Tran v Packaging Logistics Pty Ltd
[2023] VSC 775
•20 December 2023
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2022 04572
| HANH TRAN and HOI LE | Appellants |
| v | |
| PACKAGING LOGISTICS PTY LTD (ACN 101 920 763) trading as AUSTRAL ALUMINIUM PRODUCTS | Respondent |
S ECI 2022 05112
| PACKAGING LOGISTICS PTY LTD (ACN 101 920 763) trading as AUSTRAL ALUMINIUM PRODUCTS | Appellant |
| v | |
| HANH TRAN and HOI LE | Respondents |
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JUDGE: | Gorton J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 30 November 2023 |
DATE OF JUDGMENT: | 20 December 2023 |
CASE MAY BE CITED AS: | Tran v Packaging Logistics Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2023] VSC 775 |
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APPEALS – Appeals from Magistrates’ Court of Victoria – Assessment of damages for breach of contract in supply and installation of doors and windows – Where Magistrate allowed no damages for doors and windows that had to be replaced – Whether or when to assess by reference to rectification or replacement – Whether there was evidence that could support assessment by reference to replacement – Whether a quote for replacement was admissible – Whether a quote for replacement constituted expert evidence – Whether error to conclude global quote could not be used to assess apportioned damages – Whether expert evidence of cost of rectification inadmissible due to lack of detail – Application of Australian Consumer Law – Haines v Bendall (1991) 172 CLR 60 – Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 – Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167 – JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237 – Schedule 2 to the Competition and Consumer Act 2010 (Cth).
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APPEARANCES: | Counsel | Solicitors |
| For the Appellants in S ECI 2022 04572 / Respondents in S ECI 2022 05112 | Mr S Stuckey KC and Mr J Stavris | Indovino's Lawyers |
| For the Respondent in S ECI 2022 04572 / Appellant in S ECI 2022 05112 | Mr B Mason | Phillips & Wilkins |
TABLE OF CONTENTS
A. Background.................................................................................................................................... 1
B. The evidence led relevant to quantum...................................................................................... 3
B.1The evidence relating to the rectification or replacement of the doors and windows 3
B.2.The evidence in relation to certification of the glass....................................................... 5
C. Was the evidence of Mr Samartzis and Mr Spencer admissible and probative?............ 6
C.1The quote and Mr Samartzis................................................................................................ 6
C.2Mr Spencer’s evidence.......................................................................................................... 8
D. Did the Magistrate err in law in his approach to the assessment of damages?............. 11
D.1.The test for damages.......................................................................................................... 11
D.2Reminder: how the Magistrate approached the assessment of damages................... 12
D.3 Did the Magistrate err by making an implicit finding that rectification cost less than replacement?...................................................................................................................... 13
D.4Did the Magistrate consider relevant evidence when deciding on his approach to the assessment of damages?................................................................................................... 14
D.5Did the Magistrate err by concluding that the quote did not permit an assessment of the cost of replacement of some of the doors and windows?.................................................... 15
E. The claim under the Australian Consumer Law................................................................... 18
F. The application to reopen......................................................................................................... 19
G. What should now be done?..................................................................................................... 21
HIS HONOUR:
A. Background
These appeals raise for consideration the approach taken in the Magistrates’ Court of Victoria to the assessment of damages in a claim brought by a building owner against a company that supplied some aluminium windows and bi-fold doors. Although there were many issues relating to the terms of that supply and the adequacy of what was supplied, the Magistrate found that:
(a) Packaging Logistics Pty Ltd, trading as Austral Aluminium Products (‘Austral’) agreed to supply to Ms Tran and Mr Le and to install, among other things, three large glass windows, two sets of bi-fold doors, and two sets of sliding doors.[1] These were referred to as the ‘Pool Windows’, the ‘Corner Bi-Fold’, the ‘Downstairs Sliding Doors’, ‘BF-1’ (that I will call the Upstairs Bi-Fold Doors) and the ‘Upstairs Sliding Door’;
(b) The price agreed to be paid was $59,000, based on a quote for the supply of all the doors and materials and the installation of some of them, together with a reasonable rate of remuneration for the installation not otherwise included in the quote, later found to be $6,855;[2] and
(c) Each set of windows or doors had numerous problems with the way they had been built or installed that meant that Austral was in breach of obligations imposed on it by the Australian Consumer Law[3] that the windows and doors be of an acceptable quality and that the installation be performed with due care and skill and achieve the intended result that the installation be fit for purpose.[4]
[1]The contract was found to be both in writing and oral.
[2]Austral brought proceedings against Ms Tran and Mr Le in quantum meruit for at least part of the installation work and judgment was entered in this amount.
[3]The ‘Australian Consumer Law’ is the text set out in sch 2 of the Competition and Consumer Act 2010 (Cth) and applies in Victoria by reason of s 8 of the Australian Consumer Law and Fair Trading Act 2012 (Vic).
[4]Australian Consumer Law ss 54, 60 and 61.
