Sunlight Nominees Pty Ltd v Zotti - [2017] SASC 176

SUPREME COURT OF SOUTH AUSTRALIA
(Magistrates Appeals: Civil)
SUNLIGHT NOMINEES PTY LTD v ZOTTI & ZOTTI
[2017] SASC 176
Judgment of The Honourable Justice Doyle
22 November 2017
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH
TRADE AND COMMERCE - COMPETITION, FAIR TRADING AND CONSUMER PROTECTION LEGISLATION - CONSUMER PROTECTION - MISLEADING OR DECEPTIVE CONDUCT OR FALSE REPRESENTATIONS
The appellant (plaintiff) laid a concrete driveway for the respondents (defendants) at their residential property. The plaintiff charged $57,933.13 for this work, which the defendants did not pay. The plaintiff sued the defendants for this sum.
In their defence and counterclaim, the defendants alleged that the works were defective and in breach of contract, including because the concrete did not comply with the specified strength of 25MPa. The defendants sought damages measured by reference to the cost of replacing the driveway.
The Magistrate upheld the defendants’ allegation of breach of contract in relation to the concrete strength, and awarded damages measured by reference to the cost of replacing the driveway, but capped at the pleaded amount of $56,600, giving a net judgment in the plaintiff’s favour of $1,333.13.
On appeal, the plaintiff complains that the Magistrate erred:
1.       in finding that the defendants specified the use of concrete with a strength of 25MPa;
2.       in holding that this specification was a term of the contract; and
3.       in holding that the defendants were entitled to recover damages for the cost of replacing the driveway.
The plaintiff’s appeal also complained about an evidential ruling by the Magistrate, and sought to rely upon fresh evidence in relation to two matters.
The defendants cross-appealed, complaining that the Magistrate erred in confining their damages to the pleaded quantum.
Held (per Doyle J):
1.       No error has been established in the Magistrate’s finding that the defendants specified concrete with a strength of 25MPa (at [66]) or holding that this was a term of the contract (at [69]).
2.       Consideration of the principles governing the receipt of further evidence on appeal (at [82]).
3.       Not appropriate to exercise the Court’s discretion in favour of permitting further evidence to adduced in this case (at [86] and [89]).
4.       No error has been established in the Magistrate’s decision to exclude evidence in relation to the finish applied to the driveway (at [94]).
5. Consideration of the general rule in Bellgrove v Eldridge (1954) 90 CLR 613 in favour of the recoverability of damages reflecting the cost of rectification work, and the qualification to that rule that the work be necessary and reasonable to achieve contractual conformity (at [96]-[100]).
6.       No error has been established in the Magistrate’s decision that the general rule applied, and that the qualification had not been made out (at [111).
7.       In circumstances where the defendants provided advance notice of expert evidence seeking a figure slightly higher than the pleaded figure, opened on that higher figure and neither the plaintiff nor the Magistrate suggested that the defendants would be held to the pleaded figure, the Magistrate erred in confining the defendants to their pleaded quantum (at [123]).
8.       Appeal dismissed; cross appeal allowed for the purpose of substituting a figure of $65,000 for the defendants’ damages on the cross appeal, resulting in a net judgment in the defendants’ favour of $7,066.87.
Supreme Court Civil Rules 2006 (SA) r 286, referred to.
Bellgrove v Eldridge (1954) 90 CLR 613; Wade v Australian Railway Historical Society (2000) 77 SASR 221; Built Environs Pty Ltd v Saunders International Limited [2012] SASC 111; Masterton Homes Pty Ltd v Palm Assets Pty Ltd (2009) 261 ALR 382; CDJ v VAJ (No 2) (1998) 197 CLR 172; Viscariello v Livesey [2013] SASC 99; Chakravarti v Advertiser Newspapers Ltd (1998) 72 SASR 361; Collex Waste Management Services Pty Ltd v The Corporation of the City of Enfield (No 2) [2000] SASC 140; Robinson v Harman (1848) 1 Ex 850 at 855; Tabcorp Holdings Ltd v Bowen Investments Pty Ltd ( 2009) 236 CLR 272; Stone v Chappel (2017) 128 SASR 165; Gould v Mount Oxide Mines Ltd (In Liq) (1916) 22 CLR 490; Leotta v Public Transport Commission (NSW) (1976) 9 ALR 437; Dare v Pulham (1982) 148 CLR 658; Water Board v Moustakas (1988) 180 CLR 491; Sands v Channel Seven Adelaide Pty Ltd [2010] SASC 202, considered.

SUNLIGHT NOMINEES PTY LTD v ZOTTI & ZOTTI
[2017] SASC 176
Magistrates Appeal: Civil

DOYLE J: The appellant (plaintiff), Sunlight Nominees Pty Ltd, laid a concrete driveway for the respondents (defendants), Mr and Mrs Zotti, at their residential property. The plaintiff subsequently charged the defendants $57,933.13 for this work, which the defendants did not pay. The plaintiff sued the defendants for this sum.
In their defence and counterclaim, the defendants alleged that the works were defective and had been undertaken in breach of contract in that: the concrete used did not comply with the specified strength of 25 megapascals (MPa); the crossover between the boundary of the property and the road did not have the specified pattern; and there were other defects in the concreting work including variations in colour and pattern. The defendants sought damages for the cost of the rectification work necessary to achieve conformity with the contract, which they contended would involve replacement of the driveway at a cost of $65,000.
The Magistrate upheld the defendants’ allegations of breach of contract in relation to the strength of the concrete and the crossover pattern, but rejected the other allegations of breach through defective workmanship. The Magistrate upheld the defendants’ contention that the contemplated rectification work was necessary to achieve contractual conformity, and was not unreasonable, such that the cost of that work was recoverable as damages in accordance with the general rule in Bellgrove v Eldridge.[1]
[1] Bellgrove v Eldridge (1954) 90 CLR 613.
While accepting that the expert evidence suggested that the cost of this rectification work would be about $65,000, her Honour confined the defendants to the amount pleaded in their counterclaim, namely $56,600. The Magistrate entered judgment in the plaintiff’s favour for $1,333.13, this being the difference between the contractual price charged by the plaintiff and the defendants’ entitlement to damages for the cost of the rectification work.
In its appeal, the plaintiff challenges the Magistrate’s decision in several respects. By way of overview, the plaintiff contends that the Magistrate erred:
1.   in finding that Mr Zotti requested that the defendants use concrete with a strength of 25MPa;
2.   in holding that it was a term of the contract that the work be done using concrete with a strength of 25MPa; and
3.   in holding that the defendants were entitled to recover damages for the cost of the rectification work.
The plaintiff’s appeal also complains about a ruling made by the Magistrate, the effect of which was to exclude some evidence in relation to the finish used on the driveway. The plaintiff also seeks permission to adduce fresh evidence in relation to two matters.
The defendants have cross-appealed. Their sole ground of cross-appeal is that the Magistrate erred in confining them to their pleaded claim for $56,600, as opposed to the amount of $65,000 that was supported by the evidence. The defendants also seek permission to rely upon fresh evidence in relation to the use and condition of the driveway since the trial.
Background
The plaintiff has for a number of years carried on a concreting business under the name Security Cement Works. It has done so through its sole director, Mr Antonio Russo.
The defendants are a married couple who live on a property in Yatala Vale. The property is a relatively large one. Looking at the property from the street, the defendants’ home is to the right and towards the rear of the property. There is a large shed to the left. The shed was constructed by the defendants in 2003, and has a concrete hardstand area to one side of it.
In early 2008 the defendants contacted the plaintiff to provide a quote to construct a concrete driveway from the street through to the area alongside the defendants’ home at the rear of the property. The shed and hardstand area was to the left of the proposed driveway area, and some metres away rather than adjoining it. While there was some dispute about the area to be covered by the concreting works, it was ultimately determined to be approximately 490 m².
