Honeywell Limited v Ong

[2006] WADC 37

JURISDICTION     :   DISTRICT COURT OF WESTERN AUSTRALIA

IN CIVIL

LOCATION:   PERTH

CITATION:   HONEYWELL LIMITED -v- ONG [2006] WADC 37

CORAM:   COMMISSIONER SCHOOMBEE

HEARD:   11 MAY 2005

DELIVERED          :   23 MARCH 2006

FILE NO/S:   CIV 2140 of 2000

BETWEEN:   HONEYWELL LIMITED

Plaintiff

AND

KING ING ONG
Defendant

(BY ORIGINAL ACTION)

KING ING ONG
Plaintiff

AND

HONEYWELL LIMITED
Defendant

(BY COUNTERCLAIM)
 

Catchwords:

Contract - Supply of security system - Absence of dedicated line - Fitness for purpose - Implied term - Misleading and deceptive conduct - Disclaimer clause - Causation - Loss of chance - Measure of damages - Replacement value of lost jewellery - Ability to obtain at cheaper price

Legislation:

Trade Practices Act 1974 (Cth) ss 52, 68(1), 71(2), 74(1), 74(2), 82(1)

Result:

Judgment for the plaintiff and judgment for the plaintiff by counterclaim

Representation:

Original Action

Counsel:

Plaintiff:     Mr S M Davies

Defendant:     Mr R J Price

Solicitors:

Plaintiff:     Blake Dawson Waldron

Defendant:     Murcia Pestell Hillard

Counterclaim

Counsel:

Plaintiff:     Mr R J Price

Defendant:     Mr S M Davies

Solicitors:

Plaintiff:     Murcia Pestell Hillard

Defendant:     Blake Dawson Waldron

Case(s) referred to in judgment(s):

Bennett v Jones (1977) 2 NSWLR 355

Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367

Codelfa Construction Pty Ltd v State Rail Authority NSW (1982) 149 CLR 337

Crawford v Mayne Nickless Ltd (1992) 59 SASR 490

E v Australian Red Cross Society (1991) 27 FCR 310

Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1

Gould v Vaggelas (1985) 157 CLR 215

Hadley v Baxendale (1854) 9 Exch 341

Hanave Pty Ltd v LFOT Pty Ltd [1999] ATPR 41‑687

Harry v Rottnest Sightseeing Cruises Pty Ltd [1988] WAR 239

Henville v Walker (2001) 206 CLR 459

Hoad v Scone Motors Pty Ltd (1977) 1 NSWLR 88

Hoyt's Pty Ltd v Spencer (1919) 27 CLR 133

In The Marriage of Antmann (1980-1981) 6 Fam LR 560

Insurance Commission of Western Australia v Kightly (2005) 13 ANZ Ins Cas 61‑656

J J Savage & Sons Pty Ltd v Blakney (1970) 119 CLR 435

JLW (Vic) Pty Ltd v Tsiloglou & Ors [1994] 1 VR 237

Johnson v Perez (1988) 166 CLR 351

Kabwand Pty Ltd v National Australia Bank Ltd [1989] ATPR 40‑950

Malec v J C Hutton Pty Ltd (1990) 169 CLR 638

March v E&MH Stramare Pty Ltd (1991) 171 CLR 506

Monarch Steamship Co Ltd v A/B Karlshamns Oljefabriker [1949] AC 196

Oceanic Sun Line Special Shipping Company Inc v Fay (1987 ‑ 1988) 165 CLR 197

Olympic Holdings Pty Ltd v Lochel [2004] WASC 61

Petera Pty Ltd v EAJ Pty Ltd (1985) ATPR 40‑605

Poseidon Ltd & Sellars v Adelaide Petroleum NL (1992-1994) 179 CLR 332

Reg Glass Pty Ltd v Rivers Locking Systems Pty Ltd (1968) 120 CLR 516

The Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64

Thiess Contractors Pty Ltd v Norcon Pty Ltd (2001) 11 ANZ Ins Cas 61‑509

Thorpe v Lochel [2005] WASCA 85

Wardley Australia Ltd v State of Western Australia (1992) 175 CLR 514

Watts v Turpin (1999) 21 WAR 402

Wenham v Ella (1972) 127 CLR 454

Wheeler Grace & Pierucci Pty Ltd v Wright & Anor (1989) ATPR 40-940

Zweeres v Thibault (1942) 23 A 2d 529

Case(s) also cited:

ACCC v Henry Kaye [2004] FCA 1363

Bowler v Hilda Pty Ltd (1998) 80 FCR 191

BP Refinery (Westernport) Pty Ltd v Shire Council Hastings (1977) 180 CLR 266

Butler v Egg & Egg Pulp Marketing Board (1966) 114 CLR 185

Cammel Laird & Co Ltd v Manganese Bronze and Brass Co Ltd [1934] AC 402

David Jones Ltd v Willis (1934) 52 CLR 110

Effem Foods Pty Ltd v Lake Cumbeline Pty Ltd (1999) ATPR 41­686

Expo Aluminium (NSW) Pty Ltd v W R Pateman Pty Ltd (1990) ASC 55­978

Famel Pty Ltd v Burswood Management Ltd (1989) ATPR 40­962

Fraser Jewellers (1982) Ltd v Dominion Electric Protection Co (1977) Can L11 4452 (Ontario Court of Appeal)

Furness v Adrium Industries Pty Ltd [1996] 1 VR 668

Grant v Australian Knitting Mills Ltd (1935) 54 CLR 49

Howe v Teefy (1927) 27 SR (NSW) 301

I & L Securities Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2002) 210 CLR 109

James v ANZ Banking Group Ltd (1986) 64 ALR 347

Manchester Liners Ltd v Rea Ltd [1922] 2 AC 74

Miba Pty Ltd v Nescor Industries Group Pty Ltd (1996) 141 ALR 525

Nils E Thomsen v Johnson Burglar Alarms Co Ltd [2001] HKCF1 1082 (Hong Kong Court of First Instance)

Optus Networks Pty Ltd v Leighton Contractors Pty Ltd [2002] NSWSC 325

Public Transport Corporation v Sartori [1997] 1 VR 168

Read v Nerey Nominees Pty Ltd [1979] VR 47

Reiffel v ACN 075 839 226 Ltd (2003) 132 FCR 437

Supresencia v Powell [2002] NSWSC 773

Ting v Blanche (1993) 118 ALR 543

1. COMMISSIONER SCHOOMBEE:  Ms King Ing Ong ("Ms Ong"), the defendant and plaintiff by counterclaim, is a property developer and director of Griffin International Pty Ltd.  Between 1996 and 1999 she and her son and daughter occupied a residential property at 18 Macrae Road, Applecross in Perth while building another home nearby in Dunvegan Road.  Before she moved into the property at Macrae Road Ms Ong had certain work carried out by trades' people as well as a security alarm system fitted to the property.  She contacted Mr Roy Slade of Honeywell Limited, the plaintiff and defendant by counterclaim ("Honeywell") to discuss the fitting of a security alarm system. Ms Ong had previously engaged Mr Slade, representing Honeywell, to install a security alarm system at her business premises at 421 Canning Highway, Como, at an Indonesian restaurant at 903 Canning Highway and at the Kirin Centre at 15 Ogilvie Road, Applecross, a five storey building developed by Ms Ong and consisting of retail outlets on the ground level and office space above.

Ms Ong

1. Ms Ong gave evidence that shortly prior to 12 November 1996 Mr Slade attended at 18 Macrae Road to discuss the installation of the alarm system with her.  At that time Ms Ong had known Mr Slade for at least a year and had met him on numerous occasions.  She had had dealings with Mr Slade when the security alarm systems were installed on the other properties, but also saw him regularly as he frequented a restaurant at ground level in the Kirin Centre where Ms Ong had her own offices on the fifth level.  Ms Ong was the owner of numerous items of expensive jewellery and liked to wear a number of these items on a daily basis.

2. When Ms Ong met with Mr Slade at the Macrae Road property she told him that she was only living there temporarily, but that she was concerned about the easy access to the property.  There was no fence or gate at the front and the backyard of the property was exposed to three large backyards of adjoining properties.  She also advised Mr Slade that she was often overseas and was concerned for the safety of her children, particularly her daughter whose bedroom had a large sliding door.  She told him that she liked to keep her jewellery at home and that she wore it a lot.  Ms Ong advised Mr Slade that she therefore wanted the best alarm system.  She wanted him to make sure that if the telephone line was cut or if someone came into her daughter's room or broke in elsewhere, the security system would notify the monitoring centre so that someone would call her.  She mentioned the cutting of the telephone line to Mr Slade because she knew that after a telephone line has been cut, the monitoring centre may not receive a call.  In response to her request Mr Slade said "Don't worry, leave it with me".

3. Apart from the above discussion Ms Ong left the detail of the security system and its installation to Mr Slade.  Ms Ong agreed that Mr Slade had walked with her through the house and had shown her where he intended to put the movement detectors.  However, she said that Mr Slade did not explain that there would not be detectors in all rooms and that an intruder could walk unnoticed in those areas of the house which were not covered by a detector.  Mr Slade recommended that five detectors be fitted, one in the main bedroom, one in each of the son's and daughter's bedroom, one in the study and one in the lounge room.  In order to deal with Ms Ong's concern about the sliding door in her daughter's bedroom, Mr Slade suggested that a glass break‑in detector should be fitted in the daughter's room.  This device would sense if glass was broken and send a signal to the monitoring centre.  Ms Ong was also concerned about what would happen if there was a power failure, but Mr Slade assured her that there was a back‑up battery.

4. Ms Ong gave evidence that on the day that Mr Slade came to discuss the fitting of the security alarm system with her, he suggested that the control panel for the alarm system be fitted in the laundry.  This was a room at the back of the house which could only be accessed from outside; it did not have an internal door to the rest of the house.  Ms Ong was concerned that the outside door of the laundry was not very heavy or secure, but Mr Slade assured her that if anybody tried to tamper with the control panel or removed a screw, the monitoring centre would pick this up and call her.  Mr Slade denied that he had ever suggested putting the control panel in the laundry and relied on a mud‑map which he had drawn at the time indicating the control panel in the main bedroom.  He could not say how it came about that the installer of the system, an employee of Honeywell, placed the control panel in the laundry.

5. Ms Ong said that there was no discussion between her and Mr Slade with regard to the manner in which the control panel would communicate with the monitoring centre and whether this would be by way of the existing telephone line to the property or a dedicated line.  In giving evidence Mr Slade and the expert witnesses called by both parties explained that if the communication is by way of an existing telephone line, the monitoring centre will not receive a signal from the control panel if the telephone line is cut.  In order to circumvent this problem, an additional telephone line dedicated to the security system would have to be installed. This is more expensive to install and would incur ongoing telephone line rental costs.  Such a dedicated line is constantly monitored at the monitoring centre and the centre receives a signal as soon as the line is cut.  Another way of achieving this more secure position is to install a Securitel system which converts an ordinary telephone line into a line that is continuously monitored.  Honeywell did not offer a Securitel system in 1996, but it did have available the installation of a dedicated line.  A further alternative was to have a mobile telephone line installed. 

6. According to Ms Ong none of this was discussed between her and Mr Slade.  Ms Ong was told by Mr Slade that a person would come to "fix" the telephone line for the alarm system.  A person from KSR Communications came to install what Ms Ong thought was a telephone line to be connected to the alarm.  In fact it was only a socket for the existing line to which the control panel was to be connected.  It was put to Ms Ong that the invoice from KSR Communications only referred to a "socket for Honeywell security system" and not to a telephone line.  She said she did not know the difference.  She understood that a telephone line would be connected to the alarm system and if someone came into the house after the alarm had been fitted and cut the telephone line, the monitoring centre would respond.  Ms Ong did not know how many telephone lines were in the property prior to the security system being fitted.  She was not asked whether she realised that rental for an additional telephone line would have been required if a dedicated telephone line had been installed.  Ms Ong said that she trusted Mr Slade and told him that she trusted him to fit a suitable alarm system.