It seems that the Magistrate also found that the glass, which had not been certified by Austral, could not be certified by another supplier without all the glass in all the doors and windows being removed and replaced. This was significant because a certificate of occupancy could not be provided without certification of the glass used.
Accordingly, Ms Tran and Mr Le were entitled to damages. They sought, relevantly,[5] either the cost of removing and replacing all the doors and windows or their money back.[6] The Magistrate found that the Downstairs Sliding Doors, the Upstairs Bi-Fold Doors and the Upstairs Sliding Doors were unable to be rectified and would have to be replaced, but that the Pool Windows and the Corner Bi-Fold Doors were capable of being rectified and so did not have to be removed and replaced. The Magistrate allowed in his assessment of damages the amount that it would cost to rectify the Pool Windows ($5,700) and the Corner Bi-Fold Doors ($3,000), but reasoned that:
(a) because there was no evidence that dealt separately with the cost of removing and replacing the Downstairs Sliding Doors, the Upstairs Bi-Fold Doors or the Upstairs Sliding Doors, no damages (at all) should be allowed as compensation for the breaches associated with the defective supply and installation of those items; and
(b) because there was no evidence that dealt with the cost of removing and replacing the glass in all the windows so that the glass used could be certified, no damages should be allowed as compensation for the provision of uncertified doors and windows.
[5]They sought other damages, such as for delay, but were unsuccessful. Those claims are not relevant in this appeal.
[6]So much was made clear by their final submissions.
The principal subject of Ms Tran and Mr Le’s appeal is the Magistrate’s decision to assess damages the way he did rather than by reference to the cost of removing and replacing all the doors and windows.
Austral has also appealed.[7] It challenges the Magistrate’s decision to award any damages at all, on the grounds that there was no evidence on which his Honour could rely to assess damages for the cost of rectifying those doors and windows that could be rectified.
[7]Austral initiated its own appeal. It took the view, based on Dessco Pty Ltd v Davey [2020] VSC 696, that s 109 of the Magistrates’ Court Act 1989 (Vic) does not provide for cross-appeals. The two appeals were argued together.
The way the arguments and findings below intersect with each other and my conclusions in this Court is complicated. I will first set out the relevant evidence as to quantum, then set out my findings on the various arguments that fall for determination, and then, at the end, consider what orders should now be made.
B. The evidence led relevant to quantum
B.1 The evidence relating to the rectification or replacement of the doors and windows
In order to understand whether the Magistrate erred in his approach to the assessment of damages, it is necessary to consider the quantum evidence that was before the Magistrate. Austral did not tender any. Ms Tran and Mr Le put the following evidence relevant to quantum before the Magistrate:
(a) A report dated 25 June 2019 from a building consultant, Mr James Campbell, that identified numerous defects with the supply and installation of the doors and windows. He did not opine on the cost of rectification or replacement, but said at the end of his report:
There has been no cost estimate prepared at this time, as such was not requested, however I am of the opinion that the complexity and likely hood [sic] of complete removal and alteration of the fabrication, the estimating of the likely costs would be better served by either a qualified Quantity Surveyor of by competitive tender.
Mr Campbell also gave evidence that it was not ‘viable’ for another supplier to provide certification of the glass used and for that to happen all the glass would have to be removed, discarded and replaced.
(b) A report dated 21 December 2021 from Michael Spencer from the Australian Glass and Window Association, a fitter and machinist with qualifications also in engineering, among other things, that set out numerous defects with the relevant doors and windows. He said that the Pool Windows and the Corner Bi-Fold Doors could be rectified at identified costs but the Downstairs Sliding Doors, the Upstairs Bi-Fold Doors and the Upstairs Sliding Doors were unable to be rectified and would have to be replaced. Mr Spencer did not give any evidence as to the cost of replacing the windows or doors or as to whether that would be more or less expensive than rectifying those that could be rectified. Mr Spencer did not deal, in his report, with the issue of certification of the glass used.
(c) A quote dated 24 January 2020 from Pacific Shopfitters Pty Ltd for $82,240 plus GST for the removal and replacement of all the relevant doors and windows, and also an extra door that was not part of this case. Ms Tran and Mr Le had called (over Austral’s objection[8]) the owner and director of Pacific Shopfitters Pty Ltd who prepared the quote, Mr Kon Samartzis. He signed the code of conduct document appropriate for an expert witness.[9] He explained that he had over 30 years of experience as an aluminium fabricator and glazier, was an accredited member of the Australian Window Association, and in his business manufactured, supplied and installed these types of windows and doors. He had attended the property and inspected and measured the doors and windows in order to prepare the quote. The written quote gave specifications for the doors and windows to be removed and replaced but did not break down how the figure of $82,240 was arrived at. When counsel for Ms Tran and Mr Le started to enquire about the breakdown, counsel for Austral objected to Mr Samartzis’ giving oral evidence on the matter. In cross-examination, counsel for Austral established that Mr Samartzis had with him documents that set out his workings (that Mr Samartzis said were ‘confidential’), but did not seek to inspect them, to cross-examine on them or to tender them.
