Beirne v Kidd
[2015] NZHC 2151
•4 September 2015
IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY
CIV-2014-425-124 [2015] NZHC 2151
BETWEEN GRAHAM HENRY BEIRNE
Appellant
AND
CHARLES EDWARD FRANCIS KIDD Respondent
Hearing: 25 August 2015 Appearances:
W J Hamilton for Appellant
R T Chapman for RespondentJudgment:
4 September 2015
JUDGMENT OF MANDER J
[1] The appellant, Mr Graham Beirne, imported a recreational camper vehicle (RV) from the United States. He entered into a contract with the respondent, Mr Charles Kidd, to carry out modification work to reduce the width of the RV in order for it to comply with New Zealand standards.
[2] Mr Beirne and Mr Kidd subsequently came into dispute regarding the standard of the work carried out and claims made by Mr Beirne of damage to the RV and alleged defects in workmanship, which Mr Beirne was required to remedy himself.
[3] Mr Kidd sued Mr Beirne to recover the sum of $28,262.06 (including GST), representing the unpaid portion of the amount he had invoiced Mr Beirne for the work done. Mr Beirne counterclaimed for the sum of $17,867.48 (including GST), for costs he claimed he had incurred to remedy Mr Kidd’s defective work and
damage.
BEIRNE v KIDD [2015] NZHC 2151 [4 September 2015]
[4] The District Court allowed Mr Kidd’s claim in full.1 Mr Beirne was awarded
$3,128.62 on his counterclaim.
[5] Mr Beirne has appealed the District Court’s award in favour of Mr Kidd, and
the refusal of the balance of his counterclaim.
Facts
[6] There is no material dispute regarding the wider background facts. After Mr Beirne imported the RV, he met Mr Kidd who advised that he had experience in modifying RV’s to meet New Zealand regulations. The process involved cutting the vehicle in half, reducing the width of the vehicle by some 60 mm, and then reassembling the vehicle.
[7] The parties first met at Rolleston, where the price discussed between them ranged from $18,000 to $30,000, but up to $35,000. A second meeting took place at Mr Kidd’s farm in Winton, in April 2010, when the RV was taken to Mr Kidd for him to inspect. The price discussed by the parties at that meeting was between
$18,000 and $35,000. Mr Kidd accepted that he gave an upper price range of
$35,000 “tops”, and acknowledged he used that phrase in the conversation. There is
no dispute that GST was not discussed at either meeting.
[8] At the meeting at Mr Kidd’s farm, agreement was reached for Mr Kidd to carry out the work, and Mr Beirne left the RV with him for the modification to be carried out. A matter in dispute between the parties is whether or not the range of price discussed was inclusive or exclusive of the cost of a new windscreen. Similarly, there is dispute as to whether the work to be carried out included painting of the parts of the RV that were to be affected by the work.
[9] When the modifications were completed, Mr Beirne’s nephew picked up the RV and transported it to Invercargill. When Mr Beirne’s nephew took possession of the RV, he took photographs at the time, as it was considered the RV was in a
substandard state, with various defects and damage which were to be the subject of
Mr Beirne’s counterclaim.
Principles on appeal
[10] It is accepted by the parties that on a general appeal to this Court, I have the responsibility of arriving at my own conclusions regarding the merits of the case. No deference is required to the lower Court findings beyond the ordinary acknowledgment of the lower Court’s advantage regarding the opportunity to observe and assess the witnesses as they gave their viva voce evidence.2
The issues on appeal
[11] Helpfully, the parties are agreed in their identification of the issues the subject of appeal. These are identified as follows:
(a) Was there an agreed maximum price for the work of $35,000?
(b)Related to that first issue, was the price to include the cost of the replacement windscreen?
(c) Was the price inclusive or exclusive of GST?
(d)Was repainting the rear bumper, the front of the vehicle, and associated costs within the scope of works covered by the price?