7. Shortly after Mr Slade's visit to the property in Macrae Road, Ms Ong signed two contract documents.  The first was a proposal by Honeywell, dated 12 November 1996, which stated the installation price to be $1,250 (including sales tax) and the monitoring fee to be $6 per week payable in advance ("the Honeywell Proposal").  The document listed the equipment to be supplied as, inter alia, a control panel with power supply, rechargeable standby batteries, internal siren and digital dialler, a code pad, five interior detectors, one door contact and three emergency devices.  The reverse side of the Honeywell Proposal contained terms and conditions of sale, but Ms Ong did not read these as she "trusted" Mr Slade.  Mr Slade signed the Honeywell Proposal on behalf of the plaintiff.  Ms Ong gave evidence that at the time of signing the Honeywell Proposal, Mr Slade did not provide any further explanation to her regarding the equipment listed in the Honeywell Proposal.   Ms Ong denied ever discussing the price of the alarm system with Mr Slade or trying to bargain him down. 

8. The second contractual document signed by Ms Ong and Mr Slade was the Honeywell Protection Services Agreement, dated 13 November 1996, which set out the alarm monitoring and response services that would be provided by Honeywell.  Part of this document was a schedule headed "Monitoring Schedule Y – Part A" which contained three names and mobile telephone numbers under the heading "Contacts for Response to Events" ("the Monitoring Schedule").  The three names were Ing Ong, Herbert Kwok and H W Khoo.   Mr Herbert Kwok was Ms Ong's son and Mr Khoo was the managing director of Griffin International Pty Ltd at the time. He had assisted Ms Ong in her dealings with Mr Slade and had filled in this information.  Ms Ong understood that these three people were to be contacted should the monitoring system receive a signal from the alarm at the property at Macrae Road.  Ms Ong could not say whether her mobile telephone number listed on the Monitoring Schedule was the same as the mobile number that she had in April 1999.

9. On 24 April 1999 Ms Ong took her sister, who was visiting her from Singapore at the time, and a cousin to Margaret River, about three and a half hours drive from Perth.  Her son Mr Kwok, stayed behind at the property in Macrae Road.  Mr Kwok gave evidence that he left the house in the early evening of 24 April 1999 and only returned at about 1 am the next morning.  When Mr Kwok arrived at his home in the early morning of 25 April 1999, he found that the premises had been broken into.  He called his mother on her mobile telephone, but this was switched off.  However, he reached her via the owner of the property where Ms Ong, her sister and cousin were staying and Ms Ong returned to Perth on the morning of 25 April 1999.

10. Ms Ong said that she left Margaret River just after breakfast and arrived at 18 Macrae Road at about lunchtime on 25 April 1999.  When she arrived at her house she found it in great disarray.  Her business cards had been dropped all over the floor, the drawers in the bedrooms had been pulled out and tipped over and the mattresses had been partially pulled off the beds.  One piece of her luggage was missing.  The doors to the wardrobe in her bedroom, which she had locked prior to leaving for Margaret River, had been forced open and the contents of the drawers had been spread all over the floor.  The whole house was turned upside down.  The television, videocassette recorder and DVD player in the lounge room and the computer and Sony play‑station in her son's bedroom had been disconnected and removed.  Her sister's luggage which had been left in her daughter's bedroom had been pulled apart and so had the luggage in her son's bedroom.  Some of her daughter's clothing and handbags had been removed from the cupboard and strewn over the floor.

11. A number of items of her jewellery were missing.  Her jewellery had been kept in drawers inside the wardrobe which she had had installed in her bedroom before she and her family had moved to 18 Macrae Road.  The wardrobe had a solid door and could be locked with a key.  Ms Ong said that she had a small safe in the house which was kept in the study.  She stored important documents, a gold bar and some of her jewellery in this safe.  However, the safe was full and this is why the rest of her jewellery was kept in the drawers in the wardrobe in her bedroom.

12. Ms Ong found out shortly after the burglary that the telephone line had been cut and therefore realised that the monitoring centre had not responded when this had happened.  However, it appears that she did not realise that this could happen again, unless the alarm system had a dedicated telephone line.  She said in evidence that she had asked Mr Slade at some stage after the burglary at the Macrae Road property why the monitoring centre had not picked up that the telephone line had been cut and he apologised and said that he would fix it up next time. She apparently did not ask how the mistake could have occurred.

13. Ms Ong moved to 15 Dunvegan Road a few months after the burglary and again engaged Mr Slade to install an alarm system there.  She asked Mr Slade not to make any further mistakes and said that she wanted an alarm system that would cause the monitoring centre to respond if a telephone line was cut.  The alarm system at the Dunvegan Road property again did not have a dedicated telephone line.  Ms Ong said in evidence that she did not know that the alarm system at Dunvegan Road had the same shortcomings as at 18 Macrae Road.  She did not understand until after a further burglary had happened at the Dunvegan Road property, and the monitoring service had again not responded, that the reason for this was that there had been no dedicated telephone line.

14. Ms Ong originally claimed damages in respect of 40 items that were removed during the burglary.  However, at the trial the value of only some of these items was proven, presumably because that value already exceeded the then jurisdiction of the District Court.  Most of these items were jewellery and owned by Ms Ong.  Some of the items for which a value was proven belonged to Ms Ong's sister, namely a Cartier watch with blue strap, a pair of diamond earring studs and a solitaire diamond ring.  A Cartier men's Parsha chronograph watch was owned by her son. 

15. The most expensive item lost by Ms Ong in the burglary was a white gold ring with a central 3.2 carat "princess" cut diamond with two shoulder‑set heart shaped diamonds of a total of 2.45 carat.  This is item 1 on the list of items in respect of which damages were originally claimed.  I propose to continue using the numbering on this list, although some of the items on the list no longer form part of the claim.  The princess cut diamond had been purchased for Ms Ong in Antwerp, Belgium, by Mr Peter Green of Solid Gold Jewellers.  Ms Ong produced a valuation certificate from the Diamond High Council in Antwerp in respect of the "princess" cut diamond.  The two heart shaped diamonds were obtained by Ms Ong from a wholesaler in Singapore, Ge‑Ko Intertrade Services Pte Ltd, who also provided the setting for the ring.  This ring was obtained by her as a replacement for a similar piece of jewellery which had been stolen during an earlier burglary at her house at 421 Canning Highway, Perth.  That burglary had occurred before she had had any alarm system fitted to her home.  Ms Ong gave evidence that this ring had been in the drawer of her wardrobe prior to the burglary. 

16. Shortly after the burglary Ms Ong made an attempt to replace the "princess" cut diamond ring by buying a "princess" cut diamond of 3.45 carat for SG$57,700.  She also purchased two triangle shaped diamonds to complete the ring, as she could not find a matching pair of heart shaped diamonds.  She said in evidence that she was still looking for a pair of heart shaped diamonds, but had stopped looking for some years as her daughter had passed away in 2000 and she had felt sick and depressed and disinterested in jewellery for some time.

17. Item 2 on the list is a pair of 18 carat yellow gold jade earrings for which Ms Ong produced an invoice from Superb Jewellery Pty Ltd in the amount of SG$8,500.  Ms Ong gave evidence that these earrings had been in her daughter's room prior to the burglary.  Item 3 is a gold ring with a 4.55 carat cab ruby and a number of small diamonds with a total carat of 1.56.  In respect of this item Ms Ong produced an invoice from Mavis Mak Company in the amount of HK$35,000.  She said that this ring had been in the drawer of the wardrobe in her bedroom.  Item 4 on the list are various gold chains which Ms Ong said she had left in her daughter's bedroom prior to the burglary and which she had purchased in Hong Kong.

1. Item 7 is an 18 carat white gold emerald ring with 10 diamonds clustered around the emerald.  In respect of this item Ms Ong produced an invoice from Emerald Mines Ltd, dated 10 March 1995, which indicated that the emerald itself cost HK$54,472.  A further invoice from Mavis Mak Company, dated 20 March 1995, showed that the 10 diamonds had a total weight of 1.66 carat and cost, together with the setting, HK$20,000.  Ms Ong said that this ring had been left in the drawer of her bedroom wardrobe when she left for Margaret River.  After the burglary at Macrae Road, Ms Ong replaced this ring from a cash payout made by her insurer.  Ms Ong produced an original invoice from Larry Jewellery for a total amount of SG$21,800.  The invoice regarding the replacement ring indicates that the emerald had a weight of 3.6 carat and the diamonds a weight of 2.7 carat.  Ms Ong further produced a certificate of valuation from Solid Gold Jewellers, dated 12 December 1996, which values the replacement ring at AUS$20,500.

2. Item 11 is a pair of Cartier spectacles and item 17 a set of Cartier pens, in respect of which Ms Ong produced an invoice from Tiara Optical, dated 20 December 1998, in the total amount of Rp 15,318,000.  She said that these items were in her bedroom prior to the burglary.  Item 21 on the list is a Jaeger Coultre gold clock with a semi‑precious blue stone at the base which stood on Ms Ong's dresser in her bedroom.

3. Item 22 is SG$10,000 and US $5,000 in cash which Ms Ong said she had kept in the drawers of her wardrobe in the bedroom.  Item 27 on the list is a Cartier gold and diamond watch, limited edition "Panther" with mother of pearl face which Ms Ong said she had owned and kept in the drawer of her bedroom wardrobe.

4. Item 37 on the list is a pair of 18 carat yellow gold earrings with pear shaped diamonds.  Ms Ong produced a certificate of valuation from Solid Gold Jewellers, dated 12 December 1996, in respect of the earrings in the amount of AUS$48,200.  She gave evidence that these earrings had been in her daughter's bedroom prior to the burglary.  Item 38 is an 18 carat Patek Phillippe Geneve watch for which Ms Ong produced a certificate of valuation from Solid Gold Jewellers in the amount of AUS$30,200.  She also produced an invoice from Sincere Watch Pty Ltd in Singapore, dated 29 March 1980, in the amount of SG$15,500.  Ms Ong said that this watch had been in her bedroom.

5. Item 39 is an 18 carat diamond pendant and chain for which Ms Ong produced a certificate of valuation by Solid Gold Jewellers, dated 12 December 1996, in the amount of AUS$20,000.  She said that she could not remember at which jeweller she had bought the round brilliant cut diamond of 1.23 carat for the pendant.  She had bought the stone in Singapore and had it set in Singapore at one of the many jewellers with whom she did business.  This had been some time in the 1980's.  Ms Ong stated that she had kept the pendant in the drawer of her bedroom wardrobe.

6. Item 40 is an 18 carat ring with a ruby in the centre and two heart‑shaped diamonds on either side.  Ms Ong produced a certificate of valuation from Solid Gold Jewellers, dated 12 December 1996, in respect of this ring to a total value of AUS$41,200.

