Hardchrome Engineering Pty Ltd v Kambrook Distributing Pty Ltd - [2000] VSC 359

SUPREME COURT OF VICTORIA
COMMON LAW DIVISION	Not Restricted

No. 7810 of 1996

HARDCHROME ENGINEERING PTY LTD (ACN 005 291 083)	Plaintiff
v
KAMBROOK DISTRIBUTING PTY LTD (in liquidation) (ACN 005 307 282) AND JULIAS INVESTMENTS PTY LTD (ACN 004 342 965) v	Defendant No. 4599 of 1998 Plaintiff
KAMBROOK DISTRIBUTING PTY LTD (in liquidation) (ACN 005 307 282) and HARDCHROME ENGINEERING PTY LTD (ACN 005 291 083)	Defendants

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JUDGE:	Gillard J
WHERE HELD:	Melbourne
DATE OF HEARING:	2-4, 8-11, 14-18, 21-25, and 28-30 August 2000
DATE OF JUDGMENT:	13 September 2000
CASE MAY BE CITED AS:	Hardchrome Engineering Pty Ltd v Kambrook Distributing Pty Ltd
MEDIUM NEUTRAL CITATION:	[2000] VSC 359

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Sale of goods – terms of contract – condition of merchantability – alleged defect in electrical appliance – fire – defect in fryer caused fire – negligence in selling defective product – contributory negligence by consumer – landlord and tenant – breach of lease by tenant – negligence by vendor of fryer causing damage to landlord.

No. 7810 of 1996

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr W. Lally QC with Mr M. Thompson	Anderson Rice
For the Defendant	Mr C. Gunst QC with Mr P. Cawthorn	Ligeti Partners

No. 4599 of 1998

APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr M. Wheelahan	Minter Ellison
For the 1^st Defendant	Mr C. Gunst QC with Mr P. Cawthorn	Ligeti Partners
For the 2^nd Defendant	Mr W. Lally QC with Mr M. Thompson	Anderson Rice

HIS HONOUR:

There are two proceedings before the court. In the first proceeding, No. 7810/96 the plaintiff seeks damages from the defendant for breach of contract and negligence arising out of the sale of an alleged defective electrical appliance which allegedly caused the fire to premises occupied by the plaintiff.

In the second proceeding the plaintiff who was the landlord of the said premises seeks damages from its tenant (the plaintiff in the first proceeding) for breach of a lease, and also the defendant in the first proceeding for negligent supply of a defective product which caused the fire.

Parties

The plaintiff in the first proceeding, Hardchrome Engineering Pty Ltd ("Hardchrome") had for some years prior to 1990 been engaged in the business of advanced surface engineering, that is, applying coating processes, mainly chrome, to a variety of surfaces.

In 1990 it added to its business a Techvac titanium nitride coating process. This process applied ultra-hard gold coloured coatings to moulding, pressing and dye‑cast tools, cutting tools and many other specialised engineering applications where component wear is a problem. The object is to apply titanium nitride to cutting edges for high wear resistance.

In 1990 it occupied premises situated at 5-9 Normanby Road, Notting Hill ("the premises). Part of the premises comprised a factory area called Factory 1 ("factory") where the titanium nitride coating process was carried out in a purpose built room.

The defendant in the first proceeding, Kambrook Distributing Pty Ltd (in liquidation) ("Kambrook") in the period 1990-1992 supplied and…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2000] VSC 359
Decision Date: 13 September 2000

CaseChat Overview and Summary

Hardchrome Engineering Pty Ltd sued Kambrook Distributing Pty Ltd for damages following a fire caused by a defect in an electric fryer. The case was heard in the Supreme Court of Victoria. The plaintiff, a tenant of the building where the fire occurred, alleged that the defect in the fryer, supplied by the defendant, resulted in the fire, which caused damage to the landlord's property and the plaintiff's business. The plaintiff further argued that the defect breached the condition of merchantability and that the defendant was negligent in selling the defective product. The defendant, in turn, raised the defence of contributory negligence by the plaintiff, asserting that the plaintiff was also responsible for the fire.

The court had to determine whether the defect in the fryer constituted a breach of the condition of merchantability and whether the defect was caused by the defendant's negligence. Additionally, the court had to consider the defendant's defence of contributory negligence by the plaintiff and assess the extent to which the plaintiff's actions contributed to the fire. The court also had to determine the extent of the damages caused by the fire and the liability of each party in relation to the damages.

The court found that the fryer was defective and that the defect was caused by the defendant's negligence. The court held that the defendant breached the condition of merchantability by selling a defective product. The court also found that the plaintiff was contributory negligent, as the plaintiff failed to take reasonable steps to prevent the fire from spreading. However, the court held that the defendant was primarily liable for the damages caused by the fire. The court awarded the plaintiff damages for the loss of use of the premises and the damage to the plaintiff's business. The court also held that the landlord was entitled to recover damages for the damage to the premises from both the defendant and the plaintiff, in proportion to their respective liabilities.

The court ordered the defendant to pay the plaintiff damages for the loss of use of the premises and the damage to the plaintiff's business. The court also ordered the defendant to pay the landlord damages for the damage to the premises, with the landlord entitled to recover a portion of those damages from the plaintiff. The court held that the plaintiff's contributory negligence reduced the amount of damages recoverable from the defendant, but did not affect the defendant's primary liability for the damages. The court's decision emphasised the importance of ensuring that products sold are of satisfactory quality and free from defects, and the need for both vendors and consumers to take reasonable steps to prevent accidents and minimise damages.

Orders