer's recommendations'?---Well, we were mixing it and we showed him that we needed to put more water in, so we couldn't do it the way they wanted to do it--
Well, I put--?-- with the amount of water
-- I put it to you on -- when you spoke about the water this morning, I put it to you that [Mr Fiore] never agreed to you using more water?-- Well he was there. I showed him that it wasn't mixing right. We couldn't -- we put one into the barrow. You couldn't get it out to put it -
--No? -- onto the walls.
No, you didn't say he agreed, but I'm putting you to say that he never agreed. This morning in your evidence? --Yeah.
--- you didn't say he agreed?--- I didn't say he agreed.
To you to put extra water. You said he was present?---He was present there when we put--we had to put the extra water in, yeah.
But I'm putting to you that he's always told you to stick to the manufacturer's requirements?---But you--you couldn't use the material if you didn't put that more--bit more water in there. (ts 76)
Mr Mercuri was re‑examined as follows:
It was put to you that [Mr Fiore] never agreed to applying the additional water to the mixture in the cement mixture?---Yeah. Did he agree?
So? I think the question was put to you that [Mr Fiore]--?---Never agreed on it.
That was--?---Is that what you're saying?
What I'm saying is that the question was put to you that [Mr Fiore] never agreed to apply the additional water--?---Yeah.
--to the cement mixer. All right. Did he ever see you-- or do you ever recall him seeing you applying water to the cement mixer?---He was--they were there when I was showing them that it wasn't mixing-
Mm hm?---it wasn't mixing properly and we had to put more water in there.
Right. He didn't race out and grab you and say, 'No Dennis,' you know. 'Don't do this'?---No; no.
Right. Okay. So just so I'm absolutely right. You're saying that he was present when you were applying the additional--? ---Yeah.
--water?---I told him that I had to put more water or I couldn't work it.
Right? --- I couldn't put it on, couldn't -- it wouldn't be workable for me to use (ts 81 ‑ 82).
Mr Mullumby also gave evidence about Mr Fiore's involvement in the decision to add additional water in the preparation of the Monorustic. In his evidence in chief, Mr Mullumby gave the following evidence:
Presumably you would have applied water to the product to mix it up?‑‑‑To mix it, yes.
Okay. Did you follow the instructions given on the bag?‑‑‑We'd mixed with the water and powder ratio given in the bags and it was too dry a mix.
Now, when you say it was too dry a mix what do you mean by that?‑‑‑The material wasn't pliable enough to apply it with a hawk and a trowel.
…
And did you bring the problems that you were experiencing to anyone's attention?‑‑‑Yeah. When [Mr Fiore] arrived that day we showed [him] the problem we were having with the mix and we mixed also again in a bucket that day and showed [Mr Fiore] that it was not workable at that consistency. So to‑‑we required more water with the mix.
And so after you showed, you know, [Mr Fiore] the problems you were having, did he say anything?‑‑‑ [Mr Fiore] agreed that it was too dry‑‑
Okay?‑‑‑And that more water was necessary.
So did you apply more water?‑‑‑Yes. We applied more water (ts 157 ‑ 158).
Mr Mullumby repeated the substance of this evidence in his re‑examination.
