Willshee v Westcourt Ltd - [2009] WASCA 87

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: WILLSHEE -v- WESTCOURT LTD [2009] WASCA 87

CORAM: MARTIN CJ
BUSS JA
NEWNES AJA

HEARD: 19 FEBRUARY 2009

DELIVERED : 18 MAY 2009

FILE NO/S: CACV 21 of 2008

BETWEEN: DEREK MICHAEL WILLSHEE
Appellant
AND
WESTCOURT LTD (ABN 98 009 250 373)
Respondent

ON APPEAL FROM:
For File No              :  CACV 21 of 2008
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :TEMPLEMAN J
Citation  :WILLSHEE -v- WESTCOURT LTD [2008] WASC 18
File No  :CIV 1497 of 2004

Catchwords:

Contract - Breach of contract - Implied term that limestone would be of high quality - Reasonableness of damages - 'Ruling principle' from Robinson v Harmon (1848) 1 Exch 880; (1848) 154 ER 363 - Put in same position as if contract had been performed - Unreasonableness qualification - Turns on own facts

Legislation:

Supreme Court Act 1935 (WA), s 32
Trade Practices Act 1974 (Cth)

Result:

Appeal allowed
Cross-appeal dismissed

Category: B

Representation:

Counsel:

Appellant: Mr M L Bennett
Respondent: Mr S Owen-Conway QC & Mr P A Monaco

Solicitors:

Appellant: Lavan Legal
Respondent: GV Lawyers

Case(s) referred to in judgment(s):

Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613
Nouvelle Homes Pty Ltd v G & M Smargiassi [2008] WASC 127
Radford v De Froberville [1977] 1 WLR 1262
Robinson v Harmon (1848) 1 Exch 850; (1848) 154 ER 363
Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 83 ALJR 390; [2009] HCA 8

MARTIN CJ:

Summary

The appellant, Derek Michael Willshee (Mr Willshee) claimed that Westcourt Ltd (Westcourt) breached a term of a contract for the construction of a house by using inferior or second quality limestone in the external cladding of the house. The trial judge upheld Mr Willshee's claim, but awarded him damages which reflected only the cost of cleaning and sealing the limestone, and some repainting necessitated by the cleaning and sealing work. Mr Willshee's claim for damages in an amount equal to the costs of, and associated with, replacement of the inferior limestone was rejected by the trial judge. Mr Willshee appeals from that part of the decision of the trial judge. Westcourt cross‑appeals from the determination that it breached its contractual obligations to Mr Willshee. For the reasons given below, Westcourt's cross‑appeal should be dismissed, and Mr Willshee's appeal should be allowed.

The decision of the trial judge

The reasons of the trial judge comprehensively review the negotiations which preceded entry into the contract for the construction of the house, the representations that were made by Westcourt in the course of those negotiations, the terms of the building contract, and the evidence given by the various witnesses that were called. As the issues raised by the appeal and the cross‑appeal are relatively confined, I will refer only to those aspects of the decision of the trial judge that bear directly upon those issues.
It should be noted that in addition to his claim for breach of contract, Mr Willshee advanced claims for damages for negligence and for misleading and deceptive conduct in contravention of the Trade Practices Act 1974 (Cth). The trial judge concluded that those claims added nothing to the claim for breach of contract and did not separately resolve them. Neither party complains of that approach.

The relevant contractual term

The trial judge noted that in its defence, Westcourt admitted that there was a term to be implied into the building contract that the limestone which it was to supply and use in the construction of the house would be of high quality [85].
As the trial judge noted, on the topic of liability, the critical issue between the parties was whether Westcourt complied with its contractual obligation to supply high quality limestone.