The plaintiff provided a written quote for construction of the driveway dated 24 February 2008. It contained a basic description of the work to be done, specified that the concrete would be 100 mm thick, and would be reinforced with SL72 mesh in the driveway itself and with SL62 mesh in the remaining areas. The quote was for $29,780, but only related to an initial area of 322 m².
Through subsequent discussions with the defendants, the work was expanded to cover an area of approximately 490 m². The additional work was not the subject of a written quote, but it was agreed that it would be carried out at the same rate as the work contemplated by the 24 February 2008 quote.
The work commenced with the first pour of concrete occurring on 24 April 2008. There were eight subsequent pours of concrete, with the last of these occurring on 13 May 2008.
The work did not proceed entirely smoothly. One area was damaged by rain, resulting in the plaintiff having to redo the relevant part of the work. Further, Mr Russo became unwell and was hospitalised during the course of the work, and so while he was there at the start of the work, he did not personally supervise the people that he had arranged to execute the work. Mr Zotti was at the property each day.
On 2 April 2008 and the plaintiff invoiced the defendants for the figure of $29,780 contained in the initial quote. After the work was completed, the plaintiff rendered a second invoice[2] for the additional works, being for an amount of $28,153.13 and taking the invoiced total to the claimed amount of $57,933.13.
[2] The invoice was dated 26 July 2009, being a date over a year after the work was completed, although Mr Russo’s evidence was that this was the date the copy of the invoice in evidence was printed rather than the date it was first issued.
Following completion of the work the parties fell into dispute over various matters. The defendants declined to pay any of the sum claimed in the invoices.
The plaintiff issued proceedings in 2012, some four years after the work had been carried out, seeking payment of the invoiced amounts. The defendants filed a defence and counterclaim alleging various defects and breaches in the work.
The matter proceeded to a trial over six hearing days in late July and early August 2016. The plaintiff called evidence from Mr Russo and an expert engineer, Mr Feeney. The defendant called evidence from Mr and Mrs Zotti, an expert engineer, Mr Goldfinch, and a quantity surveyor, Mr Altamura.
The Magistrate delivered judgment in the defendants’ favour in November 2016.
The Magistrate’s reasons
The first matter dealt with by the Magistrate was the identification of the parties to the relevant contract. Her Honour held that both Mr and Mrs Zotti were parties to the contract.
The next matter was the identification of the contractual price for the concreting work. Based on the evidence of Mr Zotti, the defendants contended that the extent of the works was agreed at the time of the initial quote, and that Mr Russo had agreed to do the entire job for $19,875. The Magistrate rejected this evidence, finding instead that, following the initial written quote of 24 February 2008 for $29,780, the parties agreed (through discussions between Mr Russo and Mr Zotti) to expand the scope of the works on the basis that the additional work would be carried out at the same rate per square metre as the work the subject of the initial quote. In so finding, her Honour preferred the evidence of Mr Russo over that of Mr Zotti as to the agreed price. Her Honour referred to the expert evidence from the defendants’ quantity surveyor (Mr Altamura) to the effect that it would have cost about $65,000 to perform the concreting works. Her Honour considered it implausible that Mr Russo would have agreed to do the concreting work at such a huge discount to the likely cost of the work.
As to the strength of the concrete to be used in carrying out the works, the defendants’ case was that it was agreed that concrete with a strength of 25MPa would be used. The plaintiff denied that 25MPa had been specified. It contended that the construction of the driveway and associated paths was to be carried out using concrete with a strength of 20MPa. The Magistrate accepted Mr Zotti’s evidence that he had requested, and that he and Mr Russo had agreed, that 25MPa concrete would be used. Based on this finding of fact, her Honour held that it was a term of the contract that 25MPa would be used, and that by using 20MPa concrete, the plaintiff breached its contract with the defendants.
In relation to the crossover between the driveway and the road, this was initially constructed using a charcoal pattern pave that matched the driveway. After damage caused by rain, the plaintiff reinstated the crossover, but did so using a plain finish. Mr Russo’s evidence was that he had been instructed by Mr Zotti to change to the plain finish because that was what Mrs Zotti wanted, and that Mr Zotti gave this instruction despite being told by Mr Russo that it would not look good. Mr Russo also said that it would have been easier for him to have used the pattern pave when reinstating the crossover, but that he used the plain finish because he had been instructed to do so by Mr Zotti. Both Mr and Mrs Zotti denied any request or instruction by them to change to a plain finish when reinstating the crossover. The Magistrate rejected Mr Russo’s evidence on this issue, both as to the instruction to leave the crossover with a plain finish and as to his suggestion that it would have been easier for him to use the pattern pave. Her Honour accordingly concluded that the plaintiff breached its contract with the defendants by using the plain finish on the reinstated crossover.
The defendants also alleged various other breaches of contract related to the quality of the workmanship in the concreting work. They included complaints about the quality of the finish in one area of the driveway, the sealant that had been used, and the lifting or subsiding of the paving in some areas. The expert evidence of Mr Feeney was to the effect that the work had been completed to a satisfactory industry standard. While Mr Goldfinch identified some defects that had emerged in the work undertaken, he accepted that they were matters that one might reasonably expect. Ultimately, the Magistrate concluded that the work was done to a satisfactory standard and was (other than the matters identified above in relation to the strength of the concrete and the crossover finish) in accordance with what had been agreed.
Having found that the plaintiff breached the contract in two respects – by not using 25MPa concrete, and by not using the charcoal pattern pave when reinstating the crossover – the Magistrate turned to the assessment of damages on the defendants’ counterclaim.
The defendants contended that they were entitled to damages to reflect the cost of achieving contractual conformity. They contended that as it was not possible to retrospectively strengthen concrete (or install the pattern on the crossover), it would be necessary to remove and replace the driveway. They claimed that the driveway as constructed was of no use to them.
The plaintiff, on the other hand, contended that the driveway as constructed was of the standard strength for residential driveways, and conformed to the relevant Australian Standard in this respect. The plaintiff denied that it was necessary or reasonable to carry out the proposed rectification work.
The Magistrate upheld the defendants’ claim for damages for the cost of rectification involving the removal and replacement of the driveway. While adequate for the purposes of a residential driveway, the Magistrate accepted that the plaintiff had specified concrete with a strength of 25MPa so as to make the driveway suitable for use by heavy vehicles accessing the shed and hardstand area. The rectification works were thus necessary and reasonable in order to achieve contractual conformity.
However, as mentioned, in making an award of damages on the counterclaim, and despite accepting the expert evidence of Mr Altamura to the effect that the cost of the rectification work would be approximately $65,000, the Magistrate confined the defendants to the pleaded amount of $56,600.
Finding that Mr Zotti requested concrete with a strength of 25MPa
The plaintiff challenges the Magistrate’s finding that Mr Zotti specified concrete with a strength of 25MPa. In order to understand this challenge it is useful to commence by summarising the evidence on this issue, and her Honour’s reasons for accepting the evidence of Mr Zotti on this issue.
Mr Zotti’s evidence
Mr Zotti’s evidence was that in 2003 he had built what he described as an industrial shed on the property. It was about 13.5 by 13.5 metres in area, with an adjoining concrete hardstand area. His plan had been to use the shed to store hydraulic fluids or oils that he had a contract to supply to the Department of Defence. While it was not proposed that the driveway to be constructed by the plaintiff would join up with the hardstand area, Mr Zotti intended at a later stage to construct a connecting driveway leading to the shed and hardstand.
Mr Zotti said that when Mr Russo came to give a quote for the work, in addition to discussing matters such as the area to be covered and the finish to be used, he said to Mr Russo that he wanted “extra strength”. When Mr Russo asked him what strength he wanted, he initially said 32MPa. When Mr Russo asked him why he needed this, Mr Zotti mentioned the shed and hardstand, and said to Mr Russo that he hoped to be selling oil and needed to be able to have trucks going up and down from the shed. Mr Russo then suggested that 20MPa concrete would be sufficient, but Mr Zotti’s evidence was that he was aware from experience with his mother’s concrete driveway that using forklifts resulted in stress and cracking on a driveway with a thickness of 90 mm and thin reinforcing wire. So he explained to Mr Russo about his mother’s drive, and that he wanted to use concrete with a strength of 25MPa or 32MPa, with a thickness of 100 mm, and with extra or thicker reinforcing wire. Mr Russo told Mr Zotti that he automatically used the extra reinforcement, and that 25MPa would be more than enough. Mr Zotti said that after their discussion to this effect, they settled on 25MPa.
