FDC Constructions and Fitout Pty Limited v Condensing Vaporisers Aust. Pty Ltd t/as RJ Tinker and Son

[2013] NSWSC 1073

Supreme Court

New South Wales

Medium Neutral Citation:	FDC Constructions & Fitout Pty Limited v Condensing Vaporisers Aust. Pty Ltd t/as RJ Tinker and Son [2013] NSWSC 1073
Hearing dates:	14 February 2013
Decision date:	09 August 2013
Jurisdiction:	Common Law
Before:	Slattery J
Decision:	Contract is for payment at a fixed price for sunshades shown in the architectural drawings of the building exterior. Tinker's cross-appeal dismissed. Tinker to pay FDC's costs of the cross-appeal.
Catchwords:	CONTRACT - construction of contract - supply of sunshades for fixing to exterior building surfaces during construction - exchange of sunshade supplier's invoice and builder's purchase order - whether contract price is calculated per sunshade unit supplied up to 102 sunshades or, whether it is a fixed price for sunshades shown in architectural drawings of the exterior building surface. APPEAL - appeal from Local Court - Local Court Act ss39 and 40 - whether appeal on a question of law
Legislation Cited:	Local Court Act 2007 s 39, s 40 Supreme Court Act 1970 s 69 Uniform Civil Procedure Rules 2001 Pt 50.
Cases Cited:	Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Wainohu v State of New South Wales (2011) 243 CLR 181 Workers Compensation (Dust Diseases) Board of NSW v Smith [2010] NSWCA 19 Pavey & Mathews Pty Limited v Paul (1987) 162 CLR 221 Condensing Vaporisers Aust Pty Ltd v FDC Construction & Fitout Pty Ltd, 3 November 2011, unreported, Magistrate Bradd Condensing Vaporisers Aust Pty Ltd v FDC Construction & Fitout Pty Ltd, 17 April 2012, unreported, Magistrate Bradd
Category:	Principal judgment
Parties:	Cross Appellant:- FDC Constructions & Fitout Pty Limited Cross Respondent:- Condensing Vaporisers Aust. Pty Ltd t/as RJ Tinker and Son
Representation:	Counsel: Cross Appellant:- M. Pesman; C. Alexander Cross Respondent:- F. Corsaro SC Solicitors: Cross Appellant:- Paul Antony Clark, Clark McNamara Lawyers Cross Respondent:- Timothy John Mitchell, Bay Legal
File Number(s):	2011/384083
Publication restriction:	No
Decision under appeal	Jurisdiction: 9109 Date of Decision: 2011-11-03 00:00:00 Before: Magistrate Bradd File Number(s): 2009/352741

Judgment

1. The appellant, Condensing Vaporisers Aust Pty Ltd t/as RJ Tinker & Son ("Tinker"), contracted in February 2009 with the respondent, FDC Construction & Fitout Pty Ltd ("FDC"), for the supply of sunshades for fitting to the exterior surfaces of a building in Chatswood.

1. Tinker brought proceedings in the Local Court for recovery of money for the supply of the sunshades. Tinker contended in the Local Court that payment under the contract for the supply of the sunshades was calculated on a unit basis per sunshade supplied. FDC defended the proceedings, contending that the contract required Tinker to calculate the number of sunshades required for the price quoted, using certain architectural drawings of the surface area of the building to be fitted with the sunshades.

1. At trial Tinker contended it was entitled to payment for all of the 183 sunshades provided to FDC and in particular for the additional 81 sunshades in excess of the 102 sunshade units for which it had quoted in February 2009. But FDC's case was that Tinker's quote and the purchase order were for sunshades to fit the surface area of certain architectural drawings, and that whether or not it had quoted for 102 was irrelevant; it had quoted a fixed price of $59,243.54 for an identified surface area of the building indicated on the drawings, and that Tinker bore the risk of error in its calculations of the number of sunshades required for that identified surface area.

1. But FDC conceded that Tinker had supplied (and FDC accepted it was liable to pay for) 12 sunshades and one sunshade awning, which were fixed outside the surface area of the building identified in the drawings.

The proceedings in the court below

1. The present appeal and cross-appeal arise from a decision of Magistrate Bradd of the General Division of the Local Court of New South Wales in proceedings heard over 5 days in 2010 and 2011.

