Hawk Construction Services Pty Ltd v Kelmist Nominees Pty Ltd as Trustee for the Mount Verde Trust t/as Midland Cement Materials
[2020] WADC 89
•19 JUNE 2020
JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA
IN CIVIL
LOCATION: PERTH
CITATION: HAWK CONSTRUCTION SERVICES PTY LTD -v- KELMIST NOMINEES PTY LTD as Trustee for THE MOUNT VERDE TRUST t/as MIDLAND CEMENT MATERIALS [2020] WADC 89
CORAM: STEWART DCJ
HEARD: 20-21 JUNE, 24-28 JUNE, 5-8 AUGUST, 27 SEPTEMBER & 14-18 OCTOBER 2019
DELIVERED : 19 JUNE 2020
FILE NO/S: CIV 2452 of 2016
BETWEEN: HAWK CONSTRUCTION SERVICES PTY LTD
Plaintiff
AND
KELMIST NOMINEES PTY LTD as Trustee for THE MOUNT VERDE TRUST t/as MIDLAND CEMENT MATERIALS
Defendant
KELMIST NOMINEES PTY LTD as Trustee for THE MONTE VERDE TRUST
Plaintiff by counterclaim
HAWK CONSTRUCTION SERVICES PTY LTD
First defendant by counterclaim
MARK TADDEI
Second defendant by counterclaim
Catchwords:
Contract - Breach of contract - Expert evidence - Reasonableness of damages - Turns on own facts
Legislation:
Civil Liability Act 2002 (WA)
Competition and Consumer Act 2010 (Cth)
Sale of Goods Act 1895 (WA)
Result:
Plaintiff's claim against defendant successful
Plaintiff by counterclaim's claim against first defendant by counterclaim dismissed
Plaintiff by counterclaim's claim against second defendant by counterclaim dismissed
Representation:
Counsel:
| Plaintiff | : | Mr M R Collins |
| Defendant | : | Mr P McQueen |
| Plaintiff by counterclaim | : | Mr P McQueen |
| First defendant by counterclaim | : | Mr M R Collins |
| Second defendant by counterclaim | : | Mr M R Collins |
Solicitors:
| Plaintiff | : | Hotchkin Hanly |
| Defendant | : | Lavan |
| Plaintiff by counterclaim | : | Lavan |
| First defendant by counterclaim | : | Hotchkin Hanly |
| Second defendant by counterclaim | : | Hotchkin Hanly |
Case(s) referred to in decision(s):
AVWest Aircraft v Clayton Utz (a firm) [No 2] [2019] WASC 306
Coal Hub Pty Ltd v NSL Consolidated Ltd (No 2) [2016] WASC 257
Ermogenous v Greek Orthodox Community of SA Inc [2002] HCA 8; (2002) 209 CLR 95
GH Myers & Co v Brent Cross Service Co [1934] 1 KB 4655
Jones v Dunkel [1959] HCA 8, (1959) 101 CLR 298
Makita (Australia) Pty Ltd v Sprowles [2001] 52 NSWLR 705
Seadrill Management Services Ltd v OAO Gazprom [2010] EWCA Civ 691
Vantage Systems Pty Ltd v Priolo Corporation Pty Ltd [2015] WASCA 21; (2015) 47 WAR 547
Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27
Wilshee and Westcourt Ltd [2009] WASCA 87
Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454
Table of Contents
Overview
The pleadings
Issues arising for determination
Background facts
The witnesses
Mr Marco Taddei
Mr Clint Strykert
Mr Mijo Sarich
Mr Darren Rullo
Mr Dale Carter
Mr Daniel Carter
Mr Andreas Twete
Mr Anthony Fettucia
The evidence - Jones v Dunkel
Factual matters for determination
Telephone call of 19 January 2016
Findings
Meeting 29 February 2016
(1) Did Hawk specify its requirement for concrete suitable or appropriate for a burnished finish for the warehouse floor?
Evidence of Mr Strykert
Evidence of Mr Sarich
Evidence of Mr Daniel Carter
Evidence of Mr Dale Carter
Evidence of Mr Andreas Twete
Findings
First concrete pour - 23 March 2016
Discovery of delamination of concrete on 4 April 2016
Meeting 5 April 2016
Site visit - 7 April 2016
Meeting 19 April 2016
Meeting 26 April 2016
Expert evidence
List of questions for experts
Mr Peter Killeen
What was the cause or likely cause of the delaminated concrete MCM supplied Hawk?
What is the significance, if any, of adding air to a concrete mix?
What is the significance, if any, of adding steel fibres to a concrete mix?
What is the significance, if any, of adding water to a concrete mix?
Was the concrete MCM supplied suitable for the purposes of achieving a durable burnished finish?
What was the area of delamination?
Did MCM supply Hawk with concrete that could achieve 32 MPa?
Creamy mix
Mr Peter Trinder
What was the cause or likely cause of the delaminated concrete MCM supplied Hawk?
What is the significance, if any, of adding air to a concrete mix?
What is the significance, if any, of adding steel fibres to the concrete mix?
What is the significance, if any, of adding water to a concrete mix?
Was the concrete MCM supplied suitable for the purpose of achieving a durable burnished finish?
What was the area of delamination?
Did MCM supply Hawk with concrete that could achieve 32 MPa?
Creamy mix
Mr Frank Papworth
What was the cause or likely cause of the delaminated concrete MCM supplied Hawk?
What is the significance, if any, of adding air to a concrete mix?
What is the significance, if any, of adding steel fibres to a concrete mix?
What is the significance, if any, of adding water to a concrete mix?
Was the concrete MCM supplied suitable for the purposes of achieving a durable burnished finish?
What was the area of delamination?
Did MCM supply Hawk with concrete that could achieve 32 MPa?
Creamy mix
Findings
(2) Was MCM obliged to supply concrete suitable for a burnished finish?
Express terms of contract
Implied terms
(3) Was the concrete supplied by MCM suitable or appropriate for a burnished finish?
(4) Was the removal of the concrete supplied by MCM for the warehouse floor by Hawk reasonable?
The claim under the Competition and Consumer Act 2010 (Cth)
Hawk's claim in negligence
Conclusion
STEWART DCJ:
Overview
The plaintiff Hawk Construction Services Pty Ltd (Hawk) was engaged by CTI Transport Systems Pty Ltd (CTI) to design and construct an office and distribution warehouse facility in Hazelmere.
Hawk engaged the defendant Kelmist Nominees Pty Ltd trading as Midland Cement Materials (MCM) to supply the concrete for the facility.
Hawk contends that in breach of its contractual obligation or negligently, MCM did not supply concrete suitable to achieve a burnished finish concrete floor.
Hawk contends further that the concrete supplied did not achieve compressive strength of 32 MPa after 28 days.
Hawk contends further that certain representations were made to it by an employee of MCM that were false and constituted misleading and deceptive conduct within the meaning of the Competition and Consumer Act 2010 (Cth).
Hawk claims damages for the cost of the removal and replacement of the concrete.
MCM denies that it supplied defective concrete. MCM says there was never any stipulation for a burnished finish.
MCM says it was engaged to supply pre‑mixed concrete 32:20:80 in accordance with two contracts and is therefore entitled to payment for that supply.
MCM counterclaims for payment for the concrete it delivered. MCM says Mr Taddei, the sole director of Hawk, guaranteed Hawk's obligations under the contracts.
The action was tried before me on 20 - 21 June 2019, 24 ‑ 28 June 2019, 5 ‑ 8 August 2019, 27 September and 14 - 18 October 2019.
For the reasons which follow, Hawk has established its claim in contract and is entitled to judgment against MCM.
The pleadings
Hawk claims against MCM for breach of contract. In addition, Hawk advances claims for damages for negligence and for misleading and deceptive conduct in contravention of the Competition and Consumer Act 2010.
Hawk pleads in its claim for breach of contract:[1]
[1] Plaintiff's substituted statement of claim, par 18.
18.Further and/or in the alternative, by an agreement made on or about 29 February, alternatively, 29 March 2016, the Defendant agreed to supply the Plaintiff with concrete for a burnished finish concrete floor with a compressive strength of 32 MPa at the CTI warehouse site, that would be delivered in accordance with the times and volumes as required at the price of $149 plus GST per cubic metre, with the Defendant to store and add metal fibres as the Plaintiff directed.
Particulars of Subcontract
The agreement was made on 29 February 2016, comprising an oral agreement as a result of the meeting between Mr Strykert on behalf of the Plaintiff and Mr Twete on behalf of the Defendant ("Oral Subcontract").
Alternatively, the agreement was made on 29 March 2016, was partly oral, partly written and partly by conduct and comprised:
(1)the Oral Subcontract;
(2)the Plaintiff's Purchase Order Number 00008676 (including the Plaintiff's Conditions) dated 2 March 2016, which was emailed to the Defendant on 9 March 2016;
(3)instructions and documents contained in an email from Mr Trevor Cawthan, of the Plaintiff, to Mr Twete dated 9 March 2016;
(4)the Defendant's conduct by supplying concrete to the Plaintiff at the CTI Warehouse Site, commencing on 23 March 2016;
(5)the Defendant's Tax Invoice No: 811607 dated 23 March 2016, under cover of an email from accounts bearing the date 29 March 2016 (being page 20 of DD140), which incorporated the Plaintiff's terms of payment, being 'Cust 30 Days EOM' as contained in the Plaintiff's Conditions (and not the Defendant's payment terms as set out in clause 4.2, Part D of the Defendant's Application for Commercial Credit which relevantly stated that '[the Plaintiff] must ensure that payment for the Goods is made by [the Plaintiff] to the [Defendant] no later than 30 days after the date of [the Defendant's] invoice …'),
('Subcontract').
Hawk contends that the oral agreement, as a result of the meeting between Mr Strykert and Mr Twete, alternatively, the inferred agreement, contained a number of express and implied terms.[2]
[2] Plaintiff's closing submissions, par 206.
Hawk pleads:[3]
19.The Oral Subcontract contained the following terms:
(a)the Defendant would supply concrete to the Plaintiff for the CTI Warehouse Site that was appropriate to be finished to achieve a burnished finish concrete floor at the price of $149 plus GST per cubic metre;
(b)the Defendant would supply concrete to the Plaintiff for the CTI Warehouse Site that was appropriate to be finished to achieve concrete with a compressive strength of 32 MPa at site;
(c)the Defendant would supply concrete to the Plaintiff for the CTI Warehouse Site that would be delivered in accordance with the times and volumes as required; and
(d)the Defendant would store and add metal fibres to the concrete, as the Plaintiff directed.
[3] Plaintiff's substituted statement of claim, par 19.
In the alternative, Hawk contends that the inferred agreement (being partly oral, partly written and partly by conduct) was formed on 29 March 2016 and contained the same terms as those concerning the oral agreement, save that the parties agreed that Hawk's terms and conditions were incorporated into their agreement.[4]
[4] Plaintiff's substituted statement of claim, par 19A; Plaintiff's closing submissions, par 231.
In addition, Hawk pleads:[5]
[5] Plaintiff's substituted statement of claim, par 20.
20.Further and/or in the alternative, the Subcontract, alternatively, the Oral Subcontract, contained the following implied terms:
(a)the Defendant would exercise all reasonable care, skill and attention to supply concrete under the Subcontract, alternatively, the Oral Subcontract, that was appropriate to be finished to:
(i)achieve concrete with a compressive strength of 32MPa at site;
(ii)achieve a burnished finish concrete floor; and
(iii)achieve concrete free from substantial defects.