[8]Although Austral were provided with this quote well in advance of the hearing, no witness outline or expert report had been exchanged. Austral also submitted that the quote did not provide sufficient reasoning for it to be admissible as expert opinion.
[9]See Magistrates’ Court General Civil Procedure Rules 2020 (Vic) r 44.03(1) Form 44A.
Austral objected to Pacific Shopfitters Pty Ltd’s quote and to Mr Samartzis’ evidence in relation to the quote being admitted and also submitted that the quote was ‘not probative’.
Although Austral did not object to Mr Spencer’s report being tendered or to his giving oral evidence, it also submitted that Mr Spencer’s evidence as to the cost of rectifying those doors and windows that he thought could be rectified was inadmissible or ‘not probative’.
As noted above, the Magistrate accepted Mr Spencer’s evidence as to the cost of rectification of those doors and windows that Mr Spencer said could be rectified.
B.2. The evidence in relation to certification of the glass
The evidence was that the supplier has to certify the glass used in order for a building to obtain a certificate of occupancy. The evidence as to the provision of certification in this case was unusual. Austral called its owner, Mr Kochev. Mr Kochev gave evidence primarily in relation to the contractual relationship between the parties, but did not dispute that he was required to certify the glass used. He said that he had not provided certification because Ms Tran and Mr Le had not paid their bill. By the time the matter came to trial, Ms Tran and Mr Le had paid their bill and, when asked about the certification, Mr Kochev said that he had the certificates in his office and could produce them the following court day. He was asked to do so, but did not produce them. Ms Tran and Mr Le’s solicitors then requested them on several subsequent occasions, but the certificates were not produced and no reason was given for the failure to produce them. Evidence to that effect was included, by affidavit, with Ms Tran and Mr Le’s written submissions. Ms Tran and Mr Le submitted that the Court should conclude that the failure to provide certification was another reason for which they did not get what they contracted for.
The Magistrate did not state in terms whether he accepted or rejected Mr Kochev’s evidence that he had the certification material and that it could and would be provided. His Honour, however, set out, and appears to have accepted, the following evidence from Mr Campbell:
The origin and compliance of glass at this time is highly unlikely to be achievable at a viable cost or on which compliance certification will be provided without removing, discarding existing glass and replacement and refitting of compliant glass panels throughout.
His Honour then stated his conclusion that, notwithstanding that evidence, no damages could reasonably be assessed for this defect because there was no evidence as to the cost of replacing all the glass panels.
On a proper reading of his Honour’s reasons, it follows that his Honour did not accept Mr Kochev’s evidence that he was ready, willing and able to provide the necessary certification, and indeed concluded by necessary implication that the removal and replacement of the glass was necessary in order for certification to be obtained.
C. Was the evidence of Mr Samartzis and Mr Spencer admissible and probative?
As noted above, Austral submitted below that the evidence of Mr Samartzis and Mr Spencer was inadmissible or ‘not probative’,[10] and commenced its own appeal in which it contended that the Magistrate erred in allowing the damages he did based on Mr Spencer’s evidence. The first step is to consider whether this is right.
[10]Strictly, if evidence is not probative, then it is not admissible because, under s 56(2) of the Evidence Act 2008 (Vic), evidence that is not relevant is not admissible. The way this case was run, it seems that evidence was admitted subject to the parties’ right to argue in submissions that it was not relevant and so should not be relied on. There is nothing wrong with a trial proceeding on that basis if that is thought efficient.
C.1 The quote and Mr Samartzis
Austral submitted that Pacific Shopfitters Pty Ltd’s quote and Mr Samartzis’ associated oral evidence were inadmissible because:
(a) Mr Samartzis’ evidence was expert (that is, opinion) evidence and neither the quote nor his oral evidence set out or established his expertise or his reasoning process; and
(b) the quote was in any event of no probative value.
A simple quote is not, ordinarily, opinion evidence because the quote does not ordinarily state that the identified price is, in the quoter’s opinion, the market price. I disagree that this makes the quote inadmissible. I reject the premise of Austral’s argument that the only evidence that may be led to establish the market or a fair price for a good or service is an opinion from an expert as to what that person thinks is the market or fair price. Evidence of the price for which that good or service may in fact be purchased in the marketplace – that is, a quote - may also be led because it is evidence that could rationally affect (directly or indirectly) the assessment of the market or a fair price.[11] The Court might conclude that the market or a fair price is in accordance with the quoted price if it is satisfied that the quoter carries on business in that market, particularly if the quoted price is the only evidence or otherwise is not challenged as unreasonable in some way.
[11]Evidence Act 2008 (Vic) s 55(1).
Austral also contended that the quote was ‘of no probative value’ because it did not break down the price quoted by reference to the hourly rate charged for labour and the cost of materials with the result that the Court could not ‘appreciate the basis upon which Mr Samartzis reached his conclusion’. I disagree. His quote remained admissible and probative for the reasons set out above. The lack of detail explaining how the quoted price was arrived at could have been a reason for the Court not accepting or not relying on the quote, particularly if there were some contrary evidence or reason to doubt the reasonableness of the quote, but that is not the same as saying that it was of no probative value. In this case, of course, not only did Austral not lead any evidence on quantum itself, but it did not challenge Mr Samartzis’ quote in any substantive way or suggest to him that the quote was unreasonable, despite its being in the same business.