(e) As a result of the modification work, was damage caused to the RV’s headlining, and, if so, what is Mr Kidd’s liability to make good that damage?
(f) Is Mr Kidd liable for the cost of replacing the urethane around the windscreen?
Was there an agreed maximum price for the work of $35,000?
[12] The District Court found that the parties had come to no fixed agreement between them as to cost, and that the price range provided was an estimate. It was not, in the District Court’s view, what could be described as a near quote.3
[13] Mr Beirne submitted that the District Court erred in reaching that conclusion. He submitted that the use of the word “tops”, as communicated by Mr Kidd, was a representation as to the maximum cost (irrespective of the GST issue) upon which he could rely of what the work would cost.
[14] Mr Beirne relied on his evidence, and that of his wife, that when Mr Kidd was questioned at the time for the reason for the wide range in the cost, Mr Kidd advised this was because he did not know how much the windscreen would cost, if one was required.
[15] Mr Beirne accepted the offer made by Mr Kidd to carry out the work after discussion at the farm, when, as accepted, the cost was represented as “$35,000 tops”. That statement induced Mr Beirne to enter into the contract, and the representation as to the maximum cost became a term of their agreement, from which Mr Kidd cannot now resile.
[16] As an alternative argument, Mr Beirne submitted that, even if the figure provided by Mr Kidd was an estimate, it should be regarded as a “near quote” of the type referred to by Miller J in MacFarlane v Dickson Marine (Refits) Ltd.4 When providing an estimate there is an obligation on the estimator to advise if the amount of work is going to materially exceed the estimate, and that person carries a duty of care in that regard.5
[17] Mr Beirne submitted the scope of work to be undertaken by Mr Kidd was readily identifiable and discrete. It had been assessed by Mr Kidd after his
inspection of the RV at his farm when the opportunity had been provided to confirm
3 See, for example, MacFarlane v Dickson Marine (Refits) Ltd [2013] NZHC 647 at [42].
4 MacFarlane v Dickson Marine (Refits) Ltd [2013] NZHC 647.
5 J and J C Abrams Ltd v Ancliffe [1981] 1 NZLR 244 (CA).
the work needed to be done and to be factored into the cost range provided. It was incumbent on Mr Kidd to make it clear that the price range provided was an estimate only, and that the costs could rise and fall beyond the $35,000. At the very least, Mr Beirne submitted, the use of the term “$35,000 tops” was misleading, and that misleading statement had induced Mr Beirne to enter into the contract. He should therefore be bound by the price he represented or required to pay damages resulting from his misrepresentation.
[18] Inextricably linked to whether there had been an agreed maximum price is the issue of whether the price range provided included the cost of a replacement windscreen. Mr Beirne’s position is that, as already indicated, the price represented included the cost of a replacement windscreen. Mr Kidd, however, gave evidence that the price range he provided did not include the cost of a replacement windscreen. His evidence was that such a cost was so variable that he was not in a position to accurately make such an assessment, and therefore did not do so.
[19] Mr Kidd submitted that the issue of whether a fixed maximum price had been agreed was secondary to whether the price represented by Mr Kidd included or excluded the cost of a replacement windscreen. In his submission, that was a factual issue between the parties. The District Court’s approach to that issue, relying on what Mr Kidd submitted was the “best evidence” provided by “contemporaneous documentation”, namely an email exchange between the parties, between 16 and 19
March 2011, was, in his submission, sound.
[20] In the District Court, Mr Kidd had denied that he had told Mr Beirne at their second meeting at the farm that the reason for the price range was because he did not know how much the windscreen would cost. His evidence was that all he said in relation to the windscreen was that he did not know how much the windscreen would cost, if one was required, this, he said, was because the manufacture of a custom made windscreen was such an unknown that he was not prepared to include the windscreen (or the painting) in the range of price that he provided. He mentioned a possibility of the windscreen having to be manufactured in America. Mr Kidd submitted there were other variables in play, including whether the RV’s tanks had to be removed, which gave rise to the uncertainty of the price. As a result, the
windscreen was a separate discrete matter which was not included in the range provided.