7. Ms Ong had insured some of the items lost with Distinctive Home Insurance.  The insurance schedule, dated 23 December 1998, listed the gold earrings with the pair shaped diamonds, the Patek Philippe watch, the diamond pendant and chain and a 3.5 carat and 2 x 1.5 carat diamond ring under the heading "Personal Valuables Outside Residence".  The schedule showed a value of AUS$66,000 for the diamond ring.  However, this schedule was adjusted on 12 January 1999 to the effect that from 24 December 1998 the diamond ring to the value of AUS$66,000 was deleted from the insurance cover and a 18 carat yellow gold ruby and diamond ring to the value of AUS$41,200 was added.  Ms Ong could not give an explanation as to why the insurance cover for the diamond ring with a value of AUS$66,000 was deleted from the insurance cover.  She said that she was not sure that this was the same ring as the "princess" cut diamond ring, item 1, on the list.  She said that the weight of the two diamonds was different.  The diamond ring to the value of AUS$66,000 was stated in the insurance schedule to have a weight of 3.5 carat, whereas the "princess" cut diamond had a weight of 3.2 carat.  Counsel for Honeywell suggested to Ms Ong that she had no longer kept the 3.2 carat "princess" cut diamond ring at home and had therefore deleted it from her insurance cover, but Ms Ong insisted that the ring had been in her drawer when she left for Margaret River.

Mr Khoo

1. Mr Khoo gave evidence that he had been one of the directors of Griffin International Pty Ltd and had attended to the day-to-day running of this company's business during the period of time when the various alarm systems were purchased by Ms Ong.  He had arranged with Mr Slade to install the first alarm security system at 421 Canning Highway.  He said that when he discussed this with Mr Slade, it was agreed that the system should be monitored, but the different types of communication systems between the secured property and the monitoring centre were not raised.  Subsequently Mr Khoo also attended to the installation of an alarm system at the Indonesian restaurant operated by Ms Ong and again engaged Mr Slade to do so.  There was no discussion about the communication system or telephone lines.

2. Mr Khoo did not contact Mr Slade in respect of the installation of an alarm system at 18 Macrae Road.  This was done by Ms Ong as Mr Khoo was involved in other matters.  However, during one of Mr Khoo's visits to 18 Macrae Road to check on the renovations in progress, he met Mr Slade and Ms Ong who were discussing the proposed alarm system.  Mr Khoo said that Ms Ong had expressed concern about the security of her children and that Mr Slade had assured her that if someone broke in through the front door or a window the alarm system would go off.  He said that Ms Ong also asked what would happen if the telephone line was cut and Mr Slade said that the control room would pick this up.  Mr Khoo said that there was no discussion about different types of systems, different types of monitoring or different types of telephone lines.  Mr Khoo was of the impression that there were two telephone lines available in the house.  He said that Mr Slade showed him where the detectors would be placed, but that he left this decision to Mr Slade and trusted him.  Mr Khoo denied that there had been any discussion about the costs of the detectors, the installation price or the monitoring services.  Mr Khoo admitted that he may have said to Mr Slade that they had been very happy with the alarm system at 421 Canning Highway, as every time they mistakenly tripped the alarm, they immediately got a call from Honeywell.

3. Mr Khoo further gave evidence that on a subsequent occasion when Mr Slade returned to the Macrae Road property, Ms Ong expressed concern to Mr Slade about the control panel being placed in the laundry as this was easily accessible from outside.  He said that Mr Slade replied that there was no reason to worry, because if anyone tried to tamper with the control panel or to unscrew it, it would be picked up by the monitoring service.

4. On the night of the burglary at 18 Macrae Road, Mr Khoo was at home.  His residence was approximately 10 minutes' drive from 18 Macrae Road.  Mr Khoo was asleep when Ms Ong's son telephoned him to tell him about the event.  He got dressed and drove to 18 Macrae Road to give Mr Kwok moral support.  Mr Khoo said that if he had received a call from Honeywell on the night of the burglary telling him that the telephone line had been cut, he would have first tried to contact Ms Ong or Mr Kwok.  If he would not have been able to contact either, he would have driven to 18 Macrae Road, as he would have felt morally obliged to do so.  He said he would have walked around the house and made a quick assessment whether anyone was in the property.

5. Mr Khoo again contacted Mr Slade after the Macrae Road burglary when an alarm system was to be installed at 15 Dunvegan Road.  He said that he was prepared to deal with Mr Slade despite the problems with the alarm system at Macrae Road, because he was a very nice person and he trusted him.  When he spoke to Mr Slade about the alarm system at Dunvegan Road, he asked him what had gone wrong at Macrae Road.  Mr Slade told him that the telephone line had been cut and that this had not been picked up by the monitoring service.  Mr Khoo asked him why it had not been picked up as Mr Slade had told him and Ms Ong that if any part of the system was tampered with it would be picked up.  In response Mr Slade said that the system was not functioning – there was a fault in the control room.  He did not explain what that meant.

6. Mr Khoo gave evidence that it was only after the third burglary at Dunvegan Road that he became aware, after having spoken to Mr Terry Hayden of Hayden Security, a company that provided the monitoring service for the alarm at the Dunvegan Road property, that the monitoring centre would not know if a telephone line was cut unless the alarm system had a dedicated line.  Mr Khoo denied that during the discussion with Mr Slade prior to the burglary at the Macrae Road property Mr Slade had mentioned that if the telephone line was severed, the monitoring service would not pick that up.  Mr Khoo said that on the contrary, Mr Slade had told him and Ms Ong that if part of the system was tampered with, this would be noticed by the monitoring centre.

7. Mr Khoo denied that Mr Slade had offered to install a dedicated line when they discussed the alarm system for Dunvegan Road.  Mr Khoo said he would not have rejected a dedicated line, as it was not his decision to make.  He stated that he did not realise at any stage prior to the further burglary at Dunvegan Road that there was a potential problem with the alarm system in the absence of a dedicated line.

8. Mr Khoo gave evidence that when Mr Slade recommended a security system for Dunvegan Road, he included in his recommendation a detector in the roof, break glass sensors on all windows and the encasing of the telephone line on the outside of the house where it emerged from its existing casing about 10 inches above the ground.  In spite of this, the burglars of the Dunvegan Road property managed to cut the cables in the roof after taking off some roof tiles.

9. Mr Khoo wrote a reference for Mr Slade in which he said that he had known Mr Slade for well over five years, that Mr Slade always exercised a high degree of reliability and that any work delegated to him had been well done.  The reference was dated 19 April 1989 and was on the letterhead of Griffin International Pty Ltd.  It was signed by Ms Ong as the managing director.  Mr Khoo said that Mr Slade had asked him for a reference and, although he could not remember the exact date when he wrote it or gave it to Mr Slade, he could see no reason why this would not have been on or near 19 April 1999.  It was put to Mr Khoo that he had called Mr Slade into his office after the burglary at Macrae Road and told him that he would cancel the monitoring service with Honeywell.  It was further put to Mr Khoo that at this meeting he had offered a reference to Mr Slade saying that Ms Ong wanted to give a reference to him.  In reply to this Mr Khoo said that he may have called Mr Slade into his office after the burglary, but said that it was laughable that he would have put Mr Slade "on the carpet" and at the same time offered him a positive reference.

Mr Kwok

1. Mr Kwok also gave evidence.  He said that on the night of the burglary he helped out at his mother's Indonesian restaurant and thereafter went to his mother's offices in the Kirin Centre to check his emails.  He stayed there until approximately 1 am.  He then went home and discovered that there had been a burglary.

2. Mr Kwok said that he always kept his mobile phone on 24 hours a day and that he recognised the mobile phone number listed in the Monitoring Schedule as the phone number that he had at that time, because of the last three digits.  The digits 168 are considered to be a lucky number in Chinese culture.  Mr Kwok said it would not have taken him more than three minutes to get from the offices in the Kirin Centre to his home at 18 Macrae Road as he would only have had to pass one traffic light.  He said that if he had been telephoned by Honeywell because of an interference with the alarm system, he would immediately have driven home and would have confronted anyone who was in the house in order to defend his property.

3. Mr Kwok said that when he arrived at the house he tried to put the alarm code into the alarm control panel, but it was completely dead and did not make the usual beeping sound upon the numbers being entered.  He used his mobile telephone to call Honeywell.  The lady on duty told him that there was nothing wrong as no signal had been received from the alarm system at 18 Macrae Road.  He told her that he could see something was wrong as he was at the house and it had been burgled.  Honeywell then agreed to send out a patrol van.  Mr Kwok said that the patrol arrived some time thereafter and a person walked through the house and made some investigations, but he could not recall what he had said at the time.  He was still too distressed.

4. Mr Kwok vigorously denied that he might have forgotten to switch on the alarm on leaving the house that night.  He said that he would definitely have done so as it was a habit and that he would listen for the sound indicating that the alarm was on before leaving the house.  He said that it had never happened to him that he had not put on the alarm upon leaving the house.

5. Mr Kwok gave evidence that the house had been ransacked and his mother's room was a huge mess.  The sliding door in his sister's bedroom was open and her room was also in a mess.  Mr Kwok said that he noticed that the bathroom window was open whereas it was usually shut.  When he walked around the house he saw that the flyscreen of the bathroom window was lying on the ground in the alleyway on the side of the house.  He also noticed upon walking through the house at a later stage that the man‑hole in the passageway leading to the roof was not properly in place.  He further stated that when the police arrived on the morning of the next day they showed him that some roof tiles were missing near the laundry.  Mr Kwok said the missing clay tiles were "pretty close" to the gutter about the second row of tiles.

6. Mr Kwok said that he lost a Cartier watch which his father had given him, his computer and a play‑station in the burglary.

Mr Slade

1. Mr Slade gave evidence that he had been employed as a representative of Honeywell on a commission basis.  He received a commission equal to the monitoring fee for one year in respect of the first alarm system that he sold in each week.  For each subsequent alarm system sold in the same week the commission increased by 10 per cent.  If a customer chose not to have the alarm system monitored, Mr Slade received no commission.  He said that he would therefore always try and sell the monitoring service together with the alarm system.  The standard weekly rate for monitoring a system which operated on the existing telephone line, a "dialler system", was $7 but Honeywell allowed him to reduce this to $6 for regular customers.  Honeywell expected him to sell a monitoring service for a period of five years, or at least two years.

2. Mr Slade explained that in 1996 when the alarm system was sold to Ms Ong, Honeywell also offered the installation and monitoring of a dedicated line.  This required the installation of a separate telephone line from the secured property to the nearest Telecom substation and a similar line to the Honeywell monitoring centre.  The installation of such a line cost approximately $200 to $300 depending on how far the nearest sub-station was from the secured property.  In addition, an interface on the control panel was required which cost about $200.  The ongoing monitoring costs of a dedicated line were substantially more expensive than those for a dialler line being $20 to $23 instead of $7 or $6 per week.  Mr Slade was not sure whether the Telecom rental costs of a separate line were included in the amount of $20 or $23.  He initially thought that the Telecom rental had to be paid in addition, but then conceded that it was probable that it was included in the monitoring charge.

3. Mr Slade said that he always tried to sell a dedicated line to customers first because he received a higher commission equal to one year's monitoring fees.  He was not sure, however, whether the commission was based on the full amount of $20 or $23, or a lesser amount, as this may have included the telephone line rental.  He did not sell many dedicated lines as not many customers wanted to go to that expense.  He said that he sold approximately 600 alarm systems on behalf of Honeywell to businesses of which about only five were dedicated lines.  He initially said that all dedicated lines that he sold were to businesses but at a later stage said that he had also sold a dedicated system to a private residence in Dalkeith.  He had sold approximately 500 alarm systems to private residences.  In spite of the low demand for dedicated lines, Mr Slade repeatedly said that he had always offered customers a dedicated line first.

4. Mr Slade conceded that a major problem with the dialler system was that if the telephone line was cut or otherwise interfered with by mistake, the monitoring service would not receive any signal at all.  He explained that the monitoring service would check every dialler line once every 24 hours and would then find out if the line was no longer operational.  The Honeywell log for the Macrae Road alarm system showed that this test was carried out at 2.35 am in March and April 1999.  Accordingly, if the telephone line was cut at any time of the day or night prior to 2.35 am, the monitoring centre at Honeywell would not be aware of this until a test was done at 2.35 am.

