Southern Wire Pty Ltd v Clover Communications Pty Ltd - [2023] SASCA 18

Supreme Court of South Australia
(Court of Appeal: Civil)
SOUTHERN WIRE PTY LTD v CLOVER COMMUNICATIONS PTY LTD
[2023] SASCA 18
Judgment of the Court of Appeal
(The Honourable President Livesey and the Honourable Justice Bleby)
27 February 2023
APPEAL AND NEW TRIAL - PROCEDURE - SOUTH AUSTRALIA - WHEN APPEAL LIES - FROM SUPREME COURT - BY LEAVE OF COURT - GENERALLY
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - LIABILITY OF MANUFACTURERS OR IMPORTERS FOR DEFECTIVE GOODS
The respondent operates a sheep grazing property on Kangaroo Island. Towards the end of 2008, it decided to construct new raceways to move sheep between its paddocks. In January 2009 and May 2010, the respondent purchased a total of 54 x 200-metre rolls of fencing wire through an agricultural agent. The applicant is the manufacturer of the fencing wire.
The fencing wire was steel wire galvanised with a zinc/aluminium alloy, at a thickness of 125 grams per square metre and coated with a green polymer paint. The respondent asked for fencing that would last 50 years, only wanting to instal the fencing once.
The respondent installed the fencing wire by the end of 2010. By December 2015, the respondent found the fencing wire to be corroding and contended that it continued to corrode.
The respondent brought an action in the Adelaide Magistrates Court, claiming damages up to the jurisdictional limit of $100,000 for the defective fencing wire it purchased from the applicant. The claims were for negligent advice and misrepresentation as to the suitability of the green polymer paint coating on the fence for use on the respondent’s farm; false and misleading conduct concerning the quality of the fencing wire, contrary to ss 52(l) and 53(a) of the Trade Practices Act 1979 (Cth) (TPA); and breach of s 51(4) of the Manufacturers Warranties Act 1974 (SA) (MWA). The magistrate dismissed the action.
The respondent appealed to a single judge of this Court. The judge allowed the respondent’s appeal and awarded damages of $78,000. The applicant seeks leave to appeal against this decision.
The Notice of Appeal raises six substantive grounds of appeal and numerous sub grounds. Broadly, the applicant contends that the judge:
•failed to have any or any sufficient regard to cogent and admissible evidence which the applicant contends demonstrates the wire supplied to the respondent was not defective and of merchantable quality (Ground 1);
•erred in various findings (Ground 2);
•failed to consider and apply s 4(3) of the MWA (Ground 3);
•erred in in holding that the respondent is entitled to damages because the corrosion was the consequence of exposure to aggressive fertilisers and other farm chemicals (Ground 4);
•erred in awarding damages in the sum of $78,000 (Ground 5); and
•failed to take into account and/or apply an appropriate discount to the damages assessed on the basis of…

Grounds of appeal

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

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

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

Consideration

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

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

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Details

Case: [2023] SASCA 18
Decision Date: 27 February 2023

CaseChat Overview and Summary

Southern Wire Pty Ltd sought leave to appeal to the Full Court of the Supreme Court of South Australia against a decision of Kourakis CJ. The dispute concerned the respondent's purchase of approximately 10 kilometres of fencing wire manufactured by the applicant for use on its sheep grazing property on Kangaroo Island. The respondent alleged it was induced to purchase the wire by representations that it was high quality, the best corrosion-resistant option, and would last 50 years, which was necessary for the respondent's requirement to only install the fencing once. The respondent subsequently experienced significant corrosion and rusting of the wire, well before the expected lifespan.

The legal issues before the Full Court were whether the applicant should be granted leave to appeal against the Chief Justice's decision, which had allowed the respondent's appeal from the Magistrates Court and awarded damages of $78,000. The applicant's grounds of appeal were not detailed in the provided text, but the court considered whether these grounds raised any question of general importance or if a grant of leave would otherwise be in the interests of justice, given the substantial costs already incurred in the proceedings.

