T. & M.M. Rayner Pty Ltd v Richards & Dove - [2009] SADC 112

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Minor Civil Review)
T. & M.M. RAYNER PTY LTD v RICHARDS & DOVE
[2009] SADC 112
Judgment of His Honour Judge Tilmouth
20 October 2009
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - CONSIDERATION - FAILURE OF CONSIDERATION
Award of damages by Magistrate set aside on review, as no contract was formed between the parties and for failure of consideration - otherwise turns on own facts.

T. & M.M. RAYNER PTY LTD v RICHARDS & DOVE
[2009] SADC 112
The Issue

In August 2008 the respondents to this review, Dr Richards and his wife Ms Dove, sued the appellant T. & M.M. Rayner Pty Ltd trading as “Terry’s Tiles”, for damages. They claim to have ordered tiles described as “Tempo White” wall tiles. The tiles eventually supplied were a different shade and of different manufacture, not to their liking. They claimed damages for the removal and for fixing new tiles.
The proceedings in the court below
Proceedings were issued in the Minor Civil jurisdiction of the Magistrates Court sitting at Elizabeth. There is no doubt they contracted with the builder Mr Spirritt, to renovate an ensuite bathroom to their house in King Street Gawler. Ms Dove went to the Terry’s Tiles showroom at Evanston and “carefully chose the tiles” to harmonise with floor tiles they had also selected. The bathroom was tiled between 25 and 29 February 2008 by a tiler engaged by Mr Spirritt. Because of equipment in the room, it did not connect in anyone’s mind until the 29^th when grouting commenced, that the tiles used may have been different from those ordered. Dr Richards described them as “dove gray shades “which did not enhance the floor or feature tiles”, rather than “bright warm white”, as ordered.
The action came on for trial before the learned Special Magistrate sitting at Elizabeth, initially in February 2009 and again in March and then in June 2009. The delay in the intervening period was occasioned by the transfer of the Magistrate from Elizabeth to a country jurisdiction.
Dr Richards gave evidence before her Honour of the building contract with Mr Spirritt, quoting $32,581 to complete the ensuite. This included “$7,500 for plaster and tiling … basically we were to supply the tiles and he put in an amount of around $1,000, might cover it”.[1] Dr Richards explained the tiles as supplied were also of a different size than those ordered “but the colour is actually the thing that is the important part to us”.[2] He said they did not notice the difference because of the lighting conditions and that it did not become evident until grouting commenced.
Mr Rayner gave evidence confirming the owners inspected the tiles at the Evanston showroom and that they were ordered through Mr Spirritt’s trade account with Terry’s Tiles. They were paid for by Mr Spirritt. He accepted the order was for Tempo White tiles, manufactured by Mulia. These were supplied and imported by Newton Ceramics. One sample of this Mulia tile was tendered as Exhibit P1, bearing the manufacturers marking on the rear. After placing the order, Terry’s Tiles was advised by Newton Ceramics that these particular tiles were no longer available in that size.[3] Mr Rayner then said he spoke with the builder who came into the showroom, stating “the size is not important as long as the colour is right”.[4] He then went on to say Mr Spirritt ordered other tiles which Mr Spirritt considered were equivalent in colour to those originally ordered. Mr Rayner gave this further evidence:[5]
I don’t for one minute say the that the tile we supplied originally was the tile that was originally selected. We informed the builder that the tile that his clients chose was no longer available. He was told by a member of my staff, and I was present when he was told, and unfortunately the builder didn’t inform his clients. He told us to go ahead and order the tile, which we had as a replacement for the original selection.
These were the RAK tiles manufactured in the United Arab Emirates and these were those fixed to the walls by the tiler. A sample of this tile became Exhibit D1.
[1]    T3.22-.38
[2]    T4.26, 27 February 2009
[3]    T15.22, 27 February 2009
[4]    T15.19, 27 February 2009
[5]    T89.20, 26 June 2009
There is not that much difference in colour between the two to the naked eye, but when seen in situ they appear “to be a significantly different tone and shade … greyish in tinge …”, according to the observations of the Magistrate when a view was taken on 4 March 2009: [6]
I will also note that having seen Exhibit P1 in the bathroom it appears to be a significantly different tone and shade. In fact the bathroom tiles appear to be greyish in tinge and the sample tile is whiter. The sample tile Exhibit P1 seems to me to be a different colour as opposed to shade. It seems to be a denser white although both are matte tiles … gloss tiles. The sample tile seems to be off white hue. The wall tile appears to be a white-grey in hue. They do not appear to be the same tile.
