Professional Construction Control (Australia) Pty Ltd v Atkins Campbell & Associates Pty Ltd

[1984] FCA 25

IN THE FEDERAL COURT OF AUSTRALIA

)

)=SOUTH WALES	DISTRICT	REGISTRY	)	No. G.13 of 1983
)

GENERAL DIVISION )

BETWEEN : FROFESSIONAL CONSTRUCT101

CONTROL (AUSTRALIA) PTY.

LIMITED

Applicant

AND :

ATKINS CAMPBELL &

ASSQCIATES PTY. LIMITED

First Respondent

ALAN ATKINS

Second Respondent

COLIN CFNPSELL

Thlrd Respondent

ORDERS

CORAM : ST. JOHN, J.

D: TUESDAY, 28th FEBRUARY, 1984

PLACE : SYDNEY -

1. The appllcatlon 1 s dismlssed.

2. The applicant is ordered to pap the cespondents’

costs.

IN THE FEDERAL COURT OF AUSTRALIA	1
1
NEW SOUTH MALES DISTRICT REGISTRY	) No. G.13 of 1933
)

GENERAL DIVISION I

BETWEEN : FROFESSIONAL CONSTRUCTIOFi CONTROL (AUSTRALIA) PTY. LIMITED

Applicant

MJD :

ATKINS CAMPBELL &

ASSOCIATES PTY. LIMITED

Flrst Respondent

a L m ATKINS

Second Respondent

C O L I N CAMPBELL

Thlrd Respondent

REASONS FOR JUDGMENT

CORAM : ST. JOHN, J.

W: TUESDAY, 28th FEBRUARY. 1984.

PLACE : SYDNEY

The applicant company seeks damaues from the

respondents pursuant to Sectlon 82 of the Tr3de Practlces .%*cc,

1974 ("the Act") for alleged breaches of Sectlons 5 2 , 53 and

55 of Part V of the Act and also for fraud and necrllgent

misstatement, all of whlch causes of action are based upon

certain statements, oral and In wrlting, alleged to have been

made by or on behalf of the respondents about the performance

and capacity of a mobile concrete block-making machlne

imported into this country from Italy by the respondents and

mounted on a traller.

The applicant company, of which Mlchael Wallace was

director was based in Lismore, to where Michael Wallace

retired from hls former occupatlon of quantlty surveyor. In

December, 1981 Michael Wallace became aware of a bulldlng

system known as Boralok, whlch system consisted of buildlnq by

means of placing together interlocking concrete buildlng

blocks which dld not need mortar in order to effect a ~oint

between the blocks, and which blocks were marketed by the

flrst respondent. Michael Wallace approached the first

respondent by speaking to one of its dlrectors. namely the

second respondent, and expressed the lnterest of the appllcant company in becornins an agent for marketing houses construcced in the Boralok system in and around Llsmore. In February the

following year, Mlchael Wallace attended the offices of the

first respondent where he learned that the latter was In the

process of importing from Italy a machlne for makina concrete

blocks which would later be mounted on a traller and made

moblle. Negotlatlons then commenced wlth a vlew to reachlng

agreement as to the use of the machine bp the appllcant

3 .

company in the Lismore area and the applicant company alleges

that, durinq the course of these negotiations, mlsleadlng

statements within the meanlng of	Section 52 of the	Act were
made.

From the amended statement of clalm, the statements

relied upon by the applicant company to substantlate all its

causes of actlon were as follows:-

(a) Was fully moblle.

(b)	Could be operated efficlently by three men.
( C )	Would be fully tested and operational before it was delivered to the applicant.
( d )	Was capable of manufacturing cement blocks of a
quality suitable for use In housino and building construction uenerally.
(e)	Was capable of manufacturlng cement blocks of a
quality suitable for use In a building system known
as the "Boralok Buildlnq System" marketed by the

first respondent.

(f) Was capable of manufacturlnu cement blocks of a

uniform high standard quality.

.

4 .

(q) Was capable of manufacturmg cement blocks of a

standard and quality equal to or better than those

manufactured by other cement block manufacturers in

and around Lismore, New South Wales.

(h) Could be towed safely behind a 2 . 5 tonne truck.

ti) Was suitabie for operation in and around Lismore in

the said State using	raw materials available In that
locality.

(1)	Was capable of mixing 0.183 cubic metres of cement
and aggregate mix every five minutes.
( k )	Could manufacture several types of cement blocks at a specified speed, material wastage and profit margm.
(1)	Would be available for dellvery on a speclfied date
(m)	Would be promoted by the first respondent m and
around Lismore in the said State.
(n)	Would be available for use by the applicant In
relation to the construction of a supermarket at
Caslno in the said State and for the other bullding

5.

projects of which the applicant informed the first

respondent.