5. Mr Slade said that he had been told by Honeywell to advise all customers of this potential problem with a dialler line and insisted that it was his practice to do so.  He gave evidence that once customers were informed of the potential problem with a cut telephone line, many of them decided not to enter into a monitoring agreement at all as they saw little use in a system that could be rendered ineffective by someone cutting the telephone line.  Mr Slade explained that even if the telephone line were cut the alarm system would still operate as a "local alarm" unless the wires of the alarm system itself were cut as well.  If only the telephone line were cut, the siren installed on the inside and outside of the property would still sound loudly which would hopefully frighten the burglars.

6. Mr Slade denied that Ms Ong had told him that she wanted the best alarm system and that she had expensive jewellery to protect.  He admitted that he had seen Ms Ong regularly for a period of approximately two and a half years prior to selling the alarm system at Macrae Road to her.  He agreed that he liked to have a meal or a drink at the Bangkok Seafood Restaurant which was on the ground floor of the Kirin Centre where a friend of his was working.  He regularly saw Ms Ong walking past as she went to and from her office, and at times exchanged polite greetings with her.  He said that at the time when he sold the alarm system for Macrae Road to her he was on friendly terms with Ms Ong and Mr Khoo and called them by their first names.

7. Mr Slade denied that Ms Ong had asked him to make sure that if somebody broke into the house or if the telephone line was cut, the monitoring centre would pick this up and call, or that he had said in response "don't worry, leave it with me".  He stated that he had told Ms Ong on the day when he sold the Macrae Road alarm system to her that if the telephone cable was interrupted either in the road or upon being cut, the system would act as a local alarm, meaning that the siren would still go off.  He insisted that he had offered Mr Khoo a dedicated line and had pointed out to him that there was a Telecom station just across the road from the Macrae Road property.  Mr Khoo had replied to this that it was too expensive and that he wanted the same system as at 421 Canning Highway.  He said that he had offered a dedicated line to Mr Khoo in respect of each of the alarm systems that he had sold to Ms Ong and that Mr Khoo had rejected them on each occasion as being too expensive.  He gave evidence that he had also offered perimeter protection to Ms Ong but that she had rejected it as too expensive and instead, he had put a break glass unit into the daughter's bedroom. 

1. Mr Slade said that he had walked through the house with Ms Ong and had shown her where he planned to put the detectors.  He also drew a mud‑map which showed a detector in the master bedroom, the daughter's bedroom, the son's bedroom, the computer room and in the lounge-room.  Mr Slade admitted that there was no detector in the passageway and that this would have enabled burglars to come in through the bathroom window, walk through the bathroom into the passageway and enter the manhole in the passageway without being noticed by a detector.  However, he denied that it had been amiss of him not to put a detector into the passageway, as in his view any burglar who wanted to remove items of value would walk into one of the protected rooms.  He did not think that the ability of the burglars to enter the roof space through the bathroom window and the passageway was a problem as the burglars could, in any event, have entered the roof space by removing a few roof tiles.

2. Mr Slade said that Mr Khoo had tried to bargain him down when he first mentioned the price for the alarm system at Macrae Road and this is why the monitoring fee was reduced to $6 per week.  Mr Slade also gave evidence that he could not provide the alarm system for Macrae Road at the same price as that for 421 Canning Highway as he needed two extra detectors in two bedrooms.  When he suggested two additional detectors to Mr Khoo, he said that it was too expensive at $156 each.  Mr Slade then agreed to give Ms Ong two free detectors for which he had to pay out of his own pocket.

3. Mr Slade agreed that the Honeywell Proposal did not list a dedicated line as one of the items of equipment that could be ticked on the Honeywell Proposal and only referred to a dialler as part of the alarm system to be supplied.

4. Shortly after the burglary at the property in Macrae Road on 25 April 1999, someone at Honeywell advised Mr Slade of this.  Some time thereafter he was asked to see Mr Khoo at his office.  This was the first occasion when Mr Slade saw Mr Khoo after the burglary.  Mr Slade said that Mr Khoo told him that he was not happy with Honeywell anymore, that the system did not work and that he was going to cancel the monitoring.  In reply Mr Slade said that the system had been "okay", it was just that the burglars had cut the cables and stopped the system from working.  Mr Slade gave evidence that Mr Khoo said nothing in response to that other than that he was going to cancel with Honeywell and then handed Mr Slade the reference dated 19 April 1999.  Mr Slade's words were "then he gave me a reference, would you believe".  Mr Slade denied that he had asked Ms Ong or Mr Khoo to give him a reference and stated he was quite shocked that they would give him a reference after the burglary.  It was only when he left Mr Khoo's office that he realised that the reference was "back-dated" to before the burglary.  Mr Slade said that on this occasion he had also suggested to Mr Khoo to contact Terry Hayden, who also provided monitoring, and that he should get a dedicated line.  Mr Slade said that after this meeting he never received any further complaint from Ms Ong about the alarm system at Macrae Road or the burglary.  He said that it did not occur to him to contact Ms Ong or Mr Khoo after the burglary at the Macrae Road property to remind them that he had offered them a dedicated line and that they had refused that offer.

5. Mr Slade gave evidence that in early 1999 Honeywell gave notice to its sales personnel working for a commission that Honeywell intended to close down its monitoring service and that they had six to seven months to find a different job.  Mr Slade then decided to start his own security business, Slade Security.  He finally left Honeywell in the middle of 1999.

6. A few months after the burglary at Macrae Road, Ms Ong contacted Mr Slade in order to install an alarm system at 15 Dunvegan Road, where Ms Ong was about to move.  Mr Slade said that on this occasion he again offered a dedicated line to Ms Ong and Mr  Khoo to which Mr Khoo replied that "all that was going to be dealt with Terry Hayden which was fine".  However, Mr Slade said that he arranged the monitoring contract on behalf of Hayden Security and that this was monitoring for a dialler system.  Mr Slade said that he asked Mr Khoo whether he wanted a direct line, but Mr Khoo indicated that a dialler system was quite sufficient. 

7. Mr Slade took a number of additional precautions with regard to the alarm system at the Dunvegan Road property.  He said that Mr  Khoo wanted a detector in every room, additional break glass units were installed and a detector was installed at a later stage in the roof space.  Mr Slade also arranged for the telephone cable on the outside of the house to be cemented in.  Mr Slade denied that Ms Ong told him when she discussed the alarm system for the Dunvegan Road property not to make any more mistakes and to make sure that the alarm system was monitored in the event of the telephone line being cut.

8. In spite of the additional precautions taken with the alarm system at 15 Dunvegan Road, a further burglary occurred in 2000.  On this occasion the burglars gained access to the roof space by lifting roof tiles.  Even though the outside siren had sounded because a detector had been situated in the roof the burglars managed to cut the telephone and security system wires within seconds.  Mr Slade said that a dialler system needed a few seconds to actually dial the number of the monitoring centre and, as the monitoring centre did not receive any signal on this occasion either, the telephone wires must have been cut more quickly than the time required to dial the requisite number.

9. Mr Slade said that immediately after the burglary at 15 Dunvegan Road, Mr Khoo called him on the telephone and he went to the premises to talk to Ms Ong and Mr Khoo.  He said he could not remember exactly what was said by Ms Ong and Mr Khoo but they were not very happy about the burglary.

The expert evidence

1. Mr John Horton gave evidence on behalf of Ms Ong.  He said that he was a former Chief Superintendent of Police and prior to that Officer in Charge of the Forensic Division of the Western Australia Police Service.  At the time of the trial he was working as a licensed security agent and installer, forensic consultant and investigator for his own firm, John Horton and Associates.  He explained that he had practical knowledge of the different types and functions of domestic intruder alarm systems, which he had gained from installing some systems himself and also from his duties as a forensic officer and forensic consultant.  He gave evidence that he had investigated thousands of crime scenes and established the method of entry of burglars at those crime scenes.  However, his firm currently specialised in closed circuit television systems and over the last five years he had only installed 15 domestic security alarm systems and five in commercial premises.  He had been a member of the Security Agents Institute of Western Australia since 1994.

2. Mr Horton gave evidence that he had visited the residence at 18 Macrae Road sometime prior to the trial and had entered the roof space through the manhole.  He said that the ceiling of the residence was only approximately two and a half metres high and that it would not have been too difficult for a burglar to enter the manhole from the passageway, particularly if there had been two burglars and one had been standing on the other's shoulders.  The manhole was covered by a cut-out and this could easily be lifted by pushing against it. 

3. Mr Horton said that he inspected the roof space and came to the conclusion that it would have been impossible for even a small person to enter the roof space from outside if two tiles in the second row of tiles from the gutter had been lifted.  This was because the eaves were very wide and the second row of tiles from the gutter, if not the third or perhaps even the fourth row, were situated over the wall of the house and not above the roof space.  In his opinion it would have been impossible for a person to have entered the roof space even if two tiles in the third row, or even in the fourth row, had been removed from the outside.  Mr Horton was cross-examined about this issue at length, but he insisted that the slope of the roof made it impossible for a person to have entered the roof space at that level.  He said that one would hardly have been able to push a cat through an opening left by tiles in the second row of tiles from the gutter.  Mr Horton gave evidence that entry into the roof space would not have been made easier by lifting two rows of tiles at the same time, as there was a batten supporting each row of tiles which prevented access.  In his opinion it was likely that the tiles had been lifted by the burglars, not to gain entry to the roof space, but to see whether there was a detector on the bathroom window.  Mr Horton said that the wires leading from the detector into the roof space would have been clearly visible.

4. Mr Horton gave evidence that the telephone and alarm system wires in the roof space were situated approximately three metres from the edge of the roof and that they were fairly taut.  Accordingly, it would have been impossible for someone to grab the wires, even with a piece of conduit with a hook on the end, and pull them towards the opening in order to cut them.  It was his view that the burglars at 18 Macrae Road would have had to enter the roof space through the manhole in order to have cut the wires.

5. Mr Horton stated that in his opinion the alarm system should have been fitted with a detector in the passageway.  He said that it was industry practice in respect of alarm systems for smaller residences to fit at least three movement detectors.  One should be placed in the main bedroom where jewellery was generally kept, one in the room where the television or hi-fi system was situated, and one in the passageway which would pick up the movement of burglars from room to room.

6. Mr Horton was also asked what he considered the best alarm system available in 1996.  He answered that such an alarm system should have had either a dedicated line or a Securitel arrangement.  The control panel should have been mounted within a protected area and the system should have had perimeter protection.  Perimeter protection provided some form of detection device on each opening to the residence.  Mr Horton agreed that perimeter protection was expensive, particularly when it had to be fitted to an existing residence, as it was then time consuming to have it installed.  Mr Horton was of the view that the "best alarm system" should also have had a light beam relay or similar detection device in the roof space.  Mr Horton agreed that no alarm system could guarantee that burglars would not be able to circumvent it.

7. Mr Horton further gave evidence that on four occasions he had timed how long it took him to drive from the Kirin Centre to 18 Macrae Road.  He had also timed how long it took him to take the lift from the fifth floor of the Kirin Centre to the ground floor.  The longest time to get from the fifth floor of the Kirin Centre to 18 Macrae Road had been four minutes; a journey of 1.3 kilometres.  The shortest time was approximately three minutes.  Mr Horton estimated that at night time when the traffic was less, the time of the journey would probably have been two to three minutes.  Allowing the person who received the phone call approximately two to three minutes to stop doing what he was doing, gather his keys and his thoughts, it would have taken that person four to six minutes to get to 18 Macrae Road.  If the person took five minutes before leaving the Kirin Centre, the whole journey would have taken nine minutes at the outset.