(b)the concrete supplied by the Defendant under the Subcontract, alternatively, the Oral Subcontract, would be reasonably fit for the purpose for which it was supplied, namely that:
(i)it would be appropriate to be finished to achieve concrete with a compressive strength of 32MPa at site;
(ii)it would be appropriate to be finished to achieve a burnished finish concrete floor; and
(iii)it would comply with the relevant Australian or other applicable standards; and
(iv)it would be appropriate to be finished to achieve concrete free from substantial defects.
Particulars
The implied terms set out above are to be implied as a matter of law and inferred from the parties' intentions when entering into the Subcontract, alternatively, the Oral Subcontract, alternatively, are implied in fact as each such term:
(1)is a necessary and reasonable consequence incident to the express terms of the Subcontract, alternatively, the Oral Subcontract;
(2)is necessary to give business efficacy to the Subcontract, alternatively, the Oral Subcontract;
(3)is capable of clear express; and
(4)does not contradict any express terms of the Subcontract, alternatively, the Oral Subcontract.
Hawk pleads that, in breach of the oral agreement, alternatively, the inferred agreement, MCM supplied concrete that did not achieve compressive strength of 32 MPa after 28 days and was not appropriate to be finished to achieve a burnished concrete floor.[6]
[6] Plaintiff's substituted statement of claim, pars 27, 27A, 33.
Further, and alternatively, Hawk pleads that MCM breached the implied terms of the contract.[7]
[7] Plaintiff's substituted statement of claim, par 33.
In response MCM says the second contract was entered into on or about 23 March 2016.[8]
[8] Defendant's closing submissions, par 20.
MCM pleads:[9]
[9] Defendant's substituted defence and counterclaim and set‑off, pars 18.3, 19, 21 and 22.
18.3says further that on or about 23 March 2016 the Plaintiff and the Defendant entered into a further contract pursuant to which the Defendant would supply the Plaintiff with 1785 cubic metres of premixed concrete 32:20:80 for the project the Plaintiff was undertaking for CTI Logistics for a price of $265,965 + GST (Contract 2).
Particulars
18.3.1The Contract is partly written and partly to be implied from conduct.
18.3.2Insofar as it is written, it is comprised of the following documents:
(a)ACCF [Defendant's Application for Commercial Credit Form] signed by Mr Taddei of the Plaintiff and dated 20 January 2016;
(b)Plaintiff Purchase Order 00008676 dated 2 March 2016 (PO#00008676); and
(c)Email from Trevor Cawthan of the Plaintiff to Mr Twete sent 9 March 2016.
18.4Insofar as it is to be implied from conduct, the Defendant supplied the Plaintiff with the first batch of concrete the subject of PO #00008676 on 23 March 2016.
19.Relevantly, there were express terms of Contract 2, by reference to the documents referred to in paragraphs 18.3.2(b) and (c) above, that the Plaintiff would:
19.1source from Sika, and supply to the Defendant, the metal fibres for inclusion in the concrete mix; and
19.2direct the Defendant as to the ratio of fibres to concrete mix.
21.As to paragraphs 19, 19A and 20 the Defendant:
21.1denies each and every allegation therein;
21.2repeats paragraphs 13, 15 and 18 above.
22.As to paragraph 21 the Defendant:
22.1denies each and every allegation therein;
22.2says further that:
22.2.1at no time was the Defendant requested to provide concrete for the preparation of a burnished concrete floor;
22.2.2at no time was the Defendant requested to provide expertise or any advice regarding the type of concrete required to prepare a burnished concrete floor;
22.2.3in any event, the concrete provided could be finished to achieve a burnished concrete floor;
22.2.4the concrete provided could be finished to achieve a concrete with a compressive strength of 32MPa at site;
22.2.5the concrete provided complied with the relevant Australian or other applicable standards; and
22.2.6the concrete provided could be finished to achieve concrete free from substantial defects.
Hawk pleads in reply that MCM did not accept Hawk's application for credit.[10]
[10] Plaintiff/first defendants by counterclaim and second defendants by counterclaim reply and substituted defence to substituted defence and counterclaim and set-off, pars 3 - 4.
Hawk pleads in relation to loss and damage:[11]
25.On or about 4 April 2016, Perth Concrete Services discovered a section of the concrete previously placed and finished by it had delaminated.
26.Between on or about 5 and 14 May 2016, as the result of the widespread delamination of the burnished concrete, the Plaintiff was required to remove the defective concrete.
27.Compressive strength testing of concrete from the CTI Warehouse Site, undertaken by SGS Australia Pty Ltd revealed that the compressive strength of the concrete supplied by the Defendant did not achieve 32MPa after 28 days. …
27AThe Defendant supplied concrete to the Plaintiff between 23 March and 4 April 2016 being pours 1 to 6 in paragraph 24 above, that was not appropriate to be finished to achieve a burnished concrete floor.
[11] Plaintiff's substituted statement of claim, pars 25 - 27A.
In response MCM pleads:[12]
[12] Defendant's substituted defence and counterclaim and set-off, pars 27 - 29.
27.As to paragraph 26 the Defendant:
27.1denies each and every allegation therein;
27.2says further that in any event, any delamination could have been reasonably remedied by track blasting of the slab surface to remove the affected concrete down to sound concrete followed by the application of a self-levelling screed repair mortar.
28.As to paragraph 27 the Defendant:
28.1denies each and every allegation therein;
28.2says further that:
28.2.1the results of compressive strength testing of the concrete supplied by the Defendant to the Plaintiff revealed that the compressive strength of the concrete was capable of and did achieve a compressive strength of 32MPa after 28 days.
Particulars
(a)The said testing was conducted by Voracious Holdings Pty Ltd trading as West-Test Laboratory ('West‑Test').
(b)The said testing results are contained in West-Test Concrete Test Reports W63629 dated 29 March 2016, W63634 dated 30 March 2016, W63635 dated 30 March 2016, and W63641 dated 1 April 2016 and W63642 dated 1 April 2016.
29.As to paragraph 27A the Defendant:
29.1repeats paragraphs 24.1, 25.1 and 25.3 above;
29.2otherwise denies each and every allegation therein.
MCM says further, and in any event, that:[13]
[13] Defendant's substituted defence and counterclaim and set-off, pars 33.2.1 - 33.2.2.
33.2.1the cause of any loss and damage was due to delamination which related to the placement, finishing and treatment of the concrete by the Plaintiff's subcontractor that performed the placement and finishing work, full particulars of which will be provided prior to trial, but which included:
(a)the introduction of excessive water to the concrete;
(b)the failure to adequately compact the concrete when placing the concrete; and
(c)the premature finishing of the concrete; and
33.2.2by reason thereof and/or alternatively the matters pleaded in paragraph 2.7.2 above the Plaintiff has failed to mitigate any loss or damage.
MCM pleads:[14]
[14] Defendant's substituted defence and counterclaim and set-off, par 39.
39.Further and/or in the alternative if, which is denied, the Plaintiff is entitled to relief against the Defendant, then the Defendant says:
39.1each of the Plaintiff's claims is an 'apportionable claim' as that term is defined in Part 1F of the Civil Liability Act 2002 WA and Part VIA of the Competition and Consumer Act 2010.
…
39.3The agreement for Concrete Placing Services contained an express or, alternatively, implied term that the Concrete Placer would provide the Concrete Placing services and do so in a skilful and competent manner and/or so as to provide a compressive concrete strength of 32MPa and a finish that conformed with the specification pleaded in paragraphs 3 and 4 of the SOC ('Alleged Finish');
39.4Further or alternatively, at a time prior to the first date on which the Defendant supplied concrete to the Plaintiff, the Plaintiff instructed the Concrete Placer that the Plaintiff required the Alleged Finish;
39.5Further to paragraph 39.4 above, the Concrete Placer, by reason of its business practice and the experience and training of its personnel, ought reasonably to have known that the manner in which it performed the Concrete Placing Services, including the addition of water to the concrete and the time the finishing services were carried out to the concrete, would affect the compressive strength of the concrete and the final finish of the concrete and, in particular, whether a compressive concrete strength of 32MPa and the Alleged Finish would be obtained;
…
39.12By virtue of the matters set out herein the Concrete Placer is a concurrent wrongdoer within the meaning of that term and the Relevant Acts; and
39.13The Defendant relies on the proportionate liability provisions of the Relevant Acts to limit its liability in respect of the Plaintiff's claims.
In reply, Hawk says that the area of delamination was significant and that it could not obtain a warranty about a topping unless the concrete was structurally sound.[15]
[15] Plaintiff/first defendants by counterclaim and second defendants by counterclaim reply and substituted defence to substituted defence and counterclaim and set-off, par 13.
Hawk's claim under the Competition and Consumer Act 2010 is as follows:
(a)on 19 January 2016 Mr Twete informed Mr Taddei that MCM was able to supply concrete to Hawk for the CTI warehouse site that would achieve a compressive strength of 32 MPa (strength representation);[16]
(b)on 29 February 2016 Mr Twete advised Mr Strykert, Mr Sarich, Mr Daniel Carter and Mr Dale Carter that MCM was able to supply concrete to Hawk for the CTI warehouse that was appropriate to be finished to achieve a burnished finished concrete floor (supply representation);[17]
(c)Hawk entered into the oral agreement, alternatively the inferred agreement relying upon the supply representation and/or the strength representation, which were false or misleading, causing Hawk to suffer loss.[18]
[16] Plaintiff's substituted statement of claim, pars 6 - 9.
[17] Plaintiff's substituted statement of claim, pars 10 - 15.
[18] Plaintiff's substituted statement of claim, pars 17 - 18, 29 - 32, 34.
MCM admits that Mr Twete sent the email on 19 January 2016 but denies it made any representation about the strength of the concrete.[19] MCM admits there were telephone discussions between Mr Strykert and Mr Twete in or around February 2016. MCM denies that Mr Twete made any representations whatsoever about achieving a burnished finish concrete floor.[20]
[19] Defendant's substituted defence and counterclaim and set-off, pars 6 - 7.
[20] Defendant's substituted defence and counterclaim and set-off, pars 13-16.
MCM says further that Hawk's loss was caused by the placement, finishing and treatment of the concrete by the plaintiff's subcontractor that performed the placement and finishing work, full particulars of which will be provided prior to trial, but which included:[21]
(a)the introduction of excessive water to the concrete;
(b)the failure to adequately compact the concrete when placing the concrete; and
(c)the premature finishing of the concrete.
[21] Defendant's substituted defence and counterclaim and set-off, par 33.2.1.
MCM asserts that Hawk's claim is an apportionable claim as that term is defined in pt VIA of the Competition and Consumer Act 2010.[22]
[22] Defendant's substituted defence and counterclaim and set-off, par 39.1.
MCM relies on the proportionate liability provision to limit its liability in respect of Hawk's claims.
Hawk's claim in negligence is in similar terms to that given in support of the breach of contract claim.
MCM counterclaims for payment for the supplied and delivered concrete in accordance with contracts 1 and 2.[23]
[23] Defendant's substituted defence and counterclaim and set-off, pars 41 - 45.
MCM says further that Mr Taddei as guarantor has refused or failed to pay the amount of the defendant's invoices despite demand.[24]
[24] Defendant's substituted counterclaim and set-off, pars 46.
Issues arising for determination
There is no signed contract between the parties.
There is no dispute that there was a concluded contract or contracts between the parties, but the terms of the contract or contracts are in dispute.