It follows, also, that the quote was not inadmissible on the grounds that Mr Samartzis failed to satisfy the requirement set out in s 79(1) of the Evidence Act 2008.[12] That section only applies to opinion evidence and, for the reasons set out above, the quote was not, strictly, opinion evidence.
[12]As to which see, eg, Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588.
Accordingly, in my view, the quote and Mr Samartzis’ oral evidence were admissible and evidence upon which the Court was entitled to rely.
C.2 Mr Spencer’s evidence
As noted above, Austral has brought its own appeal in which it contends that the Magistrate erred by awarding damages based on Mr Spencer’s evidence as to the cost of rectification on the grounds that that evidence was inadmissible or not probative. It contends that, as a result, there should be no order against it for damages at all, notwithstanding the findings that in breach of contract it had supplied and installed defective windows and doors that had to be either rectified or replaced.
Mr Spencer’s written report was largely directed at discussing and identifying the various defects in the doors and windows and what was required to bring them up to standard. After having done so, his report included the following statements (and these have been selected from different parts of his report):
· 1.1… An estimated rectification re-glaze cost using the same glass is $700 per light. To flash the window correctly the window should be removed and a folded up sill tray would be required. The estimated cost if done when the glass is out is $800 per light...
· 1.2… Small joint sealant should be applied to this window and some of the gaps need some attention. If the windows and glass were out this is an easy fix at around $300 per light.
· 1.3… The doors should be removed and the still trays have end stops fitted or at least sealed. It would be hard to do a proper job without removing the doors. An estimated cost is $1900.
· 2.2… This is the same door with no vertical flashing. It could be fixed when the door was removed to fix the sill tray. Estimated cost is $600.
· 2.13… You would expect to pay an estimated $3000 to do this work and supply the replacement parts. If you still wanted the flat sill it would not pass the standards and the repair costs would be around $1500.
· 9…3 fixed Lights: The 3 fixed light windows are fixable if the following is done:
[various work processes were then set out]
Estimated cost $1900 per light
· 9…3 The corner Bifold: If you are ok with that than the product is fixable:
[various work processes were then set out]
Estimated cost $3000
Austral made a forensic decision not to cross-examine him on his figures or how he reached them. It did not contend that the Magistrate erred in the calculations he made based on Mr Spencer’s report.
As is apparent, Mr Spencer did not provide a quote: he was not offering to perform the rectification works himself but was identifying what was, in his opinion, the market price for those works. Accordingly, his evidence was opinion evidence and so was inadmissible[13] unless he had specialised knowledge based on his training, study or experience and his opinion was wholly or substantially based on that knowledge.[14]
[13]See Evidence Act 2008 (Vic) s 76.
[14] Ibid s 79(1).
Austral did not dispute that Mr Spencer was an ‘expert’. The challenge was to the form of his evidence: Austral submitted below that Mr Spencer did not set out the process of reasoning required and so the Court had ‘no way of ascertaining whether it is a reasonably calculated figure, a rough estimate, or a figure plucked from thin air’. In this Court, Austral emphasised that Mr Spencer ‘did not identify the portions allocated to labour and materials’ and did not ‘quantify the hours of labour required to perform that work, or the materials to be used, or the rates applied for each of them.’ It contended, in summary, that because Mr Spencer failed to expose his reasoning processes, his evidence had ‘no probative value’. Its argument included, as I understood it, an assertion that the evidence was inadmissible because his failure to expose the reasoning process behind his estimates also meant that the Court could not be satisfied that his opinion was wholly or substantially based upon specialised knowledge held by him based on his training, study or experience and to the conditions for the admission of opinion evidence were not met.
I do not agree that the criteria set out in s 79(1) of the Evidence Act 2008 were not met. In the circumstances of this case, it was not necessary that Mr Spencer identify the precise calculations behind his estimates of the cost required to get work done for the inference to be available that his estimates were wholly or substantially based on specialised knowledge acquired by him in the course of his work with doors and windows. His report, read as a whole, well justifies that inference in the absence of some reason to think the contrary. There may be cases where an opinion is sufficiently disconnected from the apparent area of expertise that some real detail is required to establish that the opinion is wholly or substantially based on specialised knowledge acquired by the expert, and where that is the case that detail should probably be set out in the report,[15] but that was not the situation here.
[15]Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, 729-730 [59] (Heydon JA), but cf Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588, 604 [37] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ).
Equally, the lack of the detail behind his estimates might make his evidence less persuasive, and might be a reason for which a court might not accept his estimates, particularly if they were contradicted or challenged in some way, but it is not a reason for which his estimates have no probative value. Indeed, a court is well entitled to act upon uncontradicted and unchallenged evidence given by a door and window expert as to the estimated cost of rectifying defects that that expert has identified in doors and windows that the expert has examined without those estimates having been broken up into hourly rates, hours taken, and cost of materials. It is possible, endlessly, to challenge assumptions made in any pricing.[16] The level of granular detail required to support an opinion, if it is to be persuasive, will vary from case to case and depend on other evidence led. But once it can be inferred, as is the case here, that estimates are based on an expert’s specialised knowledge, the estimates are admissible, and probative in the sense that a court is entitled to act upon them.
