Whijohn Pty Ltd v Coastzone Pty Ltd
[2014] VCC 242
•20 June 2014
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CIVIL DIVISION | Revised Not Restricted Suitable for Publication |
COMMERCIAL LIST
EXPEDITED CASES DIVISION
Case No. CI-13-00795
| WHIJOHN PTY LTD | First Plaintiff |
| AND | |
| ALLAN KIMBER WHITE | Second Plaintiff |
| v | |
| COASTZONE PTY LTD (TRADING AS WIRRAWAY MOTORHOMES PTY LTD ) | Defendant |
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JUDGE: | HIS HONOUR JUDGE COSGRAVE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24-28 February, 3-7, 11 and 13 March 2014 | |
DATE OF JUDGMENT: | 20 June 2014 | |
CASE MAY BE CITED AS: | Whijohn Pty Ltd & Anor v Coastzone Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2014] VCC 242 | |
REASONS FOR JUDGMENT
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Subject:CONTRACT, CONSUMER LAW
Catchwords: CONTRACT – Breach of contract.
CONSUMER LAW – Supply of goods – Goods Act 1958 (Vic) – Whether goods reasonably fit for purpose – Whether goods of merchantable quality.
CONSUMER LAW – Competition and Consumer Act 2010 (Cth) – Australian Consumer Law – Breach of statutory guarantee.
Legislation Cited: Competition and Consumer Act 2010 (Cth); Evidence Act 2008 (Vic); Goods Act 1958 (Vic); Heavy Vehicle National Law Application Act 2013 (Vic); Road Traffic Act 1961 (SA).
Cases Cited:Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387; Bunnings Group Ltd v Laminex Group Ltd (2006) 153 FCR 479; Cooke v Commissioner of Taxation (2002) 51 ATR 223; Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (2012) VSC 99; Effem Foods Ltd v Nicholls [2004] NSWCA 332; Makita Australia Pty Ltd v Sprowles (2001) 52 NSWLR 705.
Judgment:Judgment for the plaintiffs.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Mr R E T Wodak | Foster Nicholson Jones Lawyers |
| For the Defendant | Mr W Stark | Kahns Lawyers |
HIS HONOUR:
Introduction
1 This case concerns a Kenworth 408 prime mover cab chassis owned by the first plaintiff (“Whijohn”) upon which the defendant (“Coastzone”) was to build a motorhome.
2 The director of Whijohn, the second plaintiff (“White”), contends that the agreement between the parties, as varied, was for a motorhome with certain features which was to cost about $271,500. White told the director of Coastzone, Rob Tonkin (“Tonkin”), that he wanted to be able live and work in the bush and tow a trailer with earthmoving equipment so that he could travel to, and work in, remote parts of Australia. Tonkin told White that he could construct a motorhome for him on the Kenworth chassis. The dispute concerns the motorhome which Coastzone built and retains in its possession.
3 The plaintiffs say that the defendant is claiming more than the agreed cost of the motorhome and that the motorhome is not fit for purpose or of merchantable quality. The defendant contends the plaintiffs have failed and refused to pay the agreed consideration.
4 In deciding the dispute, there are two main areas which require examination. The first area is that regarding the initial agreement between the parties, the variations to that agreement and the cost of the motorhome. The second is the expert evidence which concerns the truck mounting, the likely long-term consequences of the mounting used and the permissible weight on the front axle and front axle assembly of the vehicle. The last of these considerations determines whether or not the vehicle can be lawfully driven on Australian roads. Because of the conclusion I have reached regarding this second area, I will address the areas in reverse order.
5 Before doing so I note that during the trial, I ruled in effect that the issue of liability on the claim and counterclaim be determined first and, if the plaintiffs were successful, that the issue of quantum be addressed in a later hearing. This approach to the proceeding was driven by the parties. It was apparent from reasonably early in the hearing that the trial would exceed the time estimate given to the court. Although the trial was limited to liability alone, it still ran for about double the estimated time. To have addressed the quantum issue would have created even greater inconvenience to other litigants waiting for their cases to be heard. Hence, splitting the trial in the running was attractive from this perspective. It also meant that one of the parties who complained about alleged failures in the discovery process was able to continue the liability trial without being prejudiced. Nonetheless, generally, I think courts should try to deal with all issues in a single trial. It is more efficient and less disruptive and expensive to conduct litigation in this way. Although split trials provide a saving in time and cost if the plaintiff fails on liability, in my experience there is often a considerable increase in cost if a quantum hearing is conducted a year or more after the initial trial.
Expert evidence
(a) Experts – their background and evidence
6 The plaintiffs called expert evidence from Andrew Enkelman and Jarrod Thompson. The defendant called expert evidence from Stuart Croser and William Potts.
(i) Andrew Enkelman
Engagement and qualifications
7 Andrew Enkelman prepared two reports prior to trial. At the time of trial, Enkelman held a Bachelor Degree in Mechanical Engineering, was a member of the Institution of Engineers Australia, a member of the Society of Automotive Engineers International, a member of the German Engineering Institution and a member of the Institution of Mechanical Engineers in America.
Expert reports
8 The first report of Enkelman, dated 12 August 2013, set out a number of conclusions about the quality of the vehicle. These were as follows:
· On the basis that Whijohn’s statement of claim did not disclose whether the plaintiffs had requested a vehicle with seating capacity for more than two occupants, the report could make no comment about the compliance with the seatbelt requirements for a two-seater vehicle.
· Stabilising jacks used in the vehicle were fit for purpose, notwithstanding that Enkelman could not identify whether the jacks used in the vehicle were as fitted originally or a subsequent modification.
· The vehicle was roadworthy, insofar as at the time of the report the vehicle was new and did not require a Roadworthy Certificate.
· The mounting of the motorhome body did not conform to the requirements of either the Kenworth Trucks Body & Equipment Mounting Guide (“the Kenworth Guide”) or section J of the Vehicle Standards Bulletin (“VSB”) 6.
· The structural integrity of the motorhome body was deficient due to the apparent lack of internal steel frames and cross members to provide roof support both for loads and for dynamic forces.
· In the absence of any “plated” evidence that the motorhome complied with the ECE Regulation R29 (“R29”) in relation to steer axle loading, even if the vehicle complied with R29 at the point of leaving the Kenworth factory, the making of a rear cabin cut-out would have nullified this.
9 Enkelman’s second report, dated 16 December 2013, was written in response to a report provided by William Potts of Australian Technology Pty Ltd for the defendant, dated 26 November 2013. The report addressed the testing methods employed by Potts, and restated Enkelman’s views about the vehicle’s non-compliance with the Kenworth Guide and R29.
(ii) Jarrod Thompson
Engagement and qualifications
10 Jarrod Thompson, an employee of Transport Certification Services, a consultant engineering firm, provided an expert report on behalf of the plaintiffs dated 15 October 2012. Thompson was engaged by White when White contacted Phillip Hodges, director of Thompsons’s employer, Transport Certification Services, who then instructed Thompson to inspect the vehicle being manufactured by the defendant in Mildura. Messrs White and Harmon (an employee of the defendant) supplied Thompson with information when inspecting the vehicle. At the time of inspection, the vehicle was “near completion” in the sense that its body, furniture and slide-out fittings were all present. In generating his report and expressing his opinions, Thompson discussed his views with Mr Hodges.
11 At the time of trial, Thompson held a Bachelor Degree in Mechanical Engineering, a Bachelor Degree in Aerospace Technology, was a VicRoads accredited BAS certifier, a licence certifier under the New South Wales RMS Accreditation Scheme, a licence certifier under the Tasmanian Engineering Scheme, a member of Engineers Australia, and an agent for the Department of Transport and Infrastructure. Thompson was experienced in certification of heavy vehicles, and on that basis was put forward as an expert by the plaintiffs.
12 When questioned on his experience during cross-examination, Thompson gave evidence that, insofar as motorhomes were concerned, he had experience in the mounting of bodies to vehicle chassis.
Expert report
13 Before Thompson gave evidence at trial, counsel for the defendant raised a number of objections to his evidence. These were principally that:
· Thompson’s report was obtained at the request of White.
· The report did not contain a statement to the effect that Thompson had read and agreed to abide by the experts’ code of conduct.
14 On that basis, Appendices D to G and conclusions D to G of Thompson’s expert report dated 15 October 2012 were excluded from evidence, leaving Appendices A, B and C of the report as relevant documentary evidence.
15 In relation to the issue of compliance with the Form 44 Experts’ Code of Conduct, Thompson gave evidence that he had, since writing his report, read the Code of Conduct and believed that he had adhered to the Code of Conduct when preparing the writing his report. Thompson stated that the report he created for the proceeding was “one of the earlier reports I’d written for legal purposes”.
16 Thompson gave evidence that since writing his report, he had changed his opinion in respect of one detail relating to the amber side marker lamps of the vehicle, whereby he agreed with evidence provided by another expert witness, Mr Croser.
17 In his report, Thompson concluded that the vehicle was not of merchantable quality at the time of the report for the following reasons, as expressed at Conclusions A, B and C as follows:
A. The installation of the motorhome body did not confirm to the requirements of either the Kenworth Guide (July 2007) or section J of VSB 6.
B. The vehicle’s front axle tare weight exceeded the maximum allowable load limit imposed.
C. The installation of additional seats and seat belts did not confirm to either ADR 5/05 in section K of VSB 6 or the “Vehicle Standards Information 5: Conversion of Vehicles to Motorhomes”.
18 In reaching Conclusion B (relating to the vehicle’s front axle tare weight), Thompson stated that “the modifications made to the vehicle’s sleeper cabin may prevent it from confirming to the requirements of [R29]”.
19 Given the stage in the manufacturing process of the vehicle at which Thompson created his report, there was room for speculation as to the final product vis-à-vis the requirements for “merchantable quality”.
20 In his report, Thompson stated that “no formal engineering drawing exists for the sub-frame” and Thompson gave evidence at trial that he did not take any steps to obtain such a drawing from either White or the defendant. Thompson agreed with the proposition that his assumption as to the existence of a formal engineering drawing was merely speculative.
21 The speculative nature of some of the comments made in Thompson’s report emerged during cross-examination in relation to:
· the existence of “scribe marks” on the rails of the vehicle;
· the amount of clearance allowed for access to the vehicle’s battery carrier;
· compliance with the Kenworth Guide.
22 Thompson’s experience with laminate body structures on vehicles the size of the motorhome the subject of this proceeding appeared limited; he had never seen another purpose built motorhome on the scale of that ordered by the plaintiffs.