The relevant facts and witnesses

The external walls of the house were constructed from an inner leaf of clay brick, with an external cladding of limestone blocks, separated by a cavity [106]. As Westcourt had no previous experience building with limestone blocks, and there was no expertise in that field within the tradespeople normally used by Westcourt, it subcontracted the work of laying the limestone blocks to Mr John Mayben [107].
At the time the house was constructed, Jeffrey Jones Pty Ltd, trading as Limestone Resources Australia, carried on the business of quarrying and supplying limestone from two quarries, including one at Wanneroo (which supplied limestone known as 'Carabooda') and another at Guilderton (which supplied limestone known as 'Moore River'). Between May and August 1999, that company received orders from Mr Mayben to supply Carabooda limestone blocks to Mr Willshee's site [110]. The trial judge accepted evidence given by a Mr Jeffrey Jones, a director of Jeffrey Jones Pty Ltd, to the effect that the amount of limestone supplied by that company represented only about 36% of the limestone blocks used in the construction of Mr Willshee's house during 1999 [115]. Mr Mayben was not called to give evidence, nor was there any evidence as to the source of the limestone used in the construction of the house other than that supplied by Mr Jones' company. However, the trial judge concluded that the limestone not supplied by Mr Jones' company had been quarried at the Wanneroo quarry to which I have referred because it was cut from Carabooda limestone.
The trial judge found that at the time of completion of construction, and for three and a half years thereafter, Mr Willshee was entirely satisfied with the limestone which had been used in the construction of the house. However, about three and half years after completion of construction, following Mr Willshee's return from overseas after an absence of two to three months, he noticed that the limestone had started to crumble, and large holes had begun to appear in the blocks [119] ‑ [121]. Even though the appellant had noticed the deterioration after being away, he stated that it had happened suddenly, describing it has having happened 'overnight' (ts 189) and 'like a time bomb' (ts 191). However, the trial judge found that the deterioration had occurred gradually, following completion of construction, but was not noticed by Mr Willshee until a particular point in time [126]. The trial judge found that the gradual deterioration which occurred was a consequence of weathering [126].
In about July 2003, being concerned about the deterioration in the limestone cladding, Mr Willshee asked representatives of Westcourt to inspect the house. Two such representatives (Mr Wally Tyler and Mr Ed Clent) undertook such an inspection and one or other of them agreed that some of the blocks needed repair. They indicated to Mr Willshee that they would arrange for the supplier of the limestone to inspect the house and advise what might be done to effect repairs [133] ‑ [136].
The general manager of Limestone Resources Australia, Mr Verth, gave evidence that when he inspected the house during 2003 in the company of Mr Willshee and a representative of Westcourt, he observed that the limestone had aged to a greater extent than he would have expected [147].
During 2003, Mr Willshee decided to engage contractors to treat the limestone blocks at his own expense. A representative of Westcourt recommended the Riverstone Construction Company (Riverstone) to Mr Willshee for this purpose. Mr Willshee contacted Mr Mark Stratfold, a director of Riverstone, who recommended that Mr Willshee engage his brother Paul Stratfold to clean and seal the limestone [155].
The evidence of Mr Paul Stratfold was that following his engagement by Mr Willshee, he commenced work using a high pressure water hose to clean the limestone. However, shortly after commencing work in this way, he stopped when he observed that significant portions of the limestone were falling away, including large chunks of stone [160]. His evidence, accepted by the trial judge, was that even though he had extensive experience in cleaning and sealing limestone, Mr Paul Stratfold had never encountered limestone exhibiting this characteristic before. Mr Paul Stratfold concluded that the limestone was too soft to be cleaned, so he ceased cleaning work and advised Mr Willshee of the problem. Mr Willshee corroborated Mr Paul Stratfold's evidence [162].
Dr Armand Zurhaar (an appropriately qualified expert) was engaged by Westcourt to report upon the issue which had been raised in relation to the quality of the limestone. Dr Zurhaar inspected the house in early 2004. He considered that the whole of the external limestone block work exhibited an appearance of accelerated pitting for its age. Some blocks exhibited greater prevalence of holes and porosity than others, and some exhibited excessive erosion, requiring replacement. In his view, the blocks used appeared to be structurally adequate, although many exhibited surface pitting and spalling [183].
In October 2004, Mr Willshee instructed Mr Paul Stratfold to 'do the best repair they could to remove the damaged bricks, seal and harden the walls' [197]. Mr Willshee gave emphatic evidence to the effect that Mr Paul Stratfold removed and replaced a number of limestone blocks pursuant to that engagement. However, the trial judge found that Mr Willshee was mistaken in that regard, and that in fact blocks had been removed by Mr Paul Schreurs. Mr Schreurs gave evidence which was, with one exception (to which I will refer), accepted by the trial judge in its entirety [200]. His evidence was that he had been asked by Mr Mark Stratfold to assist in the work on Mr Willshee's house. Pursuant to that request, he removed about 20 blocks in poor condition using a hammer and bolster (chisel). His evidence was that the blocks he had removed were left on site at Mr Willshee's house. He said that they were not in good condition and that although they had not 'turned to dust', they had fallen apart [204].
The trial judge noted that it was put to Mr Schreurs in cross‑examination that if there were five or six intact blocks in Mr Willshee's garage, they could not have been the blocks that he removed. Mr Schreurs agreed with that proposition [206]. This was the portion of Mr Schreurs' evidence which the trial judge did not accept [207]. I will refer to the evidence on this subject in more detail in the context of Westcourt's cross‑appeal (see [39] ‑ [58]).
The trial judge found that some of the blocks removed by Mr Schreurs were collected by Mr Willshee and stored in his garage, so as to be available for subsequent testing and inspection. He further found that some of these blocks were later tested by an expert engaged by Mr Willshee - Dr Edward Kucharski [207] ‑ [208]. Westcourt challenges this finding by its cross‑appeal.
Mr Schreurs replaced the blocks which he had removed with new blocks which he obtained from a nearby site where a house was being built for Riverstone. Following the completion of Mr Schreurs' work, Mr Paul Stratfold pressure washed the limestone walls using a less aggressive procedure than he had previously applied. He reduced the pressure of the water, and the water flow rate, and increased the distance between the nozzle of the washer and the wall. Nevertheless, Mr Stratfold noticed that during the washing process, the limestone continued to fret. Following the washing process, Mr Paul Stratfold applied a treatment made up of dampel and calcil mixed together, and then a waterborne acrylic emulsion polymer sealer known as brylcote [218] ‑ [219]. Despite criticism by Dr Zurhaar of Mr Paul Stratfold's methodology, the trial judge accepted that the treatment applied by Mr Paul Stratfold was effective, given the evidence of Mr Willshee and Dr Zurhaar to the effect that since the application of that treatment, there has been little or no further fretting of the limestone walls [227].