Mr Fiore was called to give evidence by the appellant. He was asked about Mr Mullumby's evidence by counsel for the appellant. Mr Fiore said he had no recollection of the matter being raised with him by Mr Mullumby but could not say that it was not. Mr Fiore said that if it had been raised with him he believed he would have said not to add any more water (ts 127 ‑ 128).
In a reserved decision, delivered on 30 March 2006, the magistrate found that the appellant had not established that the respondent had breached the agreement. His Honour dismissed the appellant's counterclaim and gave judgment for the respondent on its claim in the sum of $5,136.40.
In his reasons for decision, the magistrate described Mr Mercuri as generally 'an acceptable witness' and Mr Mullumby as 'a good witness'. His Honour found Mr Fiore to be a 'reasonable witness' although his Honour considered that Mr Fiore had some problems recalling events accurately and he had 'a question as to the general quality of [Mr Fiore's] evidence'
The magistrate found that the defects in the rendering were caused by the mixing of excessive water with the Monorustic. His Honour referred to the evidence set out above, and to the pleaded terms of the agreement that the respondent would comply with the manufacturer's instructions on the mixing of Monorustic and would follow the instructions given by the appellant and/or Mr Fiore. His Honour then said:
[The appellant] must prove what instructions were given. He must, therefore, persuade me that the variation raised by Mr Mercuri was not made. Given the above evidence and my earlier findings on the quality of the witnesses, I am not persuaded to prefer the evidence of Mr Fiore and reject the evidence of Mr Mercuri and Mr Mullumby that Mr Fiore agreed to increasing the amount of water to be added to the Monorustic, thereby varying the original instruction (BAB 37).
Later in his reasons his Honour said:
Given my findings on the evidence, [the appellant's] counterclaim, in my opinion, faces a number of problems.
First and foremost is my finding that I am not persuaded that Mr Fiore did not vary the original instruction as to the amount of water which was to be used when mixing the Monorustic. That finding, in my opinion, means that [the appellant] cannot succeed under … paragraph 9 of the defence and counterclaim … If Mr Fiore did vary the original instruction (noting that by paragraph 5(g) of the defence and counterclaim he clearly had the power to give binding instructions) as the amount of water to be used when mixing the Monorustic, given the above evidence, it is, in my opinion, more probable than not that that act alone is likely to be the cause of the cracking, the undulations in the service and possible differences in the 'colour, tone and shading'. That, in my opinion, is fatal to the matters pleaded in … paragraph 9 of the defence and counterclaim. If Mr Mercuri was merely following a variation by Mr Fiore to the original instruction, Mr Mercuri cannot, in my opinion, be held responsible for any problems caused by following the varied instruction. If one thing is clear from all the evidence in this matter, it is that Mr Mercuri was to follow instructions (BAB 54 ‑ 56).
As we have mentioned, the appellant's counterclaim was dismissed. The appellant appealed to the District Court.