(iii) Stuart Croser
Engagement and qualifications
23 Stuart Croser is a principal engineer and automotive program manager for Tonkin Consulting, and at the time of trial, had been providing engineering consulting services to the defendant company for approximately 10 years. As part of that role, Croser has been responsible for certification of vehicles manufactured by the defendant.
24 Croser has a Bachelor Degree in Civil Engineering from the University of South Australia and is a recognised engineering signatory for a number of transport departments in Australian states and territories.
Expert reports
25 Croser produced two reports for the defendant, dated 11 July 2013 and 15 August 2013 respectively.
26 In his first report, Croser expressed the opinion that:
· The vehicle complied with both the Kenworth Guide (February 2009) and section J of VSB 6.
· The vehicle complied with steer axle load limits, being able to operate with a steer axle load of up to 6,500 kilograms.
· As the vehicle’s sleeper cabin was not included in the R29 cabin strength certification, any modifications to the sleeper cabin did not affect compliance with R29 and, accordingly, did not alter the steer axle load of 6,500 kilograms at which the vehicle could operate.
· At the time of inspection, the vehicle was only fitted with front seat occupant seatbelts and any seating in the sleeper cabin were items of “furniture” which did not fall within applicable “automotive seating standards for road vehicles”.
· There was sufficient structural integrity in the motorhome body, including the roof structure, slide-out pods, and roof and wall jointing methods.
· Stabilising jacks fitted to the vehicle had sufficient load carrying capacity.
· The vehicle was supported by a Roadworthy Certificate and Transport SA Vehicle Modification Plates (both of which were issued by Croser).
27 Croser’s second report was framed as a response to the first report of Enkelman dated August 2013. In this second report, Croser maintained his views that the vehicle’s body mounting did not breach the Kenworth Guide and section J of VSB 6, the vehicle’s body was structurally sound, and that the vehicle could operate with a steer axle load of 6,500 kilograms and complied with this limit.
(iv) William Potts
Engagement and qualifications
28 William Potts prepared a report for the defendant, dated 26 November 2013.
29 Potts is a consulting mechanical engineer and director of Australian Technology Pty Ltd. Relevant to his expertise, he holds a Bachelor Degree in Technology (Mechanical Engineering) and is a Chartered Professional Engineer.
Expert report
30 In his report, Potts expressed the view that “there is no reason to predict that this motorhome is less fit for service and purpose than other motorhomes whether they be fixed frame or composite monocoque construction” for the following reasons:
· The vehicle body complied with the Kenworth Guide and section J of VSB 6.
· The vehicle was structurally adequate.
· The steer axle limit of 6,500 kilograms could be adhered to, provided the driver managed loading in the vehicle by taking such steps as trimming the fuel level in the tanks.
(b) Court’s view of the expert witnesses
(i) Andrew Enkelman
31 I found Mr Enkelman to be a credible witness with an impressive understanding of the technical issues affecting the Kenworth truck in question. He explained well, in layman’s terms, the more technical aspects of his report and the issues discussed in it. He was plainly well-informed about, and experienced in, dealing with commercial vehicles. I note that he was the ex-president of the Commercial Vehicle Industry Association of Australia and was directly involved in formulating Vehicle Safety Bulletin 6, which is pertinent to this proceeding. He answered questions directly and was not evasive. He was an honest witness. He was independent and there was no suggestion that he was biased or inappropriately favourable to the plaintiffs’ case. I preferred his evidence to that of Croser and Potts.
(ii) Jarrod Thompson
32 I accept that Thompson was an expert who was independent, unbiased and honest. He was impressive in the witness box, giving his evidence in a clear and cogent manner, dealing with each question on its merits and making proper concessions where appropriate. Thompson inspected the motorhome at a time when it was unfinished. To that extent, his report was less final in nature than other reports. Thompson identified defects in the motorhome at the time of his inspection, such as the inadequate jacks and the seatbelts. Later, improved jacks were fitted to the motorhome and the non‑compliant belts were removed. Thompson’s evidence carries less weight to the extent that his report was written at an earlier time. Although he did not participate in the expert conclave, his evidence was nonetheless of value.
(iii) Stuart Croser
33 I found that Mr Croser answered questions fluently and directly and appeared to be in command of his subject matter. As set out later in the judgment, his lack of independence and his conflict of interest caused me considerable concern. It was unfortunate that his independence was so significantly compromised and that the full extent of the compromise only became apparent when Mr Tonkin gave evidence. In the circumstances established by the evidence, I found it puzzling that Coastzone contended Croser’s evidence was independent.
(iv) William Potts
34 I accept that Potts was an independent mechanical engineer with experience across a range of fields, including vehicle accident analysis, analysis of design, mechanical failure, contract failure and accidents and anthropological issues, plant analysis, ergonomic and safety analysis. His report was detailed with extensive appendices. While I consider he was honest, there were aspects of his evidence which caused me concern:
· Potts did not state explicitly in his report that photographs he relied upon were not taken inside, or of, the subject motorhome but were taken in another, different, vehicle. Also, Potts did not reveal that a test which he conducted was not conducted on the motorhome but on another vehicle of different proportions.
· The wall and roof material which Potts tested was not taken from the motorhome, but was an off-cut from the defendant’s workshop.
· Potts did not say in his report that he simply presumed the off-cut material was the same as that used in the plaintiffs’ motorhome.
35 Potts was fluent when giving evidence-in-chief, but was notably less impressive in cross-examination. He was evasive, frequently failing to address the question directly and seeking to make little speeches or adding extraneous material to his answers. Potts found it difficult to answer questions to the following effect because he said that they were “too hard” or “not simple”:
“Do you agree that [the custom designed and built motorhome] is not a commercial vehicle designed to transport cargo?”
“Whether a Kenworth T408 to which a motorhome had been fitted is intended in your opinion for use as a cargo carrying vehicle?”
“Have you considered the durability of the vehicle or only whether it may safely be driven?”
“The windows and door are open or closed when the vehicle is moving?”
The demeanour and conduct of Potts while giving evidence was such that he did not give the court any confidence that he was a reliable witness whose testimony could be readily accepted.
(v) David Gray
36 The plaintiffs did not formally call this person as an expert, although they sought to obtain his views.
37 Through his company, Graystar Trailers Pty Ltd, Mr Gray’s primary business is building transport bodies and making laminated panels, mainly for refrigerated trucks. Gray said he had done this work for about 25 years. While I had no doubts about Gray’s honesty or the veracity of his evidence, it was not helpful or relevant, especially when he agreed that if the panels he supplied were not used in the subject motorhome, then his evidence was largely irrelevant. Given the date of the email confirming the order placed with Gray for panels, namely 5 July 2011, I consider it most unlikely that the panels delivered in response to that order were used in the motorhome. By that date, the motorhome was completed to the extent that it was at the cabinetmaker’s premises for the cabinetry fit-out.
38 I note that at one point, the plaintiffs appeared to be attempting to elicit some expert opinion evidence from Gray regarding the effect upon laminated panels of holes being cut in them. Given that there was no Order 44 statement served, I have not had any regard to Gray’s evidence in making the findings in this case.
(c) Objections to the expert evidence
39 The plaintiffs objected to parts of the expert evidence given by Messrs Croser and Potts. This area of the law is one which appears to be increasingly contested as parties seek to obtain an advantage from having some or all of the opposing experts’ reports ruled inadmissible.
40 In a recent decision of Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd,[1] Dixon J reviewed the provisions of the Evidence Act 2008 (Vic) and various authorities including the judgment of Heydon JA in Makita Australia Pty Ltd v Sprowles[2] and the High Court in Dasreef Pty Ltd v Hawchar[3] before summarising the steps needed to check that the expert evidence relied upon is admissible. His Honour concluded:
[1](2012) VSC 99
[2](2001) 52 NSWLR 705
[3](2011) 243 CLR 588
“98. In summary, the matters that will usually be considered at both stages of the inquiry that considers whether the exception under s79(1) renders opinion evidence admissible may conveniently be referred to as four ‘rules’ (one of which is in three parts), which are:
(a) is the opinion relevant (or of sufficient probative value) (the relevance rule);
(b) has the witness properly based 'specialised knowledge' (the expertise rule);
(c) is the opinion to be propounded 'wholly or substantially based' on specialised knowledge (the expertise basis rule);
(d) is the opinion to be propounded 'wholly or substantially based' on facts assumed or observed that have been, or will be, proved, or more specifically (the factual basis rules):
(i)are the ‘facts’ and ‘assumptions’ on which the expert's opinion is founded disclosed (the assumption identification rule);
(ii)is there evidence admitted, or to be admitted before the end of the tendering party's case, capable of proving matters sufficiently similar to the assumptions made by the expert to render the opinion of value (the proof of assumptions rule);
(iii)is there a statement of reasoning showing how the ‘facts’ and ‘assumptions’ relate to the opinion stated to reveal that that opinion is based on the expert's specialised knowledge (the statement of reasoning rule)?”[4]
[4](2012) VSC 99 at [93]
41 In this case, the defendant made no specific objection to the reports of Messrs Enkelman or Thompson.
(i) Objection to Croser’s evidence
42 Normally, parties call independent experts whose role is to assist the court in deciding issues which involve some area of specialised knowledge.
43 Here, Coastzone took the unusual course of calling a person who was not independent. Croser lacked independence in more than one respect. Firstly, he was the engineer whom Coastzone engaged to certify for government or regulatory purposes each motorhome manufactured by Coastzone. Hence, he had a lengthy pre-existing professional association with Coastzone.
44 Secondly, Croser certified in April 2013 the very motorhome the subject of the dispute in this case. Further, according to Tonkin, Croser gave engineering advice to Coastzone about the construction of this motorhome.
45 Thirdly, Croser visited the defendant’s premises periodically over the past 10 years – typically once every couple of months, but with varying frequency – and provided engineering advice to the defendant when sought from time to time. As a result, it was possible (as Croser acknowledged) that Coastzone might make a claim against Croser or his employer in respect of the advice he gave or the certification of the motorhome (or both) in the event that the court found that the motorhome was defective as not being fit for purpose or of merchantable quality.
46 The possibility of this eventuality puts Croser in a position of conflict – he has a vested interest in giving evidence which supports the position of Coastzone and himself.