In addition to the cleaning and sealing work carried out by Mr Paul Stratfold, he and his father carried out extensive patching of holes in the limestone, using a considerable quantity of mortar fill. It was generally accepted by the experts that this patching work was not carried out to an acceptable standard [324].
Dr Kucharski is an appropriately qualified expert who was, as I have mentioned, engaged by Mr Willshee. He inspected Mr Willshee's house in March and May 2005. He observed pitting and cracking in the limestone blocks [235]. Notwithstanding the treatment applied by Mr Stratfold in some of the areas where pitting had occurred, 'the constituent grains were weakly cemented and could easily be removed under moderate finger pressure' [237].
Dr Kucharski noted that the extent of deterioration was not uniform but varied depending on the strength and bedding characteristics of the particular block of limestone used [242]. He accepted that a pitted appearance was quite normal for limestone, 'but when you have pieces falling out of it then that indicates that it's pretty weak …' [243]. Further, he noted that there were some blocks on which pitting had penetrated the width of an entire block [242].
Dr Kucharski carried out tests on two of the limestone blocks which were in Mr Willshee's garage. He found that the density of those blocks ranged from 1,220 to 1,250 kg per cubic metre, whereas Carabooda limestone normally tested at 1,390 kg per cubic metre [262]. The trial judge acknowledged that there is no applicable Australian standard for limestone used in house construction. However, the trial judge found that these densities were lower than the density of 1,760 ‑ 2,560 kgs per cubic metre specified in a standard published by the American Society for Testing and Materials (albeit acknowledging that that standard applies to general building and structural purposes and it is therefore unclear whether this requires a higher quality limestone than that used for cladding) [257], [263].
Dr Kucharski also performed qualitative tests on the two blocks which he had removed from Mr Willshee's garage. Those tests included the ease of cutting with a brick saw and the rate at which the samples deteriorated through loss of material on handling. As a result of those tests, he concluded that the samples removed from Mr Willshee's garage were considerably weaker and more friable (that is, susceptible to deterioration on handling), than the samples of Carabooda limestone, and limestone obtained from the other quarry at Guilderton (Moore River limestone) [264]. He also found that the material from Mr Willshee's garage was much easier to cut than the samples which had been supplied of Carabooda and Moore River limestone [265].
Dr Kucharski also tested the material by applying moisture and then allowing it to dry. During such a process, the limestone material from Mr Willshee's garage lost weight at seven times the rate of weight lost by a sample of Carabooda limestone exposed to the same test. Dr Kucharski concluded from this test that the samples from Mr Willshee's garage which he tested would deteriorate around seven times faster than the rate which would normally be expected for Carabooda limestone [266].
When the provenance of the blocks from Mr Willshee's garage tested by Dr Kucharski was tested in cross‑examination, Dr Kucharski observed that they appeared to him to be representative of the blocks he observed in situ on the house. The trial judge accepted that evidence [267] ‑ [268]. I will refer again to that evidence in the context of the cross‑appeal (see [39] ‑ [58]).
As a result of these various tests, and his assumption that the limestone in Mr Willshee's garage which he had tested was that used in the construction of Mr Willshee's house, Dr Kucharski concluded that the limestone used in the construction of Mr Willshee's house was of 'significant inferior quality' [276].
Mr Robert Wallis, a building consultant with over 60 years experience in the building industry, was also called to give evidence by Mr Willshee. He inspected the house in September 2006. He observed that the exposed face of the blocks had notable pitting with holes ranging from 6 mm to those of 'irregular shape' which could not be 'covered by hand' [252]. In his view, there were a 'disturbing amount' of the larger holes [253]. Further, in his view, the limestone was too soft to be used as an external exposed walling material [254].
Mr Allan Stoney is an architect who was called to give evidence by Westcourt. In a report which was tendered in evidence, following inspection of Mr Willshee's house in October 2005, January 2006 and November 2007, he expressed the view that '[e]xcept for some isolated blocks, the limestone did not display abnormal signs of deterioration' [288]. However, in cross‑examination it emerged that in this context, Mr Stoney was using the term 'deterioration' to denote loss of thickness overall. It appeared that he did not regard pitting, spalling or the appearance of holes as deterioration [289]. When asked whether those features were evident, he replied that:
Some individual blocks did show evidence of having cracked or split or spalled or pitted or crumbled or holed with some displaying more than one of these 'features'. Some repairs had been carried out so I am only able to comment on those in which these features were still evident. [291]
Evidence was led in relation to the structural soundness of the building. However, as the trial judge noted, at least by the conclusion of the trial, it was clear that Mr Willshee did not contend that the limestone block walls as a whole were structurally unsound [304]. It is therefore unnecessary to refer to that evidence.
The trial judge concluded that about 50% of the limestone blocks in the construction of Mr Willshee's house had pitted, spalled and crumbled to an extent which was excessive for their age. That conclusion was drawn from the evidence of Mr Willshee, Dr Zurhaar, Mr Verth and Mr Wallis. That conclusion was also supported by the evidence that representatives of Westcourt accepted that remedial work was necessary when they initially inspected the house following complaint by Mr Willshee.
The trial judge further accepted Dr Kucharski's evidence that the limestone samples he tested, and which were representative of those used in the construction of Mr Willshee's house, were less dense and softer than Carabooda limestone or Moore River limestone [308]. That conclusion was consistent with the evidence of Mr Wallis and Mr Paul Stratfold.
The evidence of Mr Jones was that blocks of Carabooda limestone could be classified as falling within three grades - high, medium and low quality. Further, in practice at the Wanneroo quarry, blocks are graded as 'first' or 'seconds'. Blocks graded as 'seconds' are not used in house construction, but are sold for use in gardens [311], [314]. Although the trial judge was satisfied that the limestone used in the construction of Mr Willshee's house had originated from the Wanneroo quarry (Carabooda limestone) [311], he concluded that approximately 50% of those blocks were not high quality, and would have been regarded as 'seconds', and therefore as unsuitable for use in the construction of Mr Willshee's house [315]. The trial judge therefore held that Westcourt was in breach of its contractual obligation to use only high quality limestone in the construction of Mr Willshee's house.

