Excel Concrete (NSW) Pty Ltd v John Matthews trading as Portville Developments & Matthews JV & Ors

[2007] NSWSC 575

CITATION:	Excel Concrete (NSW) Pty Ltd v John Matthews trading as Portville Developments & Matthews JV & Ors [2007] NSWSC 575
HEARING DATE(S):	4 June 2007
JUDGMENT DATE :	7 June 2007
JURISDICTION:	Common Law
JUDGMENT OF:	Simpson J
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	APPEAL – appeal from Local Court magistrate – appeal available on question of mixed fact and law – no issue of law identified – appeal incompetent
LEGISLATION CITED:	Local Courts Act 1982 ss 73, 74
PARTIES:	Excel Concrete (NSW) Pty Ltd (Plaintiff) John Matthews trading as Portville Developments & Matthews JV (First Defendant) Victor Micallef trading as Portville Developments (Second Defendant) Portville Developments (No 1) Pty Ltd (Third Defendant)
FILE NUMBER(S):	SC 15474 of 2006
COUNSEL:	A Spencer (Plaintiff) G Carolan (Defendants)
SOLICITORS:	Simons Ravden (Plaintiff) Cumberland Frank (Defendants)
LOWER COURT JURISDICTION:	Local Court
LOWER COURT FILE NUMBER(S):	LC 9465 of 2005
LOWER COURT JUDICIAL OFFICER :	Magistrate S Flood
LOWER COURT DATE OF DECISION:	11 September 2006

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION
PROGRESSIVE LIST

Simpson J

7 June 2007

15474/06 Excel Concrete (NSW) Pty Ltd v John Matthews trading as Portville Developments & Matthews JV & Ors

JUDGMENT

1 HER HONOUR: By summons filed on 10 November 2006 (and amended on the day fixed for hearing, 4 June 2007) the plaintiff, Excel Concrete (NSW) Pty Ltd (“Excel”), seeks leave to appeal against a decision of Local Court Magistrate S Flood delivered on 11 September 2006.

2 The proceedings in the Local Court were commenced by statement of claim filed on 30 August 2005. Excel claimed damages for goods sold and delivered to the defendants (John Matthews and Victor Micallef trading as Portville Developments and Matthews JV) together with interest. The substance of the proceedings was the plaintiff’s claim for the sum of $40,357.24 being the contract price for delivery of a quantity of ready mixed concrete. By defence and cross-claim the defendants admitted delivery of the concrete, but claimed that it failed to conform to the terms of the contract; that it was not fit for the purpose for which it was purchased; and that it was otherwise defective. They claimed the sum of $35,200 said to have been incurred by way of rectification.

3 The proceedings were heard in the Local Court in Sydney on 24 and 25 May 2006. Evidence was given by way of affidavit and a number of witnesses gave oral evidence. At least two of these witnesses were experts, each of whom had provided a report.

4 The Magistrate delivered judgment orally on 11 September 2006. On Excel’s claim he ordered that Excel be awarded the sum $10,222.52 in damages. On the cross-claim he ordered that the defendants/cross-claimants be awarded the sum of $60,000. (This, in fact, was a reduction from a sum in excess of that figure to which he found they were entitled, but represents the limit of the Local Court jurisdiction.)

5 Put briefly, the focus in the Local Court was on the quality of the concrete delivered and what was reasonably available and necessary to rectify the defect and produce a finished result as nearly as possible in accordance with the terms (express or implied) of the contract. The defendants alleged that, on the concrete being poured, cracks appeared in the surface, denoting a defect in the concrete. The contest essentially concerned the cause of the cracking. The defendants’ case was that the cracks arose from an inadequate mix of aggregate and concrete and/or excessive water content. The plaintiff’s case appears to have been that water was or may have been added to the concrete by employees of the defendants after delivery. It was this to which much of the evidence, both expert and, to a certain extent, lay, was directed. However, it appears that the ground upon which the cases were built changed from time to time. The Magistrate noted, during the course of his judgment, that counsel for the plaintiff had conceded:

“The excess water argument … seems to have trickled away to nothing”,

and accepted and adopted that. Some challenge was subsequently made to the Magistrate’s view of this as a “concession” but it does not appear to have gone anywhere.

6 Having canvassed the evidence given, his Honour made a number of findings of fact,

7 The appeal is brought under s 74 of the Local Courts Act 1982. S 73 of that Act confers a right of appeal from a judgment or order of the Local Court sitting in its General Division where it is contended that the decision is “erroneous in point of law”. S 74 confers a right of appeal, by leave only, on a ground that involves the question of mixed law and fact.