1. After the hearing his Honour gave three judgments. His Honour delivered his principal judgment on 3 November 2011: Condensing Vaporisers Aust Pty Ltd v FDC Construction & Fitout Pty Ltd, 3 November 2011, unreported, Magistrate Bradd ("the principal judgment"). In the principal judgment the Court: ordered FDC to pay Tinker for the "sunshades [and sunshade awning] supplied in addition to the drawings"; but otherwise dismissed Tinker's case declining to order FDC to pay for sunshades supplied in addition to the 102 for which Tinker had quoted in February 2009.

1. On 17 April 2012, his Honour made orders giving effect to the principal judgment, and orders in relation to costs: Condensing Vaporisers Aust Pty Ltd v FDC Construction & Fitout Pty Ltd, 17 April 2012, unreported, Magistrate Bradd ("the April 2012 orders"). Because of FDC's concessions as to the extra 12 sunshades (and one sunshade awning] Tinker had supplied for outside the building surface area identified in the drawings, Tinker had been partly successful in the principal judgment. The April 2012 orders calculated the amount due to Tinker for the 12 additional sunshades at $4,904.62. Before the hearing Tinker had rejected FDC's February 2010 offer of compromise that turned out to be more favourable than the judgment sum of $4,904.62 awarded. So the April 2012 orders required FDC to pay Tinker's costs of the proceedings up to 11 March 2010 and for Tinker to pay FDC's costs thereafter.

1. Tinker sought by motion to correct the calculation of interest in the principal judgment and in consequence to vary the costs orders. Further orders were made on 18 June 2012 ("the June 2012 orders") and on 31 August 2012 ("the August 2012 orders").

1. The June 2012 orders increased the judgment sum by a small amount of interest. That recalculated sum slightly exceeded the offer of compromise. So Tinker sought to amend the June 2012 orders for FDC to pay all its costs. But in the August 2012 orders his Honour decided not to vary the June 2012 Costs Orders.

The appeal and cross-appeal in this Court

1. FDC appealed (by Summons) to this Court from the principal judgment. Tinker cross-appealed (by Cross-Summons subsequently amended), from the principal judgment and the subsequent orders. FDC abandoned its appeal, which has already been dismissed by consent. So the argument at the hearing was on Tinker's cross appeal.

1. Both the appeal and the cross-appeal were commenced pursuant to s 39 of the Local Court Act 2007 and s 69 of the Supreme Court Act 1970. The procedure on such appeal is governed by Uniform Civil Procedure Rules 2001 ("UCPR"). Pt 50.

1. Under Local Court Act 2007 s 39 any appeal to this Court as of right is limited to questions of law. Leave of this Court is required in relation to questions of mixed law and fact and in relation to any appeal from an order as to costs: Local Court Act 2007 s 40. The appeal raised issues of whether or not the principal judgment gave adequate reasons for decision, and as to the proper construction of the parties' contract. FDC ultimately did not contest in oral submissions that these raised issues of law.

1. FDC cross-claimed in the Court below for damages in respect of any additional amount awarded to Tinker. But the Court's finding's on Tinker's principal claim below meant that the cross-claim was not engaged and has not been propounded in either the appeal or the cross appeal.

Background - Tinker Supplies Building Sunshades in Chatswood

1. Some uncontentious background facts are required. Tinker supplied 183 sunshades to FDC and arranged for another subcontractor, Big Blue Plumbing, to fix them all to a building that FDC was constructing and fitting out in Gibbes Street, Chatswood.

1. In January 2009 FDC requested Tinker to quote for the supply the sunshades FDC required for the Chatswood construction project. FDC's request included drawings with specifications of the building surface area where the sunshades were to be fitted. FDC's drawings were subsequently revised in late January. Tinker submitted a quote setting out the number of sunshades it proposed to supply (102) and specified a price ($59,243.54).

1. On 2 February 2009, FDC issued Tinker a purchase order for the sunshades. The FDC purchase order referred to Tinker's final quote specifying the installation of a particular number of sunshades and also referred to FDC's final drawings. FDC's 2 February purchase order partly supports Tinker's case that the contract price is to be calculated from the number of sunshades (in referring to Tinker's 2 February quote) and partly supports FDC's case that the price was fixed as that for fitting sunshades to the area identified in the drawings (in referring to FDC's architectural drawings.

1. Tinker supplied to FDC 183 sunshades, some 81 more than the number referred to in its final quote (102). The sunshades were installed by FDC. Tinker requested FDC to pay for the additional sunshades. But FDC refused.