MCM contends that there were two contracts, one relating to the purchase order 00008527 dated 27 January 2016 and the second relating to purchase order 00008676 (for the warehouse floor) dated 2 March 2016.
Hawk contends there was one contract with a subcontract for the warehouse floor.
Whether there is one contract or two contracts is not determinative of the dispute between the parties.
What is in issue is whether MCM was obliged by contract or otherwise to supply concrete suitable for a burnished finish for the warehouse floor.
A visual image of a burnished finish floor is the floor of a Bunnings warehouse. The reason for doing a burnished finish it to make the floor abrasion resistant and easy to clean. It is a product of a process used to finish concrete, to provide a hardwearing, durable finish with a surface lustre.[25] The finish is a very thin but intense layer of hydrated cement.[26]
[25] Exhibit 2.44, part 4.
[26] ts 1,250, (Mr Killeen).
Accordingly, the issues to be determined in this matter are as follows:
1.Did Hawk specify its requirement for concrete suitable or appropriate for a burnished finish for the warehouse floor?
2.Was MCM obliged to supply concrete suitable for a burnished finish?
3.Was the concrete supplied by MCM for the warehouse floor suitable or appropriate for a burnished finish?
4.Was the removal of the concrete supplied by MCM for the warehouse floor by Hawk reasonable?
For the reasons developed below I conclude that:
1.Hawk required concrete suitable or appropriate for a burnished finish for the warehouse floor.
2.Hawk had an agreement with MCM for MCM to supply concrete suitable for a burnished finish.
3.The concrete supplied by MCM was not suitable or appropriate for a burnished finish.
4.In all the circumstances it was reasonable for Hawk to remove the concrete.
Liability and the quantum of the claims are in issue.
As agreed by the parties during oral closing submissions the judgment sum is to be determined after delivery of this judgment.[27]
[27] ts 1,665 - ts 1,666.
Background facts
Many of the facts relevant to the determination of this dispute are not in issue.
Insofar as there are factual matters in dispute, those matters will be addressed after referring to the witnesses and canvassing the evidence.
In August 2015 Hawk was engaged by CTI to construct a logistics warehouse facility with a burnished concrete floor, offices and associated works in Hazelmere.
On 19 January 2016 Mr Mark Taddei, the managing director of Hawk telephoned Mr Andreas Twete, the ready mix manager of MCM about MCM supplying concrete. What was said in the telephone conversation is contested.
On the same day MCM's Mr Twete emailed a commercial credit application form to Hawk.
On 20 January 2016 Hawk emailed the completed and signed application for commercial credit, applying for a credit limit of $150,000.[28]
[28] Exhibits 1.78 and 1.9.
On 27 January Hawk issued purchase order 00008527 to MCM for the initial supply of concrete. The order was 39.2 cubic metres at $149 (5,840.80 plus GST).[29]
[29] Exhibits 1.5 and 1.80.
The purchase order reads:[30]
Supply of pre‑mixed Concrete Pump Mix 32:20:80 as directed by Clint/Trent. Will be called up by Lelas Concreting when required.
Broken up as follows.
8.4M3- Office Suspended 1.
8.4M3- Office 2 G. Floor.
8.4 M3 – office 2 Susp Slab.
14.0 M3 – Rear Footpath.
ATT: - Andreas
[30] Exhibits 1.5 and 1.80.
In accordance with that purchase order MCM supplied concrete to the site from 29 January 2016 onwards. That concrete was placed by Lelas Concreting.
Mr Twete visited the warehouse site on 29 January 2016 after the first pour of MCM concrete.[31] He also visited the site on 1 February 2016, mid‑morning 'to do a bit of customer liaison'.[32]
[31] ts 510.
[32] ts 513 - ts 514.
On 29 February 2016 there was a meeting at MCM's offices between Hawk's construction manager, Mr Clint Strykert, MCM's Mr Twete and Messrs Mijo Sarich, Dale Carter and Daniel Carter of Perth Concrete Services Pty Ltd (PCS). The meeting was held to discuss timing and requirements for the supply of concrete for the warehouse floor. What was said in that meeting is contested.
Following the meeting on 29 February 2016 Mr Twete telephoned and then emailed Belinda Oelofse of Sika.[33] Sika supplied MCM and other companies with admixtures, metal fibres and technical advice relating to concrete.
[33] Exhibit 1.83.
On 1 March 2016 Mr Lester, Sika's technical manager - concrete, responded to Mr Twete. He suggested:[34]
If they want a 3 hour delay, then admixture dose and type will really need to be decided based on what weather is expected … a water reducer that provides moderate retardation, used at about 300 to 400/100 is usually used … A trial mix is essential to work out the dose and timing of finishing operations.
[34] Exhibits 1.84 and 2.36.
Mr Lester advised:[35]
Allowing a creamy surface depends on the mix proportions. There needs to be enough paste in the mix. This is done by playing with the ratios of fine to coarse sand, fine to coarse stone and also the overall sand to stone ratio.
It is not possible from just looking at a mix design to tell whether it needs to be adjusted to allow for the creamy surface they're after. A trial mix needs to be done and adjustments made to the ratios in order to achieve the correct blends. All the following adjustments allow more paste in the mix …
[35] Exhibits 1.84 and 2.36.
As can be seen, Mr Lester's responses to Mr Twete on 1 March 2016 included advice that a trial mix needed to be done.[36]
[36] Exhibits 1.84 and 2.36.
Mr Twete did not advise Hawk or PCS that a trial mix should be undertaken.[37]
[37] ts 862.
A trial mix was not performed by MCM.
On 1 March 2016 Mr Twete responded to the email.[38] He asked some questions about MCM's use of a low dosage amount of retarder 'without them really noticing it.'[39]
[38] Exhibit 2.36.
[39] Exhibit 2.36.
On 2 March 2016 Mr Taddei instructed Mr Cawthan to issue a purchase order 00008676 to engage MCM to supply 1785 cubic metres of concrete at $149 ($265,965 plus GST). The description of that order is in the following terms:[40]
Supply of premixed concrete 32:20:80 As discussed with Clint with Hawk supplying approximately 46,410 Kgs of Metal Fibres from Sika.
Note:- Perth Concrete Services Mio will be calling up the pours or Darren or Clint.
Note for the ratio of Fibres to Concrete Mix please contact Clint or Darren.
Sika will be providing the fibres to youre (sic) yard on Hawk's behalf.
Please ensure some one signs for the delivery and forwards a copy to our offices to show acceptance and quantity delivered.
Any shortage of material were at the end additional Fibres are required and can not be accountered (sic) for, Will be at MCM problem if the fibres are not used in our mix. Any issues contact Clint, to clarify.
Please liaise with Clint or Darren for programing (sic) of the works.
Att:- Andreas
[40] Exhibits 1.4 and 1.85.
On the same day Hawk issued a purchase order to engage PCS.[41]
[41] Exhibit 1.10
On 3 March 2016 Ms Oelofse of Sika emailed Mr Lester's response to Mr Twete. He said:[42]
Hi Belinda
Eco WR should be good. I'd just keep the dose reasonable, to make sure there is some bleed. A 300 to 400 dose should be good.
My personal feeling is that they would be a bit better off with some retarder, otherwise I'd think it may get away from them too fast. I personally wouldn’t use as much as 190/100, I'd probably stick to 50 to 100/100.
My recommendation, however is to suggest to them that a low dose of retarder is recommended, but don't put it in if they insist they don't need it. Just warn them that it may go off faster than the three hours they're after. If you put retarder in, when they've specifically asked for no retarder, they will blame you for anything that goes wrong, even if it has nothing to do with the retarder. These high-spec floor jobs often go wrong and a concrete supplier is usually blamed, but 9 times out of 10, not his fault. I'd be careful not to do anything that gives them any excuse to blame the concrete.
The most important thing with these sort of jobs is that every load must be exactly the same! It is a disaster if one load in the middle goes off slower than those around, because you can't blend the surface finish at the join, it becomes very ugly and obvious.
Every truck must be completely empty before being batched, using return concrete in a load is a disaster, because it affects setting time. Trucks must not stand on site too long, this also affects set time. Slump must be as carefully controlled as possible. If a batch is too wet, it can be a disaster to try to 'dry it out' by adding more cement, this will change set time.
Hope this helps?
[42] Exhibit 2.37.
On 9 March 2016 Hawk sent the site entry map and purchase order 00008676 to MCM.[43]
[43] Exhibits 1.4 and 1.85.
On 21 March 2016 Mr Twete claims he met Mr Sarich at the site where Mr Sarich gave instructions that involved changes to the slump and mix design for the warehouse floor. Mr Sarich was never asked about that meeting.
I am unable to determine whether the meeting took place. Mr Twete is not recorded as attending the site on that day in the site diaries.[44]
[44] Exhibit 1.65, page 3,251 .
On 23 March 2016 MCM delivered concrete for the warehouse floor to site. That pour was described as concrete pour 1.
There was a problem with the concrete in respect of the first two loads of pour 1. Mr Twete was advised of the problems and attended the site on several occasions that day. What was said in conversations with the three men from PCS and Mr Strykert of Hawk is contested.
On the same day PCS placed and finished concrete pour 1.
On 23 March 2016 MCM's tax invoice 811607 recorded the volume of concrete supplied on that day by each truck in cubic metres. The total amount delivered was 121.8 cubic metres over 24 truckloads.[45]
[45] Exhibits 1.81B.
On 29 March 2016 MCM delivered concrete for the warehouse floor to site – concrete pour 2. On the same day PCS placed and finished concrete pour 2.
On 30 March 2016 MCM delivered concrete for the warehouse floor to site – concrete pour 3. PCS placed and finished concrete pour 3.
On 31 March 2016 MCM delivered concrete for the warehouse floor to site – concrete pour 4. On the same day PCS placed and finished concrete pour 4.
On 1 April 2016 MCM delivered concrete for the warehouse floor to site – concrete pour 5. On the same day PCS placed and finished concrete pour 5.
On 4 April 2016 MCM delivered concrete for the warehouse floor to site – concrete pour 6. On the same day PCS placed and finished concrete pour 6.
On 4 April 2016 Hawk discovered concrete delamination. The extent of the delamination is contested.
On 5 April 2016 Mr Strykert, Mr Twete and Mr Fettucia, the managing director of MCM, met at the site to discuss the concrete delivered by MCM. Who was present at that meeting and what was said in that meeting is contested.
On 6 April 2016 MCM engaged an expert Frank Papworth of BCRC (WA) Pty Ltd. Mr Twete and Mr Fettucia gave differing accounts as to how Mr Papworth was engaged by MCM.[46]
[46] ts 641 (Mr Twete); ts 1,037 (Mr Fettucia).
On 7 April 2016 Mr Twete and Mr Papworth attended at the site. Whether Mr Twete and/or Mr Papworth spoke to anyone from Hawk and/or PCS is contested.
On 11 April 2016 MCM engaged an expert, Mr Peter Trinder of BG&E. Mr Trinder visited the warehouse site on the same day.
On 11 April 2016 Mr Twete emailed Mr Papworth about a concrete mix design for 3220 N and requested his 'thoughts on this mix, regarding creating a "Burnished Finish" '.[47] Mr Papworth replied by email on 11 April 2016, 'Why is the air still in it? What's the admixture? I will take a look later today if you can provide these answers'.[48]
[47] Exhibit 1.97.
[48] Exhibit 2.42.
On 12 April 2016 Mr Twete travelled to Germany.