Damages

The evidence established that it was impractical to remove only those blocks which had deteriorated excessively, leaving the remaining blocks in place. The trial judge accepted that the cost of rectification work in the form of removing the entire limestone cladding of the house and replacing it with high quality limestone blocks was $257,977.91. He also appears to have accepted that there would have been additional costs associated with that work, including the need for Mr Willshee to obtain alternative accommodation during the period that the work was carried out, and costs associated with the removal and storage of Mr Willshee's personal effects during that period.

In this portion of his reasons, the trial judge reiterated his finding that the house was structurally sound and likely to remain so, and that the sealing work carried out by Mr Paul Stratfold had been effective to prevent any further significant deterioration in the condition of the limestone [323]. He also referred to Dr Zurhaar's evidence to the effect that the aesthetic defects of which Mr Willshee complained could be repaired in a way which was invisible or virtually invisible to the untrained eye. That would involve the removal of the patches applied by Mr Paul Stratfold [324].
Evidence was led of the value of the residence at various points in time. No evidence was led as to the effect which the condition of the limestone had upon value. The trial judge accepted that the house had a value of approximately $1.7 million in January 2007. In that context, he expressed the following conclusion:
The plaintiff contends that it is reasonable to spend some $258,000 in rectifying defects in a house worth $1.7 million. I do not accept that proposition. In my view, it would be unreasonable to demolish the entire external cladding of the plaintiff's house, including a substantial number of satisfactory blocks, when the structural integrity of the house is not in doubt and when the plaintiff's complaint can now be based only on the aesthetic quality of the limestone, about which the contract was silent. [328]
After referring to Ruxley Electronics and Construction Ltd v Forsyth [1996] AC 344, the trial judge went on:
In my view, this example is analogous to the present case. Accepting that a significant proportion of the limestone used in the construction of the plaintiff's house was originally unsuitable for that purpose, the present position is that the deterioration has been halted by the sealing carried out by Mr Stratfold. It is now true to say, therefore, that the house is 'entirely adequate for its design purpose', thus, the plaintiff's concern can only be 'the lack of aesthetic pleasure' which he might have derived from the sight of limestone in pristine condition. [336]
The trial judge noted that Mr Paul Stratfold had rendered an account for $12,716 for cleaning, patching, filling, sealing and binding the limestone. The trial judge noted that the patching and filling work, which he considered to be ineffective, was time‑consuming, and that Mr Paul Stratfold had previously estimated the cleaning and sealing work to cost in the vicinity of $4,000. Accordingly, the trial judge estimated the cost of cleaning and sealing work to have been $5,000 [338]. He disallowed that component of Mr Paul Stratfold's invoice which he estimated to be referrable to the patching and filling work. Mr Willshee does not challenge that aspect of the decision.
The trial judge awarded Mr Willshee a further amount of $4,290, being the cost of repainting timber decking, posts, beams and eaves which were affected by the cleaning and sealing work. The trial judge refused to award any general damages for loss of amenity on the ground that there was no contractual obligation to provide limestone which was aesthetically pleasing to Mr Willshee. While he accepted that Mr Willshee would have been inconvenienced by having to devote time and energy to the pursuit of his claim, in the view of the trial judge that was the consequence of the litigation, not the breach of contract [342].
Accordingly, the trial judge awarded Mr Willshee damages in the amount of $9,290, together with interest on that sum.

The cross‑appeal

As the cross‑appeal goes to the question of Westcourt's liability to Mr Willshee, it is appropriate to deal with it before dealing with Mr Willshee's appeal, which is concerned with the amount of the damages awarded to him.
Westcourt's cross-appeal is limited to the proposition that the trial judge erred in fact by finding that the two blocks from Mr Willshee's garage which were tested by Dr Kucharski had been removed from Mr Willshee's house. Westcourt contend that because of that error, the conclusion of the trial judge to the effect that Westcourt had breached its contractual obligations to Mr Willshee should be set aside. The cross‑appeal must be rejected for two reasons. First, on the evidence it was open to the trial judge to conclude that the blocks tested by Dr Kucharski had come from Mr Willshee's house. Second, and in any event, the conclusion of the trial judge to the effect that Westcourt had used limestone which was not of high quality in the construction of Mr Willshee's house was amply sustained by other findings made by the trial judge which did not depend upon the testing of the samples undertaken by Dr Kucharski.