47 Fourthly, Croser failed to draw a clear line between his role as engineering consultant to Coastzone and being an expert witness for the court. He certified the motorhome after being retained to provide the expert report. Also, he copied to the defendant, rather than the defendant’s solicitors, an email to Mr Ben Barter of PACCAR Australia Pty Ltd (“PACCAR”), the company which produces Kenworth trucks in Australia, even though it was sent in a context of obtaining information to include in his second expert report. The email itself uses the word “we” rather than “I”, which suggests his mind was focused more on the position of his client, Coastzone, and not on his role as a person providing expert assistance to the court.
48 For these reasons, I consider it inappropriate to give much weight to the views expressed by Croser.
49 Apart from the issue of independence, there are other aspects of Croser’s evidence which concern me.
50 The plaintiffs contended that Croser lacked the expertise to address all the matters in his reports. It was said that, by virtue of s79 of the Evidence Act 2008, opinion evidence which is based on specialised knowledge is admissible as an exception to the opinion rule in s75 of the Evidence Act.
51 For evidence to be admissible, the witness must have arrived at the opinion on the basis of training, study or experience. The evidence must be wholly or substantially based upon the specialised knowledge of the witness.
52 It appears that parts of the material filed by Croser concerned materials engineering, a field in which the evidence failed to disclose he possessed a specific expertise. This view was reinforced by that part of Croser’s report where he said that he conducted his assessment of the structural adequacy of the vehicle in consultation with his colleague, Graeme Burton. He referred to Burton’s qualifications and experience and his membership of certain professional organisations, presumably because they were material to the views being expressed. Croser himself has never been a member of these organisations.
53 To the extent that an expert consults with a colleague who possesses extra qualifications and experience, questions arise about the capability of the expert to express views on the topic the subject of the consultation and whether the expert is simply adopting the colleague’s opinion. Where there is confusion about the roles of the respective individuals, or lack of clarity that the expert relied upon is responsible for the report, and the report expresses the opinion held on the basis of the expert’s own knowledge, the court can reject the opinion.
54 In Cooke v Commissioner of Taxation,[5] where two experts wrote a report which acknowledged the existence of other uncalled persons who worked under the authors’ supervision, the court rejected the report because it was not wholly or substantially based on the specialised knowledge of the expert witness. The trial judge allowed the witness to give evidence only in relation to those parts of the report for which he had been responsible.
[5](2002) 51 ATR 223
55 Croser sought to explain the position with Burton in his oral evidence. He said that because the company for which he worked was accredited to the level of ISO 9000, it was a requirement from a quality assurance perspective that he have his work peer reviewed and verified by others. Because Croser and Burton together comprised the bulk of the automotive program expertise in the company, they reviewed each other’s work. Burton was 20 years senior to Croser. Although I accept that Croser and Burton together were recognised as engineering signatories for schemes in all States and Territories within Australia, it is not clear to me why Croser would need to support his report by referring to the qualifications and experience of Burton, especially when they appear to be materially different, and possibly more extensive, than his own unless they added something to the report.
56 Croser did not demonstrate that he had relevant expertise in materials engineering. I uphold the plaintiffs’ objection on that issue. To the extent that materials engineering is a distinct discipline or area of expertise and Croser sought to give evidence about the structural integrity of the motorhome based, at least to a marked degree, upon the assessment of the quality of the composite panels, I rule that evidence (which appears in Court Book 299) inadmissible. In so doing, I note that, even if that part of the page which remained after another objection had been accepted as valid, it would not have affected my view of the defendant’s case. This is due to the reservations I have about the independence and reliability of Croser’s evidence.
(ii) Objection to Potts’ evidence
57 Potts was entirely independent of Coastzone but the plaintiffs objected to parts of his report on the grounds that Potts did not demonstrate that he had the relevant expertise in materials engineering to offer opinions based on tests which he conducted upon materials which were said to be the same materials as those used in the motorhome. By letter dated 3 March 2014, the plaintiffs’ solicitors advised the defendant’s solicitors that they objected to summary point (f) at Court Book 306, section 7 of Potts’ report at Court Book 316−325, and Appendices 34−46.
58 Potts did not dispute, but indeed accepted, that there was a distinct field of engineering known as “materials engineering” or “material science”. The plaintiffs tendered a document indicating the availability of a four year undergraduate course at Monash University.
59 Potts stated that he had undertaken materials analysis up to about a dozen times since 1987. I consider that it is difficult to accept someone as having specialised knowledge in an area if the work said to give rise to the expertise has occurred only once every two years on average. Potts did not claim that he had any special expertise in the area and agreed or acknowledged that there were specialist engineering courses in the area and that it was a discrete field of work. He clarified the distinction between his skills and those of a materials engineer or scientist by explaining that he would use the work generated or produced by such people in undertaking his own work. Potts would rely on these other people to catalogue the properties of the material he was interested in. Accordingly, I reject Appendices 34−46 of Potts’ report as inadmissible, together with summary point (f) and section 7 of the report.
60 There is a further reason why, even if those appendices were admissible, they would be of little or no assistance to the court.
61 The tests which Potts relied upon for part of his report were on a sample of composite material. However, Potts could not say (and there was no other evidence to establish):
(a)that the sample used was from the same batch of panels used in the construction of the subject motorhome;
(b)how long the sample he used had been at Coastzone’s premises or the conditions in which it had been stored.
62 Although Potts said in evidence that the sample was cut from the panel which formed an exhibit in court, there was no basis stated for this – for example, he did not say that he cut off the material for testing or he saw it being cut off. As a result, the defendant has not established by proper evidence that the composite material is relevantly the same as that used in the walls and roof of the subject motorhome. Nor has the defendant established that the tested material was in the same condition as the material in the motorhome.
63 Potts’ evidence was notable in other respects as well. Firstly, his report referred to a test conducted about the adequacy of the air conditioning support in the roof. It emerged in cross-examination that the test of suspending a 75 kilogram man from an aperture in the roof to measure deflection was conducted not on Whijohn’s vehicle but on another smaller vehicle. This was not made explicit in the body of the report.
64 However, given the duty of the expert to assist the court, it would certainly have been helpful in a report comprising approximately 115 pages, including annexures, if the report made clear where the tests relied upon were not conducted upon the subject motorhome.
65 Also, it was only in cross-examination that Potts made clear both that the photos appearing in the Court Book in the lower half of page 386 and at page 387 were photos of a different vehicle from the subject vehicle, and that the photos of any slide outs were not the slide outs of the subject vehicle. While these omissions in the written report do not invalidate the report, they raise concerns about the reliability of the expert and his evidence.
66 The concern about reliability arose more starkly when Potts was being queried about the mounting on the motorhome and the application of force to the chassis and motorhome. Potts said that there were similarities between the motorhome and a Tautliner vehicle. A Tautliner vehicle often has a lightweight roof, with a steel frame around the body, curtained sides and a heavy steel floor. Potts said that the motorhome had a roof and walls with cut-outs, a rear frame with a cut-out and a cut-out to the cabin. When Potts was asked whether the cut-outs in the walls, being the windows and doors, were open or closed when the vehicle was moving, Potts was reluctant to agree that the doors were shut. His reluctance to answer created some controversy and the witness was asked to leave court for a short time while discussion ensued. Upon Potts’ return, it became apparent that his reluctance sprang from his view that, viewed from the perspective of a mechanical engineer, whether or not the door and windows were shut when moving was not material.
67 However, in circumstances where the court, not long before, had directed the witness that the usual procedure was for counsel to ask questions and the witness to answer them, it was unfortunate that Potts would not accept the direction, simply answer the question and wait for re-examination to add any further gloss. He should have given the obvious answer that the doors were not open when the motorhome was moving. The approach adopted by Potts was consistent with that of the expert who does not respond appropriately to questions and, in effect, becomes something of an advocate for his client’s position.
(c) Applicable regulations
68 The expert evidence is important because of the weight allowed on the front axle of the vehicle. The permissible weight for various sorts of vehicles is subject to certain limits. If the limits are exceeded, the vehicle cannot be lawfully driven on the road. The plaintiffs submitted that, pursuant to the Heavy Vehicle National Law Application Act 2013 (Vic), the Heavy Vehicle National Law, as enforced from time to time as set out in the Schedule to the Heavy Vehicle National Law Act 2012 of Queensland, applied to the vehicle as if it were an Act in Victoria and South Australia (the vehicle was registered in South Australia). Under the Heavy Vehicle National Law, the permissible limit for the steer axle or front axle is 6,000 kilograms. But there is an exception applicable to a heavy vehicle such as the Kenworth T480 under which, provided certain conditions are satisfied, the limit is increased to 6,500 kilograms. The conditions are set out Clause 1 of Schedule 3 of the Regulations to the Heavy Vehicle National Law legislation as follows:
(a)an engine complying with the emission control requirements contained in ADR80/01 (Euro IV Engine) or a later version of ADR80;
(b)a front under-run protection device that complies with UN ECE Regulation No 93 or ADR84 – front under-run impact protection;
(c)a cabin that complies with UN ECE Regulation No 29 (“R29”);
(d)appropriately rated tyres, axle and suspension to permit 6.5 tonne on the steer axle;
(e)a GVM (Gross Vehicle Mass) of 15 tonne or more.
69 The defendant submitted that the Heavy Vehicle National Law was not relevant until after 1 September 2013. I note that, by proclamation, the Heavy Vehicle National Law did not come into effect in Victoria until 10 February 2014 (and this was Enkelman’s understanding).[6] The Heavy Vehicle National Law also did not come into effect in South Australia until that date.
[6]Heavy Vehicle National Law Application Act 2013 (Vic) s2 concerns commencement
70 According to Croser, pursuant to South Australian law at the relevant time, testing for R29 compliance applied only to the occupant section of a vehicle’s cabin, rather than “other elements” of the vehicle (by which Croser meant, amongst other things, the sleeper compartment).
71 It was on the basis of the Heavy Vehicle National Law’s application to the vehicle that the plaintiffs contended that Croser’s evidence as to the applicable law, in particular with respect to compliance with R29, ought be rejected. To the extent there was a distinction between the law as Croser presented in evidence and that contained in the Heavy Vehicle National Law, the plaintiffs submitted, this difference was moot because the latter prevailed in relation to the vehicle the subject of the proceeding.