On 13 April 2016 Mr Strykert emailed Mr Twete as follows:[49]
As discussed can you send me your test results and QA for plant, I need it to show that our substructure is OK for the Sika topping to get our warranty.
[49] Exhibit 2.26.
On 19 April 2016 Mr Twete returned from Germany.
On 19 April 2016 Mr Twete claimed he met Mr Strykert and Mr Rullo, the construction supervisor for Hawk, at the warehouse site. What was said in that meeting and if it occurred, is contested.
On 19 April 2016 Mr Twete provided each of Mr Papworth and Mr Trinder with a large bundle of material about the concrete it supplied to Hawk.[50] The information provided included an aggregate test report from BGC, data sheets from Sika, West‑Test laboratory concrete test reports and MCM's batch records. This information was not provided to Hawk except for the 28 day test results from West‑Test on 26 April 2016.
[50] Exhibits 1.99 and 2.00.
On 20 April 2016 Hawk sent two emails to MCM.[51] In the first email, Hawk provided MCM with test results relating to the compressive strength of the concrete. Hawk stated that based on these results the product has been supplied non‑conforming at this stage.[52] In the second email Hawk attached additional information with respect to the core samples and an adhesion testing report dated 19 April 2016. Hawk also requested data relating to the mix. The sheet attached to the email requested 11 separate items including admixture proposed, aggregate information and air content by recent test. Hawk emphasised the need for a quick turnaround.[53]
[51] Exhibit 2.03.
[52] Exhibit 2.02.
[53] Exhibit 2.03.
On the same day MCM received a report from Mr Papworth about the strength of the concrete supplied to Hawk.[54]
[54] Exhibit 2.01.
On 22 April 2016 Hawk engaged an expert, Mr Robert Landorf of ANCON Beton Pty Ltd. Mr Peter Killeen, an expert witness in this trial, is a colleague of Mr Landorf.
On 26 April 2016 there was a further meeting on site with Mr Strykert, Mr Rullo, Mr Papworth, Mr Fettucia and Mr Twete. What was said at the meeting is in contest.
On 26 April 2016 MCM provided Mr Jones of BG&E the latest concrete test results and BGC cement papers.[55]
[55] Exhibit 2.28.
On 26 April 2016 MCM emailed the 28 day test results from West‑Test to Mr Strykert.[56]
[56] Exhibit 2.10.
On 28 April 2016 Mr Fettucia drafted an email to Mr Papworth asking Mr Papworth to redact parts of his core report. Mr Twete sent the request by email to Mr Papworth.[57]
[57] Exhibit 2.23.
On 28 April 2016 CTI informed Hawk that it rejected the concrete slabs that had shown major delamination. CTI said it would also recover delay costs from Hawk.[58]
[58] Exhibit 1.11
On 28 April 2016 Hawk sent two emails to MCM. The first email sent at 12.56 pm requested MCM provide the information requested on 20 April 2016 by midday on 29 April 2016.[59]
[59] Exhibit 2.13.
On 28 April 2016 at 2.15 pm, Mr Twete responded saying:[60]
We have instructed our two independent experts to gather the relevant information as requested by you … we will however endeavour to get all the information to you before 10th of May 2016.
[60] Exhibit 1.63.
On 28 April 2016 Hawk sent a second email at 2.30 pm again requesting the information that was requested on 20 April 2016. Hawk informed MCM that the date of 10 May 2016 was not acceptable.[61] The data sheet was once again attached showing data required.
[61] Exhibit 2.15.
On 29 April 2016 Mr Papworth made the changes to his report, as requested by MCM.[62]
[62] Exhibit 2.24.
On 29 April 2016 Mr Twete emailed a reply to Hawk including an attached letter from Pat Fettucia, a director of MCM, to Hawk Construction, which stated that MCM:[63]
Is also unable to submit the requested documents by midday and the timeframe suggested by the experts, the 10 May 2016, remains. MCM will of course forward these document as soon as we have received them.
[63] Exhibits 1.19 and 2.16.
On 29 April 2016 Mr Twete said he met Mr Strykert and Mr Rullo on site as a follow‑up to the 26 April 2016 meeting. Mr Fettucia said he went to the site and spoke to Mr Strykert as he drove off in his car. I do not need to determine what occurred at site on 29 April 2016.
On 2 May 2016 as requested by MCM, BGC emailed the aggregate compliance certificate for the concrete.[64]
[64] Exhibit 2.29.
On 2 May 2016 Hawk emailed Mr Twete and Mr Fettucia rejecting MCM's position that it would provide the information by 10 May 2016. The email informed MCM that CTI would be seeking liquidated damages against Hawk. It also informed MCM that on the advice of Hawk's expert the concrete was defective and Hawk would be removing the concrete.[65] That email was forwarded to Mr Papworth the same day by Mr Fettucia.[66]
[65] Exhibit 1.13.
[66] Exhibit 2.35.
Mr Papworth drafted a response to Hawk on 2 May 2016.[67] On the same day MCM received the report from BG&E. Mr Fettucia did not forward the report to Hawk.
[67] Exhibit 2.35.
On or about that day Mr Rullo of Hawk marked out areas of delaminated concrete with pink paint.
Between 5 May and 10 May 2016 the concrete supplied by MCM was removed.
From 13 May 2016 onwards BGC supplied concrete to the site to replace the concrete MCM had supplied and to finish the warehouse floor. PCS placed and finished that concrete.
A report was received from Hawk's expert, Mr Robert Landorf of ANCON Beton Pty Ltd, in May 2016.
On 18 May 2016 Mr Twete asked Mr Trinder to update his report on the basis of batch records revealing sand being removed.[68] Mr Trinder revised the report as requested.[69]
[68] Exhibit 2.38.
[69] Exhibit 2.49.
The witnesses
I have assessed the oral evidence of the witnesses in the context of the documents and established facts.
Mr Marco Taddei
Mr Taddei is the sole director of Hawk. He has many years' experience in the building of commercial premises, including warehousing facilities.
Mr Taddei impressed me as an experienced and capable business person who sees his role as overseeing his business. He left the day to day running of his construction sites to his employees.
He gave evidence that in 2015 Hawk was contracted to extend the CTI warehouse in Hazelmere. BGC was Hawk's usual supplier of concrete, but because of its workload BGC was concerned it would not be able to keep up with the required program. Mr Taddei then approached MCM.
On 19 January 2016 he telephoned Mr Twete at MCM to discuss the project. I will make my findings of fact as to what occurred during that telephone call after canvassing the evidence of that call.
In cross‑examination Mr Taddei was shown an email from accounts at MCM to [email protected] dated 21 January 2016 attaching credit approval to trade with Midland Cement with $100,000 credit limit. The email was discovered by MCM very shortly before trial. It was not part of the trial bundle and identified at trial as document DD257.[70] Mr Taddei testified he had never seen it. He was made aware of it about a week before he testified at the trial of this matter. He went back and reviewed all the emails and said it went to the junk section of the Hawk email account.[71]
[70] Exhibits 1.14 and 1.79.
[71] ts 210 - ts 211.
Mr Taddei said Josephine Yustira, the accounts person, sent the credit application form from her email address.[72]
[72] ts 210 - ts 211.
I accept Mr Taddei's evidence in that regard. It is supported by the documentary evidence showing the application for credit was sent from Ms Yustira's email account rather than from the address later used by MCM.
Mr Clint Strykert
Mr Strykert was the construction site manager for Hawk for a period of about 6 ½ years.
Mr Strykert impressed me as an honest and credible witness who gave his evidence in a straightforward and convincing fashion. He was unshaken in his evidence that at the critical meeting on 29 February 2016 he told Mr Twete to make sure it (the concrete) is fit for a burnished finish.[73]
[73] ts 286 ‑ ts 287.
I will make my findings of fact as to what occurred during that meeting after canvassing the evidence from all the witnesses present at the meeting.
Mr Strykert in cross‑examination became upset and emotional when it was suggested to him:[74]
The documents from Hawk say nothing about the burnish finish, your boss, you, and the Sarich's, the triangle, are all coming here to throw Mr? --- Not at all.
‑ Twete under the bus, that's what's? --- We didn't try to throw them under the bus, all we're mentioning is that he was aware of the burnish finish, that's all that is getting mentioned here.
Well, that's your evidence? --- I am telling you, I thought everything ran smooth, I had no problems with him, until those delamination problems, right? And all I did, I spent plenty of time with them all to go and try and give them the time of factor to come out and do this, they're being very hidden with everything they were doing, right? I tried to come and bring them out to go through things, to cabinets, I was the one that sat there and go, 'Oh, can we do a topping?', so I don't know where you're going, I really don't. I'm ‑
Or? --- trying to tell you there was a burnish finish mentioned on numerous occasions, okay?
So where we're going is here, all right? If the expert evidence? --- Let the experts talk then.
You're cutting me off. If the expert evidence shows that the? --- I'm getting upset cos you're putting it to me that I'm lying to get someone in trouble, I don't appreciate that.
[74] ts 373.
I make no adverse finding in relation to Mr Strykert's demeanour during his evidence. In my view it was understandable he was upset given the tenor of questions from counsel for MCM.
Moreover, Mr Fettucia when giving his evidence appeared to be trying to portray Mr Strykert in a negative manner.
For example, Mr Fettucia said when he arrived on site on 26 April 2016 Mr Strykert made a beeline for him. He observed:[75]
… his chest puffed up ... I could just feel that he just had a lot to say … he had a very aggressive stance.
[75] ts 1,042 - ts 1,043.
I make no adverse finding in relation to Mr Strykert's demeanour on that day. I find he was understandably upset. As Mr Fettucia testified Mr Strykert said to him:[76]
Well, you know with your - with Andreas, you know I ordered concrete suitable for a burnished finish …
[76] ts 1,043.
His demeanour and actions strengthen my view that Mr Strykert specified a burnished finish at the meeting on 29 February 2016.
Mr Mijo Sarich
Mr Mijo Sarich is a concrete placer. He was a partner of PCS. PCS specialises in distribution warehouse flooring around Australia.
Mr Sarich and his partners have been involved in this business since 2000 and have placed over two million square metres of flooring. The business uses specialised equipment including a laser screed to produce high performance flooring.
Mr Sarich described high performance flooring as a floor that is hard wearing and dust free, that is placed and finished with specialised equipment.
Mr Sarich described in detail the process of placing the concrete for a high performance floor. Mr Sarich impressed me as a witness who had many years' experience in placing high performance floors. I accept his evidence as honest, accurate and reliable.
In relation to the job at the CTI warehouse he gave evidence that Clint (Strykert) from Hawk telephoned him at the end of February and said that MCM were going to be supplying the concrete for the warehouse facility. He was asked to attend MCM and have a preconstruction meeting in regards to the finishing processes and finishing application that they were going to do for the warehouse facility. He attended the meeting with Dale Carter, Daniel Carter and Clint Strykert.[77]
[77] ts 428.
I will make my findings of fact as to what occurred during that meeting after canvassing the evidence of all the witnesses in attendance at the meeting.
In cross‑examination, Mr Sarich was not challenged about his expertise in placing high performance floors.
He testified that the placer cannot tell a concrete supplier how to make their product.[78] He was not challenged about that issue.
[78] ts 447.
He was asked if he added water to the mix and he described that he added water on some trucks but how many he could not say.[79] It was never put to Mr Sarich that he added excessive water to the concrete.
[79] ts 446.