On the topic of the thickness of the drive, Mr Zotti’s evidence was that he said to Mr Russo that he would extend the driveway down to the shed later on; that he wanted the entrance towards that extension to be 150 mm thick so that when trucks turned over that area (and the edge of the driveway) there would be extra thickness and strength. He said that Mr Russo responded that this was “not a problem”. He said that they discussed and agreed that the rest of the area would be 100 mm thick, even though Mr Russo had said to him that the pathway areas did not need to be that thick.

Mr Zotti described the conversation about the work to be undertaken as being friendly but business-like, and as lasting about 40 minutes.
According to Mr Zotti, he did not realise that 20MPa concrete had been used until after the work had been completed. He said that he found a delivery docket on the site which suggested that 20MPa concrete had been delivered. He was then worried that 20MPa concrete had been used rather than the 25MPa concrete that he had specified. He said that he telephoned Mr Russo and sent letters to him by facsimile and post questioning the strength of the concrete that had been used and enclosing a copy of the docket that he had found.
A copy of the facsimile and letter purportedly sent by Mr Zotti were in evidence at the trial. They were both handwritten documents, addressed to Mr Russo of Security Cement Works, and bearing the date of 16 May 2008. The former bore a facsimile imprint suggesting it was sent from the defendants’ facsimile number at 3.28 pm on 16 May 2008. The facsimile stated that after the workers had left following the concrete pour on 13 May 2008, Mr Zotti had found a blue piece of paper. The facsimile continued:
I opened it (unfolded it) and read it. I was guttered (sic), with what I read and am still trying to come to terms with it. It has left such a foul taste in my mouth, I have not been sleeping, my usual 7 to 9 hours per night. All I have been getting is two to three hours per night, only once exhaustion sets in.
And to make things worse, I have put on 4.6 kilos.
I am very emotional and cranky (as you may or may not have noticed).
I’ve not been my usual talkative and chirpy self.
So before I jump to conclusions, I wish to give you the right to reply and inform me of your view or take on this situation. I would like you to address the information contained on the blue piece of paper. I am posting it to you today Friday 16^th May 2008, please check postmark.
The facsimile concluded by asking Mr Russo to answer whether this concrete had been used and ordered by him.
The letter of the same date referred to the delivery docket being enclosed. The letter said:
The enclosed delivery docket is the reason I am very concerned.
It quite clearly shows MPa 20. If this is an error on their behalf (ie Hanson Construction Materials P/L) then all we have is a minor inconvenience.
I tried confirming details with Hanson P/L, but as I was not an authorised person for Security Cement Works, they would not release or confirm any details.
If on the other hand, you (Tony) ordered MPa 20, either by accident or in error, then we will have a major inconvenience/delay.
The MPa rating we agreed on was 25MPa, that there is absolutely no disputing.
As this what not a ‘normal’ sized driveway, 20MPa will results (sic) in cracking within a week of completion. I would gladly give you double your fees, if a crack does not appear in concrete, by the end of this week, on any part of driveway/pathway.
I hope you can see my side of the situation, as this project is very dear to my heart.
And I would appreciate you not making fun or laughing at my expense.
Mr Zotti said that Mr Russo’s response to his communications was that he would look into it, but that it would be fine.
Mr Russo’s evidence
Mr Russo’s evidence on this topic was quite different. He explained that he had constructed thousands of driveways and that he usually used 20MPa concrete; that this was standard and appropriate for a residential driveway. He said that 25MPa was unusual and that if this had been specified he would have noted that on his quote. He said that 25MPa concrete would be suitable for an industrial establishment but was not usual or standard for a residential driveway.
Mr Russo denied having a conversation of the nature described by Mr Zotti. He denied that Mr Zotti said anything to him about the shed, or his plan to later extend the driveway down to the shed and to have heavy vehicles, or forklifts, using the driveway to access the shed. While apparently aware of the shed’s existence, he denied having any conversation with Mr Zotti about it or its use. He denied ever discussing making the part of the driveway that would be used to access the shed in due course 150 mm thick.
Mr Russo said that if he had been told by Mr Zotti that he wanted to make the driveway suitable for use by heavy vehicles, including forklifts, then he would have said that 25MPa would be necessary. However, he added that because this stronger concrete tended to be more brittle, he would also have suggested a thickness of 150 mm rather than 100 mm.
According to Mr Russo, the first discussion he had with Mr Zotti about the strength of the concrete was on the day of the first pour of concrete. Mr Russo said that on this occasion Mr Zotti asked to see the delivery docket, and then said to Mr Russo that he thought he was going to use 25MPa. Mr Russo said to Mr Zotti that he was only proposing to use 20MPa; that this would be adequate, but that if Mr Zotti was prepared to pay an extra $7 or $8 per square metre, and potentially for an extra man (because this concrete dries more quickly), then he could use 25MPa concrete. Mr Russo’s evidence was that Mr Zotti then said he was happy to proceed with 20MPa concrete. The issue of the strength of the concrete did not arise again until much later, when the defendants were refusing to pay for the work that had been done.
Mr Russo did acknowledge an earlier conversation about the thickness of the wire mesh to be used to reinforce the concrete. He said they discussed and agreed some weeks before the work commenced that he would use the thicker, 7 mm in diameter, wire mesh (referred to as S72 mesh) for the driveway, and 6 mm wire mesh (S62) elsewhere.
Mr Russo did not recall any dispute or issue arising out of a delivery docket found by Mr Zotti. When shown the facsimile and letter of 16 May 2008 he said he did not recall receiving either, adding that if he had then he would have responded to them. But Mr Russo did not go as far as to deny receiving these documents. Indeed, during cross-examination in relation to the second of the two documents he said “I recall something like this, yes but there would be a response to that”.
The 16 May 2008 communications
There was no evidence of any written response to the 16 May 2008 communications. The defendants’ case was that the only response was the oral suggestion by Mr Russo that he would look into the issue. Despite Mr Russo’s somewhat equivocal evidence, and the facsimile imprint on the first document, the plaintiff’s case became that the documents had never been sent or received.
The documents were discovered by the plaintiff’s solicitors, but they were discovered without any acknowledgement of their provenance or original source. The versions in evidence were copies, and a call for production of the original letter and enclosure from the plaintiff produced a nil return. However, following the conclusion of the trial, the plaintiff’s solicitors did make disclosure of an envelope addressed to the plaintiff and bearing a postmark dated 16 May 2008. The Magistrate received this envelope and permitted supplementary submissions from the parties as to its significance.
The Magistrate noted that the plaintiff’s counsel submitted that there was no way of knowing what the envelope contained and that there was no evidence that the facsimile bearing the automatic imprint was ever received by the plaintiff. The Magistrate said that she considered it highly improbable that Mr Zotti sent the facsimile to anyone other than the plaintiff, and considered that it was a reasonable inference that the envelope was an envelope posted to the plaintiff by Mr Zotti on 16 May 2008.
The Magistrate’s finding
In ultimately finding that Mr Zotti had specified the use of 25MPa concrete, the Magistrate reasoned as follows:
I do not find Mr Zotti to be an impressive witness. I had cause to doubt his evidence about the issue as to who were the contracting parties. However, this ended up being a non-issue. Despite my concerns about his evidence, with respect to the issue as to whether 25MPa concrete was specified, I prefer the evidence of Mr Zotti to that of Mr Russo. Mr Zotti gave clear evidence and a plausible explanation as to why he wanted the higher grade concrete. Mr Zotti’s evidence as to the agreed strength of the concrete is supported by copies of the letters dated 16 May 2008. Mr Russo did not deny receiving these letters. I find that Mr Zotti specified that he wanted 25MPa concrete and this was a term of the contract. I find that although not specified in the invoices, the quotation was based on 25MPa.