72 In forming his opinion, Croser relied upon an application of relevant heavy vehicle law as in force in South Australia – being the State in which the vehicle was registered – as at the time of the vehicle’s registration. The relevant law, according to Croser, was in the form of a Notice of Approval and Exemption issued by the Minister for Transport pursuant to sections 161A and 163AA of the Road Traffic Act 1961 (SA). Clause 2.11 of “Notice of Approval and Exemption – 6.5 Tonne Steer Axle Mass Limit for Heavy Vehicles” provides:
“2.11.To be subject of and for the purposes of this Notice, an eligible vehicle must:
2.11.1. not be a bus; and
2.11.2. be rated at 15 tonne or more gross vehicle mass; and
2.11.3. comply with front underrun protection to UN ECE regulation 93; and
2.11.4. comply with cab strength to UN ECE regulation 29; and
2.11.5. comply with emission levels to Australian Design Rule 80/01 or later edition; and
2.11.6. have any protrusion certified by a competent entity as complying with front underrun protection to UN ECE Regulation 93; and the protrusion be plated accordingly; and
2.11.7. be fitted with an Approval Plate.”
73 It seems the better view is that the Heavy Vehicle National Law did not apply in South Australia and Victoria until February 2014, which was after the time at which the motorhome vehicle was certified. However, whether that law or the law set out in paragraph 72 was applicable, in each case compliance with R29, at least as to cabin strength, was required if the vehicle were to obtain an exemption allowing the weight on the steer axle to range between 6,000 kilograms and 6,500 kilograms. The experts agreed that all other relevant criteria were satisfied.
(d) Weighing of the vehicle
74 Since 2012, the vehicle, including the motorhome, has been weighed on several occasions as follows:
Date Front Axle Rear Axle Occupants 11 March 2014
Boral
6,120 12,100 Nil 11 March 2014
Boral
6,300 12,140 2 11 March 2014
GTS
6,160 12,140 Nil 11 March 2014
GTS
6,320 12,180 2 12 August 2013 6,600 11,120 2 15 August 2013
GTS
6,380 11,080 1 7 August 2012
Boral
6,320 12,220 Unknown
75 The parties jointly arranged the 11 March 2014 weigh-ins at Boral and GTS with full tanks and either two or no occupants. Enkelman arranged the 12 August 2013 weigh-in. Tonkin made arrangements for Coastzone’s employee, Powell, to conduct the 15 August 2013 weigh-in a few days later at GTS. It appears that White organised the weigh-in at Boral on 7 August 2012.
76 From those results, it is apparent that the weight on the steer axle is usually between 6,000 and 6,500 kilograms, although the weigh-in arranged by the plaintiffs’ expert, Enkelman, in August 2013 achieved 6,600 kilograms, which exceeds the highest permissible weight even allowing for the operation of the exception.
77 In addition to the above figures, the applicable Australian Government Department of Infrastructure and Transport Circular 0-4-12 requires an allowance of 60 kilograms for the personal effects of each occupant. This weight is to be added to the above figures, with the weight distributed equally over the front and rear axles. According to Enkelman in his report dated 12 August 2013, the Recreational Vehicle Association would allow 400 kilograms for personal effects, provisions or other additional weight.
78 The same Government Circular specifies an allowance of 68 kilograms per passenger in the vehicle. It is not clear from the evidence whether the two occupants who are referred to in the weigh-ins conducted in March this year weighed more or less than the permitted 136 kilograms.
79 While the weigh-ins conducted at Mildura during the trial are the most recent and the least controversial, to the extent that at least one representative from each party was present at the time, the earlier weigh-ins cannot be ignored. They are relevant in at least two respects. First, the result achieved on 12 August 2013 means the motorhome could not lawfully be driven on Australian roads. There is no evidence before me of what took place between that date and March 2014 to explain the difference in weight between last year and this year.
80 Second, the results for 12 August 2013 and 15 August 2013 show that the rear axle weight is approximately 1 tonne less than the results for August 2012 and March 2014. Again, there is no evidence to explain the difference. This change in the rear axle weight is intriguing for a couple of reasons. First, the vehicle was completed and certified by about April 2013. No further work should have been performed on the motorhome after certification. Also, the motorhome has been in the defendant’s possession throughout the period from April 2013. To the extent that there has been a substantial change in the rear axle weight, it is unlikely to have happened without the knowledge of the defendant.
81 Late in his cross-examination evidence, Tonkin alleged that the different weights were explained by Enkelman emptying the water from the tanks on the motorhome before weighing it and putting extra load on the front end.
82 I reject Tonkin’s allegation. First, it is a serious allegation which, if the defendant wished genuinely to pursue, ought to have been put to Enkelman when he gave evidence. The plaintiffs are correct to contend that there was no attack on Enkelman’s expertise or independence when he gave evidence. The cross-examination was directed to showing that the conclusions Enkelman reached were incorrect while those of the defendant’s experts were correct. That being so, the defendant cannot raise substantial allegations at a late stage of the trial when Enkelman was given no opportunity to deal with the point. Neither the specific allegation of dumping the water, nor the allegation that the weight recorded by Enkelman was inaccurate, was raised with Enkelman in court.
83 Second, Tonkin’s evidence does not explain the results of the weigh-in on 15 August 2013 when Tonkin himself arranged the weigh-in by GTS Freight Management after the 6,600 kilograms result a few days earlier. The defendant’s evidence was that, at the weigh-in, the vehicle had full water and fuel and there was only one occupant. If this is correct, then it suggests that there must be some other explanation for the weight difference.
84 Having regard to the purpose for which the motorhome was to be used and especially White’s desire to live a more nomadic existence in outback or remote Australia, I think it appropriate to make a higher, rather than lower, allowance for personal effects. This Kenworth truck is not simply a prime mover; it is White’s mobile home. Using the same proportions as set out in Government Circular 0-4-12, 200 kilograms would be added to each of the front and rear axles to allow for personal effects in the motorhome.
85 Another relevant contingency is White’s desire to have another couple travel with him and his partner. I infer this from the specification requiring at least two seatbelts in the body of the motorhome, so people can be safely transported on the road. Allowing an average of 68 kilograms per passenger adds another 136 kilograms to the weight of the motorhome. Again, I distribute this weight equally over the front and rear axles.
86 If one allows an extra 268 kilograms on the front axle weight, comprising half the combined weight of the personal effects and half the weight of two passengers, then it has potentially significant impact on the table at paragraph 73 and the consequential utility of the motorhome. Taking each weigh-in result in turn from paragraph 73, the results are as follows:
(a)6,120 kilograms front axle weight plus 268 kilograms, plus 136 kilograms for two occupants riding in the driver compartment ─ 6,520 kilograms;
(b)6,300 kilograms front axle weight plus 268 kilograms ─ 6,568 kilograms;
(c)6,160 kilograms front axle weight plus 268 kilograms, plus 136 kilograms for two occupants riding in the driver compartment ─ 6,560 kilograms;
(d)6,320 kilograms front axle weight plus 268 kilograms ─ 6,588 kilograms;
(e)6,600 kilograms front axle weight plus 268 kilograms ─ 6,868 kilograms;
(f)6,380 kilograms front axle weight plus 268 kilograms, plus 68 kilograms for additional occupant riding in the driver compartment ─ 6,716 kilograms; and
(g)6,320 kilograms front axle weight plus 268 kilograms ─ 6,588 kilograms.
With this final entry, it was unknown whether there were any occupants in the vehicle at the time of weighing. If there were no occupants or only one occupant in the driving compartment of the vehicle at the time, then the front axle weight would increase by 68-136 kilograms.
87 In arriving at these figures, I have used the government mandated weight of 68 kilograms per person. However, having observed White and his partner at close quarters during the trial, I take judicial notice of the fact that White was a large man whom I would expect to weigh in excess of 100 kilograms. His partner was a woman of mature years and not an anorexic teenager. I estimate she would have weighed around 60 kilograms. Whatever the precise weights of the individuals were, I expect that their combined weight would have exceeded the notional allowance of 136 kilograms.
88 The upshot of this discussion is that, to the extent that the front axle weight exceeded 6,500 kilograms, the motorhome could not be driven on roads in Australia, even if it complied with R29. Consequently, the motorhome would be confined to the defendant’s premises unless it could somehow be relocated without being driven. Further, unless the motorhome’s front axle weight complied with R29 (or at least the cabin strength component), then it could not be driven if the weight exceeded 6000 kilograms.
(e) Whether the vehicle complied with R29
89 R29 deals with the safety of, or protection provided by, the cabin of the heavy vehicle truck. Unless the cabin complies with the cabin strength requirement in R29, then the maximum permissible limit on the front axle is 6,000 kilograms.
90 The parties agreed that:
(a)the cab section of the vehicle, which comprises the engine/bonnet area, driving compartment and the sleeper section, is an integrated cabin;
(b)when the cab chassis left the Kenworth factory, it complied with R29.
91 An important question is whether the later modification to the sleeper component of the cabin affected that compliance.
92 Croser says that the initial approval for R29 remains intact even after the hole was cut in the rear panel of the sleeper cabin to enable people to walk from the sleeper into the motorhome without having to go outside.
93 In his first report, dated 11 July 2013, Croser said that the sleeper cabin was not included in the R29 cabin strength certification for the vehicle. Hence, the modifications to the sleeper section had no effect upon the certification of the vehicle as compliant with R29.
94 Croser gave oral evidence to similar effect, namely, that for the purposes of R29 compliance the sleeper cabin was not part of the vehicle cabin. He said that R29 was designed to test for a specified level of occupant protection for the seated occupants and not anyone in the sleeper compartment. Croser said that a manufacturer like Kenworth with each model of prime mover would offer variations, some with and some without the sleeper cab. The manufacturer therefore tested the worst case scenario on the main driving cabin. Provided that the driving cabin met the applicable standard in R29, then the manufacturer could offer variations which included additional structures such as the sleeper cabin without having to do more testing. By way of contrast, if the testing were done with the sleeper cabin attached or included, then more testing would be needed if the vehicle were sold without that sleeper cabin. As Croser said:
“It’s very easy to put a case to a regulator that if you’re adding structure to a vehicle it’s improving the situation.”
95 In his second report dated 15 August 2013, Croser said:
“The effect of the modification to the sleeper cabin by the installation of the access aperture through to the motorhome compartment has been discussed with Kenworth Trucks Australia. Their opinion is that the modification is consistent with that which they do to Kenworth’s Trucks of this model for supply as mobile home/cab/chassis vehicles, and were supportive of the view that it has not degraded the cabin strength as asserted by Mr Enkleman.”
96 The plaintiff subpoenaed two witnesses from Kenworth to give evidence: Gary Leckie, the Application, Test and Certification Manager at PACCAR, which manufactures Kenworth vehicles in Australia; and Ben Barter, Test and Certification Technician at PACCAR. Leckie is Barter’s senior boss.