He agreed he made suggestions to Mr Twete to add additional stone into the mix to give it body. He described that concrete pour 6 was better than concrete pour 1 on the finishing side but not on the visual look.[80]
[80] ts 449 - ts 450.
Other than being asked about the addition of water, Mr Sarich was not challenged in any way about the way PCS placed the floor at the warehouse.
Mr Darren Rullo
Mr Rullo worked as the construction supervisor for Hawk Construction for a period of nearly five years. His job was to run day to day scheduling and coordinate trades. He completed the daily site diary from 29 February 2016.[81]
[81] Exhibit 1.65.
Mr Rullo notified Clint Strykert and Mark Taddei after the delamination was discovered on 4 April 2016 following concrete pour 6.
He marked out the areas of delamination and took photographs of the delamination[82] and the core samples[83] taken from the concrete. Mr Rullo also made a video recording.[84]
[82] Exhibits 1.71, 1.72 and 1.73.
[83] Exhibits 1.67, 1.68 and 1.69.
[84] Exhibits 1.70, 1.74 and 1.75.
Mr Rullo impressed me as an honest, straightforward witness who gave his evidence in a convincing fashion.
Mr Dale Carter
Mr Dale Carter has an oversight role at PCS. He is the father of Daniel Carter, a partner in the business. He is an experienced concrete placer having been in the business for a significant number of years.
Mr Dale Carter impressed me as a no‑nonsense, straightforward witness who recounted his memory of the events in issue.
I will make my findings of fact as to what occurred at the critical meeting on 29 February 2016 and at the concrete pours after canvassing the evidence from all the witnesses present at the meeting.
Mr Daniel Carter
Mr Daniel Carter has worked in the concrete industry for 25 years. He is a partner of PCS.
Mr Daniel Carter also impressed me as a reliable and credible witness who gave his evidence to the best of his ability.
I will make my findings of fact as to what occurred at the critical meeting and at the concrete pours after canvassing the evidence from all the witnesses.
Mr Andreas Twete
Mr Twete is the ready mix manager for MCM.
He graduated with an International Business degree from the University of Richmond (United States of America) and worked in consulting before obtaining employment with MCM in 2010.
He met Mr Fettucia, the managing director of MCM, when they were both studying at university in the United States. Mr Fettucia offered him employment with MCM in Perth.
Mr Twete was the main witness called by MCM. His credibility is a crucial issue I must determine. So far as Mr Twete is concerned, I find he lacked credibility in relation to the critical matters in contest in this matter.
I did not find Mr Twete to be a reliable or an accurate witness in relation to what occurred during the telephone call with Mr Taddei on 19 January 2016, the critical meeting on 29 February 2016, or what occurred on the day of the first pour of the concrete floor on 23 March 2016.
Further, I do not accept his evidence as accurate and reliable in relation to what occurred after the delamination of the concrete was discovered on 4 April 2016.
I will make my findings of fact as to what occurred during the telephone call on 19 January 2016 and at the critical meeting on 29 February 2016 after canvassing the evidence.
I find that on a number of occasions during his evidence, Mr Twete appeared to be tailoring his evidence to try to assist MCM's case.
For example, I do not accept Mr Twete's evidence that no‑one from Hawk told him that Hawk required a mix suitable for a burnished finish at any time until 19 April 2016.[85] Furthermore, I do not accept his evidence that he did not know that PCS were burnishing the concrete at the CTI site at any time during the six concrete pours. In my view his evidence was unconvincing for the following reasons.
[85] ts 659, ts 660, ts 696.
First, counsel for MCM questioned a number of Hawk's witnesses on the basis that Mr Twete did not understand what a burnished finish was. For example, it was put to Mr Strykert in cross‑examination:[86]
And indeed precisely, Mr Strykert, that's what Mr Twete's going to say. He's going to say, 'They didn't say it because it's a word I didn't understand and I would have asked them to explain it?' Yes, but it was explained that machine work and all - So you say --- I don't know word for word, but it was explained. That was the whole purpose of the meeting.
[86] ts 391 - ts 392.
Counsel for MCM also put to Mr Daniel Carter that Mr Twete did not know what a burnished finish was at that time.[87] It was also put to Mr Taddei that Mr Twete did not know what burnished meant.[88]
[87] ts 137.
[88] ts 267.
However, in cross‑examination Mr Twete gave evidence that he knew what a burnished finish was even before the meeting on 29 February 2016. I set out the relevant portions of his evidence below:[89]
[89] ts 978 - ts 980.
STEWART DCJ: Sorry? --- I knew about a burnished finish. Not about this job. I knew what a burnished finish was before this date, yes.
COLLINS, MR: So you knew before the 23rd what it was? --- I know what a burnished finish is, yes. I'm not an expert in a burnished finish, but I knew about a burnished finish.
And you knew about that on the 23rd? --- I knew it before even I met Mijo Sarich and everybody.
So when they were doing the burnishing and so forth, you well across that then? --- I'm sorry?
When they were doing the burnished finish, and you were onsite for, I think, each of the days, and you saw what they were doing, you understood that they were burnishing the concrete? --- I knew of the term of burnished finish, I am not an expert in how to create a burnished finish. And also, I was generally not on the jobsite when they were actually doing the finishing. I was there in the mornings making sure the trucks were being delivered on time.
I might just change topics, your Honour, for a second.
Just before I leave that topic, you said you knew what burnished was, you knew it even before you met Mijo. Are you saying that you knew that as part of your thing as a production manager you knew what burnished finish was? --- As being involved in the concrete industry, you hear many terms and things that are out there. And it's one of the terms you'd heard of before, yes.
…
STEWART DCJ: Well, he's asking if you knew exactly what the term was. That was the question? --- I'd heard of the term. So I knew the term, but I don't know how to create it or make it or actually do it. As I don't lay concrete.
…
COLLINS, MR: … then also in your role as a production manager, you knew generally what it was, but you hadn't been involved in it, other than knowing the term in a general way? --- I would say -
- Would that be correct? --- I would say that's fair.
I find Mr Twete then retreated from this evidence. I set out the relevant portions of his evidence below:[90]
[90] ts 980 - ts 984.
COLLINS, MR: Now, what I wanted to ask you about is that it has been said that your evidence was going to be - and this was said by your counsel, Mr McQueen - that you did not know what burnished meant. You did not know what a burnished floor was at that time? --- I would say I don't know what a burnished floor is. No. How it's done or the technical aspect of it. But it is a term I'd heard before.
But they're two different things, aren't they. Your counsel was saying that:
He does not even know what it means.
The evidence you have given is, you do know what it means and you knew what it means as a production manager? --- No. I again would say I know the - of the term. I have no experience of ever providing concrete. I've never been involved in creating a burnished finish. It's a term I know - like other terms I do know - but it doesn't mean how - what it entails, or an expert or any real knowledge of it.
Well, maybe there's subtlety there that I'm not appreciating. At T358 in the transcript - this is for her Honour's benefit and Mr McQueen's benefit:
Mr Twete is going to say, 'I didn't even know what a burnished - didn't even know what burnished meant - what a burnished floor was.'
…
And this - and I apologise. It's - it's - I'm just putting to you that your counsel has said to a number of witness on this side of the table, that you did not even know what burnished meant. What a burnished floor was. And I want to say to you, that doesn't seem to be true, does it? --- Depends what you mean by how technical - like I said, I'd heard the term, but I - by no expert - an expert. I'm actually - actually knowing what burnishing means, what it entails, what the aspects of it are. Do you need special machines, or special chemicals? Or what it's - actually look like? But that is correct what Mr McQueen said. But it's a term I had heard, just like I've heard many terms out there, but I now absolutely nothing about it.
So is it - what you're saying is, that you'd heard this term used in your role as a concrete production manager, where you're required to prepare mixes and so forth? --- I don't -
And? --- Sorry.
And that you're saying that you just did it anyway - didn't really know what it meant. Is that what you're saying? --- There's lots of terms in the concrete industry that I've heard, but I have not followed up on or I'm not involved in.
But as the production manager, your role is to produce (inaudible) concrete, isn't it? --- My - the role as production manager was not only - related to ready mix. It was actually more on the concrete product side of the business. But again, I don't create the mix designs. I am not a mix design expert by any means.
But it's fair to say that as a production manager is it not that you were supplying concrete that was to be finished to a burnished finish? --- We have never supplied concrete to a customer that was - with a mix that's - with a mix suitable for a burnished finish. We don't have a mix.
Well, you took us to an email where you did have a mix? --- That's correct. That was a - that email - no, no, no - sorry. That email is not a burnished mix, if I'm correct. I believe Frank Papworth sends back with suggestions what needs to be changed to the mix. … I mean, I can give many examples of concrete terms that I've heard but I have no understanding of what it entails or what it requires.
So maybe I'll approach this a different way. Is it your evidence then, that on the 23rd when you're (inaudible) machines, shining the concrete, polishing the concrete, panning the concrete, that at that stage on 23 March, are you saying then that you didn't know what burnished meant? --- Was I there when they were finishing concrete?
STEWART DCJ: You said you were there for the whole day on the 23rd, if my memory serves me correctly? --- I didn't say that I believe. Did I? If I did, I apologise. I was there in the morning. I believe I said I went home, back to the factory. And then I got a phone call from Clint Strykert saying that the concrete was soft on one section and I went back there. Isn't that correct?
COLLINS, MR: Well, can we approach it a different way? --- Yes, sir.
You did go back to the site on the following day, didn't you? --- I was there for - the first - - - (Indistinct)? Yeah, I was there in the mornings of every pour until I left. That's correct.
So you were aware of - you've seen the concrete. You've seen that it's dark. You've seen that it's shiny. You've seen the burned finished, haven't you? --- They had sprayed it with chlorinated rubber and that's why it was dark.
Are you saying, Mr Twete, that after being at site for five days, you didn't realise that what they were doing was burnishing the concrete? --- I did not know what it entails to burnish concrete.
Did you ask? --- I didn't know they were burnishing the concrete, supposedly.
So it's your evidence that you were there on five consecutive days? --- Yes, sir.
- for the pours, and you made no inquiries about what they were doing. You just saw that the concrete was shiny and said - ? --- No. You're making a lot of assumptions, I believe.
You went to the site? --- I -
- consecutively, didn't you? --- In the mornings.
Yes. And because you were there in the mornings, you would have seen the previous day's completed polished shiny surface, and on the second day onwards, wouldn't you? --- My focus was on the delivery of the trucks. I was not going around inspecting the slabs. But you are correct, the slabs looked darker cos they had sprayed it - sprayed it with chlorinated rubber and it had a wavy look.
So when you came back to site in the afternoons, are you saying that they had finished, and at no stage did you ever see any machines? --- The only time I saw a machine I believe, was on the first pour when they - when they called me and said that the concrete was soft. Other than that, I came back well and truly when they were done - maybe around 2, 3 o'clock - and saw Mijo Sarich and got feedback from him and followed his directions.
And you still saw the machines there? --- I saw machines there but they were not working on the concrete. But even if they were, I'm - don't work on the concrete.
And it's your evidence then, through that who five day pour, you did not know at any stage that they were burnishing the concrete? --- Nobody informed me that they were burnishing … No, I did not know. Absolutely not.
I want to suggest to you that that is just simply implausible, Mr Twete? --- Okay.
And that if you did not know prior to the 23rd, you would have asked? --- I disagree with that.
As can be seen from the relevant passages of evidence I have set out, Mr Twete's evidence in relation to his knowledge of burnishing concrete was inconsistent. At first he said he knew what burnishing the concrete was. He then retreated from his evidence.
