F & L Salandra T/A Salandra Developments & Assoc v Resource Co Pty Ltd No. Scciv-02-1606

FRANCESCO SALANDRA & LORENDA SALANDRA TRADING AS SALANDRA DEVELOPMENTS & ASSOCIATES v
RESOURCE CO PTY LTD
[2003] SASC 128
Magistrates Appeal

DEBELLE J On 27 February 2003 I heard this appeal from a decision of a magistrate. I dismissed the appeal and made consequential orders for reasons to be published later. These are the reasons for that decision. I will refer to the parties as “the plaintiff” and “the defendants”.
The plaintiff recycles building waste and materials and its business includes crushing concrete and brickwork.
The defendants are husband and wife. They carry on business as builders. They purchased a site on Days Road, Croydon Park for redevelopment. The site contained the remains of previous building work which included concrete footings and slabs as well as brickwork. The concrete work included steel which had been used for reinforcing.
The defendants wished to crush the concrete material and brickwork on the site. They asked the plaintiff to provide a quotation for the cost of doing so. The plaintiff provided the defendant with a quotation which included the item “crush concrete to 40mm minus - $7.00/t”. The defendants engaged the plaintiff to do the work. The plaintiff performed the work between May and September 2001. The defendants refused to pay the whole of the cost of the work asserting that the plaintiff had failed to crush the materials to the specified size.
The plaintiff issued proceedings in the Adelaide Magistrates Court claiming the amount of $19,153.80 being the balance due to it. The defendants counterclaimed for the cost of recrushing the material to the specified size. The magistrate upheld the plaintiff’s claim and dismissed the defendants’ counterclaim. From that decision, the defendants appeal to this court.
The magistrate’s conclusions turned in large part on her assessment of the credibility of the witnesses. Evidence for the plaintiff was given by Mr Simon Brown, its managing director, and Mr Rozenbilds, its recycling and contracts manager, as well as by a Mr White, who operated the plant at the site. Evidence was given for the defendants by Mr Salandra and by a Mr Vreugdenberg, a structural engineer. The magistrate accepted the evidence of the plaintiff’s witnesses and rejected that of Mr Salandra, describing it as “inherently improbable”. Mr Vreugdenberg had given evidence concerning a sample of material which had been collected by the defendant. He had no knowledge of how the sample had been collected or by whom. The evidence related to the quality of the material for underfloor filling. The magistrate found that this question had not been discussed between the plaintiff and the defendants. She held that Mr Vreugdenberg’s evidence was of no assistance. There is no appeal from that decision.
The issues at the trial turned on the meaning of the quotation provided by the plaintiff. After the defendants had contacted the plaintiff, a meeting took place on the site between Mr Brown, Mr Rozenbilds and Mr Salandra. They discussed the options available to crush the material. Those options were either to crush the material on site or to transport it to the plaintiff’s premises, crush it and transport it back to the defendants’ land. The latter would produce a finer grade of crush because a secondary crusher was available at the plaintiff’s premises but was also a more costly operation than the former. If the material had been taken to the plaintiff’s premises and put through a secondary crush, the overall cost would have been $17 per tonne. It was common ground that the defendants asked that the crushing be done on site.
The central issue at the trial concerned the size of the product after it had been crushed. It was the defendants’ case that the material was to be crushed to a size of 40mm or less. The written quotation had been provided to the defendants on about 11 May 2003. Mr Salandra signed it on behalf of the defendants a few days later and work started shortly after. The defendants relied on the expression “40mm minus” to indicate that all material was to be crushed to the size of 40mm or less with no oversized material. The plaintiff’s case was that it was to be crushed to a size described as “nominal 40mm minus”, an expression used to convey that the product would be roughly 40mm in size. The expression conveyed also that some of the product would be more than 40mm in size. This was to be distinguished from “strictly 40mm minus” where the entire product would be 40mm or less in size. Mr Rozenbilds’ evidence was that Mr Salandra was told that crushing on site would be done with a primary crusher only with the result that there would be some oversized material in the product. Mr Brown gave evidence that he was nervous about crushing only at the site because there would be oversized pieces. He said that he informed Mr Salandra of this and told him that, if the material was taken to Wingfield, it could be processed without any oversized material. According to Mr Salandra, there was no discussion of any possible oversized pieces at this first meeting. The magistrate rejected his evidence.