[21] Mr Kidd submitted the email exchange between the parties was consistent with his evidence, which was that the windscreen was not part of the estimate because, as stated in the email, “the windscreen was an unknown item”. This, it was argued, could be reasonably read as an “unknown cost”.
Analysis
[22] It is clear from the evidence that at the second meeting at the farm a contract was entered into between the parties, whereby Mr Kidd undertook to carry out the necessary modifications of the RV to meet New Zealand requirements. In turn, Mr Beirne undertook to pay Mr Kidd for that work. It is equally clear that Mr Kidd was not able to provide an exact figure, and he provided a price range of between “$20,000 to $35,000 tops”. This was because of some presently unknown variables associated with the work which could attract greater or lesser cost.
[23] I accept Mr Beirne’s submission that the use of the word “tops” indicates a maximum which would not be exceeded, at least not without Mr Kidd reverting to him about that additional cost. I also accept that Mr Beirne entered into the contract on that basis, and that the indicated range did induce Mr Beirne to enter into the contract and engage Mr Kidd to carry out the work. It does not matter a great deal whether the representation regarding the cost range is described as an estimate, a quote, or a near quote, in my view, it was a term of the contract upon which Mr Beirne relied in accepting Mr Kidd’s offer to carry out the work.
[24] However, as was recognised by Mr Kidd’s counsel, such a finding does not resolve the issue. The question that remains is whether on the evidence the price range quoted, “$20,000-$35,000 tops”, included or excluded the cost of the windscreen. The District Court does not make any specific finding regarding the windscreen issue, however, I consider it implicit in its finding that there was no agreed fixed price that the windscreen was to be a standalone cost not included in the range provided by Mr Kidd. Whether that implicit result stands scrutiny turns on an analysis of the available evidence.
[25] The District Court Judge was satisfied that both parties were attempting to tell the truth as they saw it. The Judge concluded that because the transaction took place some time ago, in 2010, the best evidence of what the agreement was between the parties came from what the Judge described as “the contemporaneous documentation”.
[26] The District Court’s reliance on the email exchange of March 2011 as “contemporaneous documentation” is, in my view, misplaced. The emails do no more than record the position being taken by the respective parties after the dispute had arisen between them, at the time Mr Beirne received Mr Kidd’s invoice. The documents in question were not generated at the time the contract was formed, nor are they contemporaneous with the period when the work was being carried out. The stance being taken by the parties in the emails was replicated by them in their respective positions before the District Court. I cannot therefore discern how the emails assist in determining what was agreed as between the parties. It is therefore necessary for me to examine the issue afresh. In that regard, I note the observations of the District Court Judge, who heard and saw the witnesses first hand, that she did not consider either party was seeking to be dishonest in the evidence they gave about these events.
[27] I have already reviewed some of the evidence given by the parties regarding their recollection of what was or was not discussed at the second meeting at the farm, in particular regarding the windscreen. It is apparent that the windscreen was a variable in respect of which no specific figure could be provided. Equally, however, it would appear clear that the modification, which involved narrowing the width of the RV, would require, if not the replacement of the current windscreen, substantial modification to it. It was therefore an important component of the work to be undertaken.
[28] Mr and Mrs Beirne both gave evidence about this issue. Mr Beirne’s evidence was that, at the first meeting at Rolleston, the price range had included the cost of a fabricated windscreen. Mrs Beirne, in her evidence, made reference to some discussion regarding the possibility of the windscreen breaking, but that this would be considered later, if and when that time comes. Her evidence was that
nothing else was discussed, at least at that stage, which may have caused the price to fluctuate. In relation to the second meeting at Mr Kidd’s farm, both Mr and Mrs Beirne gave evidence that the need for a range of costs to be provided was because Mr Kidd did not know whether a new windscreen would be required.