Appellate approach
In considering the plaintiff’s challenge to the Magistrate’s finding, I bear in mind that the appeal is one by way of rehearing.[3] It requires that I undertake an independent review of the evidence and findings below, and form my own view as to the appropriate outcome. That said, the appeal is not a hearing de novo, and I should not substitute my own view, or otherwise interfere, unless satisfied that the Magistrate has made an error.[4] Further, in conducting my own review of the evidence and findings below, while not shying away from the task of weighing conflicting evidence and drawing inferences where appropriate, I should nevertheless have regard to the findings of the Magistrate below, and any advantage that she may have had in making those findings. In particular, I should be mindful of the Magistrate’s advantage in assessing the credibility of witnesses, and in so doing be guided by the principles set out in Fox v Percy.[5]
[3]    Supreme Court Civil Rules 2006 (SA), r 286(1).
[4]    Wade v Australian Railway Historical Society (2000) 77 SASR 221 at [38]-[40].
[5]    Fox v Percy (2003) 214 CLR 118 at [126]-[128].
Here the plaintiff’s challenge is to a finding of fact based upon credibility findings, or at least the preference for Mr Zotti’s evidence on this topic over Mr Russo’s evidence. As such, it is important that, in conducting my own review of the evidence and findings, I bear in mind her Honour’s advantage of having presided over the trial below, and in particular of having heard both Mr Russo and Mr Zotti give evidence at length, and in the context of the evidence as a whole. That said, and consistently with the approach summarised above, the mere fact that the finding in question was based upon a preference for the evidence of one witness over another does not mean I must accept it. For example, if I were satisfied that it was contrary to some incontrovertible fact, some other uncontested testimony, or was otherwise glaringly improbable or contrary to some compelling inference,[6] then this might justify a conclusion that the finding was made in error and hence justify my intervention.
[6] Fox v Percy (2003) 214 CLR 118 at [26]-[29].
The plaintiff’s challenge
In the passage extracted above, the Magistrate gave three reasons for preferring the evidence of Mr Zotti as to the specification of 25MPa concrete. First, Mr Zotti’s evidence was clear. Secondly, there was a plausible explanation for him specifying higher grade concrete. Thirdly, the specification of 25MPa concrete was supported by the 16 May 2008 correspondence.
In challenging the Magistrate’s finding that Mr Zotti specified 25MPa concrete, the plaintiff contends that:
·    the Magistrate’s preference for the evidence of Mr Zotti’s evidence on this issue is inconsistent with her Honour’s general acceptance of, and preference for, the evidence of Mr Russo;
·    there were real doubts about the authenticity of the 16 May 2008 correspondence;
·    even if authentic, the Magistrate erred in this context in relying upon the 16 May 2008 correspondence because it was post contractual conduct; and
·    Mr Russo’s version of events was more inherently plausible or probable, and consistent with the expert evidence.
The first of these contentions is flawed for two reasons. The first reason is that it is not correct to suggest that the Magistrate generally preferred the evidence of Mr Russo. While the Magistrate said that Mr Zotti was an unimpressive witness, it does not follow that her Honour generally preferred, or even generally accepted, Mr Russo’s evidence. It is true that the Magistrate accepted and preferred his evidence as to the contractual price, but she expressly rejected his evidence in relation to the reinstatement of the crossover. It is apparent from reading her Honour’s reasons that she had some reservations about material aspects of the evidence of both Mr Russo and Mr Zotti. This is supported by her Honour’s reference to their evidence involving attempts to recall events that occurred some eight years earlier in 2008, and to it thus being understandable that their memories of the relevant events might be uncertain.
The second reason is that even if the Magistrate did generally prefer the evidence of Mr Russo, it is trite that it does not follow that her Honour was required to prefer his evidence on all topics. Her Honour was entitled, indeed obliged, to consider the competing evidence on each issue of significance. While the general reliability of a witness’ evidence may assist in reaching a view about their reliability on a particular issue, there is no reason why a generally reliable witness’ evidence cannot be rejected on a particular issue. Conversely, the Magistrate’s view that Mr Zotti was generally not an impressive witness did not of itself stand in the way of her Honour accepting or preferring his evidence on this particular issue.
In support of its second contention that there were real doubts about the authenticity of the 16 May 2008 correspondence, the plaintiff relied upon the terms of that correspondence and Mr Russo’s evidence. The plaintiff argued that if, as Mr Zotti suggested, he only found the delivery docket on 13 May 2008, the terms of that correspondence were implausible. The references in the letter to only getting two to three hours sleep a night, to putting on 4.6 kilograms of weight, and to various other difficulties Mr Zotti claimed to be experiencing were, the plaintiff argued, not consistent with such a short interval of time. The plaintiff contended that the Magistrate ought to have ignored the correspondence on the basis that it was not authentic and was in any event self-serving.
I do not accept this attack upon the Magistrate’s reasoning. The Magistrate gave sound reasons for accepting the genuineness of the correspondence. The facsimile imprint and postmarked envelope provided significant objective support for the authenticity of the correspondence.[7] It is also significant that Mr Russo did not deny receipt of the letters. He said merely that he did not recall receiving them, and indeed, in the case of one, acknowledged that he recalled “something like this”.
[7] So too does the fact that the documents were discovered by the plaintiff, thus suggesting that the documents had been in Mr Russo’s possession. That said, I do not attach much weight to this consideration given that the plaintiff’s solicitors apparently disclaimed any knowledge as to the provenance or source of the documents. This may explain why the Magistrate did not mention this matter in her reasons.
Further, while acknowledging the potential for an element of exaggeration or dramatization in Mr Zotti’s description of his reaction to learning that the concrete was 20MPa, I do not consider there is anything in the terms of either piece of correspondence to suggest that they were not genuine. In this respect it is noteworthy that the Magistrate did not rely upon this correspondence as probative of the precise nature and extent of Mr Zotti’s reaction to learning that Mr Russo appeared to have used 20MPa concrete. The Magistrate’s use of it was confined to the correspondence providing contemporaneous support for Mr Zotti’s evidence that he believed that Mr Russo was going to use 25MPa concrete. Such a belief was consistent with Mr Zotti’s evidence that he specified 25MPa concrete, and inconsistent with Mr Russo’s evidence that they had agreed at the time of the first pour of concrete that he would use 20MPa concrete.
I do not accept that there was anything impermissible or erroneous about the use made by the Magistrate of this correspondence. Her Honour did not use this post-contractual conduct in order to ascertain the meaning of a term of the parties’ contract. At most, the Magistrate used this post-contractual conduct for the permissible purpose of establishing the terms of the contract,[8] and in particular, as probative of the incorporation of a term to the effect that 25MPa concrete would be used. I say “at most” because it appears that her Honour’s primary reliance upon the correspondence was not so much as evidence directly probative of a contractual term that 25MPa concrete would be used, but rather as evidence that was consistent with, if not corroborative of, Mr Zotti’s evidence as to the discussion about concrete strength, and was inconsistent with Mr Russo’s evidence on this topic.
[8] Built Environs Pty Ltd v Saunders International Limited [2012] SASC 111 at [104].