The provenance of the tested blocks

In support of its cross‑appeal, Westcourt relies upon the following evidence which it asserts undermines the trial judge's conclusion that the blocks from Mr Willshee's garage tested by Dr Kucharski had in fact come from Mr Willshee's house:
(a)Mr Willshee's evidence (given emphatically) was that he had observed Mr Paul Stratfold remove at least 15 blocks from his house in October 2004, using, amongst other things, an angle grinder;
(b)however, the evidence of Mr Paul Stratfold was that he had not removed any blocks from Mr Willshee's house, and the evidence of Mr Schreurs was that he had removed 'probably about 20' blocks using a hammer and bolster (chisel), and not an angle grinder;
(c)Mr Stoney's evidence was that the blocks which he observed in Mr Willshee's garage bore evidence of an angle grinder having been applied to them;
(d)Mr Schreurs' evidence was to the effect that none of the limestone blocks which he removed from Mr Willshee's garage were intact, and all fell apart. Mr Schreurs was asked whether the 'five or six intact blocks' that were in Mr Willshee's garage could have been the blocks that he had removed. Mr Schreurs replied, 'no, I wouldn't have thought so - no'.
In evaluating Westcourt's submissions, it is necessary to look in more detail at the evidence that was given.
First, it is undoubtedly correct that Mr Willshee gave emphatic evidence to the effect that the blocks in question were removed by Mr Paul Stratfold. Mr Willshee also gave evidence that Mr Paul Stratfold had the help of a female assistant and that an angle grinder was used in the process. It is clear from Mr Schreurs' evidence that Mr Willshee was mistaken in these respects. However, given that the blocks were removed approximately three years prior to him giving evidence, an erroneous recollection as to the identity of the person who removed the blocks, and the means of their removal, does not compel the conclusion that his evidence (which the trial judge generally found to be reliable) in relation to the provenance of the blocks should be rejected in its entirety.
Mr Willshee's evidence was emphatically to the effect that the six blocks which were stored in his garage all came from the house. He denied that he had obtained blocks from any other source. In the course of that denial, he rhetorically asked why he would have gone to the trouble of collecting six heavy blocks from some other source and storing them in his garage (ts 251 ‑ 252). The only obvious answer to that reasonable rhetorical question is that Mr Willshee must have been engaged in a deliberate plan to deceive Dr Kucharski and the court as to the provenance of the blocks, if they did not in fact come from his house. However, that proposition was not put to Mr Willshee, nor did counsel for Westcourt contend, either at trial or on appeal, that any conclusion to that effect was justified by the evidence.
Notwithstanding the erroneous aspects of Mr Willshee's evidence on this subject, his evidence to the effect that the blocks stored in his garage were some of the blocks which were removed from his house is inherently plausible. It seems highly unlikely indeed that he would have obtained blocks from some other source, and then provided them to Dr Kucharski for testing. He would have no apparent reason for storing heavy and bulky blocks obtained from some other source. Further, assuming that Mr Willshee was aware that the provenance of the blocks was not from his home (which would seem extremely likely given that they were stored in his garage), the only explanation for giving them to Dr Kucharski for testing would be a deliberate desire to deceive Dr Kucharski and the court. A serious course of deception of that kind seems inherently improbable and was not put to Mr Willshee.
Mr Willshee's evidence as to the provenance of the blocks was reinforced by the evidence given by Dr Kucharski. He said that before undertaking the testing and sampling of the blocks, he examined them to see how similar they looked to the existing blocks in the house. From those observations he concluded that the blocks in Mr Willshee's garage were similar to those that had been used in the house, save that the deterioration in the blocks in the garage was more extreme than that which could be seen on the blocks remaining on the house. Following that observation he concluded that the blocks in the garage were 'reasonably representative of what was seen on the house walls' (ts 302). At another point in his cross‑examination, he reiterated that the blocks which he tested looked 'very representative to me of the rest of the structure I observed' (ts 360).
Westcourt rely on the evidence of Mr Schreurs as to the condition of the blocks which he removed. That evidence was as follows:
When you removed the blocks how would you describe them? What condition were they in?---Not very good.
Were they intact?---No, they weren't.
Had they all turned to dust so there was just - - -?---They hadn't turned to dust but they had fallen apart.
Were any of them intact?---No.
None of them was intact. If there were five or six intact blocks sitting in Mr Willshee's garage today which he claimed came from his house, they couldn't be the blocks that you removed. Is that what you are saying?---No, I wouldn't have thought so - no.
So there wasn't a single one of those blocks that was intact?---Well, from what I can remember when I took them out.
Of course it's quite a destructive exercise with a hammer and chisel of course?---No, not if you know what you're doing. It's easy enough to take out and replace. If the joints were too hard, it will be destructive but I think a couple of them came out and they had fairly big hairline cracks in them.
Do you recall if Paul Stratfold was present on that occasion?---I do remember him coming around to the job (ts 482).
It is of some significance that the line of cross‑examination pursued was directed at identifying whether the blocks removed by Mr Schreurs were 'intact'. Giving the ordinary meaning of that word (taken, for example, from the Macquarie Concise Dictionary) as 'remaining uninjured, unaltered, sound, or whole; unimpaired', it was inevitable that all the blocks removed by Mr Schreurs would not have been described using that term, because if they were 'unimpaired', of course, they would not have been removed.
This point was made by Mr Paul Stratfold, who was present at the house when the blocks were replaced. Mr Paul Stratfold and his father were carrying out an inspection and returned, once Mr Schreurs had completed the replacing of the blocks, so Mr Paul Stratfold could carry out the cleaning and sealing. He was cross‑examined along the same lines as Mr Schreurs. The relevant cross‑examination was as follows:
You counted 15 blocks which you believed had been removed?---Yes.
Were those blocks intact?---Describe intact.
Well, not dust, not crumbled to dust?---Portions of them had, yes.
How many were relatively intact, recognisable as a limestone block?---They would all be recognisable as a limestone blocks, just of varying degrees of
I take it that we're talking about October 2004 now?---Sure.
You say in the garage you observed some blocks?---Yes.
Did you have a discussion with Mr Willshee about where those blocks came from?---I don't know.
Why don't you know?---Because I don't recall.
Were you curious about it?---I knew that they had come from the house.
You believed that they had because somebody told you. Is that right?---I knew that they had come from the house.
Listen to me. You could only know if they came from the house if you saw them removed or if you removed them?---Okay.
Correct?---Yes.
When the evidence of Mr Stratfold and Mr Schreurs is considered together, it is entirely consistent with the conclusion that while all of the blocks removed had deteriorated and were damaged to some degree, and were not therefore 'intact', at least some of them remained recognisable as limestone blocks with approximately the dimensions used in the construction of the house. That conclusion is reinforced by the photographs taken by Mr Stoney of the blocks which he observed in Mr Willshee's garage, all of which show deterioration and damage to some extent. So the evidence of Mr Schreurs does not preclude the acceptance of Mr Willshee's evidence to the effect that the blocks stored in his garage, and which were tested by Dr Kucharski, were some of those which had been removed from his house.
Westcourt also rely upon the evidence of Mr Stoney, to the effect that the blocks which he observed in Mr Willshee's garage bore evidence of angle grinding. Westcourt submits that it follows that these cannot have been the blocks removed by Mr Schreurs, because he did not use an angle grinder.
The first point to note about this aspect of Westcourt's argument is that there must be some question as to whether Mr Stoney possessed the expertise necessary to express an admissible opinion on the machine or machines which had been applied to the blocks which he observed in Mr Willshee's garage. Mr Stoney is an architect. The profession of architecture would not, of itself, appear to provide a sufficient qualification to express a conclusion as to the type of machine or machines that might have been applied to a limestone block. Obviously some implement or mechanical device must have been used to cut the blocks at the time they were quarried. Mr Stoney's capacity and expertise to distinguish between the effect which such an implement or mechanical device would have upon a limestone block, as compared to the effect which an angle grinder would have upon such a block was not explored in the evidence.
The second point to note about Mr Stoney's evidence is that, as he conceded (ts 574), all he could say was that, in his opinion, an angle grinder had been applied to the blocks 'at some time'. He could not say that the angle grinder was applied at the time they were removed from the house. Accordingly, it does not follow, as a matter of logic, from his evidence that the blocks in Mr Willshee's garage could not have been the blocks removed by Mr Schreurs using a hammer and chisel.
In summary, Mr Willshee gave evidence to the effect that the limestone blocks which were stored in his garage were some of the blocks which had been removed from the external cladding of his house. The observations of Dr Kucharski corroborated that evidence, which was inherently plausible. Neither the evidence of Mr Schreurs, considered in the light of the evidence of Mr Paul Stratfold, nor the evidence of Mr Stoney, precluded the trial judge accepting Mr Willshee's evidence, which he did.