Soon after the work began, Mr Salandra complained that the product was too large. A plate was installed on the crushing machine so that everything was directed into the jaws to reduce the size of the product. The crushing machine was operated when both Mr Rozenbilds and Mr Salandra were present. Material was crushed. Mr Salandra inspected the result. Mr Rozenbilds’ evidence was that he told Mr Salandra that the product could not be any smaller and asked him if he wished the plaintiff to proceed. He said that he made it quite clear to Mr Salandra that, if he was not happy and did not wish to pay for the work, the plaintiff would stop crushing. He said that Mr Salandra told him to proceed. Mr Rozenbilds also offered to put an employee on the crusher to handpick the crush at the plaintiff’s expense. Mr Salandra declined the offer.
Mr Rozenbilds also gave evidence concerning a handwritten note given to the plaintiff by Mr Salandra. The note contained three points. The first read, “To remove all concrete block which was left uncrushed and also the grass piled up”. The plaintiff regarded this as part of the work it had contracted to undertake. The second read, “To remove all steel piled up and any that is left around that section”. Mr Rozenbilds gave evidence that the defendants had been told that there was a magnet on the primary crush which would remove most but not all of the steel. It was Mr Rozenbilds’ evidence that the steel was removed at the plaintiff’s expense and so no invoice was sent for that work. The third point read, “All concrete crushed to be free from any steel pins or any steel in general”. The concrete slab had iron filings in it. They were visible and they were visible when Mr Salandra approved the product produced as a sample crush after the plate had been installed. The magistrate found that it was explained to Mr Salandra that the iron filings could not be removed. The magistrate found, by implication, that the plaintiff had completed the work, the subject of this note.
The plaintiff had instructed Mr White, its plant operator, to obtain the signature of Mr Salandra on a record of the quantity of material crushed. The note was also intended to establish that the plaintiff had done the work and that Mr Salandra was content with it. Mr White gave evidence that Mr Salandra was present each day. If he had any concerns, he came and spoke to Mr White and Mr White would then try and sort the matter out. As the magistrate found, Mr Salandra had ample opportunity to complain to Mr White about the quality of the work. Mr Salandra did not complain to the plaintiff about the quality of the work after the adjustment to the plate on the crusher.
The plaintiff also crushed a large quantity of bricks which had been placed in a separate pile. The defendants have made no complaint about the quality of the crushed bricks. The plaintiff sent invoices to the defendants for payment. Some, but not all, of the invoices were paid. The defendants did not complain about oversize material until after the final invoice had been received.
The magistrate conducted a view. At the rear of the site were large mounds of material which were the product of the plaintiff’s crushing. The magistrate’s reasons include the following description of the mounds of material:
“These mounds consisted of an outer layer of rocks of varying sizes, a number of which appeared larger than 40mm and some items of steel in the mounds and amongst the rocks. The inside of the mounds and apparently most of the volume of the mounds, appear to be made up of dirt like material not inconsistent with the fill which covered the rest of the site.”
Whilst the appearance of the mounds gave the effect of a significant number of uncrushed rocks, the unchallenged evidence of Mr Rozenbilds was that, in the crushing process, the rocks were deposited on the outside of the mounds.
The defendants’ case, both at the trial and on this appeal, was that the plaintiff had contracted to crush the material to a size of 40mm or less, had not done so and so was not entitled to be paid the full cost of the work. The magistrate found
● that the contract was partly oral and partly in writing;
●that the contract included the issues discussed at the first meeting and, in particular, the reference to “normal 40mm minus”;
●that the defendants were informed that there would be oversized material in the crush and that the size would be a nominal 40mm minus;
●that, after Mr Salandra inspected the sample product following the installation of the plate in the crusher, he expressed his satisfaction with the product and instructed that the crushing should continue; and
●that, when he signed the record of the quantity of material crushed, he indicated, among other things, his satisfaction about the work.
It was implicit in her findings that the written part of the contract was constituted by the quotation which had been proffered by the plaintiff and signed by Mr Salandra.