[16]If, for example, Mr Spencer had said that his quotes were based on an hourly rate of, say, $80 for labour, it might be said that the selection of this hourly rate required further justification.
I note that, too, that the giving of an estimated figure without detailed breakdown into their components is not unusual in court proceedings, especially where the evidence is not contested and the figures are relatively modest in the scheme of things. For example, in medical negligence cases, a doctor will often give an estimate of the cost of, say, a knee operation without separately identifying the component of that cost that is attributable to the surgeon’s fee, the anaesthetists fee, and the hospital’s charge for the provision of nursing and other equipment. While the lack of a detailed breakdown is not ideal, this does not mean the estimated global figure is unable to be relied upon when assessing damages.
D. Did the Magistrate err in law in his approach to the assessment of damages?
Having concluded that the evidence of Mr Spencer and Mr Samartzis was admissible and probative, it is necessary to turn to the question as to whether the Magistrate erred in law in his approach to the assessment of damages.
D.1. The test for damages
Ms Tran and Mr Le were entitled to the damages necessary to put them in the same position that they would have been in had the contract been complied with.[17] Those damages fell to be assessed by reference to the cost of making the goods and services supplied conform to the contract; that is, the reasonable and necessary work required to ensure that they had doors and windows that were fit for their purpose in their house.[18]
[17]Haines v Bendall (1991) 172 CLR 60, 63 (Mason CJ, Dawson, Toohey and Gaudron JJ).
[18]Bellgrove v Eldridge (1954) 90 CLR 613, 618 (Dixon CJ, Webb and Taylor JJ).
Clearly enough, one method of assessing those damages would be to adopt the cost of removing and replacing the defective doors and windows. Another method would be to adopt the cost of performing work on the doors and windows that are already there if that could make them fit for purpose. The approach is guided by the principle that the work by which the damages are to be assessed must be both necessary and reflect a reasonable approach to adopt in the circumstances. If more than one method of making the goods and services conform to the contractual obligation were available a claimant would ordinarily be entitled only to damages having regard to the least expensive approach.[19] There is otherwise no presupposition in favour of either rectification or replacement and which is appropriate must depend on the particular circumstances.
[19]See, eg, Lester v White [1992] 2 NZLR 483, 499 (Greig J).
Significantly for this case, which method is most appropriate would likely depend on whether the cost of rectifying those windows and doors that could be rectified would be more or less expensive than the cost of removing and replacing them, and would have to take into account also the need to have doors and windows that could be certified as being compliant with the relevant standards.
D.2 Reminder: how the Magistrate approached the assessment of damages
To repeat, the Magistrate’s assessment process was as follows:
(a) First, his Honour accepted Mr Spencer’s evidence as to which doors or windows could be rectified and which had to be replaced, and as to the cost of rectifying those that could be rectified;
(b) His Honour allowed damages for the cost of rectifying those doors and windows that Mr Spencer said could be rectified in the amounts that Mr Spencer identified;
(c) Then, his Honour turned to the doors and windows that Mr Spencer concluded could not be rectified and that had to be removed and replaced;
(d) His Honour concluded that the quote provided by Pacific Shopfitters Pty Ltd ‘did not provide any rational foundation to assess the damages’ because the assumptions and methodology adopted were not apparent, there was no breakdown of the individual items on the quotation, and the dimensions of the doors and windows were different to those supplied by Austral;
(e) His Honour, for that reason, did not allow any damages as compensation for Austral’s provisions of those doors and windows that were defective, unable to be rectified and had to be removed and replaced;
(f) Next, his Honour noted that the glass in all the doors and windows had to be removed and replaced in order to obtain certificates of compliance; and
(g) His Honour did not allow any damages as compensation for the need to remove and replace the glass in all the doors and windows because there was no evidence as to the separate cost of doing so.
His Honour did not, in terms, consider whether the cost of rectification was less than or more than the cost of replacement for those doors and windows that his Honour found could be rectified.
The Magistrate accepted, it seems, that all the glass had to be removed and replaced, but, did not award any damages for that also on the ground that damages for that failure could not ‘be reasonably assessed’.
D.3 Did the Magistrate err by making an implicit finding that rectification cost less than replacement?
Ms Tran and Mr Le submitted that the Magistrate must, tacitly, have concluded that the cost of rectification was less than the cost of replacing the Pool Windows and the Corner Bi-Fold Doors, and that finding was not open because there was no evidence to that effect. In this way, they submitted, the Magistrate erred in his approach to the assessment of damages.