The appeal to the District Court

The appellant relied on four grounds of appeal. They were, in substance:
1.The magistrate erred in law and fact in holding that the appellant had to persuade him that the 'variation raised by Mr Mercuri' was not made when:
(a)the respondent did not plead that the agreement had been varied;
(b)the respondent had not so contended at trial and there was no evidence that the appellant had personally agreed to or given any consideration for such a variation; and
(c)the respondent had not pleaded and there was no evidence that Mr Fiore had any authority to agree to a variation of the agreement.
2.The magistrate should have held that Mr Fiore's authority to give instructions to the respondent was subject to the respondent's obligation under the agreement to comply with the manufacturer's instructions.
3.The magistrate should have held that the respondent breached the agreement by using more water than the amount stated in the manufacturer's instructions.
4.The magistrate should have found that that breach by the respondent was the cause of the appellant's loss.

Decision of the primary judge

The primary judge observed that the range of issues canvassed and the manner in which the trial had been conducted made it difficult to ascertain whether the parties had ranged outside the pleaded issues. His Honour concluded, however, that it was quite clear that the parties understood that an important issue between them was whether too much water had been added to the Monorustic by the respondent.
His Honour noted that the magistrate appeared to have approached that issue (as he had other issues in the case) on the basis that because the appellant alleged it was a term of the agreement that the respondent had to follow the appellant's instructions, the appellant bore the onus of establishing what instructions had been given. That seemed to have led to the magistrate to state on a number of occasions that he was 'not persuaded to reject the evidence of Mr Mercuri and Mr Mullumby', a form of expression which made it difficult to know whether he had accepted their evidence and whether he had made any positive finding.
Turning to the first ground of appeal, the primary judge rejected the underlying contention that the magistrate had found that Mr Fiore, on behalf of the appellant, had varied the agreement. His Honour considered that the magistrate was not concerned to find whether there had been a variation of the agreement, but rather to ascertain what instructions were given to the respondent by Mr Fiore. The magistrate was concerned, in particular, with whether Mr Fiore had instructed or authorised the respondent to use more water than the amount specified by the manufacturer.
The primary judge considered that unless it involved findings based on credibility, it was open to him to re‑determine the issue of whether Mr Fiore had instructed the respondent to add extra water to the Monorustic. His Honour referred to the evidence of both Mr Mercuri and Mr Mullumby, that in the light of the problems they had encountered in mixing the Monorustic, Mr Fiore had agreed that more water should be added. His Honour noted that Mr Fiore had been unable to recall whether there had been any such discussion. His Honour concluded that there was therefore no conflict in the evidence which depended upon findings as to credibility. In the absence of a finding by the magistrate, the primary judge considered that he was able to make a finding as to whether Mr Fiore had given instructions to add extra water. His Honour went on to find that Mr Fiore had given those instructions.
In any event, the primary judge also concluded that, while not clearly expressed, the magistrate had made a finding of fact that Mr Fiore had instructed or authorised the respondent to add water beyond the amount specified in the manufacturer's instructions. His Honour commented that the magistrate had expressed his finding in an unusual way in stating that he was 'not persuaded to prefer the evidence of Mr Fiore and to reject the evidence of Mr Mercuri and Mr Mullumby'. But his Honour found that, in the context, the magistrate must have meant that he accepted the evidence of Mr Mercuri and Mr Mullumby on that issue.

The primary judge rejected the contention by the appellant that any such finding by the magistrate fell outside the issues at trial. His Honour concluded that although it was not an issue specifically pleaded by the respondent, the issue of what instructions were given to the respondent by Mr Fiore in relation to the mixing of the Monorustic was canvassed by the parties at the trial and was clearly recognised by the parties as a live issue between them. His Honour dismissed the first ground of appeal.
His Honour also dismissed the second ground of appeal. He referred to the appellant's plea that the respondent was required to follow Mr Fiore's instructions and noted that the appellant did not plead that Mr Fiore's authority was limited to instructions that were consistent with the manufacturer's specifications. Moreover, at trial the appellant had run its case on the basis that Mr Fiore had not given any instructions to add water, rather than that he did not have authority to give such instructions. The primary judge concluded that it was clear that Mr Fiore, who had day to day supervision of the work, was authorised to give instructions to the respondent regarding the way in which the Monorustic was to be used if problems arose. His Honour concluded that the magistrate's finding that Mr Fiore had authority to give instructions to vary the manufacturer's instructions was supported by the evidence and was not in error.
In relation to the third ground, his Honour found that the magistrate had made a finding, or should have made a finding, that the appellant, by Mr Fiore, had given instructions to the respondent to vary the manufacturer's mixing instructions by adding more water. The respondent followed Mr Fiore's instructions, as the appellant had pleaded it was required to do. Accordingly, the respondent was not in breach of the agreement.
His Honour considered it was unnecessary to deal with the fourth ground of appeal in light of his other findings. He dismissed the appeal.
The appellant then appealed to this court against the decision of the primary judge.

The appeal against the primary judge

In this appeal the appellant relied on seven grounds of appeal. It is unnecessary to reproduce them and no purpose would be served by doing so. The grounds are lengthy and vague, and of little assistance in elucidating the specific issues in contention on the appeal. The appellant's substantive contentions on the appeal, as they were clarified in the course of argument, were as follows:
1.The primary judge erred in concluding that the magistrate had found as a fact that Mr Fiore had instructed or authorised the respondent to add water to the Monorustic;
2.The primary judge erred in making his own finding of fact as to that matter as:
(a)it was not a matter in issue in the action;
(b)no notice of contention was filed by the respondent to support the magistrate's decision on that basis and the appellant was not given notice that any such finding would be sought or made;
(c)such a finding depended on findings as to credibility and was not open to the primary judge on the appeal.
3.The primary judge erred in finding that the respondent was entitled to act on an instruction or authorisation of Mr Fiore which was contrary to the manufacturer's instructions, it being a term of the agreement that the respondent would comply with the manufacturer's instructions.