97 The evidence of Leckie and Barter was informative. I accept that each of them was truthful and I have no doubts about accepting their evidence. Each of them answered questions directly and appeared to be reliable and well-informed.
98 Leckie was shown photos of the subject motorhome and, in particular, the area in which the rear of the sleeper wall was cut out to make an entrance into the motorhome. Leckie said that it looked like the rear panel of the cabin had been substantially reduced and probably some of the reinforcement removed. The central cross supports were removed. He said that he regarded the work done as a modification of the sleeper cabin. He said that PACCAR, to the best of his knowledge, had not undertaken any strength calculations or computer simulations to satisfy itself that the modified vehicle complied with R29. He was not aware of Kenworth undertaking any other investigations to so satisfy itself. Nor had Kenworth liaised with any approval authority in relation to the modified cabin.
99 In cross-examination, Leckie explained that while it did not normally supply a cab chassis with a cut-out at the rear of the sleeper cabin, Kenworth was capable of supplying such a vehicle if sought by a customer. But he noted that for the company to do this, it would effectively be a new model and would have to be completely engineered.
100 Leckie explained that Kenworth built two kinds of sleeper cabin, an integrated one and a modular one. In the integrated version there was no join – the engine/bonnet area, driver’s compartment and sleeping cabin simply comprised a single unit. The modular sleeper was a separate item from the cab and sat on a separate set of mounts on the frame behind the cab. It was joined to the cab by a flexible rubber seal. This case concerns an integrated cab.
101 Leckie explained the reference to “engineering” as meaning there would have to be a new design for the proposed cabin – it was in effect a new model. With the new design, Kenworth may, or may not, do a finite element analysis to check the strength of the cab structure.
102 An important aspect of Leckie’s evidence was as follows:
“Q: With modifications of the sleeper cabin are you likely to affect compliance with R29?---
A: Couldn’t comment on that unless it was tested.”
103 Leckie was clear that as the Application, Test and Certification Manager, he could not comment on whether the cabin as modified complied with R29 unless and until it was tested. The significance of this evidence is that I regard it as being contrary to, or inconsistent with, the view expressed by Croser regarding the irrelevance of the sleeper cabin to the issue of R29 compliance. If Croser were right, then one would have expected Leckie to say something to the following effect: the sleeper cabin was irrelevant to R29 compliance; Kenworth had tested the cab chassis previously and that part of the cab occupied by the driver was compliant; whether or not the rear wall of the sleeping section of the integrated unit had a cut-out made no difference to the R29 compliance; once the driver section of the cab was shown to be compliant, no other testing was necessary until that part of the vehicle was modified. But Leckie said none of these things. His answer suggested that the position adopted by Croser is incorrect.
104 I also note that the defendant did not put to Leckie in cross-examination its theory about the irrelevance of the sleeper cab. In order to make good this point regarding R29, the defendant has relied primarily, if not wholly, on Croser’s evidence. To not raise the matter with the manufacturer’s representative responsible for Application, Test and Certification, seemed a material oversight. This was especially so when Croser sought to support his views about the sleeper cabin in part by reference to the views of Kenworth.
105 In his evidence, Barter said that if a party other than Kenworth modified a Kenworth cab chassis, and the modification caused a failure in the cab chassis, Kenworth would cover the failure under warranty provided the modification complied with the guidelines for bodybuilding standards. However, if the motorhome body were mounted to the chassis in a manner which did not comply with the recommendations in the Kenworth Guide, that might affect the warranty coverage.
106 Barter was referred to an exchange of email correspondence between himself and Croser on 15 August 2013. I note in passing that neither Coastzone nor Croser revealed these emails in the discovery process. Rather, they were produced as a result of a subpoena on one of the plaintiffs’ expert witnesses.
107 Barter said that his recollection of the emails was a bit vague as he had not kept a record of them himself. He believed that Croser said to him that he had been approached to do some engineering work on a matter and he wanted Kenworth’s advice.
108 After the phone discussion, Croser sent Barter an email on 15 August 2013 at 12.57pm. The email read as follows:
“Thanks for your time on the phone a few minutes ago.
As discussed, Wirraway Motorhomes have constructed a Motorhome body onto a Kenworth T408 cab chassis. As part of the conversion, a doorway has been formed in the rear of the Kenworth sleeper cabin. I have attached some photos that show the aperture. The sketch depicts the framing of the aperture using aluminium angle section.
The Kenworth cabin is originally certified as compliant with ECE R29 and Wirr-away were originally advised that the proposed sleeper cabin modifications were unlikely to affect compliance with this standard for the subject vehicle.
I understand the position of Kenworth being a full volume vehicle manufacturer that each combination of vehicle cabin has been tested and in accordance with ‘normal procedures’ evidence processes, and therefore any variations or modifications have to be verified by test also.
However, in this case we are not seeking Kenworth certification, but rather some assistance in quantifying the effect on the original certification of the modifications that have been undertaken. We need to be able to provide satisfactory analysis or thorough statement from Kenworth that the modifications don’t result in the vehicle being unable to comply with ECE R29.
This is of prime importance, since the owner specified, and Kenworth provided, a vehicle that cannot be operated with the fuel tanks filled without exceeding the 6000kg statutory front axle limit. Wirr-away have fitted the vehicle with a compliant Kenworth FUPD which means that with the ADR 80/02 engine and ECR R29 cabin strength certification, we can access the statutory provisions to operate the vehicle at the 6500kg front axle limit.
I’ll be available in my office all afternoon today. If reception tell you I am not taking calls, please let them know that I am taking your call.
As discussed, we only have today and tomorrow to answer this item that has now presented itself as an issue.”
109 By email dated 15 August 2013 at 1.50pm, Barter responded as follows:
“As a full volume manufacturer, Kenworth tests and certifies all variations of trucks that it designs and builds. If a third party wishes to modify our vehicles in certain ways then it may be altering the original design and therefore render the compliance void.
Wirraway Motorhomes has modified a Kenworth T408 with a 36” Integrated sleeper cab to accept a motorhome body extension. A portion from the rear of the sleeper box has been removed to facilitate a walkway between the cab and accommodation space.
Majority of the original cabin cross-supports remain and weakening of the rear wall is unlikely to occur due to OEM parts still in situ.
Kenworth also manufacturer (sic) a conventional cab with rear cutout similar to those modifications made by Wirraway Motorshomes (sic) on chassis 442655. This cab can be mated to a Kenworth designed and built modular sleeper box or a third party manufactured article.
I am satisfied that our conventional cab with a rear cutout is often used in combinations like this motorhome and is fully ECE R29 compliant.
Please note that OEM specified cab mounting hardware must also remain in place for ECE R29 compliance.”
110 When asked how he knew, as referred to in his email, that the majority of the original cabin cross supports remained, Barter said that that was what Croser had told him. Barter said that if those cross supports did not remain, then he would have changed his opinion and said that it was most likely that the modified cabin was not compliant with R29.
111 When asked whether he was satisfied that the Kenworth cab with a cut-out between the cab and sleeper complied with R29, Barter said that he was because it had been tested and certified. In relation to the particular vehicle in this case, he said that technically he did not think the modified vehicle did comply with R29 but if it did, it would be because of his assumption that the cabin cross supports remained in place.
112 Barter’s cross-examination focused not so much on the position of the modified vehicle with respect to R29 but upon the issue of whether, when installing the motorhome, the defendant had satisfied the Kenworth Guide regarding the fixing of the body mounting method. Barter said he could not really comment on that because he did not build the motorhome. He agreed that if the sub-frame of the motorhome had been attached to the Kenworth in accordance with the guidelines, then it would probably not affect the Kenworth warranty. However, he said that it all depended how the work was done. If, for example, the manufacturer of the motorhome had not used the existing holes in the chassis or had welded the frame where there were no holes, then that would not accord with the guidelines.
113 Barter’s evidence extended also to an email from Amanda Tonkin (the wife of the director Robert Tonkin) of the defendant to Stefan Farkas of PACCAR, in which Mrs Tonkin asked, amongst other things, for clarification on whether a sleeper cabin modification affected the R29 compliance.
114 By email on 14 August 2013 at 2.19pm, Farkas forwarded the email to Barter asking him to answer the R29 question.
115 Barter responded to the email at 2.33pm the same day by saying:
“A sleeper cabin modification is likely to affect the ECE R29 compliance. However this specification is not legally required for anything other than hauling 26 metre B doubles, so you should be fine.”
116 Having regard to the evidence of Leckie and Barter overall, I am not satisfied that the statement of the position by Croser in paragraph 95 above is a fair or accurate representation of their evidence. While the issue of the modification to the sleeper cabin by reason of the access aperture was raised, I do not regard the Kenworth representatives as saying that the modification is consistent with what Kenworth itself does for this model when supplying it as a mobile home cab chassis. Nor do I regard the Kenworth witnesses as clearly supporting the view that the creation of the access aperture in the rear wall of the sleeper section of the integrated cabin has not degraded the cabin strength. As I understand the evidence, Leckie said he could not know whether this was the case without testing and Barter intimated that his view was dependent upon whether or not the cabin cross supports remained in place (and if they were not, then the modified cabin was probably not compliant).
117 There was evidence to the effect that the cross supports were no longer in place after the rear wall of the sleeper cabin was modified to produce a walkway into the motorhome. Enkelman said that some of the vertical columns and cross members had been cut out to create the access to the motorhome. He added that no steps were taken to later reinforce the hole which was created. At least two of the horizontal cross members were removed to create the aperture. Enkelman was of the opinion that the very action of cutting a hole in the rear wall of the structure thereby degraded it. Also, cutting the aperture constituted a modification of the vehicle.
118 Leckie, having examined photographs and a colour diagram which represented the cabin wall, was non-committal in concluding whether reinforcements in the rear of the sleeper cabin had been reduced due to the quality of the photos but he did say that if two purple cross supports shown on the diagram had been removed, then it would affect the structural integrity of the rear panel.
119 Harmon, who spent considerable time working on the motorhome, said that he used an angle grinder to cut through beams to create the hole in the rear wall of the sleeper. Some of the structures cut extended the whole or part of the way from the roof to the floor and some from one side to the other. Harmon said he created a hole which was about 800−900mm wide and 180−200cm tall.
120 Tonkin said he told his staff not to cut through certain aluminium beams.
121 Croser agreed that the photos supported Harmon’s evidence about what he cut through. The only cross supports which Croser identified as remaining in place were the pillar structures directly behind the door apertures and other structures which attached to the cabin at floor level.