1. To decide whether FDC is obliged to pay Tinker any money in addition to the $59,243 referred to in the 2 February quote, the parties contested three causes of action, in contract, misleading conduct and in restitution: argued about the following issues on each of those causes of action: (1) whether their written contract, properly construed, was a lump sum contract or a price per unit contract; (2) whether FDC made any pre-contractual oral representations to Tinker that FDC and Tinker would agree on the number of sunshades to be supplied after the building had been completed and Tinker could charge for the agreed number on a per unit basis, and if so, whether any representations FDC made to Tinker were misleading or deceptive within the meaning of s 52 of the Trade Practices Act 1974; and (3) whether Tinker should be paid for the additional 102 sunshades on a quantum meruit basis.

1. Tinker's oral representation-based misleading and deceptive conduct case failed at trial. FDC did not call its employee, Mr Semple, who was alleged to have made the oral representations to Tinker's representative Mr Tinker. But Tinker's representation case was still not accepted. Mr Tinker's evidence of the representations was not clearly supported by Tinker's written quotations, which did not refer to the representations.

The FDC - Tinker alleged representations and contract documents

1. A little more detail of the contracts is now required.

1. In 2008 FDC was carrying out the Chatswood building project for Willoughby City Council and was required to install external sunshades. FDC decided to employ a subcontractor to supply the sunshades and to arrange another subcontractor to install the sunshades. It set about the engaging of these subcontractors early in 2009.

1. In late January and early February 2009, according to Tinker, representatives of FDC and Tinker discussed the sunshades orders over the telephone and at least one meeting. The principal judgment makes clear that Tinker's case was at trial based on a conversation in this period that is said to have taken place with a representative of FDC, a Mr Semple, who was not called to give evidence: principal judgment at [3]. The principal judgment records in the following terms Tinker's case as to what Mr Tinker and Mr Semple is claimed to have said to one another (principal judgment at [3]):

Tinker alleges that he said to Semple: "We will build to the plan that is provided to us, and Semple replied: "When the building is complete and the windows are in we will walk around the job and work out how many angles and brackets are required. We will multiply this on the spreadsheet". Tinker then said: OK, we will charge by unit and walk the job at the end to see how many are required.

1. The principal judgment set out FDC's case in response. That case was that FDC denied "that it told Tinker it required a certain number of sunshades": principal judgment at [8]. Mr Semple did not give evidence to deny Mr Tinker's account of the parties' conversations. But it is sufficiently clear from the principal judgment that Mr Tinker's version of these conversations was rejected.

1. In the absence of oral evidence from Mr Semple for FDC, there was nothing outside the contract documents to support a finding that a fixed price contract had been made. So the remaining contest was about the construction of the alleged FDC-Tinker contract documents.

1. The parties accepted on the appeal that the contract was represented by the purchase order that FDC issued to Tinker on 2 February 2009. This purchase order will be set out in more detail shortly. The parties contested the extent to which their pre-contractual communications could be taken into account in construing that contract. Notwithstanding that contest it is convenient to set the relevant correspondence out in chronological order. Although those communications are not all referred to in the principal judgment their existence is not in contest.

1. On 8 January 2009 FDC sent Tinker a subcontract quotation request for the sunshades. That 8 January FDC request asked Tinker for "a firm price tender for the above work in accordance with the attached Specifications/Drawings/Special Conditions of contract and other enclosed documentation" by 19 January 2009. The scope of work described was to "supply & install [the various elements of the sunshades] as per enclosed drawings". FDC's 8 January request attached several architectural drawings and specifications, which were supplemented on 14 January 2009 by sending Tinker further architectural drawings of the area for the sunshades.

1. In response Tinker sent back 4 quotations: one on 21 January, two on 23 January and another on 2 February. Tinker arranged for a subcontractor, Big Blue Plumbing, to do the installation of the sunshades. Tinker's 2 February quote was incorporated into FDC's purchase order.

1. On 21 January 2009 Tinker emailed Mr Sam Attie at FDC quoting a total price for supply of $67,740. The 21 January quote included detailed calculations of the total price based on the fabrication of an identified number of 164 "frame units". Tinker calculated for supply in the 21 January quote as "Sun Shades Approximate 250 lineal meters @ 1.200 canters gives 164 frame units".