[29] Mr Kidd’s evidence-in-chief centred on the email that he sent in March 2011, which referred to the windscreen being an “unknown item”. In that email, he referred to the price range which he provided as being dependent on whether tanks needed to be removed. If they did not need to be removed the price would be near the lower figure, but, as it turned out, that work was required to be done. Under cross-examination he denied that the range in the cost of the work provided was because he did not know how much the windscreen would cost, if it was required.
[30] Having considered this evidence and the wider circumstances as they existed between the parties, I have concluded that, on the balance of probabilities, the price range of “$20,000-$35,000 tops” would more probably have included an allowance for the windscreen. I have reached that conclusion for the following reasons.
[31] Firstly, the cost of the first windscreen, which is in dispute as between the parties, was $9,900. That represents almost half the lower end of the price range provided by Mr Kidd, and close to 30 per cent of the upper end of that range. Mr Beirne, in deciding whether to enter into the contract with Mr Kidd and have him modify his RV, would have needed to have known the extent of his financial exposure in having such work undertaken. As I have already observed, the replacement or modification of the windscreen was clearly an essential component part of the work to be undertaken. I consider it unlikely that he would have allowed himself to be exposed to such a variable without seeking some reassurance of his total liability if he was to engage Mr Kidd to do the work. This would necessarily have included the cost of this particular important part of the work to be undertaken.
[32] Secondly, while Mr Kidd claimed that estimating the cost of a windscreen was “out of his league” and not something he would venture to suggest an approximate price for, he had done this work on a number of previous occasions. Indeed, the reason why Mr Beirne was engaged with Mr Kidd was because Mr Kidd
had told him that he had experience in modifying this type of vehicle, in particular, the work required to have such vehicles cut in half and the width reduced in order to allow the vehicle to be registered and licensed in New Zealand. It follows therefore that, while this was a variable, and while, no doubt, the required windscreen and the necessary work would vary from one vehicle to the next, Mr Kidd would have been in some position to provide information about what that part of the work may involve and the range of costs that may be incurred.
[33] In the event, the first windscreen that was manufactured broke upon installation. A dispute arose as between Mr Kidd and the manufacturer as to who was at fault in relation to that breakage, which necessitated the ordering of a new windscreen, which Mr Beirne ended up paying for. The cost of the replacement
windscreen was $4,571.25, including GST.6 Mr Beirne elected to pay for the
replacement windscreen because the manufacturer and Mr Kidd were at loggerheads as to who should take responsibility for the broken first windscreen, and he needed to have the work on his RV progressed.
[34] If the first windscreen, in the sum of $9,990 was not intended to have been part of the range of cost provided by Mr Kidd of between $20,000 and $35,000, one would have expected Mr Kidd to have alerted Mr Beirne at that time, in October/November 2010, when the first windscreen broke, that Mr Beirne risked having to pay for the broken windscreen if the manufacturer did not take responsibility for it. It is apparent that no such dialogue was entered into between the parties at that time. In my view, that is consistent with the windscreen having been included in the price range provided by Mr Kidd. As already noted, the fact Mr Beirne ultimately paid for the replacement windscreen was a matter of his choice in order to ensure the work was completed and not delayed any further as a result of the dispute between Mr Kidd and the manufacturer about who was going to take responsibility for the broken first windscreen.
[35] Accordingly, I conclude that the price range of $20,000 to $35,000 did set the upper limit of the cost to Mr Beirne for the work to be carried out on the RV. This
6 I was advised by counsel that the lesser price for the second windscreen was because the mould had already been made by the manufacturer for the first windscreen.
range of cost was a term of the contract at the time it was entered into, and as such was relied upon by Mr Beirne. Further, I am satisfied, for the reasons I have traversed, that the windscreen was included as part of the range of cost involved in carrying out the work, represented to Mr Beirne by Mr Kidd.