122 From this evidence, I infer that Croser acknowledged or accepted that at least some, if not all, of the other vertical and horizontal cross supports, which were formerly located where the aperture now is, have been removed.
123 I consider the weight of evidence supports the finding, and I do find, that most if not all of the cabin cross supports were removed in order to create the walk-through entrance from the cab into the motorhome. On the basis of this finding, more likely than not, Barter’s view would have been that the modified cabin did not comply with R29 and would not have satisfied the cabin strength requirements it laid down.
124 Having regard to the whole of the evidence on the R29 issue, I consider it more likely than not that the modified cabin on the motorhome did not satisfy the requirements of R29. As a result, the front or steer axle of the motorhome could not lawfully be driven bearing a weight greater than 6,000 kilograms. Because all the weigh-in results since 2012 exceeded 6,000 kilograms, this creates a major issue for Coastzone.
125 In this context, I note the difference between the ultimate burden of proof and the evidential burden. Plainly in a civil claim, the plaintiff bears the onus of proof to establish its case on the balance of probabilities. But the evidential burden can shift at different times. For example, a plaintiff might adduce evidence which if accepted would entitle it to succeed if the defendant called no evidence. Hence, should the defendant fail to call any evidence, it will not have responded to the shift of evidentiary onus and will fail. As put in Halsbury’s Laws of Australia:
“The proponent of an issue discharges the evidential burden by adducing prima facie evidence. If the tribunal of fact believes that evidence, the inference of the existence of the fact may or may not be drawn. If the opponent does not adduce evidence it runs a risk of losing on that issue. The shifting of the evidential burden from the proponent to the opponent means that after the proponent has adduced prima facie evidence of a matter, the opponent should adduce some evidence as a matter of common prudence so as to prove the matter to the contrary or throw its existence into doubt. The opponent may achieve this by adducing evidence in its own case or by cross-examination in the proponent’s case …”[7]
[7]LexisNexis Butterworths, Halsbury’s Laws of Australia, Vol 13 (at 1 April 2014) 195 Evidence, ‘1 Preliminary Matters’ [195-360]
126 Also, the shifting of the onus of proof has been described in the High Court in the case of Purkess v Crittenden,[8] where it was held:
“The expression ‘burden’ or ‘onus’ of proof, ‘As applied to judicial proceedings … has two distinct and frequently confused meanings: (1) the burden of proof as a matter of law and pleading – the burden, as it has been called, of establishing a case, whether by preponderance of evidence, or beyond a reasonable doubt; and (2) the burden of proof in the sense of introducing evidence” (Phipson on Evidence, 10th ed (1963) par 92). This is a proposition which has been frequently acknowledged (See eg Fitzpatrick v Walter E Cooper Pty Ltd and Mummery v Irvings Pty Ltd). The proposition is, we think, correctly stated by the learned author of the work to which we have referred when he says: ‘the burden of proof in the first sense is always stable, the burden of proof in the second sense may shift constantly, according as one scale of evidence or the other preponderates’ (ibid par 95) and it was with the meaning of this expression in its secondary sense that the case mentioned was concerned.”[9]
[8](1965) 114 CLR 164
[9]Ibid at 167-168 (emphasis in original)
127 Here, the plaintiffs have established that:
(a) when the finished motorhome is weighed with full fuel and water, the steer axle weight exceeds 6,000 kilograms;
(b) at this weight, it is unlawful to drive the motorhome on Australian roads.
(c) there was evidence to support the view that the cabin on this vehicle did not comply with R29 or, at least, the cabin strength requirement in R29.
128 The defendant, if it chose, could have adduced evidence to show that the motorhome attracted the exemption which compliance with R29 conferred, and hence, the steer axle weight could have been up to 6,500 kilograms. However, the defendant neither proved this nor created, by reference to other evidence, any sufficient basis to find against the position established by the plaintiff.
129 I find that the defendant has failed to satisfy the evidentiary burden insofar as it had to demonstrate that the vehicle’s cabin complied with at least the strength requirements of R29 in circumstances where the plaintiffs had adduced evidence to support the proposition that it did not.
Breach of Contract
130 The plaintiffs rely upon four main points to contend that the motorhome supplied was defective and did not satisfy the contractual agreement with the defendant:
(a)the front axle weight problem;
(b)the motorhome was not properly mounted to the chassis;
(c)the motorhome was not structurally sound; and
(d)the motorhome could not carry at least two other passengers in addition to White and his partner.
131 To buy a Kenworth T480 prime mover as a base for a motorhome costing about $300,000 is a substantial investment. The combined cost of the base (as modified by Metalworx) and motorhome is approximately $600,000. Tonkin said that he was able to supply a motorhome which satisfied the requirements which White discussed with him when he met and showed him a plan around February 2010. The tour of the workplace and the reference to the A class motorhome and brochure confirmed that Coastzone was in the business of building motorhomes and had the ability and capacity to produce a well-appointed product.
132 In those circumstances, I consider that it would be reasonable for a purchaser in White’s position to expect several things
133 Firstly, White could expect that the motorhome could be lawfully driven on Australian roads. Even Tonkin said that if a customer asked for something that could not be built or was illegal to drive on the roads, then he would tell the customer. Also, he agreed that he as the manufacturer was responsible to deliver to a customer a vehicle capable of being driven on public roads.
134 To that extent, he appeared to have a different view from Potts, who said that Coastzone as manufacturer was not responsible for delivering to a customer a vehicle which the customer could drive out of the factory. Potts said that the loading on the front axle could not be the responsibility of the constructor. The constructor did not have responsibility for determining where items were placed in the motorhome. Potts’ view seems to me quite unrealistic – why should a customer pay for a motorhome which could not lawfully be driven from the manufacturer’s premises?
135 In his evidence, Croser initially said that it was the driver’s problem to ensure that the front axle load was less than 6,500 kilograms. He said the manufacturer bore no responsibility for delivery of a vehicle which, with full fuel and water tanks, weighed less than 6,500 kilograms. His view was that if the fuel and water tanks were empty but the vehicle nonetheless weighed more than 6,500 kilograms, then the manufacturer did have a problem.
136 Croser later modified his position to the extent that he said if the vehicle could not be driven with a reasonable amount of fuel and the water storage, then that was the manufacturer’s responsibility.
137 Secondly, White could expect that the motorhome was capable of carrying sufficient fuel and water to enable the owners to remain free camping in the bush for extended periods without the need for replenishing supplies.
138 Thirdly, White could expect that the quality of the workmanship was good and there were no defects in the motorhome – whether due to a poor mounting or lack of roof drainage or inadequate stability against the physical forces to which the motorhome would be subjected.
(a)Front Axle Weight Problem
139 Tonkin said that weight was an issue which the defendant took into consideration when building the motorhome. But the motorhome was not weighed during construction. Tonkin said he calculated the expected front axle load of the vehicle before construction but not after. He said that Coastzone’s general practice in weighing a vehicle before registration and delivery was to have the fuel and water tanks full.
140 The front axle issue has been discussed already at some length in the judgment.
(b)Mounting of motorhome on chassis
141 The chassis on the Kenworth T480 is designed to cope with a level of twisting. To a degree, it is torsionally flexible. The motorhome is agreed by Enkelman, Thompson and Potts to be a semi-rigid structure. Kenworth has produced guidelines on how bodies of different kinds are best mounted on a Kenworth chassis. With a semi-rigid body, Kenworth recommends a Type C mounting which is vertically flexible. Section J of VSB 6 also recommends body mountings with some vertical give.
142 Here, the defendant attached the motorhome to the Kenworth chassis not using a Type C mount but a rigid mount. As a result, forces operating upon the chassis are transmitted to the motorhome. Had a more flexible mounting been used, this would not have occurred or, at least, not to the same extent.
143 Enkelman was emphatic in his evidence that a flexible mounting should be used, and without it the motorhome was likely to suffer premature cracking.
144 Partly because of the logic underlying Enkelman’s position, and partly because I have reservations about the evidence of Croser and Potts, I prefer the evidence of Enkelman. Accordingly, I find that the probable result of using a rigid mount and not a more flexible Type C mount for the motorhome is that the forces passing through the chassis to the motorhome will cause premature cracking in the motorhome.
(c)Structural soundness of motorhome
145 The plaintiffs complain that the motorhome is structurally unsound in several respects: there is no independent frame for the walls and roof; the roof panels are weakened by the holes cut to accommodate machinery and are otherwise not adequate to bear the weight and forces to which they will be subject; the roof design will cause water to pool on the roof creating extra weight and stresses on the roof.
146 The motorhome walls and roof comprise a Styrofoam core and fibreglass outer skin. There is no steel frame against which the panels are anchored nor are there cross beams to support the roof.
147 The defendant’s experts say that the method of construction of the motorhome and the structural strength of the roof are satisfactory and there is no basis for the plaintiffs’ allegations. The defendant points to an absence of complaints over more than 10 years about any structural failings with the motorhome. While I accept that there may have been no complaints about other vehicles constructed using the same method, I note that the defendant has not previously built a motorhome of this size. The defendant’s argument would be significantly more persuasive if the defendant could point to similarly sized motorhomes which it had built and which the owners had used for at least 10 years without any difficulty.
148 There is a dispute about the impact on the roof of cutting holes to insert air‑conditioners and other items such as solar panels, a satellite dish and TV antenna. These items, together with cabling created with the roof panel itself, a static load of approximately 340 kilograms. Enkelman’s evidence was that the dynamic forces stemming from lateral, vertical and cornering movements would ultimately destroy the body where it lacked an internal steel frame and cross member support for the roof. Enkelman also referred to the cant rail and front and rear turret corner frames being about 8 millimetres higher at the edges than the top of the undeflected roof panel. Due to the height discrepancy and the absence of a drainage system, Enkelman opined that water would collect on the roof and this could add up to a further 250 kilograms to the weight on the roof.
149 Tonkin sought to counter Enkelman’s comments about the 8 millimetre lip on the roof and the weight of the water which would accumulate. Tonkin said that the cant rail was only about three millimetres thick and, in any case, there were drainage points on the roof. Although Enkelman was challenged in his evidence about the measurement, I accept his evidence on the point. I also accept that there was no drainage system in the roof at the time of his inspection.