1. But on 23 January 2009 Tinker submitted two revised quotes: one for over $80,891.84, and the other for $73,619.84. These two 23 January quotes were in generally the same form as the 21 January quote but each included a "Note" as to the numbers of "frames" or 'units". The top of the first 23 January quote read in a font larger than the surrounding text "Note 164 frames at 1200mm centres". In the same place on the second 23 January quote appeared the words "Note 138 units as per drawing".

1. But FDC initiated some drawing changes before the final Tinker quote on 2 February. On 30 January 2009 Mr Atie emailed Tinker to inform it that some of the architectural drawings had been amended. And on behalf of FDC he requested a revised quote from Tinker.

1. Mr Atie's 30 January email forwarded the "marked up drawings with regards the sunshades" and said "please resubmit your quotation ... to reflect the changes". The principal judgment recorded a finding based upon Mr Atie's evidence (principal judgment at [5]) that "Mr Atie agreed that the drawings could not be relied upon for installation". Despite that they were forwarded with FDC's authorisation: principal judgment at [5].

1. On 2 February 2009 Tinker emailed a revised quote for $59,243.84. This 2 February 2009 quote was in much the same form as the previous quotes including the additional larger font information about numbers of units/frames at the top of the page: "Note 102 frames at 1200mm centres". As the principal judgment records (at [9]), Tinker's 2 February quotation gives a general description "Sun Shades Approximate 118 lineal meters @ 1.200 centres gives 102 frame units". Then introduced by the words "Each frame comprises", Tinker's 2 February quote describes eleven different material components of the sunshades, and for each such component the quote costs the quantities of the relevant materials under the following headings: "Total Length", "x 164 units", "Material Cost", and "Lengths". A final materials cost column totals $24,753.20, to which 20% is added as a materials loading, making the total cost for materials $29,703.84. To this a fabrication cost of $27,540, and $2000 for powder coating is added, to make a total of $59,243.84 ($29,703.84 plus $2,000 plus $27,540). The calculation of the fabrication cost is shown as "Fabrication 102 - 3 hours - $27,540".

1. After receipt of the revised quote, on 2 February 2009 FDC emailed back to Tinker a purchase order. The purchase order included a table with four columns headed respectively: "Description", "Cost Centre", "Rate" and "Total cost excl GST". The first, description, column referred to:

"Supply, off site fabrication & delivery of sunshade awnings

As per attached quotation dated 02 Feb 2009

And as per attached drawings schedule PLUS A115 Rev F marked up (deleting vertical & sill elements) and seven Architect's dimensioned sketches attached

Includes but not limited to the following:"

1. The list that followed in the 2 February purchase order specified the required sunshade elements and some details of the sunshade installation process. At the foot of the last column the price taken from Tinker's 2 February final quote, $59,243.84 is recorded. The other two intermediate "Cost Centre" and "Rate" columns were left blank. The 2 February purchase order attached a copy of the 2 February quote and the architectural drawings and the dimensional sketches.

February to May 2009 - the supply of the sunshades and subsequent invoicing

1. Between February and May 2009 Tinker produced and supplied to FDC 183 sunshades: the 102 referred to in the Final Quote, and an additional 81. All the sunshades were installed at FDC's Chatswood construction site.

1. Following the progress of sunshade supply Tinker issued invoices to FDC that were consistent with its version of the agreed contract pricing: (1) a 2 February 2009, invoice for a deposit; (2) a 13 March 2009, invoice for "Progress Payment 2, Labour as per quote, Further payment of material costs"; (3) a 29 May 2010, invoice "To supply and fabricate 102 panel of Sun shades for [the construction site] as per quotation dated 2/09"; and (4) also on 29 May 2009, an invoice "To supply and fabricate extra sunshades for [the construction site] as requested, original quotation for 102. Total of sun shades delivered 183. 81 off extra sunshades at price as per original quotation dated 2/2/09 $580.82 each."

1. FDC paid all but the last of these invoices. FDC refused. In the payment schedule FDC sent to Tinker on 11 June 2009 it explained its refusal to pay the last invoice for $51,751.06. FDC said: "Additional quantity x 81 frames - rejected, the contract is to supply sunshades as per drawings and arch sketches T1-T19, no additional frames to those shown on the contract drawings have been installed".