Findings not dependent upon testing undertaken by Dr Kucharski

The second reason why Westcourt's cross‑appeal must be dismissed is that even if, contrary to my view, the evidence of Dr Kucharski which depended upon his testing of blocks from Mr Willshee's garage is excluded from consideration, the conclusion of the trial judge to the effect that about 50% of the limestone used in the construction of Mr Willshee's house was not of high quality is amply justified by other evidence which has not been challenged by Westcourt.
That evidence includes: the evidence of Mr Willshee as to the deterioration of the limestone blocks prior to their treatment by Mr Paul Stratfold; the evidence of Mr Jones to the effect that only 36% of the blocks used in the house were recorded as having been supplied by his company as Carabooda limestone; the evidence of Mr Verth to the effect that the limestone had worn to a greater extent than he would have expected for its then age; the evidence of Mr Paul Stratfold to the effect that the limestone was too soft to be cleaned in the normal way; the evidence that representatives of Westcourt accepted that remedial work was necessary in relation to the limestone blocks when confronted with their deterioration; the evidence of Dr Zurhaar to the effect that the limestone blocks exhibited the appearance of accelerated pitting and excessive erosion; the evidence of Dr Kucharski which did not depend upon the testing of the blocks from Mr Willshee's garage; and, the evidence of Mr Wallis relating to pitting.
So, even if the evidence of Dr Kucharski which is dependent upon his testing of the blocks from Mr Willshee's garage is excluded from consideration, the evidence to the effect that a significant portion of the blocks used in the construction of Mr Willshee's house were not of high quality was overwhelming, and the conclusion of the trial judge to that effect amply justified.
The cross‑appeal must be dismissed.