8. Mr Jeremy Quinn was called as an expert on behalf of Honeywell.  He said that he had extensive experience in the domestic alarm system industry since 1987.  He started as a sales consultant and during the period 1990 to 1994 and was engaged as technical manager for Combined Security Services (WA) Pty Ltd.  That company specialised in selling, servicing and maintaining domestic alarm systems.  During 1994 to 1999 Mr Quinn operated as a licensee for Chubb Electronic Security in the Goldfields region and provided sales and technical services in respect of domestic and commercial alarm systems.  Mr Quinn stated that he had personally installed approximately 100 domestic alarm systems and serviced or repaired an additional 200.  He was a licensed security agent, consultant and installer.  At the time of the trial he was employed with a company providing specialist services for closed circuit television systems as well as domestic and commercial alarm systems.

9. Mr Quinn gave evidence that in his experience in 1996 approximately 90 per cent of domestic alarm systems had a dialler system.  About 10 per cent of residential systems utilised a dedicated line or Securitel.  He said that he would have expected a reasonable and competent security alarm sales person to explain to a customer the problem that a dialler system can be circumvented by either a Telstra fault, non‑payment of a telephone account, or by someone physically cutting the cables.  He would also have expected that person to explain to the customer that the usual manner in which motion detectors are placed in a residence means that not every area in the house is covered by a detector. 

10. Mr Quinn said that it is industry practice to fit the detectors so that they provide a trap for a potential burglar.  Exactly where the detectors should be fitted depended on the layout of the house.  In a smaller residence it was common to have one detector in the passageway and two others in the main rooms.  The detector in the passageway would then also protect access to the other rooms in the house.  In Mr Quinn's view it was not unreasonable not to have placed a detector in the passageway in 18 Macrae Road as motion detectors had been fitted to all the bedrooms.  Mr Quinn saw no problem in the fact that the absence of a motion detector in the passageway provided unmonitored access to a burglar via the bathroom window, the passageway and the manhole into the roof space.  In his view it was easy to get into the roof space by lifting roof tiles and he thought that the likelihood of a burglar climbing through a window and into the manhole was "fairly remote".  Mr Quinn said that it would be difficult to get into the manhole from the passageway and that he did not think this would have been possible even with one burglar assisting the other.  Mr Quinn was shown a photograph of the interior of the roof space which was taken looking towards the eaves.  He said that on the photograph it looked like a person would be able to crawl head first into the roof space through a gap in the third row of tiles from the gutter.

11. Mr Quinn gave evidence that perimeter protection was very expensive, particularly where this had to be fitted to an existing residence.  Perimeter intrusion detection was more geared to alerting the occupants to entry to the house while they were home.  He said that in his 20 years in the industry he had only seen one instance where a passive infra‑red beam had been installed into a roof space.  He said that these devices were expensive and prone to false alarms.

Credibility and findings of fact

1. I found it difficult to assess the credibility of Ms Ong.  The reason for this was mainly that in my view her command of the English language was very limited.  She understood basic vocabulary and could bring key concepts across.  However, my impression was that the finer nuances of the questions asked of her escaped her and she tended to reply in an abbreviated and key-word format.   The fact that she had limited use of the English language was apparent when she looked totally puzzled by an innocuous question such as "It is one of the pleasures of buying jewellery that you can buy what you like when you see it?" 

2. Ms Ong answered numerous questions during cross‑examination with "I can't remember".  These questions related to documents prepared by her solicitors that she had seen, the dates, places and costs with regard to jewellery that she had purchased, her insurance of some of the jewellery in issue and other matters.  It is difficult to understand why Ms Ong, who describes herself as a company director and property developer, would have so little recollection of business transactions such as her insurance arrangements.  She also did not seem to understand that she was meant to pay customs duty on items that she had purchased overseas and did not know whether or how she could re‑claim GST paid on jewellery purchased in Singapore.  This seems to be difficult to comprehend in respect of a person who is an experienced businesswoman and purchaser of jewellery.  However, despite this, I am not persuaded that she was an untruthful witness.  Ms Ong repeatedly indicated in her evidence that she leaves matters to be dealt with by people who assist her and whom she trusts, such as Mr Khoo, who she said did the negotiations for her on leasing agreements and property developments, and her lawyers, to whom she left the handling of her case.  I have considered whether her abbreviated answers and her repeated assertion that she could not remember matters were an indication that she was not totally frank with the Court.  However, in considering the totality of the evidence presented to the Court, I have come to the conclusion that she was essentially an honest witness who did make some mistakes in giving her evidence, but I am not persuaded that they were made in order to mislead the Court. 

3. I also found it initially difficult to accept that a person, who describes herself as a company director and property developer and appears to be involved in major business dealings, would be content to have such little involvement with the detail of the agreement with Honeywell and have so little recall of her insurance arrangements.  I also found it unusual that an experienced businesswoman would have said to Mr Slade that she did not want to be involved in the decision as to where the detectors would be placed.  She gave evidence as follows in this regard:

   "I say, look Roy, you just do it.  I don't know anything about the alarm system, technical.  I leave it with you.  As long as I get the best system and cover the whole house". 

4. I further found it strange that she did not insist on a more detailed explanation by Mr Slade as to why the alarm system at 18 Macrae Road had not responded during the burglary.  According to her she merely said to Mr Slade: 

   "How come the telephone line cut that the monitoring room never pick up and I lost so much items?" 

5. She further gave evidence that Mr Slade replied to that:

   "He say he knows.  He will fix for me when I have my new property".

6. However, reviewing the totality of Ms Ong's evidence, it appears that she is a person who relies to a large extent on her professional and other advisors and that she trusts them to arrange matters to her benefit and satisfaction.  She said that Mr Khoo was the manager of her company and that he negotiated for her when she was purchasing property, reviewed the leases and helped her deal with the tenants.  She further stated that she left the conduct of her case to her lawyers, whom she "trusted".  She used the word "trust" on a number of occasions with regard to Mr Slade and the installation of the alarm systems at her various properties.

7. Counsel for the plaintiff submitted that there was at least one occasion on which Ms Ong purposefully misled the Court.  She was asked about a photograph of the Jaeger Coultre clock which formed part of exhibit 3, as follows:

   "What's that a photograph of?‑‑‑This is the clock.

   Which clock is it?‑‑‑This is the Jago (sic Jaeger) clock.

   Do you know when that photograph was taken?‑‑‑This was my brother's.  I have the same identical one.

   I see.  And which clock is that? Yours or your brother's?‑‑‑This one is mine.  It was in Singapore before I (indistinct).

   Yes, sorry, so whose clock was that?‑‑‑My clock.

   I see.  You said that you had a clock in Perth.  Which clock did you have in Perth?‑‑‑I have this one, the Jago (Jaeger).

   I see.  It was previously in Singapore was it?‑‑‑Yes".

1. In cross-examination she was again asked about the photograph of the clock as follows:

   "Ms Ong, is that a photo of a similar clock that your brother owns?‑‑‑Yes.

   So that one is your brother's but similar to yours?‑‑‑Yes.

   Why then did you answer a question from Mr Price and tell her Honour that that was a picture of your clock?‑‑‑Because I confused.  The other picture is mine.

   You were confused, were you?‑‑‑Yes, I was nervous.

   I see.  Mr Price asked you distinctly if that was a picture of your clock, didn't he?‑‑‑Yes.

   And you knew that it was a picture of your brother's clock, a similar clock?‑‑‑Yes.

   And yet you told her Honour that that was a picture of your clock, didn't you?‑‑‑Yes.

   Yes and you knew that wasn't true, didn't you?‑‑‑Yes.

   Yes.  Why did you tell her Honour a lie about the clock?‑‑‑The question was too quick so I didn't pick up".

2. It does appear from her examination‑in‑chief that Ms Ong initially said that it was a photograph of her brother's clock, but then changed her response when she was asked again whether it was her or her brother's clock.  There are, however, two exhibits showing the Jaeger Coultre clock.  The photograph which forms part of exhibit 3 is an indistinct photograph of the clock sitting on a desk.  Document 10 in exhibit 14 contains three close-up photographs of the clock.  In cross-examination Ms Ong said that she was confused and that "the other picture is mine".  She may have referred to the other exhibit.  Further, she readily admitted that in examination‑in‑chief she had identified a photograph of her brother's clock as being a photograph of her own clock.  If Ms Ong was intent on misleading the Court, it would have been easy for her to tell the Court from the start that all photographs of the clock were photographs of her own clock.  Having carefully reviewed this part of the evidence and taking into account my overall impression of Ms Ong as a witness who did not find it easy to follow questions put to her and struggled to express herself adequately, I am not prepared to make the conclusion that this passage of the transcript indicates that she purposefully misled the Court.

3. The other major matter that counsel for the plaintiff relied upon as indicating that Ms Ong was not an honest witness was the invoice from Fermi‑La Gems & Jewellery of Singapore that she produced in order to prove the value of the diamond ring that her sister had left in the residence and which was stolen.  Mrs Ong gave evidence that she had asked her sister for proof of the value of the ring and that her sister had faxed her the invoice.  She said that she read the invoice and then wrote on it "Lian's ring" and forwarded the invoice to her solicitors.  The invoice referred to a "brilliant cut diamond 1.23 cts H/VVS2/1292786" in the value of SG$10,000.  It was put to Ms Ong that this invoice appeared to relate to the same diamond as that referred to in the certificate of valuation from Solid Gold Jewellers which she had produced to prove the value of her 18 carat diamond pendant (item 39).  This appears to be the case as the certificate of valuation also refers to "one round brilliant cut diamond of total net weight 1.23 ct H VVS2…G.I.A. Certificate No 1292786". 

4. It was put to Ms Ong that the invoice from Fermi‑La Gems & Jewellery was dated 1998, whereas the certificate of valuation was dated 1996, and that she had therefore either sold her diamond pendant to Fermi‑La Gems & Jewellery, which sold it back to her sister, or that she had falsified the invoice from Fermi‑La Gems & Jewellery.  Ms Ong admitted that the invoice from Fermi‑La Gems & Jewellery was dated 1998, but vigorously denied that she had either sold the diamond in the pendant to Fermi‑La Gems & Jewellery or had falsified that invoice.

5. The invoice from Fermi‑La Gems & Jewellery was not an original document.  Ms Ong gave evidence that the invoice was faxed to her by her sister and the document tendered by her is a half page with the upper half clearly torn off.  The date appearing on the faxed document is "10^th MAY 198".  Counsel for Honeywell submitted that the date was meant to read "10 MAY '98".  However, the very right hand edge of the faxed document is slightly blurred, which is also visible on the words appearing in the top right hand corner of the document.  Accordingly, it seems to me that the date has not come out properly on the faxed copy and that the invoice is more likely to have referred to a year in the 1980's rather than to 1998.  This is supported by Ms Ong's initial evidence when she said that she had bought the diamond for the pendant in Singapore in the 1980's. If the invoice was dated in the 1980's, this leaves two possibilities.  Firstly Ms Ong could have purposefully submitted an existing invoice that she had for the diamond in her pendant to support the value of her sister's diamond ring, as she did not need the invoice to support the value of her pendant by reason of the certificate of valuation from Solid Gold Jewellers.  The other possibility is that the invoice for the diamond in Ms Ong's pendant somehow got mixed up with the invoices kept by her sister in Singapore and that her sister mistakenly thought that this was the invoice for the diamond in her solitaire ring.  Ms Ong did not offer any such explanation, but merely said that she did not know how the mistake had occurred.  She had received the faxed invoice from her sister and could not explain whether this was or was not the right invoice for her sister's ring. 