1. The principal judgment made a number of general findings about the contract, in [10] in the following terms:

In evidence, Tinker agreed that he estimated the number of sunshades required, which he calculated from the drawings, and FDC never told him that they required a certain number of sunshades. He agreed that FDC did not tell him to quote in units, but that was the way he quoted. Tinker gave no evidence of the representations particularised in the statement of claim. Tinker also agreed that it was a lump sum price contract

1. The principal judgment then dealt with Tinker's claim in contract, Tinker's misleading and deceptive conduct claim and Tinker's quantum meruit claim. The findings on these causes of action are set out in the principal judgment paragraphs [11] to [16] as follows:

11. Counsel for Tinker says that the evidence shows that the sunshades were not constructed as per the drawings, which confirms an agreement to construct the sunshades from a site measurement. FDC says some variation from the drawings is usual during construction.

12. The difficulty with the Tinker case is that the conversation with Semple is said to have occurred prior to the agreement, however neither the quotation from Tinker nor the purchase order is expressed in cost per unit, both documents express a fixed lump sum price. The Tinker case in contract must fail, because the contract is clearly expressed: Codelfa construction Proprietary Construction Pty Ltd v State Rail Authority of New South Wales [1982] 149 CLR 337 at [22].

Was the representation of Semple misleading?

13. Although in the alleged conversation Tinker says: "We will charge by the unit", later when Tinker made the quotation, it did not charge by the unit. The email sent by Tinker to FDC dated 23/01/2009, being a date after Tinker says he met Semple, does not refer to the meeting, and although it refers to 164 frames and 164 units, the price is not expressed per unit. (Exhibit 6 Annexure E). On 30/01/2009 FDC sent to Tinker revised drawings, and Tinker sent a quotation referring to "102 frame units" and "164 units", it is probable that Tinker omitted to change the figure "164", however the cost is not expressed per unit. On 02/02/2009 FDC raised the purchase order, which does not refer to units, but stipulates:

Supply, off site fabrication and delivery of sunshade awnings; as per the attached quotation, and as per the attached drawing schedule PLUS A115 Rev F marked up and seven architect's dimensioned sketches attached.

Tinker accepted the purchase order, even though the only cost is expressed as a total cost.

Conclusion - Claim of Misleading Representation

14. Although Semple has not been called to contradict the evidence of Tinker in relation to the alleged representation, the claim that Semple mislead Tinker must fail because the subsequent documentary evidence shows no reference to the representation either explicitly, or impliedly by the manner of Tinker accepting the purchase order. If the representation was made the evidence is that Tinker did not rely on it, because it did not charge by unit.

Quantum meruit

15. The issue is whether FDC has received the benefit of additional sunshades. Tinker's case is based upon supply and payment on a unit basis, however Tinker accepted a fixed price contract and there is no evidence of subsequent variation to the contract. In its defence, FDC states that Tinker supplied certain sunshades specified in the drawings. FDC stated that Tinker is entitled to payment for the additional sunshades supplied. There is no evidence of Tinker seeking a variation of the contract.

1. Finally, the principal judgment concluded that FDC should pay Tinker for the sunshades supplied in addition to the drawings: principal judgment at [17]. Consistent with the principal judgment's findings that the contract was for "a fixed price as per the drawings" the principal judgment found that FDC was not entitled to a rebate for the sunshades not supplied but nevertheless had to pay for the sunshades supplied in addition to the drawings: principal judgment [17].

1. Tinker appealed against the principal judgment and the April and August 2012 orders. But in oral submissions Tinker limited its appeal in relation to the April 2012 and August 2012 orders to one question as to costs following the Local Court's recalculation of interest. The principal focus of the parties' submissions on the appeal was the principal judgment.

Grounds of Appeal - Principal Judgment

1. Tinker's grounds of appeal against the principal judgment were that his Honour had: (1) erred in law by failing to give adequate reasons for the conclusions in paragraphs [12] to [16] that disposed of Tinker's contract, misleading conduct and quantum meruit claims; (2) erred in its construction of the contract by concluding that it was a lump sum contract; (3) erred in finding that FDC's alleged pre-contractual representations were incapable of founding a claim because they were not reflected in the contract made subsequent to them; (4) erred in applying an erroneous construction of the contract to reject Tinker's quantum meruit claim.

1. Tinker's ground (2) represented the parties' central contest. These reasons will therefore deal with it first, followed by ground (3) and then ground (4). Tinker's complaint about lack of reasons - ground (1) - was that the principal judgment exposed insufficient of its findings and reasons to allow Tinker to exercise its rights of appeal on the other three grounds: cf Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 and Wainohu v State of New South Wales (2011) 243 CLR 181. So this ground will be analysed whilst dealing with the other three grounds.