The appeal

Mr Willshee contends that the trial judge erred by failing to award damages equal to the amount required to put him in the position in which he would have been had the contract been performed and had he been provided with a house in which only limestone of high quality was used.
As I have noted, the process of reasoning relied upon by the trial judge to reject that contention included significant reliance upon the fact that there was no contractual provision dealing with the aesthetic characteristics of the limestone to be supplied; that there are, in any event, no objective standards or yardsticks by which the aesthetic desirability of the house in its current condition can be measured or assessed; and, that as the house is structurally sound, it is unreasonable for Mr Willshee to ask for damages measured by reference to the cost of demolishing and re‑erecting the external cladding of the house, having regard to the relativity between that amount and the value of the house. Further, the trial judge relied significantly upon the decision of the House of Lords in Ruxley.
Since the decision of the trial judge, the Australian law applicable to issues of this kind has been elucidated by the decision of the High Court of Australia in Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 83 ALJR 390; [2009] HCA 8. That case concerned a claim for damages by a landlord as a result of breach of a covenant in the lease by the tenant carrying out work, which resulted in the substantial remodelling of the foyer of the building leased without the approval of the landlord. The trial judge held that there had been a breach of covenant, but awarded damages in the sum of $34,820, being the difference between the value of the property with the old foyer, and the value of the property with the new foyer constructed by the tenant. On appeal, the Full Court of the Federal Court of Australia had increased the judgment sum to $1.38 million, made up of $580,000 to reflect the cost of restoring the foyer to its original condition, and $800,000 for loss of rent while the restoration work was taking place. The High Court upheld the decision of the Full Court.
In doing so, the High Court emphatically rejected the proposition that a party entering into a contract was at complete liberty to break the contract provided damages adequate to compensate the innocent party were paid - in the Tabcorp case being damages in the amount of the diminished value of the landlord's reversionary interest. Rather, the High Court reaffirmed the 'ruling principle' [13] that the measure of damage at common law for breach of contract was that stated by Parke B in Robinson v Harmon (1848) 1 Exch 850, 855; (1848) 154 ER 363, 365:
The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed.

Applying that principle to the facts of this case, under the terms of the contract for the construction of his house, Mr Willshee was entitled to a house constructed using limestone which was all of high quality. That is not what he got. Under the 'ruling principle', he was entitled to damages in the amount required to put him in that position - namely, by demolishing the existing external wall and replacing it with limestone which was all of high quality.
As the High Court points out in Tabcorp, the words of Baron Parke in Robinson v Harmon are not to be equated with being placed in 'as good a financial position as if the contract had been performed' [13]. So, in the case of land and buildings, diminution in value is not the only measure of damages available - although, of course, in some cases it may be the appropriate measure.
The earlier decision of the High Court in Bellgrove v Eldridge [1954] HCA 36; (1954) 90 CLR 613 stands firmly against the proposition that diminution in value is the ordinary measure of damages awarded against a builder as a result of departure from a building contract. In that case, a builder who had breached his contract in respect of the composition of the concrete in the foundations of the building and in respect of the mortar used in the erection of its brick walls, asserted that the relevant measure of damage was the difference between the value of the house and land as constructed, and the value which it would have had if the building contract had been performed. That contention was rejected. In the joint judgment of Dixon CJ, Webb and Taylor JJ, it is observed that the ordinary measure of damage is the cost of the building work which is required to achieve conformity with the building contract (617 ‑ 618). If that work requires the demolition and reconstruction of the house, then, subject to one qualification, that is the appropriate measure of damage.
The qualification to which the High Court referred in Bellgrove was that 'not only must the work undertaken be necessary to produce conformity, but that also, it must be a reasonable course to adopt' (618). On the facts of Bellgrove's case, the High Court was of the view that insistence upon the performance of the remedial work by demolition and reconstruction was entirely reasonable given the nature of the breaches of the building contract.
In the present case, part of the reasoning relied upon by the trial judge was the proposition that Mr Willshee's concern was primarily aesthetic, but it could not be said that his view of aesthetic desirability would necessarily be shared by others, and there was no term of the contract requiring a particular aesthetic standard to be achieved, nor any objective measure by which Mr Willshee's views could be assessed.
The decision in Tabcorp establishes that this process of reasoning is erroneous. Although in the present case there was no express term of the contract relating to the aesthetic standard to be achieved by the limestone cladding, there was a term of the contract which required the limestone cladding to be of high quality. It was breach of that term which resulted in accelerated deterioration of the limestone surfaces which Mr Willshee did not regard as aesthetically pleasing. As the High Court points out in Tabcorp, the question of whether or not Mr Willshee's views in this respect are idiosyncratic, or would be shared by others, is not to the point [16]. Mr Willshee entered into a contract which he considered served his interests, and he is entitled to the performance of that contract quite irrespective of the views which other people might form in relation to the advancement of those interests, such as views relating to the aesthetic appearance of the house.
In Tabcorp, the High Court also elucidated and explained the qualification of 'unreasonableness' established by the earlier decision Bellgrove. It established that this qualification is only to apply in 'fairly exceptional circumstances … only … where the innocent party is "merely using a technical breach to secure an uncovenanted profit"…' [17] (quoting from Radford v De Froberville [1977] 1 WLR 1262 (Oliver J).
Applying that test to the circumstances of the present case, it could not be said that Westcourt's breach of contract was, in any sense 'technical'. It was a serious and significant breach, which had a significant impact upon the rate at which the external cladding of the house weathered and deteriorated, and which has had a significant impact upon the appearance of the house.
Nor could it be reasonably concluded that Mr Willshee is pursuing his claim in order to secure a profit to which he has no entitlement under the building contract. Mr Willshee gave evidence in the strongest terms of his displeasure upon discovering that a significant part of the limestone used for the external cladding of his house was of inferior quality. That evidence was entirely plausible and reasonable, and was not rejected by the trial judge. Westcourt submits that the evidence does not sustain the conclusion that Mr Willshee will in fact use the damages awarded to undertake the relevant remedial work (appeal ts 47). However, there are passages in the evidence of Mr Willshee (see, for example, ts 272) which suggest that it is his intention to undertake the reconstruction work in the event that damages are awarded. In any event, the question of whether or not the work will in fact be undertaken is 'quite immaterial': Bellgrove (620).
Notwithstanding the decision in Bellgrove, under the more recent formulation of the test in Tabcorp, it is conceivable that the subjective intention of a plaintiff may be relevant to the application of the qualification to the 'ruling principle' of damages. However, a defendant wishing to rely upon the qualification carries the onus of proving the facts relevant to its application. In the present case it was not put to Mr Willshee in the course of his cross‑examination, that he had no intention of using the damages awarded to undertake the necessary reconstruction work. Accordingly, Westcourt cannot now rely upon the lack of evidence as to Mr Willshee's intention to sustain an assertion that this case comes within the 'fairly exceptional circumstances' which would result in Mr Willshee being denied the ordinary measure of damage.
As regards the decision of the House of Lords in Ruxley, upon which the trial judge placed significant reliance, in Tabcorp, the High Court observed that on one view, the result of that case was inconsistent with the principles established by earlier English decisions [18]. In any event, the High Court distinguished that case on the facts. It is equally distinguishable from the facts of this case.
In Ruxley, the builder departed from the building contract by constructing a swimming pool which had a maximum depth which was some 9 inches shallower than that specified by the contract. However, the evidence established that the pool as constructed was perfectly safe to dive into.
With respect to the trial judge, that is a very different situation to the present case. In the present case there was a contractual obligation to supply limestone of high quality for use as the external cladding of the house. The external cladding of a house is quite obviously a matter of great significance and importance to its owner. Notwithstanding that contractual obligation, Westcourt installed a significant quantity of limestone which was of inferior quality, with the result that it deteriorated rapidly, necessitating significant remedial work. Even though the deterioration did not adversely affect the structural soundness of the building, it was nevertheless material to the calibre and quality of the building supplied, when compared to the calibre and quality of the building for which Mr Willshee contracted.
In this case, application of the 'ruling principle' governing the measure of damages for breach of contract means that Mr Willshee is entitled to the amount of money required to put him in the position in which he would have been had his house been constructed using only limestone of high quality. As it could not be concluded that Mr Willshee was relying on a technical breach of contract to obtain for himself a profit which was outside the terms of the building contract in claiming damages measured in this way, the trial judge erred in concluding that the case came within the qualification of 'unreasonableness' referred to in Bellgrove.
It is therefore necessary to turn to the assessment of the amount which should have been awarded. The trial judge found that at the time of trial the cost of rectification work was $257,977.91. Evidence was also adduced by Mr Willshee to the effect that the provision of alternative rental accommodation during rectification work would cost $16,900, and that the removal, storage and insurance of his furniture and personal effects over the period of the rectification work would cost $20,339. These amounts should be added to the amount of $9,290 awarded by the trial judge. The $9,290 was the cost (as assessed by his Honour) incurred by the appellant in carrying out the cleaning and sealing work and in repainting timber decking, posts, beams and eaves which were affected by the cleaning. The trial judge found that the cleaning and sealing work should have been carried out in any event when the house was built [339]. The appellant acted reasonably in the circumstances in undertaking the cleaning and sealing work to ameliorate the deterioration in the limestone (and the cost incurred was reasonable). The awarding of the cost of removing and replacing the limestone blocks does not preclude the additional award of the $9,290. In order to allow for possible increments in cost since the date of trial, interest should be allowed on those amounts at the rate specified pursuant to s 32 of the Supreme Court Act 1935 (WA), since the date upon which the trial concluded (30 November 2007).
Mr Willshee also claims general damages. The trial judge rejected that claim because of his view that the claim was essentially one for loss of amenity, and there was no express contractual provision requiring Westcourt to achieve a particular aesthetic standard. As I have observed, the trial judge was in error in placing emphasis upon the lack of an express contractual provision in respect of aesthetic standards. Westcourt had a contractual obligation to supply limestone of high quality. As a result of breach of that obligation, Mr Willshee has been required to live in a house which he considers to be aesthetically displeasing in some respects for a number of years.
Further, as damages should be awarded on the hypothesis that rectification work will be carried out in order to provide Mr Willshee with a house which conforms to that for which he contracted, it is inevitable