On his own evidence Mr Twete knew what a burnished finish was before the meeting on 29 February 2016.
Secondly, his evidence as to what was said during the telephone call with Mr Taddei on 19 January 2016 is contrary to Mr Taddei's recollection. I will detail my findings in relation to the call later.
Thirdly, his evidence as to what was said at the critical meeting on 29 February 2016 is contrary to the recollection of other witnesses who attended the meeting. I will detail my findings in relation to the meeting later.
Fourthly, I accept the evidence of Mr Strykert, Mr Dale Carter and Mr Sarich that Mr Twete asked why the concrete was so black after the first pour on 23 March 2016.[91] I will detail my findings in relation to 23 March later.
[91] ts 294 - ts 295 (Mr Strykert), ts 398 (Mr Carter) and ts 436 (Mr Sarich).
Fifthly, on his own evidence Mr Twete was at the concrete pours every day for the period 23 March 2016 to 4 April 2016. I do not accept his evidence that he did not observe that PCS was burnishing the floor.
Mr Twete had been at the warehouse floor for a considerable period of time on site on 23 March (the first pour), not only in the morning, but after the problem with the first concrete pour had been discovered.
Mr Twete accepted he observed the different machines that were being used by PCS. He accepted in cross‑examination that he observed a machine working on 23 March when he came back to site. Specialised machines including a laser screed and trowelling machines are used for burnishing concrete floors.
The PCS machines were on site each day of the six pours.
Indeed, Mr Twete had been to the warehouse site on two occasions prior to PCS' involvement with the warehouse floor. I infer from the evidence that a different process was used for placing the concrete for the pours the subject of the first purchase order placed by Lelas Concreting.
Sixthly, Mr Twete conceded in cross‑examination that he knew the mix MCM supplied was not suitable for a burnished finish well before 19 April 2016. He said:[92]
You knew by 11 April that the mix you had supplied was not suitable for a burnished mix? --- I think we knew it by the 7th according to Frank Papworth.
[92] ts 931.
Seventhly, Mr Twete's evidence that Hawk did not order concrete suitable for a burnished finish is not supported by the documentary evidence being the email and report sent by Mr Papworth on 7 April 2016.[93] I will detail what occurred on 7 April 2016 soon.
[93] Exhibit 1.96.
On 11 April 2016 Mr Twete sent an email to Mr Papworth, copying in Mr Fettucia:[94]
Re: MCM Hazelmere job
Hello Frank, I hope you had a nice weekend. Attached is a mix design for 3220NO. What are your thoughts on this mix, regarding creating a 'Burnished Finish?'
Thank you,
Andreas.
[94] Exhibit 1.97.
Mr Twete was asked about the significance of this mix in terms of the email he sent and he said:[95]
So that is a different 3220 mix that Midland Cement has. And we wanted to get his feedback on this mix.
…
Just to get his feedback on his mix, as he mentioned in his letter that the client might be burnishing the concrete. And we wanted to find out if he felt this mix might be suitable for that.
And why put this mix forward? --- Because he already had the previous mix.
[95] ts 653.
Mr Twete received a reply and was asked is the reply significant to you for any reason. He said:[96]
No. It's just to get feedback from him. Because we're not supplying Hawk with concrete anymore. So it was just general curiosity. General knowledge.
[96] ts 654.
I do not accept his explanation. At the time Mr Twete sent the email Hawk was trying to decide what to do including whether to put a topping on the concrete.[97] Hawk was trying to obtain information from MCM to obtain a warranty from Sika.
[97] Exhibit 1.97.
Indeed, Mr Twete sent an email to Mr Strykert on 14 April 2016 stating:[98]
We want to continue to foster our relationship with Hawk Construction and get to the bottom with what has gone wrong in the process so this can be avoided in our future dealings.
…
In order to proceed MCM recommends that you:
1.Mark out the areas you contend are delaminated, e.g. using the golf stick method.
2.Record these areas on a drawing.
[98] Exhibit 1.98.
Furthermore, I cannot reconcile the evidence of Mr Twete as to a meeting he claimed took place on 19 April 2016 with the documentary evidence being the email of Mr Papworth sent on 20 April 2016 at 5.39 am.[99]
[99] Exhibit 2.01.
I will return to what occurred on 19 April 2016 and my findings when I canvas the evidence.
The combination of all the factors lead me to the conclusion that I do not accept Mr Twete's evidence that the first time Hawk said that it ordered concrete suitable for a burnished finish was on 19 April 2016. Furthermore, I do not accept his evidence that he did not know PCS was burnishing the concrete floor.
I turn now to Mr Twete's evidence after the delamination of the concrete was discovered.
In his email to Hawk on 28 April 2016, Mr Twete wrote:[100]
Based on your email dated 20th of April 2016, we have instructed our two independent experts to gather the relevant information as requested by you. Unfortunately, both of them were unavailable last week. We were informed by one of them, at the meeting with Clint on 26th of April 2016, that it may take up to 10 working days to gather this information from our suppliers.
We will however endeavour to get all the information to you before 10th of May 2016.
[100] Exhibit 2.14.
Mr Twete was cross‑examined about this email. It was put to him that it was not the experts that were gathering the information, but he himself.
Despite being shown documentary evidence to the contrary where Mr Twete either requested the information or provided the information to his experts, he maintained:[101]
…they were going to help gather all the necessary information.
… I believe he [Mr Papworth] tried to contact people too.
… But I believe they also were trying to get information.
[101] ts 812, ts 813, ts 814.
The documentary evidence does not assist Mr Twete.[102] These are all documents that Mr Twete gathered or MCM had in their possession. I have been shown no documentation where either Mr Papworth or Mr Trinder gathered information on behalf of MCM.
[102] Exhibits 1.99, 2.00, 2.28 and 2.29.
I note that the information that Mr Twete provided to his experts included the batch records, the additive information, the aggregate compliance certificates and the BGC cement papers. That information was part of the information requested by Hawk in writing as early as 13 April 2016.[103]
[103] Exhibit 2.26.
I find the email that he sent to Hawk on 28 April 2016 did not accord with his actions in gathering the information and sending that information to his own experts eight days earlier.
Moreover, I have reservations about the accuracy of the computer generated batch records provided by MCM and Mr Twete's actions in relation to the batch records.
In his email of 29 April 2016 Mr Papworth wrote:[104]
The analysis of the batch records shows the concrete supplied had more sand than stated on the mix designs. Its hard to believe that sand would be removed and not be recorded as it makes a mockery of your batch records. I am not sure I would admit that.
[104] Exhibit 2.24.
By email dated 2 May 2016 Mr Papworth wrote:[105]
I note your comment that the sand was dug out so that the sand content of the concrete was correct and not as shown on the batch records. I don't know why the batch records would not record the post 'dig out' weight but the records should be correct. If the sand was dug out then this should be recorded manually on the records (preferably entered on the computer records so its not inadvertently left off a printout).
[105] Exhibit 2.35.
On 18 May 2016 Mr Twete emailed Mr Trinder:[106]
Attached are the six batch records were (sic) the batcher directed the loader driver to dig out the fines as he went slightly over.
Can we please have the report updated with these records shown in the report.
We are on a short timeframe this morning and request to have this updated by 10 am this morning.
[106] Exhibit 2.39.
The batch records attached to the email to Mr Trinder, were added to by hand, with the words 'dug out' with initials. I note there is no date shown for when those additions were made. I also note that the volume of sand that was dug out is not recorded.
However, in cross‑examination Mr Twete denied that he wanted Mr Trinder to change his report by sending that email.[107]
[107] ts 966.
Mr Twete maintained that 'we had a policy of digging out anytime we went over 100 kilos of sand'.[108]
[108] ts 963 - ts 964.
Mr Twete said he asked the loader driver whether he had been following the policy. When questioned as to the date he said:[109]
I don't know, exactly when, but I assume around this time,
Around 18 May? --- Might have been earlier. I think this is actually, maybe created before that, these records, when we sent them originally.
[109] ts 968.
Mr Trinder's report was revised. He wrote:[110]
Of the 10 batches whose individual fine or coarse aggregate was recorded as being out of tolerance signed records have been provided to show that batch weights were manually corrected by shovelling out excess materials prior to mixing (23/3 two loads corrected, 29/3 two loads, 31/3 one load, 4/4 one load).
[110] Exhibit 2.49, page 10.
Appendix B to Mr Trinder's report attaches all the concrete batching records. None of the records carry the handwritten additions. Whilst I accept the out of tolerance batching did not affect the delamination, it is of concern to me that the timing of the addition to the batch records occurred after Mr Papworth brought the issue to Mr Twete's attention, about four weeks after the last concrete pour. The handwritten additions to the batch records were made subsequent to Mr Twete's discussion with the staff member, although no date nor volume of sand dug out is recorded.
Mr Twete then requested Mr Trinder to revise his report on 18 May 2016.
Mr Anthony Fettucia
Mr Fettucia is the managing director of MCM.
The impression I gained throughout Mr Fettucia's evidence is that he was determined at all times to protect MCM's interests.
I do not accept Mr Fettucia as a reliable or an accurate witness.
Mr Fettucia would not accept any position other than that put forward by his employee Mr Twete.
On a number of occasions during his evidence Mr Fettucia told the court that it was the placer, Mr Sarich's fault.[111] I found his comments to be somewhat self‑serving. I do not give his opinion any weight. Mr Fettucia gave evidence that he visited the warehouse site on 5 April 2016. His recollection of Mr Strykert blaming Mr Sarich for the delamination at that meeting does not accord with any other participant including Mr Twete. I will detail my findings with respect to that meeting soon. I do not accept his evidence.
[111] ts 1,030 ‑ ts 1,031, ts 1,039 (examination‑in‑chief), ts 1,129 (cross‑examination), ts 1,205 ‑ ts 1,206 (re‑examination).
Moreover, his attitude and responses to Hawk after the delamination occurred reinforced my view that he was trying to protect MCM's interests.
For example, I find he instructed Mr Papworth to change his draft report on 28 April 2016 to improve the position of MCM.[112]
[112] Exhibit 2.40; ts 1,149 - 1,154.
I set out in detail the changes made to that report at the instruction of Mr Fettucia when I assess the merits of Mr Papworth's evidence.
Furthermore, Mr Fettucia decided to withhold information from Hawk with respect to the concrete supplied, even when he was in possession of information that Hawk requested.[113]
[113] ts 1,124.
Mr Fettucia conceded in cross‑examination that MCM had the batch records, additives information and aggregate information but would not 'hand over raw data'.[114]
[114] ts 1,107, ts 1,115, 1,208.
On 2 May 2016 Mr Fettucia made a decision not to assist Hawk with the information Hawk requested after receiving the email of that date from Hawk.[115]
[115] ts 1,117, ts 1,124.
Mr Fettucia received the report from BG&E on 2 May 2016 but did not provide the report to Hawk.
I also find his difficulty in recognising his own writing or that of his fiancée in a photocopied notebook in which some entries were written during the trial was difficult to accept.[116]
[116] ts 1,157, ts 1,163, ts 1,164.
The evidence - Jones v Dunkel
Before turning to my findings in relation to the important telephone call and meetings in this matter, I turn to MCM's submission in closing submissions that the failure of Hawk to call Mr Trevor Cawthan as a witness is open to a Jones v Dunkel[117] inference. As Vaughan J said in AVWest Aircraft v Clayton Utz (a firm) [No2]:[118]
Two consequences may flow from the unexplained failure of a party to call a witness who that party may be expected to call. First, the court may infer that the evidence of the absent witness would not assist the case of the party. Second, the court may draw an inference unfavourable to the party with greater confidence. In the latter case the inference must already be available on the evidence. Also, the uncalled witness must be one who appears to be in a position to cast light on the facts relied on as the ground for the inference.