6. I am not persuaded that the fact that an invoice, which on the face of it refers to the diamond in the pendant owned by Ms Ong, was submitted in respect of her sister's solitaire diamond ring means that Ms Ong is not truthful in presenting her evidence and has manipulated the documents in support of her claim.  She was not able to produce any supporting documentation in respect of the pair of diamond earring studs owned by her sister and, if she had wanted to produce a false invoice for this item, it would probably not have been too difficult to find another invoice for diamond earring studs, or to adjust one of the many invoices that she had from Singapore or Hong Kong jewellers.  There seems to be no reason why Ms Ong would have gone to the length of producing false documents to support the claim for her sister's diamond ring where she also did not have supporting documentation for some other items of jewellery, for example her son's Cartier Parsha Chronograph watch.  Ms Ong said in cross‑examination that she told her sister that she would try and recover the value of the items lost by her sister, although her lawyer had told her that the claim did not "cover visitors".  It is unlikely that she would make a statement like this in cross‑examination if she had gone to the length of producing false evidence in order to support the claim in respect of her sister's ring.  Ms Ong further said that she did not read the detail on the invoice when it was faxed to her by her sister, but just passed it on to her lawyers.

7. I therefore have no reason not to accept the evidence of Ms Ong, including her statement to Mr Slade with regard to the requirements for the alarm system to be installed at 18 Macrae Road.  It also does not seem inherently improbable to me that Ms Ong would have said to Mr Slade that she wanted the best alarm system as she was concerned about the easy access to her property via the backyard, her daughter's safety and the protection of her jewellery.  I further see nothing inherently improbable in Ms Ong having told Mr Slade that she wanted the monitoring centre to respond if someone broke into the house or when the telephone line was cut.  Having come to the conclusion that Ms Ong dealt with business matters on the basis that she selected a trustworthy person and then left matters to him or her, I also accept that she did not press Mr Slade for a better explanation of why the alarm system had not notified the monitoring centre during the burglary at 18 Macrae Road and had accepted his assurance that he would do better next time. 

8. I accept that Ms Ong did not understand that the reason for the monitoring service not responding during the burglary at 18 Macrae Road was the absence of a dedicated telephone line.  It would be surprising if she had consciously selected another alarm system for Dunvegan Road without a dedicated telephone line if she had known that this had been a shortcoming in the alarm system installed at 18 Macrae Road.  At the very least one would have expected her to have raised this problem with Mr Slade and to have had a detailed discussion with him about the pros and cons of a dedicated line and why she had not been advised of this in the first place.  It is also significant that after the burglary at the Dunvegan Road property, Ms Ong had a dedicated line installed.

9. Counsel for Honeywell submitted that Ms Ong's version of the discussions with Mr Slade about the alarm system for 18 Macrae Road was an after the event reconstruction and that the pleadings and correspondence  indicated that she had initially not made an allegation that she had asked Mr Slade for the best alarm system.  I have considered the initial correspondence from Ms Ong's solicitors to Honeywell and the subsequent pleadings which were amended on several occasions.  In my view the correspondence and the pleadings reflect a gradual transition from the general to the more specific, but I do not detect any clear inconsistency in them which would indicate that Ms Ong invented her version of events at a later stage.  As counsel for Ms Ong pointed out, at the time that the first correspondence was written, Ms Ong did not yet know that the problem was the absence of a dedicated line.  Her solicitor's letter to Honeywell's solicitors, dated 26 August 1999, states that she holds Honeywell accountable for its "failure to respond" at the time of the burglary.  This accords with Ms Ong's understanding of the position with the alarm system at that time, because she did not realise that there was any defect in the alarm system or that it was not able to respond if a telephone line was cut.

10. I further accept the evidence of Mr Khoo.  He impressed me as a forthright witness who was prepared to admit that he had seen the witness statement of Ms Ong some months prior to giving evidence, but nevertheless gave evidence which was not always consistent with that of Ms Ong.  For example he recalled that there were three meetings with Mr Slade with regard to the ordering of the alarm system for 18 Macrae Road, whereas Ms Ong only seemed to refer to two meetings.  It did not appear to me that their evidence was tailored to each other.  It also makes sense on the probabilities that Mr Khoo, whose English is better, and who was used to doing the negotiations on behalf of Ms Ong, asked Mr Slade after the burglary at 18 Macrae Road, what had gone wrong.  He said that Mr Slade had told him that there had been a problem in the monitoring centre.  I do not see it as a matter detracting from the veracity of Ms Ong's evidence as argued by counsel for Honeywell, that Mr Khoo gave evidence that he had been told by Mr Slade that the problem had been in the control room, whereas Ms Ong did not provide this explanation.  Mr Khoo's evidence that he only found out about the particular function of a dedicated line when he spoke to Mr Terry Hayden after the burglary at 15 Dunvegan Road supports, on the probabilities, Ms Ong's case that she did not know about a dedicated line prior to the burglary at Dunvegan Road and installed a dedicated line as soon as she found out about its particular function.

11. I also accept the evidence given by Mr Kwok.  He appeared to be a serious young man who gave his evidence carefully and without embellishment.

12. I was not impressed by Mr Slade as a witness.  He gave his evidence in a defiant manner, looking at the Court at the end of each answer, refusing to break eye contact, as if to challenge the Court not to dare disagree with his evidence.  His demeanour indicated to me that he was not comfortable with the evidence that he was giving and had something to hide.  Further, even if I am wrong in assessing Mr Slade's demeanour, I am of the view that his evidence is inherently highly improbable.  I agree with the submission made by counsel for Ms Ong, that it is unlikely that Mr Slade would have explained the advantages and cost disadvantages of a dedicated line on each occasion when he sold an alarm to a residential customer when he had only sold one such alarm system in respect of a residence.  It is even more improbable that Mr Slade would have again offered a dedicated line in respect of the alarm system for 18 Macrae Road where he had installed three previous alarm systems for Ms Ong which had a dialler system.  It is not quite clear whether the alarm system at the Kirin Centre (the third one) was installed before or after the burglary at Macrae Road, but even if it was thereafter, the point remains that it is improbable that Mr Slade would have continued to offer a dedicated line on each occasion when it had been declined repeatedly before.

13. The Honeywell Proposal also does not lend any support to Mr Slade's assertion that it was practice at Honeywell and that he had been instructed to try to sell a dedicated alarm system to each customer prior to offering a dialler system.  If this was the case, one would have expected the Honeywell Proposal to have a box allowing for a dedicated line to be ticked.  Whereas Mr Slade could recall exactly what commission he was entitled to on a dialler system, he could not recall whether the monitoring fee of $20 or $23 in respect of a dedicated line included the cost of the monthly rental to Telecom and whether he was entitled to a year's monitoring fee based on those amounts or on a lesser amount after the deduction of the costs of the Telecom rental.  This is a further factor which indicates to me that Mr Slade did not advise customers as a matter of practice of the functioning and costs of a dedicated line. 

14. I was initially impressed by the fact that Mr Slade said that he remembered discussing a dedicated line with Mr Khoo because he pointed to the Telecom station across the road from 18 Macrae Road.  However, in light of the remainder of Mr Slade's evidence I am of the view that this is a matter which Mr Slade could have added after the event in order to try and lend credibility to his version of the discussions.

15. No evidence from Honeywell was provided to the Court which would have supported Mr Slade's allegation that representatives of Honeywell were instructed to try and sell an alarm system with a dedicated line.  In my view this is an appropriate case in which a Jones v Dunkel inference can be made.  It is to be assumed that the plaintiff's solicitors did have contact with a person in authority from Honeywell in preparing and conducting this case.  The inference can therefore be drawn that evidence from a person in authority from Honeywell would not have supported Mr Slade's assertions.  The absence of such evidence is a factor, together with the absence of any reference to a dedicated line on the Honeywell Proposal and Mr Slade's evidence of the small percentage of sales of systems with a dedicated line, which indicates to me that an alarm system with a dedicated line was so unusual in 1996, particularly in respect of residences, that it is improbable that Mr Slade would have explained the particular function of a dedicated line on each occasion when he sold an alarm system to Ms Ong.

16. Further, if Mr Slade had indeed offered a dedicated line to Ms Ong when the alarm system for 18 Macrae Road was discussed, it would have been most likely that he would have said to her or Mr Khoo after the burglary that the reason for the alarm system not functioning as expected was that it did not have a dedicated line and that this had been a choice which they had made.  Mr Slade would then have had all the more reason to strongly push for the sale of a dedicated line in respect of the Dunvegan Road property.  Instead, Mr Slade's recount of the conversation that he had with Mr Khoo is as follows:

    "Did Mr Khoo say anything to you?‑‑‑Yes, he told me that he wasn't happy with Honeywell anymore, the system didn't work and he was going to cancel.

    Did you say anything?‑‑‑I said well, the system was okay.  I said it's just that they cut the cables and stopped the system working.

    Did he say anything in response to that question?‑‑‑Other than he was going to cancel with Honeywell, no.  Then he gave me a reference, would you believe".

17. After a few further questions about the reference, Mr Slade was asked again, as follows:

    "Before you left the premises was anything said?‑‑‑Mr Khoo had said he wasn't happy with Honeywell. 

    Was anything else said about that?‑‑‑Yes, I suggested that they contact Terry Hayden who does monitoring as well because obviously they needed the system monitored still.

    Did you say anything to Mr Khoo about the types of monitoring that were available?‑‑‑I told him 'You should get a direct line'.

    And did he say anything?‑‑‑No, he said he was going to talk to Terry Hayden".

18. If Mr Slade had indeed tried to sell Ms Ong a dedicated line prior to the burglary, this version of the discussion with Mr Khoo is highly improbable.  In that case Mr Slade would have said: "The problem was that you did not have a dedicated line".  Mr Slade was also asked in cross-examination why he said "would you believe".  In answer he said that he did not expect to have been given a reference after "all the trouble" and that he felt at that time that he had let them down very badly.  If indeed Mr Slade had explained the availability of a dedicated line to Ms Ong and Mr Khoo and it had been their choice not to make use of it, there was no reason why Mr Slade should have felt that he let them down badly.  On the other hand, the fact that Mr Khoo wanted to cancel the monitoring contract with Honeywell but was still prepared to give Mr Slade a reference supports Mr Khoo's version that he understood that there had been a problem in the control room at Honeywell.

19. Mr Slade's evidence that he was given an unsolicited reference is also improbable.  It is much more likely that Mr Slade asked Mr Khoo sometime before 19 April 1999 to provide him with a reference as he knew since early that year that Honeywell was closing down that part of its business and that he would have to find another job.  He also said that he had started his own firm, Slade Security, prior to leaving Honeywell and that he had either started working on his own behalf or contemplated doing so in April 1999.  The fact that Mr Slade was in the unenviable position of having to start his own business at age 57 and clearly wanted to maintain a good relationship with Ms Ong and Mr Khoo, who had previously referred him to other contacts in the Asian community, may explain why Mr Slade did not provide a proper explanation to Ms Ong and Mr Khoo as to why the alarm system had not worked as expected during the burglary at 18 Macrae Road. 

20. When the Court gave Mr Slade another opportunity to explain what he had said to Mr Khoo at the meeting in his office after the burglary at Macrae Road, Mr Slade started embellishing his response to Mr Khoo saying that he told him: 

    "You can't blame Honeywell for – and in their contract it tells you, any interference with Telecom whatsoever, it will just (indistinct) message". 

21. Further, when the Court asked him whether he had explained to Mr Khoo why he should get a dedicated line, he avoided the question and instead explained the technical detail of how a dedicated line works.