[6] T81.17, 4 March 2009
The problem was compounded by the fact that insufficient tiles were ordered in the first place, requiring a second batch to complete the job. These were of yet a different shade, but as they were removed, nothing turns on this hiccup. A series of cardboard box labels were tendered as Exhibit D2. These show boxes of tiles as delivered contain prominent warnings such as “Attention: Before tile setting please verify shade, calibre and grading. Claims regarding these items cannot be accepted after tile setting.” Another reads “Attention: Before tile setting please verify tonality calibre and quality”. A third reads “All fired ceramic products are subject to size and shade variation before tile setting please verify material”.
Mr Roesler gave evidence of being hired by Mr Spirritt to lay the tiles. He said tiling the walls took 3 or 4 days after completing the floor. He did not detect the shade variations until he applied the grouting. He described the wall tiles as “a little bit off-white”.[7]
[7] T52.23, 27 February 2009
Mr Spirritt the builder also gave evidence before the Magistrate. He said he left the selection of tiles for the bathroom to the customer. He suggested the grout used was “super white grout so what it has done is … enhanced the colour of the tile to have a shade of gray”.[8] At one stage he volunteered:[9]
Partly it could be my fault because I did tell Shona that there was a change of size and it was never signed off on so I mean it is something for me to learn to –
The reference to “Shona” was of course the reference to Dr Richards’ wife Ms Dove.
[8] T65.29, 27 February 2009
[9] T77.35, 27 February 2009
The case was adjourned to 26 June 2009 when more evidence was taken. Dr Richards gave further evidence producing quotes to fix the problem of $6,200 and $6,600 respectively. He indicated that as Mr Spirritt was willing to complete the work for $4,113, he was willing to limit his claim to that sum.
The reasons of the learned Special Magistrate
Her Honour then proceeded to deliver an ex-tempore judgment in which she reviewed the facts and the evidence, making the following findings of primary fact:
·the plaintiff’s attended Terry’s Tiles showroom and selected Tempo White tiles 415 mm x 400 mm for the wall tiles of the ensuite and advised the sales assistant thereof;[10]
[10] At [4]
·the problem only emerged after further tiles were ordered to complete the job and when after applying grouting on 29 February 2009 the tiler first noticed shade differences in the white tiles next to the wall;[11]
·that neither the respondents the tiler or the builder had noted colour variations beforehand because of the poorly lit nature of the area and the presence of tiling equipment;[12]
·after the second batch of tiles were removed the plaintiff inspected the remaining tiles and considered they appeared to be of a shade of dove grey and not the shade they had selected;[13]
·on Saturday 1 March 2008 they went to Terry’s Tiles showroom and compared a sample of the tile on the wall with a sample in the display area … and they then insisted that the tiles on the walls were not as selected by them;[14]
·the cost of removing replacing waterproofing and retiling including the cost of replacement tiles was as quoted by Mr Spirritt at $4,100.[15]
·after delivery the respondents did not check the colours or dimensions of the tiles as they assumed Terry’s Tiles would supply the tiles as ordered;[16]
·it was the responsibility of either the builder or the tiler to inspect the tiles before laying commenced;[17]
·the problem “could not be categorised as a slight difference in shade between batches of tiles manufactured by the same company to the same specification”[18]
·Mr Spirritt acting as the plaintiff’s agent for Terry’s Tiles to provide a different dimension of tile and that did not affect the agreement reached between the plaintiff (the respondents) and the defendant company (the appellant);[19]
·as the respondent’s were not given the tiles selected by them, Terry’s Tiles “must pay damages for breaching the contract”.[20]
[11] At [6]
[12] At [6]
[13] At [8]
[14] At [9]
[15] At [10] Note this should be $4,113.60
[16] At [12]
[17] At [32-33]
[18] At [42]
[19] At [45]
[20] At [48]
Her Honour allowed the claim on the basis of the quote by Mr Spirritt of $4,113.60. She further awarded court costs of $93, allowed a solicitor’s fee of $260, witness fees of $30 each, a total of $180. At the foot of the judgment she referred to Mr Rayner’s insistence that the builder was informed the tiles were no longer available and that he failed to relay this to the respondents, as something that might have entitled him to join the builder as a party, suggesting he take separate proceedings against Mr Spirritt.[21]
[21] At [50]
The application for review
The appellant through Mr Rayner claims Terry’s Tiles did only as they were asked to. It is tolerably clear that the home owner picked a certain tile which turned out to be no longer available. Mr Rayner says this was conveyed to Mr Spirritt. It appears, so far as the evidence went, that he selected another tile of a different size and manufacture, believing it best matched those ordered. These proved to be of a shade that did not please the home owners.[22] This was not detected by anyone until the tiles were fixed with grouting. Seen together served to highlight the subtle variation and shade differences for the first time. In the result the home owner is left with tiles which are not to their taste and which were not those ordered. The question becomes what the legal consequence of this situation is?