As to the asserted inherent plausibility or probability of Mr Russo’s version of events – and corresponding implausibility and improbability of Mr Zotti’s version – the plaintiff relied upon both the limited extra cost of using 25MPa concrete, and the laying of concrete to a thickness of 100 mm rather than 150 mm. Relying upon Mr Russo’s evidence that using 25MPa concrete would only have added $500 or $600 to the cost of the work undertaken, the plaintiff contends that it is implausible or improbable that Mr Russo would have agreed to use 25MPa concrete, but then have taken the risk of the entire work being defective merely to save $500 or $600. The plaintiff also points to Mr Russo’s evidence that had he been asked to, and agreed to, install a driveway suitable for heavy vehicles including forklifts, and to use 25MPa concrete, then he would have suggested that the concrete be laid to a thickness of 150 mm throughout, given the brittleness of this higher strength concrete. The plaintiff contends that it is implausible or improbable that Mr Russo would have agreed, as Mr Zotti suggested, to use 25MPa concrete with a thickness of only 100 mm.[9]
[9] Putting to one side the limited area that, on Mr Zotti’s evidence, was to be 150 mm thick.
The plaintiff sought to draw support for this last submission from the expert evidence to the effect that the Australian Standard in relation to residential paving provided for 20MPa concrete with a minimum thickness of 100 mm in relation to paving intended for light use, and 25MPa concrete with a minimum thickness of 150 mm in relation to paving intended for medium use. The expert evidence was to the effect that the former specifications were standard for residential driveways, whereas the latter were standard for areas intended for industrial use.
Neither the expert evidence nor the relevant Australian Standard can have any direct bearing upon the terms of the contract because they are not matters which formed any part of the communications between the parties, and hence are not matters from which the parties’ objective intention can be gleaned. However, these matters are said to support the evidence of Mr Russo, as someone experienced in concreting, to the effect that he is unlikely to have agreed to use 25MPa concrete without also suggesting that the thickness be increased to 150 mm (from the 100 mm included in the initial quote).
I accept that the use of 100 mm thick concrete, and the absence of any discussion or agreement to increase the thickness to 150 mm throughout the relevant area, is a matter of some significance in considering the evidence on this issue. However, I do not consider that it ultimately takes the matter very far. The evidence does not go as far as to suggest that whenever 25MPa concrete is used it would or should be laid to a thickness of 150 mm. To the contrary, the evidence of Mr Goldfinch was to the effect that there would be benefit from a strength point of view by using 25MPa concrete even without an increase in thickness. Further, even on Mr Zotti’s case, he does not claim to have requested a driveway that was suitable for industrial use, let alone one that complied with the standard applicable to industrial use driveways. He merely requested an “extra strength” driveway that would cope with some heavy vehicle traffic to his shed in due course. In light of this context, I am not satisfied that it was implausible that Mr Russo would agree to use 25MPa concrete without at the same time suggesting that the thickness throughout be increased to 150 mm.

As to why Mr Russo might have failed to use 25MPa concrete despite agreeing to do so, I do not think it was necessary for her Honour to make any finding why this occurred. While it is perhaps unlikely that he would have deliberately ignored a specification of 25MPa concrete by Mr Zotti merely to save $500 or $600, I cannot say this is implausible – particularly if he thought that 25MPa concrete was unnecessary. But even if it were implausible, there are alternative potential explanations for what occurred. Mr Russo might simply have overlooked Mr Zotti’s specification, or have otherwise made a mistake, when ordering the concrete. Alternatively, the supplier might have made a mistake. The fact that Mr Russo was unwell and was hospitalised, and hence unable to supervise much of the work, may have contributed to any mistake not being identified in a timely way.
Finally, I would add that when considering the inherent probability or plausibility of the parties’ competing versions of events, it is of course relevant to consider the issue not only from Mr Russo’s perspective but also from Mr Zotti’s perspective. As the Magistrate observed, Mr Zotti’s evidence on this issue was clear and supported by a plausible explanation (given his intended use of the shed and his experience with his mother’s driveway). Significantly, it was also supported by the content of the 16 May 2008 communications.
In summary, I am not satisfied that the plaintiff has established error in the Magistrate’s findings. To the contrary, I am satisfied that her Honour’s reasoning was sound, and that the evidence supported a finding that Mr Zotti specified the use of 25MPa concrete.
Incorporation of oral term that the concrete have a strength of 25MPa
The plaintiff contends that the Magistrate erred in finding that the contract included a term that 25MPa concrete would be used. In my view, having rejected the challenge to her Honour’s finding of fact that Mr Zotti specified use of 25MPa concrete, whatever remains of this aspect of the plaintiff’s appeal can be disposed of fairly readily.
The plaintiff’s basis for suggesting there was no term in relation to the use of 25MPa concrete appears to be that the evidence as to the specification of the 25MPa was relatively equivocal; that the Court should be cautious in finding the existence of an oral term when there is a written contract (here, the 24 February 2008 quotation document); and that the need for caution in this case is enhanced by the express reference in the written contract to 100 mm thick concrete.
I do not accept the evidence was equivocal. On the Magistrate’s finding, which I have upheld, Mr Zotti specified the use of 25MPa concrete prior to accepting the quote and commencing the work, and Mr Russo agreed to the specification. While it is appropriate to exercise caution in making findings of facts sufficient to found a contractual term based upon evidence of conversations that occurred eight years earlier, the evidence here provided a sufficient basis for the term contended for by the defendants.
Nor was the existence of a written quotation any barrier to finding an additional oral term as to the strength of the concrete to be used. That is so both as a matter of principle, and in the circumstances of this case.
As to the point of principle, it is true that courts are generally cautious in finding the existence of oral terms where the parties have otherwise agreed to detailed and apparently complete written terms. The reasons for this are obvious. But equally, the authorities accept that the same caution or reticence is not necessary or appropriate in the case of agreements expressed only in very general terms or only partially reduced to writing. In such cases, the Courts will more readily find the existence of oral terms that supplement or clarify the written terms.[10]
[10] See the discussion, and authorities referred to, in Masterton Homes Pty Ltd v Palm Assets Pty Ltd (2009) 261 ALR 382 at [90].
Here, there is no doubt that the 24 February 2008 document was in relatively general terms and was an incomplete record of the parties’ agreement. It was prepared prior to discussions between the parties that expanded the scope of the works, and hence only covered the first part of the work ultimately undertaken. It specified a price of $29,780 when the total price ended up being $57,933.13.
The plaintiff emphasises, however, that the 24 February 2008 quote did specify the use of concrete with a S72 mesh and thickness of 100 mm, and submits that while the subsequent discussions expanded the area of the work, it was agreed that this would be done at the same rates as the work the subject of the quote.
In my view, this submission overlooks the fact and significance of the Magistrate’s findings as to the subsequent discussions between the parties. It was in the context of discussions leading to the expansion of the area of the works that, on the Magistrate’s findings, Mr Zotti specified that he wanted to use 25MPa concrete. I consider that the nature and context of this specification, and its timing relative to the earlier provision of the quote, the later agreement as to the total area and price, and the later commencement of the work, provides a sound basis for the Magistrate’s conclusion that it was a term of the contract between the parties.
The plaintiff suggests there is some inconsistency between this oral term specifying 25MPa concrete, and the written specification of 100 mm in thickness. I have already mentioned the evidence to the effect that the use of 25MPa concrete would often be accompanied by a specification that the concrete be laid to a depth of 150 mm. But as I have earlier explained, this is not always so. In the context of this case, I am not satisfied there is any inconsistency that would stand in the way of the finding of an oral term that the contract would be 25MPa.
Fresh evidence
The plaintiff has applied to adduce fresh evidence in relation to two matters.
The first is evidence from a truck driver employed by the supplier of the concrete, Mr Nino Calabria. The plaintiff has obtained an affidavit from Mr Calabria in which he deposed to attending the defendant’s property on or about 3 May 2008 to deliver concrete and undertake the third pour of concrete for the driveway. He heard Mr Zotti ask Mr Russo whether he could see the cart note. Mr Calabria then retrieved the cart note from his truck and handed it to Mr Russo, who in turn handed it to Mr Zotti. A copy of the cart note in question, dated 3 May 2008,[11] is attached to the affidavit, and refers to 20 MPa concrete. According to Mr Calabria, Mr Russo and Mr Zotti then had a conversation in which Mr Zotti asked whether all driveways were done in 20MPa; and Mr Russo responded “yes”, and added “your house foundation is 20MPa. If you wanted stronger then you’ll have to pay for extra labour and materials.”