This argument assumes that a court may not allow damages based on the cost of rectification without first ascertaining that the cost of rectification is less than the cost of replacement. The difficulty with this argument, though, is that it may easily be reversed. If it were wrong for the Magistrate to assess damages based on rectification without any evidence that rectification was less expensive than replacement, then it would equally be wrong for the Magistrate to have assessed damages based on the cost of replacement without any evidence that replacement was less expensive than rectification. Consistently with this, Austral contended (in its appeal) that the Magistrate was wrong to award Ms Tran and Mr Le damages even based on rectification because it was not shown that rectification was cheaper than replacement.
Accordingly, I do not accept that his Honour was not permitted to assess damages by reference to rectification without there being evidence that rectification would cost less than replacement. There is no legal principle that requires that there be evidence of comparative cost before a court is entitled to assess damages by reference to any particular method. The obligation is to provide fair and reasonable damages, and where there is evidence of comparative costs that must of course be considered. But where no evidence of comparative costs is led, the Court must do its best having regard to the evidence that is before it.
Also, and although the Magistrate did not explicitly reason in this way, it seems to me that Mr Spencer’s opinion where he identified the possibility and cost of rectifying some of the doors and windows, yet said others had instead to be replaced, probably carried with it, by implication, his expert opinion that rectifying rather than replacing those windows was a reasonable method of achieving windows and doors that were fit for purpose. However, as considered further immediately below, Mr Spencer’s evidence did not take into account the need for the doors and windows to be certified.
D.4 Did the Magistrate consider relevant evidence when deciding on his approach to the assessment of damages?
I am satisfied, however, that the Magistrate, with respect, did err in his approach to the assessment of damages in this case. Although there was no requirement that there be evidence of the comparative costs of replacement and rectification before damages could be assessed by reference to one method or the other, his Honour was obliged, in my view, when determining what was the proper approach to take to provide fair and reasonable compensation, to have regard to all the evidence that touched on that issue before deciding on what approach to take. In my view, with respect, the Magistrate erred in his approach to the assessment of damages in this case by simply adopting the evidence that assessed loss by reference to the cost of rectifying some of the doors and windows without first considering whether that approach was to be preferred to the approach of assessing loss by reference to the cost of removing and replacing those doors and windows. In the circumstances of this case, the choice was not so obvious that there could only be one correct choice.
That meant, in particular, that before deciding that the cost of rectification rather than replacement of the doors and windows that could be rectified was an appropriate measure of damages, his Honour was obliged to take into consideration the fact that the rectification proposed did not include the replacement of the glass and thus would leave the doors and windows uncertified. Here, his Honour did not take that into account. For this reason, his approach to the assessment of damages relating to those doors and windows miscarried. Further, because of the sequential way in which his Honour then reasoned, that error infected his damages assessment more generally.
I am conscious that an appeal under s 109 of the Magistrates’ Court Act 1989 is limited to a question of law and, normally, an assessment of damages is a factual rather than a legal enquiry. But, in my view, it is an error of law to determine to assess damages in a particular way without having first had regard to all the evidence that was relevant on that question.
D.5 Did the Magistrate err by concluding that the quote did not permit an assessment of the cost of replacement of some of the doors and windows?
The quote relevantly provided for the removal and supply of installation of the following for $82,240 plus GST:
First Floor
3300mm × 10,100mm = 1, 10 leaf bi-fold door (Upstairs Bi-Fold Doors)
2820mm × 3190mm = 1, apartment style sliding door (Upstairs Sliding Door)Ground floor
2810mm × 4480mm = 1, apartment style sliding door (Downstairs Sliding Doors)
3300mm × 3850mm = 1, apartment style sliding door (as above)
2810mm × 3100mm × 1830mm = 1, corner 6 leaf bi-fold door (Corner Bi-Fold)
2530mm × 2450mm = 3, fixed windows pool windows (Pool Windows)
2360mm × 1000mm = 1, single swinging door
The names in parentheses and the underlining and italicising have been added. The names in parentheses are the names used by the parties in the proceeding. The items that are underlined are the items that, the Magistrate found, could not be rectified but had to be removed and replaced. The italicised item was a door that was included in the quote but not in the proceeding.
Where liability is found due to wrongful conduct of a party, and loss has been suffered, damages should be assessed based on such evidence as is before the Court even if there are difficulties in assessing them.[20] ‘[T]he fact that damages cannot be assessed with certainty does not relieve the wrong-doer of the necessity of paying damage for his breach of contract.’[21] ‘Where there has been an actual loss of some sort, the common law does not permit difficulties of estimating the loss in money to defeat the only remedy it provided for breach of contract, an award of damages’.[22] This is the case even if it were in the power of the claiming party to lead more satisfactory evidence.
[20]Even if a ‘degree of speculation and guesswork’ may be involved: Enzed Holdings Ltd v Wynthea Pty Ltd (1984) 57 ALR 167, 183 (Sheppard, Morling and Wilcox JJ); See also the discussion in JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237, 241-244 (Brooking J).
[21]Chaplin v Hicks [1911] 2 KB 786, 792 (Vaughan Williams LJ).
[22]Fink v Fink (1946) 74 CLR 127, 143 (Dixon and McTiernan JJ).