150 The plaintiffs pointed to the evidence and photos of a pole being used to support the roof of the motorhome during construction. While this would not be determinative of the strength of the roof, where there is a need for roof supports when there were cut-outs in the roof (albeit Tonkin says a support was required on occupational health and safety grounds), I would not imagine that the need for support substantially diminishes once the air conditioning units and other equipment is actually installed on the roof and the motorhome is put into daily use.
151 The defendants appeared to agree that when building the motorhome, it used the same technique and method normally employed on its smaller models. In effect, it simply scaled up the project to accommodate the larger size of this motorhome without examining in any detail if that methodology were appropriate in the circumstances.
152 The absence of internal supports within the roof and wall structure was obvious when one considered the photos of the motorhome being built for another customer of the defendant who wanted a recessed awning. That motorhome had steel reinforcement included in the walls and roof. It is readily conceivable that the extra strength and stability which would flow from this would assist in having a structurally sound motorhome. On balance, I think it more probable than not that the motorhome is not structurally sound.
153 Having regard both to the evidence of Enkelman and my reservations about the defendant’s experts, I prefer the evidence of Enkelman. I find it is more likely than not that the motorhome was not structurally sound and would fail prematurely.
(d)Passengers
154 It is common ground between the parties that:
(a)there are seatbelts installed in the motorhome for two people;
(b)previously, two other belts were installed in the body of the motorhome but because Croser did not approve the manner of fixation within the motorhome, those belts were later removed.
155 I accept White’s evidence that from the outset he specified at least four seatbelts so that the motorhome could transport not just himself and his partner but at least two other persons. To the extent that White was unable to travel with friends or extend hospitality in a way which involved driving people in the motorhome, the work of the defendant was unsatisfactory and did not meet contractual requirements.
Legal claims
156 The plaintiff has made claims against the defendant for breach of contract including terms implied by statute as follows:
(a)a claim under s19(a) of the Goods Act 1958 (Vic) that the goods were not reasonably fit for purpose;
(b)a claim under s19(b) of the Goods Act 1958 (Vic) that the goods were not of merchantable quality;
(c)an alleged breach of the statutory guarantee in s54 of the Australian Consumer Law[10] that goods supplied to a consumer are of acceptable quality;
(d)an alleged breach of the statutory guarantee in s55 of the Australian Consumer Law that goods supplied to a consumer are reasonably fit for any purpose the consumer made known to the supplier;
(e)an alleged breach of the statutory guarantee in s56 of the Australian Consumer Law that if a person supplies goods in trade or commerce by description to a consumer (and the supply does not occur by way of sale by auction), the goods correspond with the description.
(a) Section 19(a) of the Goods Act
[10] As contained in Schedule 2 of the Competition and Consumer Act 2010 (Cth)
157 Pursuant to s19 of the Goods Act 1958 (Vic) where a buyer, expressly or by implication, makes known to the seller the particular purpose for which the goods are required, so as to show that the buyer relies on the seller’s skill or judgment, and the goods are of a description which it is in the course of the seller’s business to supply, there is an implied condition that the goods shall be reasonably fit for such purpose.[11]
[11]The proviso to this provision is irrelevant in the context.
158 In this case, Coastzone, in its final submissions, acknowledged that the inherent purpose of a motorhome is to live in it, temporarily or permanently, and travel by road in the motorhome. Coastzone further acknowledged that White told Coastzone that he was going to tow a heavy trailer with the motorhome. Coastzone’s website refers to motorhomes giving people the freedom “to travel far and wide on roads less travelled, to stay in parks or to free camp in comfort and security wherever you want, for extended periods with all the water, power and reliable appliances that you will need”. As recently as 27 February 2014, there were various pictures on the website which showed “Tanya and John Rainbird’s Outback Lifestyle Adventures”.
159 Having regard to the disclosed purposes for which White wanted the motorhome, I consider that the vehicle would not be fit for purpose unless the fuel tanks were either full or filled to the appropriate limit (which is sometimes 90 percent), the clean water and drinking water tanks were full and White and his partner had an appropriate supply of personal possessions consistent with their staying in remote areas for extended periods of time. The Australian Government Department of Infrastructure and Transport Circular 0-4-12 allows 60 kilograms of personal effects per occupant in its certification process. Having regard to the known purpose of the motorhome, I consider it appropriate that White and his partner should have a joint allowance of 400 kilograms in personal effects, as referred to by the Recreational Vehicle Association.
160 I find that the motorhome is not fit for the purpose. Firstly, the front axle weight exceeds 6,000 kilograms and, depending on the exact circumstances, might exceed 6,500 kilograms. If the front axle weight exceeds the latter, the motorhome is most likely of no use to White because it cannot be driven on any Australian road. If the front axle weight exceeds 6,000 kilograms but is less than 6,500 kilograms, it cannot be driven unless it complies with R29 (or at least the cabin strength requirement specified in R29). It was not shown that the motorhome satisfied the criteria to exceed the 6000 kilogram limit. Secondly, the vehicle cannot currently accommodate more than two persons when the motorhome is being driven.
(b) Section 19(b) of the Goods Act
161 Section 19(b) of the Goods Act 1958 (Vic) provides that where goods are bought by description from a seller who deals in goods of that description, there is an implied condition that the goods shall be of merchantable quality.[12]
[12]The proviso to this provision is irrelevant for present purposes.
162 The classic test of merchantable quality was formulated by Dixon J, as he then was, in Australian Knitting Mills Ltd v Grant, who said:
“…the condition that goods are of merchantable quality requires that they should be in such an actual state that a buyer fully acquainted with the facts and, therefore, knowing what hidden defects exist and not being limited to their apparent condition, would buy them without abatement of the price obtainable for such goods if in a reasonably sound order and condition without special terms”.[13]
[13](1933) 50 CLR 387 at 418
Here, the plaintiffs allege[14] that the motorhome was not of merchantable quality because:
[14]Plaintiffs’ Second Amended Statement of Claim, paragraph 17.
(a)it did not satisfy the criteria to obtain an approval certificate under the VicRoads Vehicle Assessment Signatory Scheme;
(b)it was not roadworthy;
(c)it was likely to avoid the Kenworth truck warranty;
(d)it did not conform to the requirements of the Kenworth Trucks Body & Equipment Mounting Guide (February 2009);
(e)it did not conform to section J of the Department of Infrastructure and Transport Vehicle Standards Bulletin 6 for heavy vehicle modifications;
(f)the mounting system used by the defendant did not allow for the chassis flexing and was not appropriate for the plaintiffs’ vehicle;
(g)the additional seats with two seat belts, which conform to the applicable standards and legislative requirements, have not been installed;
(h)the air-conditioners, solar panels, satellite dish and television aerial on the roof of the motorhome did not contain adequate structural reinforcement;
(i)the slide-out pods on the motorhome did not contain adequate structural reinforcement in the surrounding walls;
(j)the motorhome body was structurally unsound;
(k)the walls and roof panels of the motorhome were not joined in accordance with best practice methods.
163 I find the goods are not of merchantable quality. Having regard to the matters referred to earlier, I find that the plaintiffs have made out the grounds alleged in paragraphs 161(d), (e), (f), (g), (h), (i) and (j). In addition, it had the weight issue regarding the front axle.
(c) Section 54 of the Australian Consumer Law
164 Section 54(1) provides that if a person supplies goods to a consumer in trade or commerce, there is a guarantee that the goods are of acceptable quality. Under s54(2), goods are of acceptable quality if they are:
(a)fit for all the purposes for which goods of that kind are commonly supplied;
(b)acceptable in appearance and finish;
(c)free from defects;
(d)safe;
(e)durable,
as a reasonable consumer, fully acquainted with the state and condition of the goods (including any hidden defects in the goods), would regard as acceptable having regard to the matters in sub-section (3).
165 Section 54(3) provides that the matters to consider for the purposes of sub-section (2) are:
(a)the nature of the goods;
(b)the price of the goods (if relevant);
(c)any statements made about the goods on any packaging or label;
(d)any representation made about the goods by the supplier or manufacturer of the goods;
(e)any other relevant circumstances relating to the supply of the goods.
166 Section 54 will only have application to the present case if the motorhome were supplied to a “consumer”. A person is taken to have acquired goods as a consumer if, and only if, (for present purposes) the goods were of a kind ordinarily acquired for personal, domestic or household use or consumption. In Bunnings Group Ltd v Laminex Group Ltd,[15] Young J held that the word “ordinarily” means “commonly” or “regularly”, not “principally”, “exclusively” or “predominantly”.[16]
[15](2006) 153 FCR 479
[16]Ibid at [81]
167 His Honour also held that, depending on the precise statutory question and the circumstances of the particular case, it will be relevant to inquire as to the essential character of the goods in question.[17] In the circumstances, I consider that White is a consumer for the purposes of the Australian Consumer Law because goods such as motorhomes are ordinarily acquired for personal, domestic or household use. Motorhomes are leisure vehicles intended to provide comfortable travelling conditions and amenity for the users.
[17]Ibid at [83]
168 Because of the defects which I have found in the motorhome, I do not consider that the motorhome can be regarded as of acceptable quality. At present, the motorhome cannot be driven on Australian roads. It cannot take more than two passengers and, to that extent, carrying more would be unsafe. There is also a concern about the durability of the motorhome. Having regard to the proposed use of the motorhome which was advised to the defendant and the cost of the motorhome. I consider the motorhome is not of acceptable quality.
Section 55 of the Australian Consumer Law
169 Section 55(1) provides that if a person supplies goods to a consumer in trade or commerce (other than by way of sale at auction), there is a guarantee that the goods are reasonably fit for any disclosed purpose and for any purpose for which the supplier represents that they are reasonably fit. A disclosed purpose is a particular purpose for which the goods have been acquired by the consumer and that the consumer makes known to the supplier.
170 The plaintiffs made known to the defendant the purpose for which the motorhome was required – namely, for driving long distances within Australia and having lengthy stays in the bush or remote areas while towing a trailer with earthmoving machinery. There is no dispute that the defendant was aware of the purpose. As at present, the motorhome is not reasonably fit for the purpose of either driving for leisure or towing machinery.
Section 56 of the Australian Consumer Law
171 I note that s56 was raised in the Statement of Claim but it was not referred to in the plaintiffs’ final submissions and, accordingly, I make no findings in relation to that.
Other Matters
172 Because of the findings already made in this matter, I probably do not need to address other issues arising from the case. However, in deference to the extensive arguments made by counsel, I will deal briefly with the following:
(a)the agreement to build the motorhome;
(b)the variations to the agreement and the counterclaim;
(c)the credit of the witnesses.