22. Mr Slade's evidence with regard to the sale of an alarm system for 15 Dunvegan Road is also highly improbable.  He said that prior to the contract being signed he discussed with Mr Khoo a dedicated line again.  Mr Slade gave evidence that Mr Khoo responded that all of that was going to be dealt with by Terry Hayden.  But Mr Slade also said that he in fact signed the monitoring contract with Mr Khoo on behalf of Hayden Security and that the monitoring was for a dialler system.  Accordingly, Mr Slade must have known that Mr Khoo was again choosing a dialler system with the same inherent problem.  Mr Slade was asked what he discussed with Mr Khoo in relation to the monitoring and he replied that he asked Mr Khoo whether he wanted a dialler system or a "direct line" (dedicated line) and Mr Khoo replied that a dialler system was quite sufficient.  It is apparent from Mr Slade's own evidence that he avoided discussing with Mr Khoo the true reason for the problem at 18 Macrae Road and why a dedicated line for 15 Dunvegan Road should be considered.  The only reason to avoid that discussion was because the dedicated line had not been offered or explained to Ms Ong and Mr Khoo prior to the installation of the alarm system at Macrae Road.

1. The appropriate measure of damages for misleading and deceptive conduct is ordinarily the measure of damages in tort rather than the measure for damages in contract: Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1 at 14. In tort a plaintiff is entitled to "restitution damages", in other words to be placed in the position that he or she would have been if the tort had not occurred: Gates v City Mutual Life Assurance Society Ltd (supra) at 13.

2. As I have indicated earlier, the dictum in Sellars v Adelaide Petroleum (supra) makes it clear that there is no cogent reason why the principles laid down in Malec v J C Hutton Pty Ltd (supra) should not also apply to an action for breach of s 52 of the Act.

3. On the facts of this case there does not appear to be any difference in the measure of damages that Ms Ong would be entitled to whether they are calculated in respect of Honeywell's breach of the implied condition and therefore in contract, or in respect of Honeywell's misleading and deceptive conduct, and therefore on a basis akin to damages in tort.  If the condition in the Honeywell Agreement had been performed Ms Ong would have had an alarm system which would have notified the monitoring centre if the telephone line was cut.  On the other hand, if the misleading and deceptive conduct had not taken place, Ms Ong would have found an alarm system which allowed the monitoring centre to be advised if the telephone line was cut.

Disclaimer

1. Honeywell relied on cl 3 of the terms and conditions of sale on the reverse of the Honeywell Proposal which provided as follows:

   "3Guarantee

   3.1Honeywell does not guarantee the overall performance of any system or the results of any process with which its goods or services are used or integrated and shall not (subject to 2.2 above) be responsible or liable to any person for the loss or damage arising from the failure of any such system to process or perform any particular task or to produce a particular result.  Accordingly, to the full extent permitted by law, Customer hereby:

   (a)Indemnifies and holds harmless Honeywell, its servants and agents and each of them from and against all loss or damages, resulting directly or indirectly from any errors or defects in goods or services supplied by Honeywell; and

   (b)Agrees that this indemnity shall survive the termination of the agreement between Customer and Honeywell of which these Terms and Condition form a part and extends to cover any alleged error or defect in the goods or services and any failure of any system or process with which the goods or services are used or integrated to perform a particular task or to produce a particular result.

   3.2Subject to Clause 2 and sub-clause 3.1, Honeywell hereby limits its liability to Customer to the full extent permissible by State and Federal legislation".

2. This clause clearly limits and restricts Honeywell's liability to a customer as Honeywell is said to be not liable for the loss or damage resulting from the failure of any system to perform any particular task or produce a particular result.  Further, the clause provides for the customer to indemnify Honeywell, its servants and agents against all loss or damage suffered by them resulting from any errors or defects in the goods or services supplied by Honeywell.

3. Section 68 of the Act provides as follows:

   "(1)Any term of a contract (including a term that is not set out in the contract but is incorporated in the contract by another term of the contract) that purports to exclude, restrict or modify or has the effect of excluding, restricting or modifying:

   (a)the application of all or any of the provisions of this Division;

   (b)the exercise of a right conferred by such a provision;

   (c)any liability of the corporation for breach of a condition or warranty implied by such a provision; or

   (d)       the application of section 75A;

   is void".

4. The "Division" referred to in this clause is Div 2 of Pt V of the Act, which includes s 71(2) and s 74(2). Accordingly, cl 3 of the Honeywell Proposal is void, in so far as it purports to exclude or restrict the rights conferred upon Ms Ong by s 71(2) and s 74(2) of the Act.

5. Section 68 has no application in respect of a cause of action pursuant to s 52 of the Act, as s 52 is not in Div 2 Pt V. As regards s 52 the general approach by the courts has been that a disclaimer clause is ineffective in removing the statutory remedy provided by the Act for misleading and deceptive conduct. This view was expressed by Sheppard J in Clark Equipment Australia Ltd v Covcat Pty Ltd (1987) 71 ALR 367 at 371 as follows:

   "The remedy conferred by s 52 of the Trade Practices Act will not be lost whatever the parties may provide in their agreement.  If a vendor of goods has engaged in misleading or deceptive conduct, the law makes that person accountable for loss and damage suffered as a result of the unlawful conduct.  That conduct will usually have been committed, as in this case, prior to the signing of any contract.  If, as a result of the conduct, a person is induced to enter into a contract and suffers loss, an action to recover it lies.  The terms of the contract are irrelevant".

6. A similar view was adopted in Petera Pty Ltd v EAJ Pty Ltd (1985) ATPR 40‑605 at 46,887. Accordingly, cl 3 of the Honeywell Proposal cannot be relied upon by Honeywell to exclude its liability pursuant to s 52 and s 82 of the Act.

7. Counsel for Honeywell also relied on cl 7(c) of the Honeywell Protection Services Agreement.  This agreement deals with the provision of alarm monitoring and response services by Honeywell.  Clause 7(c) provided as follows:

   "7(c)Honeywell's responsibility for injury to persons or property that may be caused by or arise through the maintenance, service, functioning or use of the System shall be limited to injury caused directly by Honeywell's negligence in performing its obligations under this agreement, and in no event shall Honeywell be liable for speculative, indirect, loss of profits or consequential damages.  Additional limitations of liability are referred to in the attached schedules".

8. Counsel for Honeywell submitted that by reason of this clause Honeywell was not liable for any indirect or consequential damages and that the damages suffered by Ms Ong as a result of the burglary were indirect or consequently damages.  Counsel for Honeywell argued that the damages suffered by Ms Ong fell into the second category defined in Hadley v Baxendale (1854) 9 Exch 341.

9. The rule in Hadley v Baxendale has been summarised by Lord Wright in Monarch Steamship Co Ltd v A/B Karlshamns Oljefabriker [1949] AC 196 at 221 as follows:

   "The distinction there drawn (in Hadley v Baxendale) is between damages arising naturally (which means in the normal course of things) and cases where there were special and extraordinary circumstances beyond the reasonable prevision of the parties.  In the latter event it is laid down that the special facts must be communicated by and between the parties.  The distinction between these types is usually described in English law as that between general and special damages".

10. Firstly, it should be said that Hadley v Baxendale deals with damages recoverable by reason of a breach of contract.  The distinction drawn in Hadley v Baxendale is not necessarily applicable where the words "speculative, indirect, loss of profits or consequential damages" are to be interpreted where they appear in a contract between parties.  The meaning of these words has to be gleaned from the wording of the contract between the parties itself.

11. Counsel for Honeywell submitted that the damages suffered by Ms Ong did not flow naturally from Honeywell's breach without an intervening or independent cause, as the burglary itself was an intervening cause.  I do not agree with this construction.  In my view the losses suffered by Ms Ong in the burglary were the direct result of Honeywell not providing a dedicated line for the alarm system sold to Ms Ong.  It is fallacious to say that the burglary was an intervening event.  If this was a correct approach, there would always be an “intervening event” between the breach of a party and the loss caused to the other party as such an event is always required to bring the breach into the open.  For example, if a party negligently supplies a defective part, it could then be argued that the use by the plaintiff of that part was the "intervening event".  In my view cl 7(c) is intended to exclude consequential losses such as where tools of trade are stolen in a burglary and the plaintiff suffers loss of profits by not being able to perform his or her trade.

12. In any event, in my view cl 7(c) has no application to the breach by Honeywell in this case.  I have found that Honeywell is liable for breach of an implied condition in the Honeywell Agreement, alternatively, for misleading and deceptive conduct, both of which resulted in Ms Ong not being supplied with a dedicated line.  Ms Ong's loss and damage did not arise by reason of Honeywell negligently performing its monitoring services.  Accordingly, Honeywell's responsibility for loss and damage to Ms Ong's property was not caused by "the maintenance, service, functioning, or use of the System".  It was caused by the supply of a system which was not fit for purpose, alternatively by Honeywell's misleading and deceptive conduct.

13. Finally, if I am wrong, and cl 7(c) has a restrictive or modifying effect on the rights of Ms Ong pursuant to s 71(2) or s 74(2) of the Act, this clause is void pursuant to s 68 of the Act. Similarly, cl 7(c) cannot remove the statutory remedy provided by the Act for misleading and deceptive conduct.

Calculation of damages for lost jewellery

1. Prior to the close of the trial the parties managed to agree on a value as at the date of the loss, as well as on a value as at the date of the trial, in respect of the stolen items for which evidence of value was presented. The following schedule lists these items with the same numbering as on the original list of 40 items:

Item	Description			Agreed Value @ 25/4/99 AUS$		Agreed Value @ 9/5/05 AUS$
1	White gold ring with one central 3.20 carat "Princess" cut diamond and two shoulder set heart shaped diamonds totalling 2.45 carats			103,840		92,500
2	One pair 18 carat yellow gold jade earrings			4,500		4,500
3	One gold ring with 4.55 carat cab ruby and 1.56 carat diamonds		14,500		12,278
4	Various gold chains		2,050		2,288
7	18 carat white gold emerald and diamond multi cluster ring		15,375		10,163
10	One Cartier watch white gold and diamond with blue strap		13,150		10,800
11	One pair Cartier spectacles – Monceal model		465		465
17	One Cartier pen set		530		435
21	One Jaeger Coultre gold clock		3,500		4,500
22	Cash – SIN $ 10,000, US $ 5,000		16,476.43		14,560.45
25	One pair diamond earring studs		5,250		5,500
26	One solitaire diamond ring	10,690			12,180
27	One Cartier gold and diamond watch – limited edition "Panther" with mother of pearl backing	16,900			15,650
35	One Cartier men's Pasha 38 Chronograph watch	3,500			6,250
37	18 carat yellow gold dress earrings	36,000			41,550
38	18 carat Patek Philippe Geneve watch	11,960			9,000
39	18 carat diamond pendant and chain	15,000			20,513
40	18 carat ruby and diamond ring	30,000			30,900
TOTAL		$303,686.43			$294,023.45

1. The Court was not informed on what basis these values had been calculated.  The parties agreed that these values would apply to the respective items, if the Court found that Ms Ong was entitled to the replacement value of these items in Australia.  Counsel for Honeywell emphasised that he did not concede that it had been proven that Ms Ong owned each of the above items, that they were in the house at the time of the burglary or that they were stolen. I am satisfied that Ms Ong has proven that each of the items on the schedule was owned by her in that she tendered an invoice and/or a valuation and/or a photograph for most of them and described the remainder in detail.  I also accept her evidence that they were in the house at the time of the burglary and stolen.

2. There seemed to be agreement between the parties that Ms Ong was entitled to the replacement value of the items proven as stolen.  Where items which were meant to be retained on a long term basis are to be valued for purposes of damages, replacement value is an appropriate measure of damages: InThe Marriage of Antmann (1980-1981) 6 Fam LR 560 at 565.