[117] Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298; MCM closing submissions, pars 71 - 79.
[118] AVWest Aircraft v Clayton Utz (a firm) [No 2] [2019] WASC 306 [146].
MCM submit that Mr Cawthan prepared both of the purchase orders and provided them to MCM. It is submitted that he may surely have been able to cast light on any discussions and any other circumstances that go to his choice of wording used in the descriptions section of each purchase order.[119]
[119] Defendant's closing submissions, pars 74 - 77.
Mr Cawthan no longer works for Hawk.
Hawk in oral closing submissions responded by saying there was no suggestion in the pleadings or correspondence that Mr Cawthan was critical or relevant in any way.[120]
[120] ts 1,667 - ts 1,670.
I accept that submission. Mr Cawthan is not mentioned in the pleaded case. In my assessment no adverse inference can or should be drawn by the failure to call Mr Cawthan.
Although Mr Cawthan prepared and sent the purchase orders, the evidence of Mr Taddei was clear that Mr Cawthan, as the contracts administrator, was under his instruction. In cross‑examination:[121]
So who – I just need to understand the process, Mr Taddei. Who authorises these purchase orders? I'm just looking at the signature on the bottom of page 262 and it seems to be – maybe if I just have a look. I'll ask you this question. The signature on page 262, is that yours? --- No.
All right. Let's have a look here. Yes, it's different to the one on 254, isn't it? If you look at 254 you've got your signature as, 'Mark Taddei, Director' so the signature on 262, whose signature was that? --- That's Trevor's.
Trevor. Okay, I can see the 'T'. So he signs it but does it require your approval as the director? --- No.
It doesn't? --- No.
So he can authorise it himself? --- Yes. What he's authorising is the rate and the quantum - Yes? - can vary. It could be a little bit less, could be a little bit more.
But he's told I suppose by you, 'I've agreed this rate and this is the sort of concrete that we require'. So he's under your instruction but he executes your instruction. Is that right? --- Yes.
[121] ts 213.
Mr Strykert confirmed Mr Cawthan worked under direction in cross‑examination:[122]
And do the directions for the purchase orders to Mr Cawthan ‑ and you may not know, but do they generally come from ‑ or did they come from Mr Taddei? --- Most of the time, yes.
Most of the time? --- Sometimes from me when I was directed to, say there was ‑ if I organised something, he'd sort the purchase order out and sort the dollar figures out and make it official.
Right? --- But the majority of the time, for Marc ‑ I didn't deal with any big numbers.
Okay. So Mr Cawthan acted on instructions in relation to the numbers and the quantities from Mr Taddei? --- Correct.
And so the preparation of the purchase orders from ‑ principally was Mr Taddei directing Mr Cawthan? --- Yes.
[122] ts 332.
In all the circumstances no adverse inference can be drawn pursuant to the rule in Jones v Dunkel.
In my view it has not been shown that his evidence would have elucidated any discussions regarding the purchase orders. Mr Cawthan followed the instructions of Mr Taddei and Mr Strykert.
Factual matters for determination
In outlining the background facts, I stated that factual matters in dispute will be addressed having regard to the witnesses and the evidence. I turn now to the factual matters for determination.
Telephone call of 19 January 2016
Mr Taddei said that his usual supplier of concrete, BGC, was concerned that they would not be able to supply concrete for the CTI site.[123]
[123] ts 160, ts 228.
On 19 January 2016 he telephoned Mr Twete about MCM supplying the concrete for the CTI site. He said:[124]
What we then did is look for another close supplier, and MCM came up in discussions. And we, in turn - I, in turn - rang MCM. I was put through to Mr Twete, and we discussed the project. And we discussed it in detail as far as time, we discussed the actual address, I read him the copy of the specification that was issued, which we brought to light how the slab was going to be placed, the burnished finishing, that we were going to supply all of the metal fibre. And he had no problems with that. I advised him, at the time, that - the reasons why we came to him. In turn, I actually believe that I spoke to him about the rate, and the rate that he quoted us is no different to the rate that we were getting from BGC. So it wasn't to actually get a cheaper price, it was to get supply.
[124] ts 160 - ts 161.
Mr Taddei gave evidence that he had the specification for the warehouse in front of him.[125] He read from section C (Concrete Works), item E (Compaction for Concrete) and item K (Monolithic Finish (warehouse slabs 32 MPa - 140 mm fibre)). Those items read, inter alia, that all internal warehouse floors must be laser screeded and are to be finished with a 'burn' finish. He said he told Mr Twete the external car parking volumes, the footing volumes and the internal warehouse volumes. He continued:[126]
Now, in response to being told those volumes, can you recall what Mr Twete said? --- He'd be very, very keen to - to look at it. And he did go out of his way to say that MCM would want him to get more and more involved in those type of developments. And with that being said, the - the conversation - he said he'd get back to me to confirm the rates. Later on his rates were completed, and I believe the same day we got a credit application issued to our office, which we, within days, filled out and sent back.
…
They were very, very - he - basic - we're happy to accommodate everything or - to get this, you know, this project, underway. There was never any concerns on his behalf mentioned over the phone call, and our phone call would have lasted most probably the most part of most probably, I don't know, five to 10 minutes. And it was just general chat, but it was importantly with volumes, the areas, the time frames. And we spoke - as the time gets closer, we were going to - I was going to instruct our people to go and visit him, visit his plant to make sure everyone was on the - everyone knew what they had to do.
[125] Exhibit 1.6.
[126] Exhibit 1.6, ts 163 - ts 165.
In cross‑examination Mr Taddei confirmed he told Mr Twete that he was buying concrete from BGC at $149 per cubic metre.[127]
[127] ts 207.
Mr Taddei maintained that he had the specification in front of him and gave Mr Twete 'an overall'. He said he told Mr Twete it was internal, it was fibred, it was going to be laser screeded, mechanically finished and burnished finish on completion.[128]
[128] ts 266.
MCM argues that the second contract was formed on or about 23 March 2019 and is partly written and partly to be implied by conduct. I do not agree.
In closing submissions MCM argues that the meeting on 29 February was an enquiry from Mr Strykert and Mr Sarich about the requirements of potential future supply of concrete by MCM to the CTI site.[399] I do not accept MCM's submission. The meeting could not be characterised as an enquiry.
[399] Defendant's outline of closing submissions, par 45.9.
The whole purpose of the meeting was to ensure that MCM understood all the requirements for the assignment.
MCM further submits in closing submissions that on the evidence any purported oral term would be void for uncertainty.[400]
[400] Defendant's outline of closing submissions, pars 55 - 63.
MCM submits that further specificity was required. MCM refer to the detail that Mr Killeen recommended for a Bunnings floor.
MCM submit, this is particularly so given the seemingly contradictory request by Mijo Sarich for a creamy mix and the failure to at least clarify the type of creamy mix that MCM requires (whether it be a creamy mix with high fines or a creamy mix with high cement given that they have polar effects on successfully burnishing the concrete).[401]
[401] Defendant's outline of closing submissions, par 62.
MCM submit, a creamy mix was ordered and a creamy mix is inconsistent with a burnished finish.[402]
[402] Defendant's outline of closing submissions, par 63.
I do not accept MCM's submissions.
In relation to the level of detail required, Mr Killeen testified:[403]
You're now twisting my words and suggesting that all builders should be giving that information out. The truth is they don't.
[403] ts 1,295.
Mr Killeen in his report stated that the vast majority of warehouses and logistics centres in Australia are constructed without any 'high level' specifications.[404]
[404] Exhibit 2.45, page 7.
I have already made findings in relation to creamy mix.
As I have found Mr Twete expressed a willingness to meet all of the requirements set out by Hawk and PCS. To an objective observer Mr Twete conveyed to Hawk and PCS that MCM was able to supply the concrete that was requested.
The background to the meeting occurred after:
1.The initial telephone conversation on 19 January 2016.
2.Following that initial telephone conversation, Mr Twete emailed MCM's commercial credit application form to Hawk. Hawk emailed the completed and signed application form back to MCM, applying for a credit limit of $150,000.
3.On 27 January Hawk issued the first purchase order to MCM for the initial supply of concrete.
4.In accordance with that purchase order MCM supplied concrete to the site for the external areas and suspended slab from 29 January 2016 onwards.
5.On his evidence, Mr Twete visited the site on two occasions.
6.It was self‑evident that the work was for a large industrial project. It was self‑evident that the concrete was to be supplied for a warehouse floor of a logistics facility. It was a significant project involving the supply of concrete for a 13,000 square metre floor.
I accept Hawk's submission in closing submissions that the meeting on 29 February 2016 occurred in a serious commercial context.[405]
[405] Hawk's closing submissions, par 217.
I find the parties orally agreed the terms of the agreement between MCM and Hawk for the supply of concrete for the warehouse floor at that meeting on 29 February 2016. An objective assessment of the state of affairs between the parties show that an agreement was reached. There is an enforceable contract with express terms.
Express terms of contract
First, it was agreed at that meeting that MCM would supply concrete to Hawk for the warehouse floor that was suitable or appropriate to be finished to achieve a burnished finish.
As I have found, the whole purpose of the meeting was to ensure MCM knew what Hawk and PCS expected in supplying concrete for the warehouse floor. PCS explained the placement method and the mechanical equipment PCS used. The requirements were clearly articulated by Hawk and PCS. MCM expressed a willingness to meet all of the requirements set out at the meeting, which included the requirement to supply the concrete appropriate to achieve a burnished finish concrete floor.
Second, it was agreed that MCM would supply concrete to Hawk for the warehouse floor that was appropriate to be finished to achieve concrete with a compressive strength of 32 MPa at site.
Third, MCM agreed to Hawk's request for MCM's trucks to be limited to 5 cubic metres per truck so as to fit in with Mr Sarich's work style.
Fourth, the timing for the pouring/delivery of concrete was agreed.
Fifth, it was agreed that MCM would store and add the metal fibres as directed by Hawk.
Sixth, the price that MCM would charge for the supply of the concrete had already been agreed at $149 per cubic metre during the conversation between Mr Twete and Mr Taddei on 19 January 2016.
Subsequent to the meeting, the attendees were shown around MCM's plant and the batching facilities.
The agreement reached at the meeting is supported by each of the parties' actions after the agreement was put into effect.
On that afternoon Mr Twete sought expert advice from Sika by telephone and email as to the supply of the concrete.[406]
[406] Exhibit 1.83.
After receiving email advice from Sika, Mr Twete sought further advice from Sika about the addition of retarder.[407]
[407] Exhibit 1.84; Exhibit 2.36.
On 2 March 2016 Mr Taddei instructed Mr Cawthan to prepare a purchase order for the supply of concrete for the warehouse floor.
On 9 March 2016 Hawk sent purchase order 00008676 to MCM for 1785 cubic metres of concrete at $149 per cubic metre.[408]
[408] Exhibit 1.4.
It is important to note that the wording of purchase order 00008676 is different to that of the purchase order 00008527 in that steel fibres were to be added to the mix. Moreover, there was specific reference to the order being supply of pre‑mixed concrete 32:20:80 as discussed with Mr Strykert.
The purchase order in my view is consistent with the formation of the agreement.