Before the machine was available for operation,

Michael Wallace carried out a survey of the availability of

concrete blocks In the north coast area of New South Wales,

collected information as to where they were manufactured and

what prices were charged for them. He then, after receipt of

information as to the number of blocks which could be manufactured by the machine in a normal working day, supplled data which was fed into a computer whlch produced estlmates of

the profitability of the use of the machine. Many such print-

outs were tendered in evidence, but it is unnecessary for me

to go into detail of the data fed lnto the computer and its results because, on the evidence, I am satlsfied that the

statements made as to the capacity of the machine to produce

the number of blocks stated by the respondents was not

inaccurate and in doing so, I accept the evidence, called by the respondents, of persons who had recently operated the machine.

On receipt of the machine from Italy, the respondents

instructed a firm of engineers to mount the machlne on a

trailer and, in order to do so, so that the helght of the

mounted machine would be reduced, to sclme extent modified chat

machine. I am satisfied on the evidence hat the

modifications did not affect the performance of the mqchine ._ as

6 .

it had been seen operating in Italy before the purchase. The main components of the machine were a cement mixer from whlch a conveyer belt ran to a hopper from which the concrete

mixture could be released by means of a hand operated lever

into the mould for the particular brlck block belng

manufactured. The mixture was then vibrated in the mould to

ensure the shape of the block, the surplus materlal scraped

away, the mould removed and a pallet upon which the block was

formed was then removed for curinq.

It is of great signlflcance to the fate of the

applicant company’s claim that at the time the appllcant

company took delivery of the machine, no concluded agreement

had been reached between the applicant company and the first

respondent as to the terms and condltions under which the

machine would be operated and, in particular, that the

proposed profit-sharing which was intended to be aqreed had

not, in fact, been agreed. A rental was fixed but It was

always in the contemplatlon of the parties that further terms

and conditions as to proflt-sharing be agreed.

Before the machine was ready f o r operatlon, the

applicant company, through its director Michael Wallace,

. ._ --”.

purchased $--.Ford truck wlth the lntention of towing the

machine with it. When the machine was constructed and

operatlonal, Michael Wallace‘s son drove a Ford truck

purchased by the appllcant o Mltmqong and recelved

l .

instruction m the operation of the machlne and also used the

truck to tow the trailer on which the machlne was mounted to a

motor eqlstry for eglstratlon of the trailer. It is

pertinent to point out that at the tlme that thls was done, and in the presence of the son, parts of the machine were not

on the trailer at the time it was weighed for registration

purposes and,	additionally, no pallets were being carried on
the traller.

Within a day or two of registration, the son

proceeded to tow the traller carrying the complete machine and an unspecified number of pallets in the dlrection of Lismore. After he had proceeded some distance, the son said that when

he was going down an incline at probably no more than 70 or 80

kilometres per hour, the trailer would fishtall all over the

road and give the impression it was pushing the truck which he

was driving. He declded not to proceed wlth the tow and the

machme mounted on the trailer was later delivered to Lismore by being carrled. Mlchael Wallace decided that the Ford truck

was inadequate to tow tne traller and traded in the Ford truck

on a heavler vehicle.

Thereafter, Michael Wallace conducted what he

described as "trials" in the operation of the machine. He gave

evldence to the effect that he and three other younq men.

lncludlng his son, operated the machme and he made various complaints about the capacity and performance of r;he machine

8 .

whlch are summarlsed in the allegatlons set OUT; ln the

statement of claim and reproduced above.

It is necessary to deal speclfically with each of the

alleged statements:-

(a)

Was fullv mobile. described by the respondents' agents, but I am

not satisfied that that statement was

misleadmg or inaccurate. The evldence of

Michael Wallace's on about he traller

fishtailing referred to the trailer when It

was loaded with material other than the

machine, namely the pallets; likewise, the

evidence of Michael Wallace that the trailer

appeared to fishtail whilst towed by the

heavier vehicle when it was also partially

loaded with pallets. In addltion, chere 1 s no

expert evidence before me as to the posslble

causes of the flshtailing and, in particular,

there is no evidZnce dlrected as to whether or

not the braking system on the traller was

adequate or efficiencly worklng. In short,

there is no evidence that the traller carrying

only the machlne would mlsbehave in any

respect which would make it not moblle had It

.

9 .

not been carrying pallets, the weight of which

was not the sub~ect of any evidence.

(b) Could be operated efficiently bv three men.

Michael Wallace gave evidence that he and

three other men were necessary to operate

the

machine. His son does not confirm this and

gave evidence to the effect that his father

was "doing varlous odd jobs around the place".

When asked the direct question whether his

father was operating the machlne, the son

replied "to the best of my recollectlon he dld

not actually operate it but, no, he helped In

that operation". It is to be noted that

during the three days of trials, the son had

received some lnstructlon in the operation of

the machine. There is no evidence that the

other two youn9 men had any experlence of

operating such a machine or a similar machlne

and It is obvlous that In releasing the

mixture from the hopper, judment as to the

amount to be released had to be eserclsed and

It would be a matter of experlence that would.

determlne how much should be released and the

movement necessary to do so . In addltlon, I

accept the evidence of Mr. Hafford of hls

experience of the operation of the machlne In

10.

which he said that three men would operate the

machine and dld so for long perlods. The fact

that the machine had been In a statlonary

position whilst this was being done in my view

is not to the point, as it has not been

suggested that he machine operated any

differently whilst In a statlonary positlon of

a permanent	nature	than	In	a temporary
position.