The Full Court refused leave to appeal. Their Honours reasoned that the applicant's complaints did not demonstrate any question of general importance. Furthermore, considering the significant costs already incurred by both parties in the eight-day trial in the Magistrates Court and the two-day appeal before the Chief Justice, especially in comparison to the damages awarded, granting leave to appeal would not be in the interests of justice. The applicant was ordered to pay the respondent's costs of the application for leave to appeal.

Orders

Orders of the court

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Background

Background to the litigation

On 19 August 2022, Kourakis CJ allowed the respondent’s appeal and awarded damages of $78,000.[1] The applicant now seeks leave to appeal against this decision. For the reasons that follow, we refuse leave to appeal.[1] [2022] SASC 86. Background The respondent operates a sheep grazing property on Kangaroo Island. Towards the end of 2008, it decided to construct new raceways to move sheep between its paddocks. This required about 10 kilometres of fencing. In January 2009 and May 2010, the respondent purchased a total of 54 x 200-metre rolls of fencing wire through an agricultural agent. The fencing wire was steel wire galvanised with a zinc/aluminium alloy, at a thickness of 125 grams per square metre (‘gsm’) and coated with a green polymer paint (‘cyclone green-coat’). The applicant is the manufacturer of the fencing wire. The respondent asked for fencing that would last 50 years, only wanting to instal the fencing once. At the trial in the Magistrates Court, the respondent alleged that it was induced to purchase the fencing wire by representations made by a sales representative of the applicant. The representations were to the effect that the fencing wire was high quality fencing wire, the fencing recommended was the respondent’s best corrosion resistant fencing wire and would last 50 years, and it was appropriate to meet the respondent’s requirements. The respondent installed all the fencing wire on the Kangaroo Island property by the end of 2010.The Australian standard The Australian Standard sets out that zinc/aluminium alloy generally extends the life of galvanised wire threefold. It describes the characteristics of various forms of galvanisation and sets out the expected lifetime of those forms in a range of climatic conditions. The Australian Standard explains that galvanising with an alloy of zinc and five per cent aluminium increases the durability of the galvanisation because even though the rate of corrosion of the zinc is greater initially, it slows considerably when the coating becomes aluminium rich. The relative advantage of the alloy is greatest in conditions where there are high levels of atmospheric attack (e.g., salty spray) or where the use of corrosive farm chemicals is greater. The Australian Standard includes a graph displaying ‘indicative coating durability’ for different climatic zones. In respect of the zone in which Kangaroo Island falls, the graph shows that galvanised zinc coating of 125 gsm will provide about 22 years of protection before the onset of rusting, which is defined as rust appearing on about 10 per cent of the wire surface. For a galvanised coating of 150 gsm, the estimated period of protection is a little less than 30 years. A superior zinc/aluminium galvanisation of 125 gsm should, on a conservative assessment, generally retain its functionality for a lifetime or 50 years, or perhaps longer, if the polymer coating effectively adds to the serviceable life.Signs of rusting The respondent’s managing director, Mr Atkinson, gave evidence that he first noticed the cyclone green-coat fencing losing colour and flaking a little. By December 2015, Mr Atkinson found the fencing wire to be corroding. This had progressed by 2018. Initially, the rust was mainly on the vertical strands of the fence but it then extended to the horizontal strands.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

We are not satisfied that the applicant’s complaints on the Notice of Appeal raise any question of general importance or that a grant of leave to appeal would otherwise be in the interests of justice. The trial before the magistrate took eight days. The single judge appeal occupied two days. The costs to date of both parties must have been significant, especially when compared with the damages awarded or which might otherwise be in prospect, assuming success on Ground 6. Conclusion We refuse leave to appeal. The applicant should pay the respondent’s costs of the application.

Ratio Decidendi

Legal Principle Established

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