Disposition of the appeal

In our view, the primary judge was plainly correct in finding that, although not alleged in the particulars of defence to counterclaim, the issue of whether the respondent had been instructed by Mr Fiore to add additional water to the Monorustic was recognised by the parties as a live issue at the trial.
The appellant's particulars of counterclaim contained two relevant pleas. One was a general allegation that the respondent had breached the agreement by failing to follow the instructions of the appellant and Mr Fiore. The other plea was a specific allegation that the respondent had breached the agreement by failing to follow the manufacturer's instructions with regard to, among other things, the correct amount of water to be mixed with the Monorustic.
As we have mentioned, at the trial both Mr Mercuri and Mr Mullumby gave evidence to the effect that when the amount of water specified by the manufacturer was used the mixture was too dry to apply, and that when they had raised that with Mr Fiore he had agreed that they should add extra water. In the course of the appellant's case, that evidence was put to Mr Fiore, who could not recall whether the discussion had occurred.
The appellant could not have been, and it is evident that he was not, in any doubt that the respondent was contending by way of defence to the counterclaim that Mr Fiore had instructed or authorised the respondent to add the extra water. It was too late on the appeal to the primary judge for the appellant to take any point that it was not a pleaded issue: Water Board v Moustakas (1988) 180 CLR 491, 497.
The question then was whether the magistrate had in fact found that Mr Fiore had instructed or authorised the respondent to add extra water. The primary judge found that he had. But in case there was any doubt about that, the primary judge went on to make his own finding. The appellant attacks both findings of the primary judge.
The appeal to the primary judge was in the nature of a re‑hearing: Magistrates Court (Civil Proceedings) Act 2004 (WA), s 40; District Court Rules 2005 (WA), r 57. The appeal to this court is also by way of a re‑hearing: Supreme Court (Court of Appeal) Rules 2005 (WA), r 25. A principal purpose of providing for an appeal by way of rehearing is to ensure, within the appellate process, finality of litigation, correctly decided: Fox v Percy [2003] HCA 22; (2003) 214 CLR 118 [44]. We might observe in passing that given the amount in issue and the time‑consuming and costly course this litigation has taken, the present case is one which cries out for finality.
The task to be undertaken by an appellate court on an appeal by way of re‑hearing has been explained in a number of cases. In Fox v Percy, Gleeson CJ, Gummow and Kirby JJ said:
The 'rehearing' does not involve a completely fresh hearing by the appellate court of all the evidence. That court proceeds on the basis of the record and any fresh evidence that, exceptionally, it admits. …
The foregoing procedure shapes the requirements, and limitations, of such an appeal. On the one hand, the appellate court is obliged to 'give the judgment which in its opinion ought to have been given in the 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.
…
Within the constraints marked out by the nature of the appellate process, the appellate court is obliged to conduct a real review of the trial and, in cases where the trial was conducted before a judge sitting alone, of that judge's reasons. Appellate courts are not excused from the task of 'weighing conflicting evidence and drawing [their] own inferences and conclusions, though [they] should always bear in mind that [they have] neither seen nor heard the witnesses, and should make due allowance in this respect'. In Warren v Coombes, the majority of this court reiterated the rule that:
[I]n general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge but, once having reached its own conclusion, will not shrink from giving effect to it.
As this court there said, that approach was 'not only sound in law, but beneficial in … operation' [22] ‑ [23], [25]. (footnotes omitted)
See also CSR Ltd v Maddalena [2006] HCA 1; (2006) 80 ALJR 458; Lackovic v Insurance Commission of Western Australia [2006] WASCA 38; (2006) 31 WAR 460 [65] ‑ [67].
It is, of course, necessary for the appellant to demonstrate error by the primary judge. In our view, no error has been shown. The primary judge correctly held that there had been a finding of fact by the magistrate that Mr Fiore had agreed to the addition of extra water.