[22] T5.6-6.11, 30/09/09
It is evident from the above findings, that the Magistrate analysed the matter on the premise of a contract between the home owners and Terry’s Tiles for the supply of the specified tiles. It is also evident her Honour considered Mr Spirritt to be the home owner’s agent. The transcript of proceedings in the court below is very confusing and disjointed. The evidence of Mr Rayner’s knowledge of the course of events was contradictory. There was a distinct lack of focus on key issues, such as how or why the wrong tiles came to be supplied – did Mr Spirritt order them, or were they simply forwarded by Terry’s Tiles in the hope they would do?
Nevertheless, it is clear enough that neither identifiable offer, nor identifiable acceptance as between Terry’s Tiles on the one hand and the respondents on the other, emerges from the evidence. Terry’s Tiles did not promise to supply the respondents with anything and they fell under no obligation to Terry’s Tiles to make any payment for them. And fundamentally, there was no consideration as between Terry’s Tiles and the home owners, recognisable in law, bringing about any obligation capable of recognition as “contractual”, or sufficient to sustain the enforcement of a contractual relationship. The respondents were indifferent to the actual supplier – they simply wanted tiles of choice.
On the other hand there was plainly a contractual arrangement between the respondents and the builder. A term of the arrangement as between them, was that the builder would complete the ensuite renovation, using tiles selected by the respondents. That being the case, there was no question of any binding contractual arrangements, still less any breach of contract, as between the parties in this case. The application for review must therefore be granted on that ground alone.
The same result is reached, if contrary to this conclusion, there was a binding contract as between the parties. On the findings of the Magistrate, Mr Spirritt had the actual authority to order alternative tiles so that the respondents would have been bound by his choice. Even if he did not have their authority, as matters appeared from the perspective of Terry’s Tiles, he held the ostensible or apparent authority of the home-owners to make that decision. Still further, even if he did not and the situation was that Terry’s Tiles of their own motion dispatched tiles they considered best matched the original, the remedy if any, lay with Mr Spirritt as against Terry’s Tiles, but not as between them and the home owners. This is because there was a separate contract for the supply and purchase of the tiles as between Terry’s Tiles and Mr Spirritt.
There is a subsidiary matter. As we have seen the Magistrate allowed the respondents $260 of solicitor’s fees without furnishing reasons, as well as $180 for witness fees. Pursuant to s 38(5) of the Magistrates Court Act, legal costs cannot be awarded “unless all parties were represented by counsel, or the court is of the opinion that there are special circumstances justifying the award of such costs”. No examination of the circumstances was made, no analysis of whether they were special or otherwise was undertaken, and no inquiry as dictated by MCR R 106(2) of the Magistrates Court (Civil) Rules 1992 was embarked upon, and indeed how the $260 was made up is not revealed. Those orders too would have to be set-aside as tainted by error. However as they fall with the order for successful review, all orders for the payment of monetary awards must be set aside with it.
It appears as if Mr Spirritt is prepared to lower the cost of rectification, in order to facilitate resolution of the matter. The other parties might be well advised to consider a practical business outcome of their differences, at least if they wish to finally put this unfortunate misunderstanding behind them.
Orders
In the result however, the application for review is allowed. The judgment entered by the learned Special Magistrate on 26 June 2009 is rescinded pursuant to s 38(7)(d)(ii) of the Magistrates Court Act. In lieu thereof there will be an order that action no ELIZCI-08-1039 taken out in the civil jurisdiction of the Magistrates Court at Elizabeth, is dismissed. As the parties were unrepresented, there will be no order as to costs.