The various doors and windows were well described in the evidence before the Magistrate, and there was no suggestion that there were any particular aspects of any particular doors or windows that made them peculiarly or disproportionately expensive to supply or install. In those circumstances, the quote for the replacement of all of them provided some basis by which damages for the need to replace some of them could be estimated other than by engaging in impermissible speculation. In my view, with respect, his Honour was wrong, in law, to conclude that damages could not be assessed in this case other than by engaging in that impermissible speculation.
In my view, with respect, and although the evidence was far from satisfactory, in the circumstances of this case the evidence represented by this quote was not in the circumstances so deficient that to assess a figure for two of the items referred to within it would be to ‘pluck’ the figure ‘out of the air’. The quote set a ceiling on the damages that could be allowed, and the question became whether damages could be estimated, even if not precisely calculated, for the removal and replacement of a proportion of the units the subject of that quote. There was detailed evidence about the size and nature of each of the various units, and Austral’s charges for supplying and installing the units. In my view, this was not a case where no informed estimate could be made or damages were simply ‘unable’ to be assessed.[23] Rather, in my view, it would have been open to the Magistrate, had his Honour wished to do so, to estimate a figure having regard to the evidence as to the various items and this quote that represented fair and reasonable compensation for the need to remove and replace the underlined items. It would, of course, be necessary to be conservative – to allow only what could be allowed on ‘an absolutely safe basis’[24] – and any assessment could only be an estimate. But where there has been a finding of breach leading to a need to replace those items, it was open to the Court to make an estimate.
[23]Cf JLW (Vic) Pty Ltd v Tsiloglou [1994] 1 VR 237, 250 (Tadgell and JD Phillips JJ).
[24]Aerial Advertising Co v Batcherlors Peas Ltd (Manchester) [1938] 2 All ER 788, referred to by Brooking J in JLW v Tsiloglou [1994] 1 VR 237, 241-242.
The Magistrate was, with respect, correct to point out that there was no impediment to Ms Tran and Mr Le’s leading better evidence, and that this is a factor to be considered when determining whether damage has been sufficiently proved. But in the circumstances of this case, it should be recalled that Austral was in the business of supplying and installing windows and doors and so it too had the ability to lead evidence on quantum. Indeed, unlike Ms Tran and Mr Le, it could lead that evidence from its own knowledge. Also, Austral objected to Ms Tran and Mr Le’s counsel’s asking Mr Samartzis to provide the breakdown of the Pacific Shopfitters Pty Ltd quote, presumably because it should have been included prior to trial, and chose not to engage in any such questioning itself. That was entirely proper, but it reflects that fact that Austral, rather than being simply unable to lead evidence on the matter, made its own forensic decision to have the Magistrate consider damages on the evidence in the state it was in. It should be remembered that both parties chose to leave the evidence before the Court in the state it was.
The question as to whether evidence is sufficient to enable an award of damages in a particular case is a question of law, by analogy with the accepted notion that whether or not there is evidence to support a finding of fact is a question of law. Accordingly, I consider that his Honour also erred in law when he concluded that it simply was not open for him to assess damages for the doors and windows that were defective, could not be rectified and had to be replaced.
E. The claim under the Australian Consumer Law
Ms Tran and Mr Le submitted that the Magistrate erred by failing to consider claims under ss 259(3)(b) and 267(3)(b) of the Australian Consumer Law.[25] Section 259(3)(b) provides that a consumer may recover compensation from a supplier of goods if the supplier fails to comply with one of the statutory guarantees. If the failure to comply cannot be remedied or is a ‘major failure’, the consumer may recover compensation for any reduction in the value of the goods below the price paid for the goods. The failure is a ‘major failure’ if, among other things, the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such purpose.[26] Section 267(3)(b) provides effectively the same relief but for the supply of services.
[25]That is, sch 2 to the Competition and Consumer Act 2010 (Cth).
[26]Australian Consumer Law s 260.
Tran and Mr Le submitted that the Magistrate erred by failing to consider claims under ss 259(3)(b) and 267(3)(b) of the Australian Consumer Law.[27] Section 259(3)(b) provides that a consumer may recover compensation from a supplier of goods if the supplier fails to comply with one of the statutory guarantees. If the failure to comply cannot be remedied or is a ‘major failure’, the consumer may recover compensation for any reduction in the value of the goods below the price paid for the goods. The failure is a ‘major failure’ if, among other things, the goods are substantially unfit for a purpose for which goods of the same kind are commonly supplied and they cannot, easily and within a reasonable time, be remedied to make them fit for such purpose.[28] Section 267(3)(b) provides effectively the same relief but for the supply of services.
[27]That is, sch 2 to the Competition and Consumer Act 2010 (Cth).
[28]Australian Consumer Law s 260.
Ms Tran and Mr Le present this argument, I assume, because the measure of damages is slightly different. It requires a consideration of the reduction in the value of the goods below the price paid for the goods. They contend that those doors and windows that have to be replaced have a nil value, and so they should be entitled to recover as compensation the amount that they paid for them.