[11] Which is in the same form as the other cart notes or delivery dockets already in evidence.
In support of its application to rely upon fresh evidence from Mr Calabria, the plaintiff relied upon an affidavit from Mr Russo in which he explained that while he had remembered the first name of this driver, he had not been able to obtain evidence from him at trial because his employer, when contacted by Mr Russo, had refused to supply his name. It was only as a result of a chance meeting between Mr Russo and Mr Calabria after the trial that Mr Russo had been able to obtain the above evidence from Mr Calabria.
The second matter in respect of which the plaintiff seeks to adduce fresh evidence relates to the development approval for the defendants’ shed. The plaintiff relies upon an affidavit from one of its solicitors, Ms Tiffany Irving, which attaches a copy of the relevant Council’s 4 September 2002 approval for the development of the house and shed (that she had obtained from Mr Russo on 16 December 2016), and an extract from the Council’s 29 September 2016 development plan (obtained from the Council on 10 January 2017).
The first of these attachments (the development approval) included a condition that the “shed and carport, herein approved, must only be used for domestic storage, or for purposes reasonably incidental to a lawful use of the dwelling or/and the subject land and must not be used as a habitable living area nor for industrial or commercial purposes.” The second attachment (the development plan) included reference to principles of development control that confined the envisaged developments to various domestic and farming uses, and stated that the storage, parking and keeping of vehicles should only occur where the use of the vehicle is ancillary to existing legal use of the site.
The only explanation for the late timing of this evidence was a submission from the plaintiff’s counsel on appeal to the effect that the defendant’s pleaded case, while pleading a term that the concrete would be 25MPa, did not mention anything about the contemplated use of the driveway in accessing the shed. The plaintiff contends, in effect, that it was taken by surprise in respect of this factual aspect of the defendant’s case, and so had not obtained the evidence it now seeks to rely upon.
In terms of the principles governing the plaintiff’s application to adduce the above evidence, the Court has a broad discretion under r 286(3)(a) of the Supreme Court Rules 2006 (SA) to receive further evidence on a question of fact in an appeal such as the present. The discretion is not circumscribed by the common law principles governing the reception of “fresh evidence” on appeal,[12] although similar considerations will often be relevant. In particular, it will generally be relevant to consider:[13]
·    Whether the evidence was available, or could with reasonable diligence have been obtained for use at trial.
·    Whether the evidence is such that it would have had an important influence on the result of the trial. While it need not necessarily be decisive, it must be more than merely useful.
·    The likely impact of the evidence in terms of whether it is controversial or contested, and if so likely to require cross-examination, further responding evidence and/or that the matter be remitted for rehearing.
·    The public interest in the finality of litigation.
[12] CDJ v VAJ (No 2) (1998) 197 CLR 172 at [52], [104]-[108].
[13] CDJ v VAJ (No 2) (1998) 197 CLR 172 at [55], [111]-[116] and [186]-[189]; Viscariello v Livesey [2013] SASC 99 at [132].
The relevance of the last two considerations, and in particular the public interest in there being an end to litigation, was emphasised by the Full Court of the Supreme Court of South Australia in both Chakravarti v Advertiser Newspapers Ltd[14] and Collex Waste Management Services Pty Ltd v The Corporation of the City of Enfield (No 2).[15]
[14] Chakravarti v Advertiser Newspapers Ltd (1998) 72 SASR 361 at 372-373.
[15] Collex Waste Management Services Pty Ltd v The Corporation of the City of Enfield (No 2) [2000] SASC 140 at [17], [27]-[28].
Dealing first with the further evidence from Mr Calabria, I accept there is a reasonable explanation for the plaintiff’s failure to adduce this evidence at trial. I also accept that the evidence is relevant and would have been capable of influencing the Magistrate’s consideration of whether or not Mr Zotti had specified concrete with a strength of 25MPa.
However, I cannot be satisfied without more that the evidence would, or even would likely, have had an important influence on the case. First, while the evidence, if accepted, would tend to support the plaintiff’s case, it does not in fact square with the evidence of either Mr Zotti or Mr Russo. Secondly, and more significantly, the evidence from Mr Calabria relates to a short conversation that he overhead almost 10 years ago. It cannot be said that the evidence is inherently likely to be reliable and of significant weight. In any event, its reliability and weight could only be assessed after hearing cross-examination of Mr Calabria, and perhaps also additional evidence from Mr Zotti and Mr Russo. This would likely require that the matter be remitted to the Magistrates Court for rehearing given its interrelationship with the issues of credit that arose in the case. Further, in the circumstances of a civil or commercial dispute of the nature and limited dollar significance of the present case, and which relates to events that occurred almost 10 years ago, the public interest in the finality of litigation looms large.
Bearing in mind all of the above considerations, I am not satisfied that it is appropriate to receive the evidence of Mr Calabria, and so decline to exercise my discretion to do so.
Turning to the further evidence in relation to the development approval and plan for the defendants’ shed, there was nothing to prevent this evidence being obtained prior to trial. While the factual issue to which it related was not expressly mentioned in the pleadings, there was not (and could not properly have been) any objection to Mr Zotti giving evidence about the shed by way of explanation for his evidence that he specified concrete with the strength of 25MPa. It is often the case that, with the benefit of hindsight, there is additional evidence that might have been adduced had the case been considered and prepared more thoroughly or with greater knowledge of what was to come. In summary, while there was some explanation for the evidence not being adduced at trial, it is not a complete explanation.
More importantly, I am not persuaded that the further evidence on this topic was likely to have had an important influence on the outcome of the case. There is no concern about the reliability of the proposed evidence; the issue is its probative value. The proper interpretation of the terms of the development approval and plan, and the precise nature of Mr Zotti’s intended use of the shed, are not entirely clear. Even if they are inconsistent, Mr Zotti might have intended to, or at least had needed to, obtain some variation or amendment to the development approval that he had been given, or to have obtained some other form of permission for his proposed use of the shed. In any event, the issue in the case was not what use was permissible, but rather what use Mr Zotti intended to make of the shed. Even then, this issue was really only a matter going to the explanation for, and hence credibility of, Mr Zott’s ultimate evidence that he specified concrete with a strength of 25MPa. While cross-examination would have been permitted in relation to the development approval, evidence of its terms may not have been admissible given its merely collateral relevance.
Ultimately, the most that can be said of the evidence about the development approval for the shed is that it may well have been useful. I am not satisfied that it would likely have had an important influence on the trial. Bearing in mind my earlier observations about the public interest in the finality of litigation, I do not consider that the interest of justice would be served by this Court receiving the evidence. I decline to exercise my discretion to do so.
Exclusion of evidence
The appellant contends that the Magistrate erred in refusing to receive into evidence a document entitled ‘Avista Wet Concrete Colour Hardener – Technical Data Sheet’. The document describes the features (under the headings ‘uses’, ‘advantages’, ‘properties’ and ‘limitations’) of a finish that can be applied to concrete with a view to increasing its abrasiveness and strength. As to the latter, the document refers to a compressive strength of 47MPa. The plaintiff used this finish on the defendants’ driveway.
The appellant contends that this evidence was relevant in light of Mr Goldfinch’s evidence as to the importance of abrasive resistance in achieving a surface that was suitable for industrial use.
I am not satisfied that the Magistrate erred in excluding this evidence. There are two interrelated reasons for this. First, I am not satisfied the evidence was relevant, at least not in light of the way the case was conducted. While Mr Goldfinch did, without objection, make passing reference to the importance of abrasive strength, there was no suggestion that the use of this finish somehow meant that the contractually agreed strength of 25MPa had been achieved. The abrasive finish did not address the contractual specification in relation to the concrete strength. While the appellant’s counsel contended that the document was relevant to the general quality and strength of the driveway installed, it was not explained how this might have influenced the outcome of the case. The appellant’s counsel eschewed any suggestion that it was relevant to the issue of damages, and in particular the application of the qualification to the general rule in Bellgrove v Eldridge.