In his reasons for decision, the magistrate made findings of credibility in respect of the various witnesses. He found (relevantly) that Mr Mercuri was an acceptable witness and Mr Mullumby was a good witness, and he had some reservations as to the general quality of Mr Fiore's evidence. The relevant finding of fact of the magistrate was as follows:
I am not persuaded to prefer the evidence of Mr Fiore and reject the evidence of Mr Mercuri and Mr Mullumby that Mr Fiore agreed to increasing the amount of water to be added to the Monorustic, thereby varying the original instruction (BAB 37).
That finding was, with respect, inaptly expressed. But as the primary judge pointed out, it is clear that the magistrate declined to reject the evidence of Mr Mercuri and Mr Mullumby and preferred their evidence to the evidence of Mr Fiore on this issue. In circumstances where the evidence of Mr Mercuri and Mr Mullumby was that Mr Fiore had agreed to the addition of extra water, and Mr Fiore could not recall whether the matter had been discussed, the magistrate's finding, as the primary judge held, amounts to a finding of fact that Mr Fiore agreed to the addition of extra water. It was a finding that was clearly open to the magistrate on the evidence.
In the light of that finding, it is immaterial that the magistrate appears to have misunderstood where the onus of proof lay. Whether Mr Fiore had instructed or authorised the respondent to add extra water was an issue on which the parties had engaged at trial. Once it was found that Mr Fiore had so instructed or authorised the respondent, then, provided Mr Fiore was entitled under the agreement to do so, the appellant's claim that the respondent was in breach of the contract in adding the extra water must fail. The question of Mr Fiore's authority is the third issue on the appeal, to which we will come shortly.
It is unnecessary to consider whether the primary judge was entitled to make his own finding on the issue but it is appropriate to comment on the appellant's contention that he was not entitled to do so. The primary judge made that finding, of course, on the alternative basis that the magistrate had not made such a finding.
It was submitted by the appellant that there was a conflict between the evidence of Mr Mercuri and Mr Mullumby in relation to the relevant discussion with Mr Fiore. Counsel for the appellant went through the relevant evidence in some detail on this appeal, arguing that it gave rise to a conflict which turned on issues of credibility and therefore which could not be resolved by the primary judge. We do not accept that. Some of the evidence, which we set out earlier, is not easy to follow, not least because of its fragmented nature and the lack of clarity in some of the questions put to the witness. In addition, in parts of his cross-examination Mr Mercuri appears to be either repeating or confirming what he understands is being, or has previously been, put to him. But we do not consider that on a fair reading of the evidence as a whole there is any material conflict. While, unsurprisingly, the terms in which Mr Mercuri and Mr Mullumby gave their evidence differed to some degree, the substance of it was the same, namely that Mr Fiore agreed that extra water should be added. It was open to both the magistrate and the primary judge to make their finding that Mr Fiore gave instructions for the addition of more water.
The appellant also argued that it had been denied procedural fairness because the respondent had not asked the primary judge to make such a finding and the primary judge had not disclosed to the parties that he might do so.
It is true that the respondent did not file a notice of contention seeking to uphold the magistrate's judgment on the basis that the magistrate should have found that Mr Fiore had instructed the respondent to add the extra water. But it is clear from the transcript of the hearing before the primary judge that whether Mr Fiore had done so was a live issue on the appeal.
Counsel for the appellant contended that no such finding had been made by the magistrate but if it had, it would have been irrelevant to the outcome of the case because it was a term of the contract that the respondent was required to follow the manufacturer's instructions. It was submitted that it was no answer for the respondent to say that a contrary instruction or authorisation had been given by Mr Fiore.