As Austral notes, the same difficulty arises in that Ms Tran and Mr Le paid a single sum for all the doors and windows supplied and installed and it would not be simple to apportion what they paid for the supply of any particular window or door or for the installation of any particular window or door in order to apply this statutory assessment. But it also points out that this claim was never pleaded. Damages under s 236 of the Australian Consumer Law were sought in Ms Tran and Mr Le’s amended complaint, but not under ss 257(3)(b) or 267(3)(b). It was not submitted that the approach to the assessment of damages under s 236 of the Australian Consumer Law would be relevantly different to the approach at common law.
The parties put before me the written submissions that were made to the Magistrate below. Ms Tran and Mr Le did not in that document seek compensation under ss 259(3)(b) or 267(3)(b) of the Australian Consumer Law. Ms Tran and Mr Le did not put any evidence before me to the effect that they had, in oral submissions, sought compensation under those provisions. I infer that, even putting the pleadings to one side, no claim was made to the Magistrate for compensation under those provisions. In those circumstances, they cannot contend that the Magistrate erred in law by failing to consider such claims.
F. The application to reopen
After the Magistrate had published his reasons for decision but before his Honour had made his orders, Ms Tran and Mr Le applied for leave to reopen to lead evidence intended to remedy what the Magistrate had thought were deficiencies in the quantum evidence before him (namely, to adduce an itemised breakdown of the $82,240 plus GST quote discussed in part D.5 above). The Magistrate dismissed that application. Ms Tran and Mr Le have appealed his Honour’s dismissal of that application.
Austral contended that Ms Tran and Mr Le could not appeal against that order because it was an interlocutory order and s 109 of the Magistrates’ Court Act 1989 only gives a power of appeal against a final order.
In my view, this argument was somewhat misconceived. The limit of the right of appeal to an appeal against a final order does not mean that erroneous rulings made in the running of a case cannot be the subject of an appeal. Instead, it reflects the public policy that trials not be delayed while interlocutory rulings are appealed, but, rather, in most circumstances, the trial proceed and any complaint about the interlocutory order or ruling be brought after the trial has finished. The order appealed against remains the final order, but the validity of that order may be challenged on the grounds that an anterior decision was wrongly made.[29] To succeed, it must be shown not only that the interlocutory order was wrong, but that it did or could have affected the final order. If Ms Tran and Mr Le could establish that the Magistrate erred in law in his decision to dismiss their application for leave to reopen their case, then that could justify the setting aside of his Honour’s final orders.
[29]See, eg, Futuris Corporation Ltd v Exicom Ltd (1995) 18 ACSR 413, 414 (Cole JA).
The decision not to grant Ms Tran and Mr Le leave to reopen their case involved the exercise of a discretion. Even assuming that an appeal limited to a question of law engages no more than the usual limitations on the appeal against the exercise of a discretion set out in House v R, [30] Ms Tran and Mr Le would have to establish that no Magistrate acting reasonably could have refused their application. This they cannot do. There is a public interest in proceedings being conducted and completed in the ordinary way. It would be intolerable, having regard both to the general public interest and to the interest of other parties in the litigation, if parties were able to reopen and to lead additional evidence whenever a court in its reasons identifies what it considers to have been a deficiency in that party’s case. Here, for example, it is apparent that Austral made certain forensic decisions in the way it conducted its cross-examination and chose what evidence itself to lead based on what it perceived to be deficiencies in Ms Tran and Mr Le’s evidentiary material. For those reasons, exceptional circumstances are, properly, required before a party is granted leave to reopen the case after factual findings have been made and reasons published.[31]
[30](1936) 55 CLR 499, 504-505 (Dixon, Evatt and McTiernan JJ).
[31]See generally DJL v Central Authority (2000) 1 CLR 226.
There were no reasons identified for which Ms Tran and Mr Le were unable to lead the evidence upon which they now wish to rely in the trial proper. Some Magistrates might have granted their application, and others might not have granted their application. Having regard to the public interest in the finality of litigation and the interests of Austral, it cannot be said that all reasonable Magistrates would have granted their application. Accordingly, this ground of appeal must fail.
G. What should now be done?
Ms Tran and Mr Le’s appeal should be allowed.
Austral’s appeal was commenced out of time and so it requires leave to appeal. I accept that Austral only decided to mount its own appeal after Ms Tran and Mr Le had commenced theirs and that, in the circumstances of this case and particularly in light of the amounts involved, that was a reasonable course for it to adopt. I also note the parties agreed that were leave granted to appeal, Austral’s proposed amended notice of appeal dated 26 September 2023 ought to be evaluated rather than the version filed 12 December 2022. I will grant Austral leave to appeal pursuant to r 58.11 of the Supreme Court (General Civil Procedure) Rules 2015. However, Austral’s appeal should be dismissed, for the reasons set out above.
I will otherwise hear the parties on what further orders should be made. It may be that the matter should be remitted to be reheard. It may be that only some issues should be remitted. It may be that I should decide damages myself. Although some submissions were made as to what should be done if Ms Tran and Mr Le were to succeed, in my view the parties should be given the opportunity further to consider that issue in light of my findings.
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