Secondly, and in addition to the obscure relevance of the document, there was also a procedural reason for not receiving the document. The document was tendered right at the end of the case, during some evidence from Mr Zotti (who had been recalled for some other purpose). Not only was Mr Zotti not an expert who could sensibly answer questions about the document, but also the relevant experts who might have been able to verify and explain the document had already completed their evidence. In my view, even if the document was otherwise relevant and admissible, it was inappropriate to first seek to deploy it at that late stage in the case. It was not a document that was of any use to the Court in the absence of expert evidence, and so it was too late to seek to deploy it when the expert witnesses had already completed their evidence.
For these reasons, I am not satisfied that there was any error in the Magistrate’s decision to not receive this document into evidence.
Damages for the cost of rectification work
The ‘ruling principle’ in assessing damages for breach of contract is that the plaintiff is entitled to recover the amount necessary to place him or her in the same position as if the contract had been performed.[16]
[16] Robinson v Harman (1848) 1 Ex 850 at 855; 154 ER 363 at 365.
In accordance with this principle, in the case of defective building work the prima facie measure of damages is the cost of rectifying the work so that it conforms with the contract. This is sometimes referred to as the general rule in Bellgrove v Eldridge.[17] There is a qualification to this general rule. It is that the rectification work must be necessary to produce conformity with the contract, and must be a reasonable course to adopt.[18]
[17] Bellgrove v Eldridge (1954) 90 CLR 613.
[18] Bellgrove v Eldridge (1954) 90 CLR 613 at 618.
In Tabcorp Holdings Ltd v Bowen Investments Pty Ltd,[19] the High Court reaffirmed the application of the ruling principle, and its application to defective building work cases through the general rule in Bellgrove v Eldridge. While acknowledging the qualification to this general rule, the Court said that the “test of unreasonableness” upon which its operation depends will only be satisfied in “fairly exceptional circumstances”.[20] The Court thereby emphasised the primacy that the law of contract affords to the interest that a plaintiff has in the performance of their contract.
[19] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272.
[20] Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272 at [17].
The operation of the general rule in Bellgrove v Eldridge, and the qualification to that rule, were considered recently by the Full Court of the Supreme Court of South Australia in Stone v Chappel.[21] The Full Court reviewed a number of intermediate appellate court applications of the general rule and its qualification, and provided some guidance as to the considerations relevant in determining whether the qualification applies in a particular case. It is not necessary to repeat or summarise at length the Full Court’s treatment of the authorities and analysis of the relevant considerations. It is sufficient for present purposes to note that while each of their Honours expressed the relevant considerations in slightly differing terms, and with slightly different emphases, the relevant considerations include the following.
·    The benefit bargained for by the plaintiff. A proper identification of the plaintiff’s performance interest will often involve going behind the express contractual standard or specification relied upon in order to determine the rationale for that specification, and in particular whether it had a rationale that was functional, or that was based upon some aesthetic choice or amenity on the part of the plaintiff.[22]
·    The extent to which the defendant has, despite departure from the contractual standard, nevertheless achieved the contractual objective, and hence provided the plaintiff with the benefit he or she bargained for.[23]
·    The adverse effect of the departure on the functional utility, amenity or aesthetic appearance of the building work.[24]
·    The cost of the rectification work, and any lack of proportionality between, on the one hand, the proposed work and cost, and, on the other hand, either the benefit (by way of functionality, amenity or aesthetic) to be achieved by the plaintiff through the rectification work, or the overall value of the relevant contract or building work.[25]
·    The plaintiff’s intention and ability to carry out the rectification work.[26]
·    The practical feasibility of the rectification work, including any impact upon third parties.[27]
[21] Stone v Chappel (2017) 128 SASR 165.
[22] Stone v Chappel (2017) 128 SASR 165 at [55(3)], [257].
[23] Stone v Chappel (2017) 128 SASR 165 at [55(1)], [259].
[24] Stone v Chappel (2017) 128 SASR 165 at [55(2)].
[25] Stone v Chappel (2017) 128 SASR 165 at [55(6)], [260].
[26] Stone v Chappel (2017) 128 SASR 165 at [55(5)], [263].
[27] Stone v Chappel (2017) 128 SASR 165 at [55(4)]], [264.

It may also include consideration of the nature of the wrongdoer’s fault for the defect,[28] and the public interest in reducing economic waste.[29]
[28] Stone v Chappel (2017) 128 SASR 165 at [55(7)], [253].
[29] Stone v Chappel (2017) 128 SASR 165 at [55(8)]; cf [428].
I add that the issue is one of fact and degree. It is to be determined objectively, but in the context of the relevant contract, and hence by reference to the plaintiff’s objectives as reflected in the bargain that he or she struck.[30]
[30] Stone v Chappel (2017) 128 SASR 165 at [255].
Turning to the issue raised on this appeal, I have earlier summarised the Magistrate’s reasons in relation the defendants’ entitlement to damages under their counterclaim. Having found two breaches of contract by the plaintiff (the failure to comply with the contractual specification that the concrete be 25MPa, and the failure to use the specified pattern on the crossover[31]), her Honour held that the defendants were entitled to recover the $65,000 cost of removing and replacing the driveway. The Magistrate accepted that incurring this cost to reinstate the driveway was both necessary to achieve contractual conformity and reasonable. Her Honour thus rejected the plaintiff’s contention that this was an appropriate case to apply the qualification to the general rule in Bellgrove v Eldridge.
[31] While not the subject of a finding by the Magistrate, I note in passing that the evidence was to the effect that it would have cost about $6,000 to rectify only the crossover so that it had a pattern pave matching the driveway.
In challenging the Magistrate’s conclusion that the qualification to the general rule in Bellgrove v Eldridge did not apply in the circumstances of the present case, the plaintiff relied upon the following contentions:
·    The driveway as constructed was of high quality and had performed adequately for a residential driveway.
·    While the driveway was constructed using concrete with a strength of 20MPa rather than 25MPa, it had an abrasive finish which would assist in relation to any use of heavy vehicles on the driveway.
·    The defendants did not need the 25MPa strength concrete beyond the point of the proposed turn off towards the shed.
·    Even if the driveway was replaced in accordance with the contract (using 25MPa concrete with 100 mm thickness), this would not conform to the relevant Standard for an industrial use driveway because that Standard required concrete with a thickness of 150 mm.
The plaintiff contends that in light of all of the above considerations, removing and replacing the existing driveway with one that used 25MPa concrete, with a thickness of 150 mm, at a cost of $65,000 would be an unreasonable course to adopt.
The primary difficulty with the plaintiff’s submissions is that they tend to focus upon some concept of ‘reasonableness’ that exists in the abstract, whereas the focus must be upon reasonableness in the context of the relevant contract, and hence by reference to the defendants’ objectives as reflected in the bargain that they struck. In this way, it is of central importance that the defendants contracted to obtain a driveway with 25MPa strength concrete, and that the rationale for this specification was a functional one, namely that the driveway would be suitable for use by heavy vehicles, and in particular forklifts.
There is no dispute that the concrete used fell short of the specified strength, and was of materially inferior strength. There is no suggestion that the difference between 20MPa and 25MPa concrete is de minimus. To the contrary, the fact that it is generally accepted (including in the relevant Standard) that the former is adequate for residential use, whereas industrial use requires the latter, suggests that the difference is a material one. On the face of it, there has been a material departure from a contractual specification that has had the effect that the driveway is inadequate for the functional objective that the defendants contracted to meet.
I accept that it is relevant that the abrasive finish or surface that was applied to the driveway would have been of some assistance in relation to heavy vehicles, but the evidence did not go as far as to suggest that this was a complete or even adequate substitute for 25MPa concrete.