The dealings between the parties after the formation of the agreement were that MCM supplied Hawk with a large volume of concrete for the warehouse floor, commencing on 23 March 2016 with six concrete pours delivered between that date and 4 April 2016.
In all the circumstances Hawk who has the onus of proving the existence of the contract has proved that the agreement was concluded at the meeting on 29 February 2016.
Implied terms
Terms are implied in law in this contract as it is a contract for work and materials. The contract could also be a contract for the sale of goods.[409] I need not determine this point as there is no distinction in this case between the obligations implied with regard to quality and fitness between a sale of goods and a contract for work and materials.[410]
[409] Sale of Goods Act 1895 (WA) s 4, s 14(2).
[410] Young & Marten Ltd v McManus Childs Ltd [1969] 1 AC 454, 473 - 474.
The general rule is that laid down by Du Parcq J in GH Myers & Co v Brent Cross Service Co that:[411]
A person contracting to do work and supply materials warrants that the materials which he uses will be of good quality and reasonably fit for the purpose for which he is using them, unless the circumstances of the contract are such as to exclude any such warranty.
[411] GH Myers & Co v Brent Cross Service Co [1934] 1 KB 46, 55.
There is also an obligation to carry out the work with reasonable care and skill unless the contract provides otherwise.[412]
[412] Seadrill Management Services Ltd v OAO Gazprom [2010] EWCA Civ 691 [27] - [28].
In my view the contract agreed between MCM and Hawk did not exclude the warranties implied by law.
MCM was under an obligation to carry out the work with reasonable care and skill. MCM was under an obligation to supply concrete of good quality that was reasonably fit for the purpose for which it was required, that is, a warehouse floor for a logistics facility.
As I have set out, this was not a standard concrete floor. This was an industrial floor. The particular purpose of the floor was made known to MCM. Hawk relied on MCM's skill and ability to supply concrete reasonably fit for that purpose, that is, to be finished to achieve a burnished finish concrete floor.
It was an express term of the agreement that the parties agreed that the concrete to be supplied by MCM was appropriate to achieve a burnished finish.
In the circumstances, I am of the view that the terms implied in law in this contract do not add anything to what the parties were required to do under the express terms of the agreement.
I now turn to question 3 of the issues to be determined.
Was the concrete supplied by MCM suitable or appropriate for a burnished finish?
Based on the evidence and my findings in relation to the evidence I am satisfied that MCM supplied concrete that was not suitable or appropriate to achieve a burnished finish concrete floor. The concrete mixes supplied by MCM were unsuitable for use where a burnished finish was required.
In short, MCM supplied concrete that had too much fine material. MCM added admixtures to the concrete it supplied to Hawk. MCM supplied concrete that included air entrainer admixture, water reducer admixture and retarder admixture.
MCM did not have authority from Hawk to add these admixtures. MCM did not advise Hawk that admixtures were being added to the concrete mixes. MCM did not advise PCS that admixtures were being added to the concrete mixes.
Moreover, MCM did not perform testing or trials on the concrete mix. In particular, MCM did not conduct bleed testing or air testing on the concrete it supplied to Hawk.
MCM did not perform trials recommended by Sika as early as 1 March 2016. MCM should have conducted testing and trials.
I conclude that MCM was in breach of the express contractual obligation to supply concrete suitable or appropriate for a burnished finish concrete floor.
I am satisfied on the evidence and my findings in relation to the evidence that the inappropriate concrete mixes were the primary cause of the delaminated concrete.
I now turn to question 4 of the issues to be determined in this matter.
Was the removal of the concrete supplied by MCM for the warehouse floor by Hawk reasonable?
It is in dispute whether MCM's breach caused the plaintiff's loss. MCM asserts that the cause of Hawk's loss was Hawk's concrete placer, PCS.
As I have found, PCS did not cause Hawk's loss.
As I have concluded, the primary cause of the delaminated concrete was that MCM supplied concrete that was not suitable or appropriate to be finished to a burnished finish.
Hawk claims the costs associated with investigating, removing and disposing of the defective concrete as well as the costs associated with replacing and installing the defective concrete.
Martin CJ in Wilshee and Westcourt Ltd set out the law as follows:[413]
[413] Wilshee and Westcourt Ltd [2009] WASCA 87 [61] - [66] (Martin CJ with whom Buss JA and Newnes AJA agreed).
61… the Australian law applicable to issues of this kind has been elucidated by the decision of the High Court of Australia in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 83 ALJR 390; [2009] HCA 8. …
62In doing so, the High Court emphatically rejected the proposition that a party entering into a contract was at complete liberty to break the contract provided damages adequate to compensate the innocent party were paid - in the Tabcorp case being damages in the amount of the diminished value of the landlord's reversionary interest. Rather, the High Court reaffirmed the 'ruling principle' [13] that the measure of damage at common law for breach of contract was that stated by Parke B in Robinson v Harmon (1848) 1 Exch 850, 855; (1848) 154 ER 363, 365:
The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.
63Applying that principle to the facts of this case, under the terms of the contract for the construction of his house, Mr Willshee was entitled to a house constructed using limestone which was all of high quality. That is not what he got. Under the 'ruling principle', he was entitled to damages in the amount required to put him in that position - namely, by demolishing the existing external wall and replacing it with limestone which was all of high quality.
64As the High Court points out in Tabcorp, the words of Baron Parke in Robinson v Harmon are not to be equated with being placed in 'as good a financial position as if the contract had been performed' [13]. So, in the case of land and buildings, diminution in value is not the only measure of damages available - although, of course, in some cases it may be the appropriate measure.
65The earlier decision of the High Court in Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 stands firmly against the proposition that diminution in value is the ordinary measure of damages awarded against a builder as a result of departure from a building contract. In that case, a builder who had breached his contract in respect of the composition of the concrete in the foundations of the building and in respect of the mortar used in the erection of its brick walls, asserted that the relevant measure of damage was the difference between the value of the house and land as constructed, and the value which it would have had if the building contract had been performed. That contention was rejected. In the joint judgment of Dixon CJ, Webb and Taylor JJ, it is observed that the ordinary measure of damage is the cost of the building work which is required to achieve conformity with the building contract (617 - 618). If that work requires the demolition and reconstruction of the house, then, subject to one qualification, that is the appropriate measure of damage.
66The qualification to which the High Court referred in Bellgrove was that 'not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt' (618). On the facts of Bellgrove's case, the High Court was of the view that insistence upon the performance of the remedial work by demolition and reconstruction was entirely reasonable given the nature of the breaches of the building contract.
In Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd the New South Wales Court of Appeal stated:[414]
The general principle on which damages are recoverable by a building owner for breach of a building contract is the cost of making the work or building conform to the contract, subject to the qualification that not only must the work be necessary to produce conformity, but it must also be a reasonable course to adopt: Bellgrove at 617 ‑ 618; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 at [15]. In the latter case, the court indicated that the test of unreasonableness is only to be satisfied by fairly exceptional circumstances: at [17].
[414] Walker Group Constructions Pty Ltd v Tzaneros Investments Pty Ltd [2017] NSWCA 27 [186].
In closing submissions MCM submit that it was unreasonable for Hawk to take the action to remove and replace the entirety of the disputed pour slabs in circumstances where:
105.1such a small portion of the disputed pour slabs were identified as being delaminated;
105.2The slab was removed before Mr Papworth had the opportunity to complete his delamination testing;
105.3There is a more cost effective repair solution available to it.
MCM further submit that Hawk has not provided sufficient expert evidence in support of the proposition that it was reasonable for it to remove and replace all of the concrete supplied under the second contract, as opposed to repair the concrete in the above manner.[415]
[415] Hawk's closing submissions, pars 98 - 108.
I do not accept MCM's submissions.
In the present case there was a contractual obligation to supply concrete suitable for a burnished finish. MCM did not do so. The breach of contract impacted the warehouse floor in a very significant way. There was widespread delamination of the warehouse floor.
In my view Hawk acted reasonably in removing the delaminated concrete.
First, as I have concluded, the concrete delamination was widespread. I rely on my findings and the evidence of Mr Sarich, Mr Darren Carter, Mr Dale Carter, Mr Rullo, Mr Strykert, Mr Killeen and Mr Trinder set out earlier in these reasons. I do not accept Mr Papworth's evidence as to the extent of delamination for reasons I have previously set out.
Second, I accept the evidence of Mr Killeen that patching the affected areas was not a viable solution for the problem. Mr Trinder supported Mr Killeen's view that it was not economic to do patch repairs. I have set out my findings in that regard earlier in these reasons.
In his report, Mr Papworth did not evaluate the economics of repair versus replacement.[416]
[416] Exhibit 2.51, page 40.
Third, the matter was time critical at the time Hawk decided to remove the defective concrete. Almost a month had gone by since the delamination was discovered.
Despite repeated requests including on 20 April and 28 April 2016 and despite the fact that MCM was in possession of information that it could give to Hawk, MCM did not provide the information required. MCM maintained a date of 10 May 2016 in all correspondence despite the urgency of the situation and despite being in possession of information that could assist Hawk.
CTI informed Hawk by letter dated 28 April 2016 that it rejected the concrete slabs that had shown major delamination. CTI also said it would recover delay costs from Hawk.[417]
[417] Exhibit 1.11.
In my view Hawk had no alternative given that MCM would not supply the information requested and because of the pressure CTI was placing upon them.
In all the circumstances, in my view Hawk is entitled to the costs associated with investigating, removing and disposing of the defective concrete as well as the costs associated with replacing the defective concrete and placing and finishing the replaced concrete, less the cost of what Hawk would have paid MCM under the original contract for that concrete.
This is the sum of money that is required to put Hawk in the position in which Hawk would have been, had the contract been performed by MCM.
The claim under the Competition and Consumer Act 2010 (Cth)
I have already made findings accepting Mr Strykert's evidence, Mr Sarich's evidence and Mr Daniel Carter's evidence as to what was said at the meeting on 29 February 2016. I have already made findings rejecting Mr Twete's evidence that a burnished finish was not mentioned at the meeting.
I am satisfied that in response to Mr Strykert and Mr Sarich telling Mr Twete of the requirement for the burnished finish for the warehouse floor, Mr Twete stated on more than one occasion words such as, 'Not a problem, we can give you whatever you want', 'MCM use the same products as BGC'.
As I have found, by making these statements the other parties to the meeting were assured of MCM's willingness and ability to meet all the requirements for the concrete for the warehouse floor, in particular, the requirement for a burnished finish.
In all the circumstances I am satisfied Mr Twete made the supply representation.
In my view, the supply representation adds nothing to the express terms of the contract. Accordingly, in my view that claim adds nothing to the claim for breach of contract and I need not separately resolve it.
Hawk's claim in negligence
Having found that MCM is liable for damages for breach of contract, it is unnecessary to deal with the negligence claim.
Conclusion
I have relevantly found that:
1.MCM breached a contractual obligation to supply concrete suitable or appropriate for a burnished finish for the warehouse floor.
2.The breach resulted in widespread delamination of concrete, such that the breach was serious and significant.
3.It was reasonable for Hawk to remove the delaminated concrete that MCM supplied.
Given these findings, and on the evidence before me, MCM has not established on the balance of probabilities that it is entitled to payment for the concrete it supplied. MCM has not established on the balance of probabilities that Mr Taddei has any obligation as guarantor under the contract.
I will hear from the parties as to the form of judgment, including the proper calculation of damages in accordance with these reasons.
I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia.
TR
Associate19 JUNE 2020
0
7
3