1. Tinker also appealed - grounds (5) and (6) - against the costs orders comprised in the June 2012 and August 2012 orders. These remaining grounds will be dealt with together, after the grounds relating to the principal judgment.

Ground (2) - Lump Sum Contract

1. On ground (2) Tinker argues that his Honour erred in construing the contract as a lump sum contract. The contract is FDC's 2 February 2009 purchase order. In my view the principal judgment properly construes the contract as one "to supply sunshades as per the drawings for a fixed price": principal judgment, at [16]. I agree with his Honour's construction. But as the construction issue was extensively argued before me, I would add further reasons for reaching that conclusion than were expressed in the principal judgment.

1. A number of factors point to the correctness of FDC'c construction of the contract, as one to supply all the sunshades necessary to conform to the drawings transmitted on 30 January, and to supply them for a fixed price of $59,243.84. This construction for which FDC contends should be preferred over Tinker's claimed construction (pleaded in the Amended Statement of Claim [12] and [13]): that the contract was one to supply sunshades at a particular price per frame, and initially to supply 102 sunshade frames. In my view the contract was neither one to supply sunshades at a price per frame, nor was it a contract to supply only 102 frames.

1. First, the contract is not a schedule of rates contract for the supply of sunshade frames at a specific rate per frame unit supplied. The structure of FDC's 2 February 2009 purchase order is quite inconsistent with such a construction. The face of the purchase order form is structured to allow (on each line) for the supply of items or units of a particular product or service at a rate per item/unit, and for the total of each group of units or items so supplied then to be aggregated into a grand total, by adding up the line totals. It is difficult to look at the purchase order form, which the parties actually used without being confronted with its structural capacity easily to accommodate a schedule of rates contract.

1. But the parties did not use the schedule of rates structure in the form at all. It is clear that they rejected it. The 2 February purchase order form contains a single grand total price of $59,243.84, without any break-up of that figure identifying rates per item/unit, or identifying any sub-totals for the supply of any group of items/units. The way the parties used the purchase order form on 2 February 2009 is really only consistent with the view that they could not see their way to breaking up their contract pricing into rates per item or per unit. Rejecting this part of Tinker's case means that it is difficult for Tinker to calculate a price per frame for frames supplied in excess of 102. But looking behind the front page of the purchase order provides no better support for Tinker's argument.

1. Secondly, although Tinker's 2 February quotation is attached behind the front page of the purchase order it too does not clearly indicate that Tinker is proposing to supply frames at any particular price per frame. The note at the top of the Tinker 2 February quotation, "Note 102 frames at 1200mm centres" might be thought to indicate that this was a quotation for 102 frames as Tinker contends. But there is a difficulty with drawing this conclusion here. The difficulty, as the learned Magistrate found - principal judgment at [9] - is that the Tinker quotation still seems to carry the mathematical residue of earlier draft quotations, which had divided the total price up by 164 units, not by 102 units. It is very difficult to draw from such drafting a clear inference of a price per unit for 102 units.

1. Thirdly, another element of the purchase order that is inconsistent with a contract to supply 102 frames at a particular price per frame is that there is no definition anywhere in the FDC purchase order or the Tinker quotation of just what is meant by a "frame" or "frame unit". What exactly the purchaser gets, when it gets 102 units, is not at all clear, particularly because many of the calculations are undertaken on the basis of multiplying items by 164, not by 102. For example with the material described as "30mm SS", 2 items are apparently required per frame. But the total of "30mm SS" items needed (and which is then priced) is 328, or 2 x 164 items. The pleadings before his Honour below, were no clearer: referring as they did to "sunshades' as often as "frames".

1. Fourthly, the "Note 102 frames at 1200mm centres" is just that - a note. It is not a calculation to which Tinker shows very great commitment. This note is worded more as an indication of what Tinker then estimated was the number of sunshade frames that would be required to be fitted onto the space on the drawings. The "note" for example, bears no clear indication that Tinker was not prepared to supply any more than 102 sunshade frames for the stated price of $59,243.84, if its estimate of 102 was wrong. And other parts of the quotation support this interpretation: the words "Sun Shades Approximate 118 lineal meters @ 1.200 centres gives 102 frame units" (emphasis added) infer that 102 frame units is the product of a calculation which is itself based on a declared approximation of the number of lineal metres involved.