that such work will result in disruption to Mr Willshee's life, as he will be required to vacate the house during the performance of those rectification works. Damages have been awarded for distress and inconvenience in cases involving breach of a building contract. See Nouvelle Homes Pty Ltd v G & M Smargiassi [2008] WASC 127 [76] ‑ [104] and the cases there cited. When regard is had to those circumstances, in my opinion, an award of damages limited only to the expenses likely to be incurred by Mr Willshee in performing the rectification work, together with the cost of some of the rectification work already carried out, falls short of fully compensating Mr Willshee for the loss which he has suffered by reason of Westcourt's breach of contract. The assessment of an amount which properly reflects the more nebulous matters to which I have referred is, of course, necessarily subjective. However, this does not mean that damages cannot or should not be awarded. In order to compensate Mr Willshee for the damage which he has suffered, and which is not readily quantifiable, I would add to the amounts to which I have referred, the further sum of $5,000. As that amount is assessed as at today's date, it would not be appropriate to award interest on that amount prior to judgment.

Conclusion

In conclusion, I would dismiss the cross‑appeal and allow the appeal. As a result of allowance of the appeal, I would increase the amount of damages awarded by the trial judge by the amount of $5,000, plus the further sum of $295,216.91, together with interest on the latter amount at the rate specified pursuant to s 32 of the Supreme Court Act since 30 November 2007.
BUSS JA: I agree with the Chief Justice.
NEWNES AJA: I agree with the Chief Justice.