8 The amended summons pleads the grounds of appeal as follows:

“2. The Plaintiff contends that His Honour erred in finding that:


(a) The Defendants had discharged their onus in proving that the cracking of the concrete was caused by any act or omission of the Plaintiff;

(b) The Third Defendant had suffered loss for which the Plaintiff could be liable in circumstances where there was no evidence that the Third Defendant had contracted with the Plaintiff or suffered any loss;

(c) The Defendants added water to the concrete delivered but only up to 90 slump when the contemporaneous documentary evidence contradicted that finding;

(d) The Plaintiff was in breach of the contract against the weight of evidence which demonstrated that the concrete was delivered within Australian Standards;

(e) The concrete supplied by the Plaintiff was defective in reliance on tests undertaken by the Defendants’ expert in the circumstances where that expert had conceded that they were unreliable;

(f) The concrete supplied by the Plaintiff was defective by a comparison of the concrete supplied by the Plaintiff with that supplied by another company when there was no evidence to suggest it had endured the same conditions;

(g) The evidence of damage suffered by the Defendants was reliable;

(h) [withdrawn]

(i) The calculation of damages is infected with a fundamental error.”

9 The plaintiff provided written submissions in support of its application for leave to appeal. These set out a summary of the factual basis of the claim.

10 Then, under the heading “Water added was the central issue”, it was said:

“17. The central issue in the proceedings below was whether the cracks in the concrete were the result of a defect in the concrete supplied as opposed to the manner in which the concrete had been dealt with by the defendants on and after delivery.”

11 This was followed by detailed reference to the evidence called over the two days of the hearing. This, also, was the tenor of the oral submissions made on behalf of the plaintiff.

12 Even a cursory reading of the grounds as filed reveals that the attack upon the Magistrate’s decision is directed to his findings of fact. There is no identification of any question of mixed law and fact which would open the gateway for appeal under s 74. Examination of the written submissions and subsequent oral submissions only confirms that view. Some indication of the absence of any legal issue in the supported appeal is to be found in the absence of any citation of authority or statute by which legal error could be identified.

13 It is true that two of the grounds (2(b) and 2(f)) purport to contend that there was “no evidence” to support a particular finding. However, although the question of the correct identification of the contracting parties was touched upon, it was not pursued; and no argument was directed to the assertion in ground 2(f) concerning the absence of comparable conditions.

14 No legal principle said to have been wrongly applied or overlooked, or misconstrued, was mentioned. Indeed in the whole of the written and oral argument, no reference was made to any issue or question of law, and no contention was made of any error of law.

15 The appeal on liability is therefore incompetent.

16 The final ground concerns the quantification of damages. It asserts that the calculation of damages was infected with “a fundamental error”.

Damages

17 After delivery of judgment on the liability issues the proceedings took an unusual course. Quite extensive debate took place concerning, essentially, the cost of rectification, but involving also, some canvassing of the findings already announced. At the conclusion of that debate the Magistrate delivered a further judgment, canvassing, quite extensively, evidence that had been adduced in respect that issue.

18 The written submissions advanced on behalf of the plaintiff in this respect were these:

“The entire calculation of the damages on the cross-claim was based on the proposition that what was required and done was rectification work and that it had been performed …, the defendants had the benefit of the concrete which had been supplied by the plaintiff (to quote his Honour the defective goods had been made good …) Thus, there was no total failure of consideration. In the circumstances, and subject to the cross-claim, Excel was entitled to be paid the agreed amount due for the concrete. That agreed amount was $40,357.24. Excel was entitled to judgment on the principal claim in that amount. Nothing in the learned Magistrate’s reasoning indicates why he entered judgment not for that amount but for the lesser amount of $10,222.52. Effectively, what his Honour has done is to give judgment for the whole amount required to bring the concrete up to standard but with no payment made for it. That cannot be correct.”

19 There are flaws in this submission. Firstly, his Honour did not find that the defective work had been made good. In the passage to which specific reference was made, he referred to the report of a Stewart Bayliss, saying that in the opinion of Mr Bayliss, the expected life of an epoxy coating [one of the remediation proposals apparently advanced] was in the order of 2 to 5 years; and that, at some time thereafter, reapplication would be necessary.

20 Secondly, even on the findings to which reference was made, Excel was not entitled to be paid the agreed amount: fundamental to the decision was that the concrete delivered was, for the reasons found by the Magistrate, defective – that is, not of the value agreed by the parties in their contract.

21 The discussion between the parties and his Honour reveals that there was a considerable amount of evidence going to the most cost effective way of overcoming the defects. The Magistrate held:

“I am satisfied that Mr Matthews [one of the defendants] was getting rectification work done and not a free kick to throw something else in. He was a novice witness in my opinion and a witness who was reputable. I find that the amounts of those quotations are fair and reasonable in the circumstances for the rectification work that was required. I find that the rectification work was in fact required. I find it in part they acted on the recommendation of the plaintiff company to get that type of work done …”

22 I am satisfied that no error of law has been identified on the part of the Magistrate by the plaintiff.

23 The appeal is dismissed with costs.

**********