I also accept that a replacement driveway that conformed with the contract (25MPa, but with a thickness of 100 mm) would not meet the thickness of 150 mm suggested in the relevant Standard for driveways intended for industrial use. However, the defendants did not contract to obtain a driveway that conformed with the Standard. They contracted merely to receive a driveway using 25MPa concrete with a thickness of 100 mm. While this would not conform with the Standard for industrial use, the evidence was that it would nevertheless fulfil the underlying contractual objective of a driveway that would be sufficient for the contemplated use of forklifts. And while a driveway with 25MPa concrete that was 150 mm thick would be superior to one with that concrete but only 100 mm in thickness, it does not follow that replacing the 20MPa concrete with 25MPa concrete, without increasing the thickness, would not provide a stronger driveway. To the contrary, the effect of the evidence was that it would, and that this difference in strength would be the difference between it being inadequate for use with forklifts and adequate for that use. There was in my view nothing unreasonable about replacing the 20MPa concrete with 25MPa concrete, even if the latter was to be “only” 100 mm thick.
It may be that the defendants’ intended use of the driveway did not require that its entire area be of greater strength. But this was not explored in the evidence. Mr Zotti was not given the opportunity to explain why it might have been important for him to have greater strength concrete even beyond the turn off point to the shed. It may be that he intended that some heavy vehicles would use even this part of the driveway. In any event, in circumstances where the contractual specification was for 25MPa concrete throughout, I am not satisfied that it would be of great moment if some parts of the driveway were beyond what was strictly necessary.
It is relevant that the cost of the replacement work in this case would be significant, both in absolute and relative terms. However, as the cases make plain, this is but one consideration in the overall determination of whether undertaking the rectification work would be a reasonable course to adopt.
Nor, in my view, do any of the other potentially relevant considerations loom large in this case. The explanation for the plaintiff’s breach is not clear on the evidence, and so I do not attribute any cynical or profit-making motive to the plaintiff. On the other hand, there is no suggestion the defendants will not, if successful, in fact undertake the rectification work. There is also no suggestion that the rectification work would cause any inconvenience to any third party.
In circumstances where the departure from the specification was of the nature and significance I have described, no error has been established in the Magistrate’s decision to award the defendants damages assessed by reference to the cost of the rectification work. It has not been established that it would be unreasonable to undertake that work so as to invoke the qualification to the general rule in Bellgrove v Eldridge.
Defendants’ application to adduce further evidence
Because I have reached the conclusion that the plaintiff’s appeal should be dismissed on the basis of the existing evidence, I do not consider it necessary to determine the defendants’ application to adduce further evidence as to some of the problems that have emerged with the driveway in more recent times.
While the defendants’ application to adduce further evidence would to fall to be determined by reference to similar considerations to those governing the plaintiff’s applications to adduce further evidence, there is one material difference. The difference is that the defendants’ further evidence relates to events that occurred after the trial. However, even taking account of this difference, I would not have been inclined to exercise my discretion in favour of receiving the defendants’ further evidence in this case. Again, the reliability and weight of the evidence could not safely be assessed without cross-examination and potentially further expert evidence. I am not persuaded that it would have been in the interest of justice to permit the defendants to embark upon this process. But, as I have said, in circumstances where the defendants have successfully resisted the appeal on the evidence as it stands, I do not need to express a final view on this issue, and so do not do so.
Cross appeal
As mentioned earlier, the Magistrate accepted the defendants’ expert evidence to the effect that the rectification work would cost $65,000. However, because the defendants had only claimed damages “estimated at $56,600” in their counterclaim, and because there was no application to amend the counterclaim, her Honour confined the defendants’ damages to this sum.
The defendants’ cross-appeal contends that the Magistrate erred in confining the defendants’ claim in this way. In support of this contention the defendants rely upon the manner in which the trial was conducted, and in particular the absence of any opposition to the defendants recovering more than the pleaded amount.
There is no doubt that pleadings play an important role. They define the issues in the case, and in so doing provide the other party with notice of the case they have to meet. However, the pleadings are ultimately a means to an end. If the parties, in fighting their legal battles, choose to depart from the pleadings by shifting or expanding the battleground, then the parties will not usually be held to their pleadings. While prudence suggests that the parties should seek to amend their pleadings to reflect movements in their case, that is not always practical and does not always happen. Given the importance of the way in which the trial has been conducted, a failure to amend will not always be fatal to a party obtaining relief justified by the evidence at trial.
There is ample authority for the above statements of principle. They reflect, for example, the reasons of the High Court in Gould v Mount Oxide Mines Ltd,[32] Leotta v Public Transport Commission (NSW),[33] Dare v Pulham[34] and Water Board v Moustakas.[35] These authorities were applied by the Full Court of the Supreme Court of South Australian in Sands v Channel Seven Adelaide Pty Ltd.[36]
[32] Gould v Mount Oxide Mines Ltd (In Liq) (1916) 22 CLR 490 at 517.
[33] Leotta v Public Transport Commission(NSW) (1976) 9 ALR 437 at 446-447.
[34] Dare v Pulham (1982) 148 CLR 658 at 664.
[35] Water Board v Moustakas (1988) 180 CLR 491 at 497.
[36] Sands v Channel Seven Adelaide Pty Ltd [2010] SASC 202 at [40]-[47].
Here, the defendants opened at trial on the basis that they sought $70,533 for the cost of removing and replacing the driveway. This figure was based upon a report from a quantity surveyor that had been obtained in November 2015 (and hence well prior to the July 2016 trial). While it exceeded the figure in the defendants’ June 2015 amended counterclaim, the plaintiff must be taken to have been on notice of the slightly enlarged claim given the content of the defendants’ expert report. There was no objection taken by the plaintiff at the time of the defendants’ opening address. Nor was any objection taken at any subsequent point in the trial. The plaintiff appears to have taken a forensic decision to focus upon winning the case, and did not make any significant challenge to the defendants’ quantum evidence.
In the defendants’ closing address, their counsel sought a reduced quantum of $65,000. The reduction reflected some supplementary evidence from the quantity surveyor to the effect that the cost of the rectification works would be reduced to this amount if the concrete paths associated with the driveway were excluded from the rectification works. As the defendants conceded, it was appropriate that they be excluded because there would be no heavy vehicle traffic on those areas.
Again, no objection was taken by the plaintiff either to the defendants claiming more than the pleaded amount, or to the evidential basis for the figure claimed. In her reasons, the Magistrate accepted the defendants’ evidence, making a positive finding that the rectification works that were necessary and reasonable to achieve contractual conformity would cost $65,000.
As a matter of prudence, the defendants should probably have made an application to amend. However, their failure to do so was understandable given the manner in which the case was conducted, and in particular the absence of any suggestion by the plaintiff, or indeed the Magistrate, that they should or might be held strictly to the quantum of their pleaded claim.
The defendants now contend that had they been put on notice of any suggestion that they should or would be held to their pleaded claim then they would have applied to amend. The plaintiff does not suggest that it would have objected, or that it would have had any basis for doing so.
In all of the circumstances I consider the Magistrate erred in confining the defendants to the figure in their counterclaim. I would allow the cross-appeal for the purpose of substituting a figure for damages on the counterclaim of $65,000. Given the unpaid contractual sum of $57,933.13, that would result in a net judgment sum in the defendants’ favour of $7,066.87.
For completeness I add that while I permitted the plaintiff to file some supplementary submissions as to quantum, I do not consider it appropriate on appeal to depart from the expert’s figure of $65,000. No challenge was made to that figure at trial, and I do not consider that I can form any view about the appropriateness of the challenges now made by the plaintiff without hearing further evidence, or at least giving the defendant’s expert an opportunity respond.
Orders
For the reasons set out above, I make the following orders:
1.   Dismiss the appeal.
2.   Allow the cross-appeal.
3.   Set aside the judgment below and substitute a judgment in favour of the defendants in the sum of $7,066.87.
I will hear the parties as to interest and costs.