On the hearing of the appeal the defendants applied to lead fresh evidence concerning the quality of the crush. In an affidavit sworn in support of the application, Mr Salandra described events which had occurred after judgment. The defendants had arranged for two lots of material to be recrushed on the site. The first was the material crushed by the plaintiff. The second was a concrete slab which had been discovered in a corner of the site. Mr Salandra asserted that, in the course of crushing the material crushed by the plaintiff, a higher proportion of larger material was found than had been evident on the inspection by the magistrate. Mr Salandra had instructed Golder Associates Pty Ltd, a firm of geo-technical engineers, to examine the recrushed material. The examination occupied some 40 minutes. The effect of the report of Golder Associates was that the stock piles contained sands and gravels up to around 60mm nominal size. In addition, about 5 per cent of the surface of the stock piles and of the exposed faces of cuts in the stock piles contained materials larger than 60mm including spalls of concrete up to about 400mm long and between 200mm and 300mm thick. Mr Salandra himself estimated that at least 60 per cent of the material crushed by the plaintiff exceeded 40mm minus in size. It was sought to lead evidence from Mr Salandra and Golder Associates concerning these matters.
There are a number of reasons why the defendants’ application to adduce this evidence must be denied. First, the defendants have not satisfactorily explained why they did not seek to adduce evidence along these lines at the trial. While it was not realistically practical to examine all of the material crushed by the plaintiff to determine whether it had been crushed to the specified size, several sample piles could have been selected at random and could have been examined. The examination conducted by Golder Associates could have been conducted before the trial. The defendants have, therefore, failed to establish why the evidence could not, with reasonable diligence, have been adduced at the trial. Secondly, the evidence lacks cogency. The estimate by Golder Associates of the proportion of oversized material, broadly speaking, accords with that of the magistrate. Further, the estimates by Mr Salandra that some 60 per cent of the material was oversized is not justified in any way. It is at odds with the assessment by Golder Associates. It has all the hallmarks of an opportunistic attempt to bolster the defendants’ case after judgment. The evidence also lacks cogency because it is apparent that in December 2002 other material was introduced to the site. In the result, I am not satisfied there is a real possibility that the defendant would have succeeded if the evidence had been led: Wood v Roberts (1997) 195 LSJS 328. As already noted, the defendants’ case at the trial was conducted on the footing that the terms of the contract as to the size of the product should have been strictly interpreted and the plaintiff should have complied with them. Having failed in that case, the defendants now seek to mount a different case on the terms of the contract as found by the magistrate. It is too late in the day to do so. The defendants are not entitled, after judgment, to seek to mount an alternative case. Finally, the magistrate did not accept Mr Salandra’s evidence at the trial. It is difficult, therefore, now to accept his estimate of oversized material. For these reasons, I dismiss the application to adduce fresh evidence.
I turn to the issues on the appeal. The defendants say that the contract clearly expressed the size of the crushed material, namely, 40mm minus, and, as there was no ambiguity in the contract, parole testimony should not have been admitted to contradict, vary or alter the terms of that contract: Bank of Australasia v Palmer [1897] AC 540 at 545; Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 at 349. The defendants also contend that the size of the crushed material was not qualified in the contract so that the plaintiff failed to carry out the work in accordance with the contract.
The defendants’ submission fails to address the fact that the magistrate found that the contract was partly oral and partly in writing. The magistrate found that the parties had discussed what was meant by the expression “40mm minus” and that the defendants knew that the product would be a nominal 40mm minus with some oversize pieces. Given the findings of fact and the findings as to credibility of witnesses made by the magistrate, there is no ground for interfering with the magistrate’s conclusion.
However, even if one assumes that the defendants’ submission is correct and the contract required the material to be crushed to a size of 40mm or less, there is clear evidence that the defendants agreed to a variation of the contract. They did so when, after Mr Salandra’s complaint at an early stage of the performance of the contract, the plate in the crusher was installed and Mr Salandra expressed his satisfaction with the quality of the crush. Thereafter, Mr Salandra did not complain of the quality of the crush until after he had received the final invoice from the plaintiff. Thus, the defendants agreed to a variation in the terms of the contract as to the nature of the product produced by the crush. It was not necessary for the contract to be in writing. The contract was capable of variation by oral agreement.
For these reasons, I dismissed the appeal. The following orders were made:
1The application of the defendants to adduce fresh evidence is dismissed.
2 Appeal dismissed.
3The defendants shall pay the plaintiff’s costs of and incidental to the application to call fresh evidence and of the appeal including the costs of the hearing before Gray J on 12 December 2002.
4Of the sum of $25,000 paid into court by the defendants, the Registrar shall forthwith pay the sum of $20,254.50 to the respondent and shall pay the balance in such manner and to such persons as the respective solicitors for the parties authorise in writing.
5Liberty to apply.

[2003] SASC 128

1 May 2003