1. Fifthly, the purchase order describes what is to be provided as being both "As per the attached quotation dated 02 Feb 2009," and "as per the attached drawing schedule... and seven Architect's dimensioned sketches attached." The purchase order assumes that the supply can and must conform with both the drawings in the identified drawing schedule and also with the quotation. It is difficult to see how a contract to supply only 102 frames could conform with the drawing schedule/dimensioned sketches if, as was the case here, 102 frames were well short of the number required to fit out the space described in these drawings/sketches. But the language of the purchase order is more internally consistent on FDC's construction: on that construction the supply will readily conform with both the drawings/sketches, by filling the area they depict, and will conform with the quotation, which is for a lump sum price.

1. The parties were in contest as to whether in order to construe their contract the Court should look at anything more than the 2 February FDC purchase order, together with its attachments. For the Court to draw its conclusion that the learned Magistrate was right and that there was no error in his conclusion on this issue, it has only been necessary for the Court to look at the 2 February purchase order. But were it necessary to look at the parties' earlier communications the position would have been no different.

1. For example, FDC's call for a quotation from Tinker on 8 January requests "a firm price tender for the above work in accordance with the attached Specifications/Drawings/Special Conditions of contract and other enclosed documentation". This wording reinforces the idea that a "firm price" is required for supply in accordance with the drawings. Moreover, the earlier Tinker quotations of 21 January and 23 January are structured in the same way as the final 2 February quotation, and are of no greater assistance to Tinker's case than the 2 February quotation.

1. But Mr Pesman also argued - under ground (1) - that the learned Magistrate had failed, in relation to ground (2) issues, to give adequate reasons for his decision, resulting in an error of law: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 278 and Workers Compensation (Dust Diseases) Board of NSW v Smith [2010] NSWCA 19, see especially Basten JA(at [136] and [138]). Alternatively, Mr Pesman says that the form of the reasons actually given is so inadequate that it demonstrates other errors. For the reasons that follow I do not find these various contentions persuasive.

1. First Mr Pesman argues that in the principal judgment (at [10]) the learned Magistrate refers to the well known passage in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337, at 352 (per Mason J) to the effect that the evidence of surrounding circumstances is not admissible to contradict the language of a contract which has a plain meaning, but his Honour nevertheless goes on to make findings about surrounding circumstances.

1. Mr Pesman says that in the absence of clear reasons showing how he used these surrounding circumstances findings that it should be inferred that he used them impermissibly to construe the parties' contract. But these findings have another purpose. They do not show that his Honour has construed the contract outside permissible principles. The findings his Honour made as to the surrounding circumstances and other communications are all relevant to the misleading and deceptive conduct case and require no special explanation for their presence in his Honour's reasons. Moreover, the principal judgment (at [12]) construes the written 2 February purchase order as "clearly expressed".

1. Mr Pesman also argued that his Honour's conclusion in [12] that "the contract is clearly expressed" is either wrong, because of the debatable content of the 2 February purchase order, or lacks sufficient reasons to explain what is being "clearly expressed". Mr Pesman say if the contract is clear his Honour has not anywhere said exactly what its terms are.

1. But as Mr Corsaro SC pointed out for FDC, the answer to this lies in principal judgment [16], which is a finding as to the terms of the contract that his Honour found to be clear: "the agreement was to supply sunshades as per the drawings for a fixed price".

Ground (3) - Pre-contractual Representations

1. On ground (3) Tinker argues that his Honour erred in finding that FDC's alleged pre-contractual representations were incapable of founding a claim because they were not reflected in the contract made subsequent to them. The first question is whether his Honour did make the finding that this ground assumes was made. For the reasons that follow in my view he did not.

1. Mr Pesman argues that the principal judgment at [14] demonstrates a significant reasoning error. His Honour's reasons at [14] are set out above. Mr Pesman submits that his Honour's reasoning on the misleading representation "assumed as a matter of legal conclusion if you enter into a contract inconsistent with an earlier representation you, of necessity, can't have relied on the previous representation and that is plainly wrong. It might be right in a particular instance but his Honour does not take his reasoning that far." So Mr Pesman's point is that there has either been an error shown in the learned Magistrate's reasoning, or there has been a failure to give adequate reasons on his Honour's part.