(a) The Agreement to build the motorhome
173 I consider the better view is that the contracting parties were the second plaintiff, Mr White, rather than the company Whijohn. The discussion seems to have taken place on a “personal” rather than “corporate” basis. Various quotes and invoices were directed to White and the letter of demand from Maloney Anderson to the defendants dated 22 December 2011 was sent on behalf of White. The evidence does not disclose White informing the defendant that Whijohn was the contract party, not him.
174 In general terms, I accept the version of events given by White to the effect that he made known in early 2010 at his initial visit to the defendant’s premises the major features he sought to have included in the motorhome. White had experience living in isolated parts of Australia in a caravan and converted bus and as a result, had quite clear views on the things he wanted – such as extra seating for at least two more passengers, fresh water of at least 1000 litres, separate drinking water tank of 200 litres, three air conditioning units on the roof, front loading washing machine and king size bed. I accept that Tonkin showed White the defendant’s factory area where an A Class motorhome was under construction. This was a larger vehicle than that normally built by the defendant but was smaller than, and different from, White’s motorhome. Tonkin told White that other new features, such as a marine toilet, which were to be in the A Class vehicle, would be included in White’s motorhome. Harmon, a former employee of the defendant, saw White on his inspection of the defendant’s premises and said that White mentioned at the time things he wanted for his motorhome.
175 Thereafter, it seems to be agreed between the parties that:
· White delivered the Kenworth 480 cab chassis to Coastzone’s premises at Mildura in about the first week of July 2010.
· Coastzone began working on constructing the motorhome shortly after.
· While the motorhome was being constructed at Coastzone’s premises, White attended regularly at the premises to inspect progress. He normally came every week or two.
· The motorhome arrived at the cabinetmaker’s premises in or near Mildura in about late June 2011. The cabinetmaker, Don Scales, worked on the cabinetry for about three months before it went back to Coastzone’s premises.
· Tonkin, on behalf of Coastzone, contacted White in December 2011 to advise him that the motorhome was ready for collection;
176 There was a disagreement between the parties about which plan White gave Tonkin in early 2010, what plan he might have had in about June 2010, and the extent of the differences. I do not need to specifically resolve these issues.
(b) Variations to the Agreement and the Counterclaim
177 In the counterclaim, the defendant alleges that:
· Between March and September 2010, White requested that the specifications and finishes of the motorhome be varied in a number of ways relating to:
− the addition of further cabinetry;
− an upgraded solar electrical system and an upgraded generator;
− increased capacity in water tanks;
− RV Marine toilet in lieu of a vacuum flush toilet;
− a 12v compressor fridge.
· In October 2010, the defendant gave White a revised quote setting out the agreed variations to the works, a cost for the variations to the electrical system and generator, and no costs for some of the additional variations.
· In October 2010, White asked for more variations to cabinetry finishes.
· Between December 2010 and October 2011, the defendant made more changes to the fit out and specification at the request of White.
· The reasonable cost of the works done, including all variations, was $356,498.
178 A contract is varied when the parties agree to terms different from the original terms. As the High Court stated in Federal Commissioner of Taxation v Sarah Lee Household & Bodycare:
“When the parties to an existing contract enter into a further contract by which they vary the original contract, then, by hypothesis, they have made two contracts. For one reason or another, it may be material to determine whether the effect of the second contract is to bring an end to the first contract and replace it with the second, or whether the effect is to leave the first contract standing, subject to the alteration. For example, something may turn upon the place, or the time, or the form, of the contract, and it may therefore be necessary to decide whether the original contract subsists. In the present case, if the effect of what occurred on 30 August 1991 had been to rescind the agreement of 31 May 1991, then that would go a long way towards providing an answer to the appellant's argument that the assignment which occurred on 30 August was pursuant to the agreement of 31 May, with whatever that entails for the application of Pt IIIA of the Act.”[18]
[18](2000) 201 CLR 520 at [22]
179 Hence, because the defendant alleges variations to the original agreement to include changes to the design and composition of the motorhome, the defendant has the onus of pleading and proving the variations relied upon in order to make good that contractual claim.
180 Generally speaking, the defendant failed to establish by proper evidence that there were variations to the initial agreement between the parties. The defendant adduced very little specific evidence on the point.
181 In simple terms, the defendant’s usual approach was to argue as follows: the finished product included various specific features; certain of these features were not included in the initial quote or specification sheet supplied to the plaintiff; therefore, to the extent that the final product contained additional features, they must be variations agreed between the parties.
182 The defendant took this position, notwithstanding the overwhelming absence of evidence that:
·the plaintiff made oral or written requests for all these so-called extra features;
·the plaintiff agreed to pay a particular price for each such extra feature;
·the defendant agreed to supply the extra feature at the price accepted and agreed by the plaintiff.
183 In some cases, the plaintiff did agree that he would pay extra for work done. For example, White agreed to pay for the solar upgrade needed to run the compressor fridge. He agreed that the contract price would increase by $8,426 to reflect the upgrade he requested. Also, White asked for different cabinetry once he saw the work in Scales’ kitchen. White said that when he asked Tonkin about the cost of changing from the proposed timber finish to the two-pack painted finish, Tonkin said that there would be no charge. White paid the painter directly for this painting work. Tonkin has sought to charge White approximately $9,707 extra as a variation in relation to the cabinetry. This seemed to arise largely from the fact that Tonkin allowed only $7,000 for the cabinetry work, whereas Scales charged more than $20,000.
184 In a number of cases, the person primarily responsible for building the motorhome, Harmon, installed items in the motorhome either because he believed they were agreed at the initial meeting in February 2010 (being the time at which Harmon believed the meeting to have occurred) or because they were standard in the A3 motorhome (and Tonkin had said that the quality of the A3 was such that White’s motorhome would have the same features). The effect of this was that, for reasons unconnected with any direct request by White for a variation, items were included in the motorhome.
185 It seems to me that, in circumstances where the counter claim was alleged as a breach of contract, the defendant is unable now to seek recovery on the basis of a quantum meruit. No such claim was alleged by Coastzone. In any event, even if such a claim were otherwise permissible at this point, the defendant failed to lead any admissible evidence about the reasonable value of the work undertaken or items supplied. Without such evidence, the defendant is unable to justify the charges made for the variations. I consider that it is insufficient to rely simply upon invoices and ask that the court infer that the invoice represents the actual cost to the defendant and that the cost is reasonable. Such an inference would be especially unreliable in circumstances where it was apparent from Tonkin’s evidence that there was a certain fluidity to the invoices. They varied materially in content, depending upon the time at which his company issued them. Tonkin could not satisfactorily explain the reason for the difference between the February 2012 and April 2013 invoices. He ultimately said that the latter, which the defendant relied upon in its case, was the less accurate of the two. The February 2012 invoice (which was not given to White until after the action began) more accurately reflected the cost of the work done by Coastzone on the motorhome. The defendant’s case is not helped by the fact that Tonkin’s wife, who was involved in producing invoices for the business, attended court during the hearing but was not called to give evidence.
186 It also did not assist the defendant that it failed to produce the build sheets which very likely would have provided important contemporaneous evidence of the constituent elements of White’s motorhome and any variation to the agreement. Tonkin gave some evidence about them but the defendant did not discover them or produce them in court. Such sheets ought to have been discovered.
187 In circumstances where there are major problems with the motorhome (in particular its inability to be lawfully driven on Australian roads) and the defendant was unable to establish contractual variations to the initial agreement, I consider the counterclaim must fail. This applies even to those few items where the defendant could prove that White sought and agreed to specific variations.
Credibility of Witnesses
(a) White
188 Generally, I found White to be a credible and straightforward witness. He answered questions directly and displayed the demeanour of an honest witness. Because the transaction was a “one off” for him, it seems likely that he should have a reasonably clear recollection of the major aspects of the facts relating to the order for, and construction of, the motorhome. Harmon corroborated parts of his evidence, as did Tonkin. For example, Tonkin agreed that from the initial meeting with White, Tonkin was aware that White wanted features of the motorhome to include three air-conditioning units, a 6Kv generator, large floor to ceiling roll out pantry, sharp 27 litre microwave oven, front loading washing machine, a full length colour coordinated electric awning and extensive overhead cupboards. This was consistent with the gist of White’s evidence that he spelled out to Tonkin at their meeting in February 2010.
(b) Harmon
189 Harmon was the defendant’s employee primarily responsible for the construction of White’s motorhome. He presented as a simple person and honest witness. Although it seems Harmon is no longer on as friendly terms as he once was with Tonkin it was not suggested to him, and I do not find, that his evidence was false or in some way intentionally altered or modified to harm the defendant.
(c) Tonkin
190 I was not impressed by Tonkin’s evidence. He presented as a small business operator who would act in whatever way would achieve the best outcome for his commercial interests. Tonkin distinguished himself in the witness box by frequently asking that counsel repeat a question or saying that he did not understand the question. More than any witness I have seen, he asked more than once that questions be repeated. He appeared to be giving calculated answers and seeking as much time as possible to frame responses which suited his purposes. His manner and conduct in giving evidence inspired no confidence that he was a reliable witness whose evidence could be readily accepted.
191 For example, at one point, Tonkin gave some evidence about whether a particular toilet fitted in the A-class vehicles was in stock at Coastzone’s premises in February 2010. Tonkin said that he could not confirm that until he referred to an invoice which showed the same kind of toilet was ordered in July 2010. On the basis of this order, he said that the toilet was not in stock in February. The invoice to which he referred was produced in response to a call for documents showing the actual cost to the defendant of variations to White’s vehicle. Later in the cross-examination, he changed his evidence from saying the invoice related to a toilet in an A-class vehicle to saying he presumed it was the invoice for the toilet in White’s vehicle. Subsequently, he said he did not know where “that toilet sat in that area”. This evidence was confusing and unsatisfactory.
192 Also in this case, the defendant intimated to the Court that the items charged as extras on the motorhome were charged at cost price – that is, there was no loading on any item. But Tonkin later agreed that he charged a margin on variations (albeit what he regarded as a basic margin) and sought to make a profit from variations to the specifications.
193 Broadly speaking, I prefer the evidence of White and Harmon to that of Tonkin on the main contested issues. In circumstances where:
· I found White more credible
· Harmon corroborated White on some issues
· Tonkin himself agreed with aspects of White’s case
· I was not impressed by Tonkin’s demeanour or evidence
· Tonkin asserted a rather more than he proved
I find it more probable than not that White’s version of events is correct and White proved his case.
194 I will hear from counsel as to the form of order.
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