(C)	Would be fully tested and operatlonal before it was dellvered to the apollcant.
I am satisfied that the machlne was tested and
it was operatlonal.
( d )	Was capable of manufacturinq cement blocks of
a quality suitable for use In houslnu and
buildlns construction qenerally.
I accept aqaln the evldence of Mr. Hafford In
this regard and I am satisfled that the
differences in height produced by the
operation of the machine in the trials at
Lismore were due to Inexperience.
( e )	Was capable of manufacturlnq cement blocks of
a quality suitable for use In a bulldinq
system known as the "Boralok Buildinu Svstem:
marketed bv the flrst respondent.
Again I am satisfied that the machine was so
capable.

11.

(f) Has capable of manufacturinq cement blocks of

a uniform hiqh standard auality.

If this representatlon can be implied from the

evidence, I am satisfied that the blocks

manufactured in the machine could be of a

standard quallty In the sense that they were

properly shaped and of a size sufficlently

uniform for building purposes. No evldence

was directed to the quality of blocks produced

except their shape and helght.

( g ) Was capable of manufacturlns cement blocks of

a standard and quality equal to or better than

those manufactued by other cement block

manufacturers in and around Lismore. New South

Wales.

There was no direct evidence of thls statement

being made. Further, there was no evidence as

to the quality of cement blocks manufactured

in and around Llsmore and therefore no basis

for comparison.

(h) Could be towed safely behind a 2.5 tonne

truck.

There was no evidence that the machlne mounted

on the trailer wlthout any additional materlal

being carried on the traller could not be

towed safely behlnd a 2.5 tonne truck. In

addition, there was no expert evidence as to

12

what was a 2.5 tonne truck and addltlonally,

no evidence as to whether or not the Ford

vehicle was in that cateqory or not.

(i) Was suitable for operation in and around

Lismore in the said State usinu raw materlals available In that locality.

If thls statement can be implied from the

evidence, there is, in my view, no evlaence to

contradict it.

( j ) Was capable of mixinu 0.183 cubic metres of

cement and aqqreqate mix every five minutes. This statement was not speclfically adverted

to in evidence unless it was part of the data

fed into the computer which resulted In the

print-outs previously referred to. I have

already stated in general terms that the

representatlons as to the capacity of the

machine to produce blocks at certaln rates

were not misleading or innacurate.

(k) Could manufacture s veral tvpes of cement

blocks at a speclfled speed, materlal wastaue

and profit maruin.

The print-outs tendered were the result of -.. . _ .._

data selected by Michael Wallace to feed Into

the computer. As I have already said. if it

is these prlnt-outs which are relied upon, and

'.-. they included statements by the respondents as

1 3 .

to the rate of production, no mlsstatement was

made by any of the respondents.

(1)	Would be available for delivery on	a specified
date.

There is no evidence that delivery was

specified for a particular date and, If there

was, as no concluded agreement was reached

between the parties, no damaqe would result

from delay.

(m) Would be promoted by the flrst respondent in

and around Lismore in the said State.

Even if this statement were borne out in

evidence, no damage results from it.

(n)	Would be available for use by the awllcant In relation to the constructlon of a supermarket at Caslno in the sald State and for other
buildinq proiects of whlch the applicant

informed the first respondent.

I am not satisfied on the evidence that such a

statement was made.

As to the other causes of action, I flnd no evldence

of fraud and I find none of the elements necessary to make up

the tort of neqligent statement.

Should I be in error in any of the findings of fact

made as to whether or not the statments had been made or were

14.

in fact misleading or likely to mlslead, I go on to consider

the question of damages. Agaln, I repeat that the terms and

conditions under which the applicant company would operate the

machine were never flnally agreed upon. The applicant

company's director Michael Wallace referred to the operatlon of the machine at Lismore as "trials". The rent agreed upon

was never charged. The money expended in taking delivery of

the machine has not been specified, except that the appllcant

company claims a loss on the purchase of the two trucks.

There is no expert evidence as to the value of the Ford truck

when purchased or when traded in on the second truck, There

is no expert evidence as to the value of the second truck when

it was returned to the dealer from whom it was purchased. The

negotiations entered into by the applicant company for the

supply of concrete bricks were premature in the circumstance

that, at the time they were entered into, the appllcant

company dld not have the machine, nor did it have any

concluded agreement as to the use of the machlne.

I am satisfied that the applicant's dlrector, Michael

Wallace, was in error In his evaluation of the profltability of the machine when he failed to take into account the t m e

involved in moving the machine and settlng It up for operation

and also in falling to appreciate that, for small bulldlnqs

such as houses, the number of blocks necessary for such

buildings did not ~ustify movement to the site.

15.

The applicatlon is therefore dismissed, and the

applicant is ordered to pay the respondents' costs.

c :-r I

Sr. T a n *1 !