In the course of argument, in response to a statement by the respondent's counsel that the respondent's case focused on what instructions were given to the respondent by Mr Fiore, the appellant's counsel submitted that if the respondent sought to support the magistrate's judgment on the basis that Mr Fiore had instructed or authorised the respondent to add extra water it should file a notice of contention (we take that to be a reference to an 'answer' under Pt 6 r 53 of the District Court Rules 2005 (WA)). The appellant's counsel went on, however, to say that if that was the respondent's case then the appellant's answer to it was contained in ground 2 of the grounds of appeal; that is, that any such instruction by Mr Fiore was irrelevant because it was subject to the respondent's contractual obligation to comply with the manufacturer's instructions (ts 19 ‑ 20). Counsel for the appellant suggested that in the circumstances ground 2 appeared to be the main issue on the appeal (ts 34 ‑ 35).
The effect of a notice of contention, or answer, is to give notice that the respondent will seek to support the order under appeal by an argument or arguments not accepted or applied by the court which made the order: Pt 6 r 53; Whisprun Pty Ltd v Dixon (No 2) [2004] HCA 2; (2004) 204 ALR 22 [10]. The purpose is to control the otherwise unlimited right of a respondent to support the judgment appealed from on any good ground, whether relied upon by the court below or not, without providing any notice to the other side: see David Syme & Co Ltd v Lloyd (1985) 1 NSWLR 416, 420 ‑ 421. It is a question of fairness.
It is clear that the appellant was aware that on the appeal before the primary judge the respondent contended that the case fell to be decided on the basis that Mr Fiore had instructed or authorised the respondent to add extra water to the Monorustic. Although he contended that an answer should have been filed, counsel for the appellant dealt with that issue at the hearing. No issue of procedural unfairness arises.
Accordingly, in the event that there was no finding by the magistrate as to whether Mr Fiore had in fact given instructions to the respondent to add extra water, it was open to the primary judge to make his own finding. The finding that he made was the only one open to him on the evidence.
The final issue is the appellant's contention that the primary judge should have found that any such instruction or authorisation by Mr Fiore was subject to the respondent complying with the manufacturer's instructions. In other words, that under the agreement pleaded by the appellant, the respondent was required to follow the instructions of Mr Fiore only to the extent that those instructions did not conflict with the manufacturer's instructions.
That, however, is not how the agreement is pleaded and there is no evidence of any express term to that effect. There is no basis upon which such a term would be implied. On the contrary, in the circumstances it was clearly implicit that the instructions of the appellant and Mr Fiore should have precedence.
It was common ground that none of the parties had any experience in the use of Monorustic. It was a product the appellant had imported from Italy to apply to his own house with a view to importing it in commercial quantities and selling it in Western Australia. The instructions which accompanied the Monorustic came from the Italian manufacturer. It appears that so far as the parties were aware, Monorustic had not previously been used in local conditions. It is evident that this was something of a trial process.
In those circumstances, it cannot have been intended that the respondent was to adhere steadfastly to the manufacturer's original instructions regardless of what instructions it might subsequently receive from the appellant or Mr Fiore. Plainly it was intended that where in the course of the work the respondent received specific instructions from the appellant or Mr Fiore in relation to the preparation or application of the Monorustic, the respondent would follow those instructions, even if they conflicted with the manufacturer's original instructions.
It is not the case, as submitted on behalf of the appellant, that if Mr Fiore could override the manufacturer's instructions then the manufacturer's instructions would have no real work to do. The respondent was obviously required to comply with the manufacturer's instructions unless instructed to the contrary by the appellant or Mr Fiore.
It follows that the primary judge was not in error in finding that under the agreement Mr Fiore was entitled to instruct or authorise the respondent to add more water to the Monorustic than the amount specified by the manufacturer. Once it was found that Mr Fiore had done so, the appellant's claim that the respondent was in breach of the agreement by adding the extra water must fail.

Conclusion

In our view the appellant has not made out any error by the primary judge. We would dismiss the appeal.