1. But paragraph [14] of the principal judgment itself gives the short answer to Mr Pesman's argument. His Honour has simply inferred, using in part Mr Tinker's conduct in accepting, not rejecting the purchase order, that Mr Tinker did not rely in this case on any representation that Mr Semple may have made. That in my view is a quite available inference to draw in the circumstances of this case about Mr Tinker's reliance. Mr Tinker gave evidence and the learned Magistrate could make this assessment of him. But it is merely an available inference based on the particular facts of this case. Paragraph [14] does not contain reasoning that as a matter of legal necessity a subsequent contract inconsistent with a representation must mean that the representation was not relied upon.

1. Mr Pesman next argues that his Honour's misleading representation findings, in [14], only deal with one part of Tinker' pleaded misleading conduct case, namely Tinker's paragraph 6.3 of the Amended Statement of Claim that charging would be on a "per unit" basis. But the short answer to this is that all the other pleaded representations (paragraphs 6.1, 6.2, 6.4 and 6.5 of the Amended Statement of Claim) are nothing more than machinery provisions to facilitate the performance of a per unit contract. His Honour's findings and reasoning disposes of them all at once, in dealing with 6.3.

Ground (4) - Quantum Meruit

1. On ground (4) - Tinker's final ground of appeal relating to the principal judgment - Tinker argues that his Honour erred in rejecting Tinker's quantum meruit claim for the remaining 81 frames, because his Honour had construed the contract as requiring the supply of the whole 183 frames, concluding that there was no room for the operation of quantum meruit.

1. As Mr Corsaro SC pointed out Mr Pesman's characterisation of the contract as one to supply 183 frames is not correct. It was never a contract to supply any particular number of frames - either 102 or 183. Rather it was a contract to supply in accordance with the architectural drawings. Even if these drawings were not fully adequate for all the fabrication decisions required for the job, they were nevertheless the contract guide to the fabrication and supply that was required, rather than any number of frames.

1. But Mr Pesman appropriately conceded that if the contract for which FDC contended was found to have been made, than there was no basis to complain about his Honour's reasoning in paragraph [15] of the principal judgment. This is in accordance with accepted principle that quantum meruit is not available whilst an inconsistent contractual promise exists: Pavey & Mathews Pty Limited v Paul (1987) 162 CLR 221, at 256 per Deane J

Grounds (5) & (6) - Offer of Compromise

1. Finally there was a short argument about his Honour's costs orders. In his April 2012 judgment the learned Magistrate found that Tinker was entitled to judgment for $4,904.62, and that prejudgment interest was payable for a period. But he found that a FDC offer of compromise for $5000 expired on 11 March 2011, so that Tinker should have its costs up to 11 March 2011 and FDC its costs after that date. When interest was factored into Tinker's claim, it came to $5,152 and therefore exceeded the offer of compromise.

1. But his Honour rejected Tinker's motion to vary the costs order so that FDC paid all Tinker's costs before trial : August 2012 order. Tinker now seeks to appeal from that decision. Being a costs order leave to appeal against this decision is required: Local Courts Act s 40(2).

1. But even if leave were granted there is no basis from his Honour's reasons to conclude that his broad Civil Procedure Act s 98 costs discretion miscarried. His Honour was appropriately influenced not to vary his April 2012 costs order because: Tinker was minimally successful, the offer of compromise substantially covered the additional work on which Tinker succeeded, and Tinker failed on the other contentious grounds.

1. Mr Pesman's argument on these grounds is not persuasive.

Conclusion and Orders

1. In the result the Court agrees with the learned Magistrate's construction of the parties' agreement and the Court concludes that there was no error demonstrated in his Honour's reasons in his principal judgment. Nor has the Court found that the learned Magistrate has failed to give adequate reasons or to make sufficient findings. Nor is any error in the exercise of his Honour's cost discretion evident in the subsequent judgments.

1. The FDC appeal was not pursued and has been dismissed. The Tinker cross-appeal was unsuccessful after the argument that took place before me.

1. FDC, the cross-respondent has been substantially successful. The appropriate orders in these circumstances, which I will make are:

(1)   The Cross-Summons is dismissed.

(2)   Order the cross-appellant (Condensing Vaporisers Aust. Pty Ltd t/as RJ Tinker and Son) pay the cross-respondent's (FDC Constructions & Fitout Pty Limited) costs of these proceedings.

I certify that this and the preceding pages are a true copy of the reasons for judgment of Justice Slattery delivered on 9 August 2013

Associate..................................

Decision last updated: 09 August 2013