3. Counsel for Honeywell submitted that Ms Ong had bought most of her jewellery in Indonesia, Hong Kong and Singapore from wholesale jewellers who knew her as a regular client and that she had the ability to buy jewellery at much cheaper prices from these sources than what they could be purchased for in Australia.  Counsel for Honeywell further submitted that Ms Ong had replaced some of the items stolen with similar items to a lesser value than the value claimed, notably items 1 and 7 on the list. Ms Ong conceded in cross‑examination that she was likely to be able to obtain the heart shaped diamonds that she had been looking for to replace item 1 on the list cheaper overseas.  However, she was not able to say whether she could indeed replace item 1 by purchasing the diamonds and the setting overseas for less than the amount by which it had been valued in Australia.  She said that she could not say that until she had found a pair of heart shaped diamonds.

4. InThe Marriage of Antmann (supra) Evatt CJ, Bulley and Nygh JJ held in respect of the valuation of jewellery as follows:

   "There is however no fixed rule as to what is the proper method of valuation.  That must vary not only with each type of property or commodity concerned, but also with the purpose for which they were originally acquired and the need to realise on them in the shorter or longer term.  His Honour was entitled to determine on the evidence as to what was the most appropriate method of valuation in the circumstances".

5. A plaintiff should clearly not be over compensated for any loss suffered.   In Hoad v Scone Motors Pty Ltd (1977) 1 NSWLR 88 at 96 Moffitt P held that the benefits as well as the detriment of the method employed by the plaintiff to replace the lost items need to be taken into account so that the plaintiff is only compensated for the net detriment arising from the acquisition of the new items. His Honour further stated as follows:

   "The entire practice, intention and ensuing events are connected with the loss, or with the connected acts of mitigation and are not res inter alios acta.  Damages for the loss must have regard to all of such facts and hence bring to account any gain so connected with the acts of mitigation".

6. Although the above dictum refers more specifically to steps taken by a plaintiff in mitigation of his/her loss, in my view it also applies to the intention and ability of the plaintiff to make good his or her loss and obtain a replacement of the stolen items.

7. The evidence in respect of the value of the jewellery stolen indicates that Ms Ong purchased all her jewellery from jewellers in Indonesia, Hong Kong and Singapore. It is therefore highly likely that she will purchase her replacement items in the same manner.  However, there was no evidence led as to how much cheaper particular items, or at least jewellery in general terms, is when purchased from wholesale jewellers in Indonesia, Hong Kong or Singapore.  Accordingly, there is in my view no basis upon which I can make a finding that Ms Ong will be able to purchase the replacement jewellery at a certain percentage less than the costs of the same items in Australia.  In my view it would be unfair to Ms Ong to deduct an arbitrary percentage where it has not been established on the evidence that she can obtain jewellery at a given lesser cost.

8. Further, the Court has not been provided with the basis upon which the values in the schedule have been arrived at.  Some of the items have a higher value at the time of the loss and some at the time of the trial. Accordingly, it appears that the agreed values are not necessarily reflective of the true replacement costs in Australia at a given time.  If I were to make a further adjustment to the agreed values, the result may bear no relationship to the price that Ms Ong would in fact have to pay in Indonesia, Hong Kong or Singapore in order to replace her items of jewellery.  It would also raise the question whether Ms Ong should then be entitled to be reimbursed for her overseas airfare to purchase these items.

9. I am also not prepared to have regard to the various invoices showing the prices for which certain of the items of jewellery were originally purchased in Indonesia, Hong Kong or Singapore, and to apply the exchange rates agreed upon between the parties, as there has not been any evidence that Ms Ong would still have been able to purchase these items for the same price at the date of the loss or the date of the trial.  Some of the items were acquired in the 1980's, others in 1995, 1997 and 1998. 

10. In the absence of evidence to show for how much less Ms Ong would have been able to replace the stolen items in Indonesia, Hong Kong or Singapore, I am of the view that I should allow the costs of replacement in Australia as agreed by the parties in the above schedule.

11. I did consider whether I should adopt a different method of assessing the damages for the emerald and diamond cluster ring (item 7) which Ms Ong has already replaced.  Ms Ong tendered an invoice from Larry Jewellery, dated 14 September 1999, in the amount of SG$21,800 in respect of the replacement ring.  The parties had agreed on certain exchange rates as at certain dates.  The closest agreed exchange rate to September 1999 was 14 March 1999, when the exchange rate was 1.1017.  This means that Ms Ong paid approximately AUS$24,017 for the replacement ring.  This is more than the agreed value of AUS$15,375 as at 25 April 1999.  The replacement ring had cluster diamonds to the weight of 2.7 carat, whereas the cluster diamonds in the stolen ring only weighted 1.66 carat.  Accordingly, it would be fairer to Honeywell to rely on the agreed value and I have therefore not made an exception for item 7.

12. I have also not made an exception for item 1, the "princess" cut diamond ring with two heart shaped diamonds even though Ms Ong has replaced this ring in some fashion.  She purchased a replacement "princess" cut diamond, but this was 3.45 carat in comparison to the 3.2 carat of the original stone.  She has not yet been able to find a replacement for the two heart shaped diamonds.  I do not believe that it would be fair to Ms Ong to use the replacement cost of the two triangle shaped diamonds which she has purchased in the meantime.  I am also not persuaded that the ring which Ms Ong had insured for $66,000 with Distinctive Home Insurance was in fact the "princess" cut diamond ring with the two heart shaped diamonds.  Accordingly, I have not relied on this value but have used the agreed replacement value for item 1.

13. The general rule, both in contract and in tort is that damages are assessed at the date when the cause of action arose: Wenham v Ella (1972) 127 CLR 454 at 473 and Johnson v Perez (1988) 166 CLR 351 at 355. I see no reason and none have been advanced as to why the general rule should not be followed. There was no evidence presented as to whether jewellery generally or particular gem stones or gold has increased or decreased in price between 1999 and the date of the trial to indicate whether the replacement costs as at the date of the trial would be a fairer assessment. Accordingly, I propose to adhere to the general rule and allow the agreed values as at 25 April 1999.

Property of Ms Ong's sister and son

1. Ms Ong gave evidence that items 10, 25 and 26 on the above schedule belonged to her sister and that item 35 belonged to her son.  Counsel for Ms Ong did not concede that Ms Ong was not entitled to damages for these items and relied on the principles of bailment.  However bailment was neither pleaded nor were the requisite elements of bailment made out on the evidence.  There was no evidence that Ms Ong's sister and her son had handed over their property to the exclusive possession and control of Ms Ong.  Palmer in his authoritative work on "Bailment" 2^nd ed at p 383 refers to the following dictum by Sherbourne J in the case of Zweeres v Thibault (1942) 23 A 2d 529 as one of the most succinct statements of the distinction between bailment and license:

   "Where personal property is left upon another's premises under circumstances from which either relation might possibly be predicated, the test is whether or not the person leaving the property has made such a delivery as to amount to relinquishment, for the duration of the relation, of his exclusive possession, control and dominion over the property, so that the person upon whose premises it is left can exclude, within the limits of the agreement, the possession of all others.  If he has, the general rule is that the transaction is a bailment".

1. The evidence to prove that Ms Ong's sister and son relinquished their exclusive possession, control and dominion over the property to Ms Ong has not been made out.  I can see no basis upon which Ms Ong is entitled to claim damages for the loss of the property of her sister or her son.

2. Item 22 on the list is cash in the amount of SG$10,000 and US$5,000.  In cross-examination Ms Ong admitted that she had initially only claimed SG$6,000 from her insurers and that the remaining SG$4,000 belonged to her sister.  Accordingly, Ms Ong is only entitled to claim damages in respect of SG$6,000.  The schedule of agreed values only provides a total amount in Australian dollars for the Singapore dollars and the US dollars.  No evidence was provided with regard to the exchange rate of Singapore dollars as at 25 April 1999.  However, a list of items claimed by Ms Ong from her insurer was tendered into evidence (exhibit 25) and this has a hand written notation of "5,445" next to "S$6,000" and a handwritten notation of "7,500" next to "US$5,000".  This notation presumably refers to the value of the SG$6,000 and US$5,000 in Australian dollars as at the date of the burglary.  The document has the date "25/4/99" noted at the bottom.  Accordingly, I am prepared to allow Ms Ong damages in the amount of AUS$12,945 in respect of the amounts of SG$6,000 and US$5,000 lost by her in the burglary.

Amount of damages and interest

1. Allowing the agreed value as at 25 April 1999 on the schedule for all items, except the items owned by Ms Ong's sister and by her son (amounting to a deduction of $32,590) and except for SG$4,000, the total amount of damages that Ms Ong would have been entitled to, if the principles laid down in Malec v J C Hutton Pty Ltd(supra) did not apply, is $267,565.  I have come to the conclusion that Ms Ong is entitled to 80 per cent of this amount on the basis that she had an 80 per cent chance of not suffering any loss or damage if the implied term of the contract had been performed or, alternatively, if there had been no misleading and deceptive conduct.  This amounts to $214,052.

2. Ms Ong claimed pre‑judgment interest on the amount of damages allowed at the rate pursuant to s 32 of the Supreme Court Act 1935.  Counsel for Honeywell submitted that interest should not be allowed as it had taken Ms Ong approximately six years to advance her counterclaim to trial.  No evidence was led to indicate that there had been inordinate delay in taking any particular step or any deliberate delaying tactics by Ms Ong. 

3. The purpose of pre‑judgement interest is to compensate the plaintiff for being kept out of money to which he or she was entitled over the relevant period and to ensure the plaintiff receives the equivalent of money's worth: Watts v Turpin (1999) 21 WAR 402 at [87]. The plaintiff is prima facie entitled to interest unless he or she was guilty of disentitling conduct: Harry v Rottnest Sightseeing Cruises Pty Ltd [1988] WAR 239 at 247 ‑ 248.

4. Delay in issuing proceedings or prosecuting them is not per se a reason to deny a successful party interest on the damages awarded: Bennett v Jones (1977) 2 NSWLR 355 at 371. Further, it was Honeywell which instituted the proceedings on 16 September 1999. In March 2000 Ms Ong brought an application to have the matter transferred from the Local Court to the District Court to allow for her counterclaim. Thereafter Honeywell also had control over the proceedings and could have made sure that they were prosecuted with diligence: Bennett v Jones (supra) at 371.

5. Accordingly, I am not persuaded that Ms Ong should not be entitled to interest at the rate of 6 per cent from the date of the loss to date of the judgment.

Insurance Payment

1. The insurance pay-out that Ms Ong received from Distinctive Home Insurance is irrelevant to her claim in contract and pursuant to the Act: Thiess Contractors Pty Ltd v Norcon Pty Ltd(2001) 11 ANZ Ins Cas 61‑509 at [12] ‑ [17]. In any event it was not clear on the evidence exactly what payment Ms Ong received from her insurer and with regard to which items. Ms Ong may have a duty pursuant to the doctrine of subrogation to account to her insurer in respect of damages received in this action which relate to items for which she has already received a pay-out from her insurer: Insurance Commission of Western Australia v Kightly (2005) 13 ANZ Ins Cas 61‑656 at [50]. However, this is not an issue relevant to these proceedings.

Honeywell's claim

1. Honeywell tendered an invoice, dated 6 June 1999 in the amount of $357, which indicates that a call out charge for after hours in the amount of $262.50 was charged and labour service in the amount of $94.50.  The invoice has the following notation: "As per CSR 032364 repaired system after B&B, all wires to PA panel severed".  Ms Ong admitted that this invoice related to the call out when Honeywell sent a technician to repair the alarm system and telephone wires that had been cut.  She agreed that she had not paid the invoice and said that she was told not to pay it.  No other reason was advanced as to why this amount was not owing by Ms Ong to Honeywell.

2. Accordingly, I allow Honeywell's claim in the amount of $357.  No claim for interest was made.