[36] If the cost was to exceed the range provided, it was incumbent on Mr Kidd to contact Mr Beirne, before further costs were incurred over the maximum of the range provided, and advise that the cost of the work would materially exceed the estimate. Mr Kidd carried a duty of care to that effect. In the absence of such advice, responsibility for the additional costs for completion of the contract rested with him.7
Despite an event occurring, namely the breaking of the first windscreen, which may
have raised issues regarding additional costs to Mr Beirne, it is apparent that nothing was raised with him regarding that possibility. In my view, that confirms the price range provided was meant to provide a ceiling, or a fixed maximum price, for the work.
Was the price inclusive or exclusive of GST?
[37] In the District Court, as in this Court, the parties were in agreement that GST had not been discussed when negotiating the price for the works. It was therefore subnmitted by Mr Beirne that the price was GST inclusive.
[38] Judge Bouchier referred to authority, to which I shall shortly return, holding that there is a presumption that the starting point is that a contract will be inclusive of GST. Despite this authority, Judge Bouchier considered there to exist circumstances:
which would make it inequitable to grant the relief sought by the defendant that the price be exclusive of GST because, quite clearly, in business as the plaintiff has said in evidence, prices are quoted that are exclusive of GST but the expectation is that there will be GST added to the price.
[39] On this basis it was held that the parties intended that GST was to be added to the quoted price. In other words, that it was a GST exclusive agreement.
7 J and J C Abrams Ltd v Ancliffe [1981] 1 NZLR 244 (CA).
[40] On Appeal, Mr Kidd seeks to uphold Judge Bouchier’s decision by asserting that it was a finding of fact, based on both parties to the transaction being businessmen, and that in a business setting prices are quoted as being exclusive of GST. Mr Kidd also relies on the fact that he was not aware this was a private transaction, with the concomitant result that he believed both parties were GST registered. Mr Kidd says he placed reliance on this assumption.
[41] Mr Beirne submits that Judge Bouchier erred in law in disregarding authority holding that the presumptive position is that a contract is GST inclusive. He considered the terms of the contract to be decisive. However, beyond the terms of the contract Mr Beirne also relies on the fact this was a private arrangement between the two parties. The proceeding was issued by Mr Kidd personally (not his company or partnership) and that all Mr Beirne knew was that Mr Kidd was a farmer who occasionally modified RVs.
[42] Finally, that if regard is to be had to the equity of the situation, then it would be inequitable for Mr Beirne to have to pay GST when the agreement was entered into in his personal capacity, with the contract silent as to GST. If Mr Beirne was aware the agreement was GST exclusive, he could have used one of his corporate entities as a conduit for the transaction.
Analysis
[43] In any contractual dispute, the starting point is the express words of the contract. In this case, not only are there no express words, but the parties are in agreement that the issue of GST was never discussed.
[44] In the absence of express words, the position must be determined by reference to the presumptive position. The starting point is the judgment of this Court in Denning v Tri-Star Customs and Forwarding Ltd, where Salmon J averred:8
It is clear on the basis of this authority that the starting point must be that where GST is not mentioned a price is deemed to be inclusive of the tax. That means that if the Dennings are to succeed they must establish that the
8 Denning v Tri-Star Customs and Forwarding Ltd [1996] 3 NZLR 630 (HC), affirmed on appeal in Tri-Star Customs and Forwarding Ltd v Denning [1998] 1 NZLR 33 (CA),
parties had agreed that GST should be included, that the written agreement did not reflect that fact and should be rectified, or that there was a mistake justifying relief under the Contractual Mistakes Act 1977, or that circumstances exist which would make it inequitable to grant the relief sought by the plaintiffs.
[45] This default position is arrived at as a matter of implication from the provisions of the Goods and Services Tax Act 1985. GST is payable on the supply of commodities, not their receipt.9 There is no obligation incumbent on a purchaser to indemnify the supplier of commodities of their statutory requirement to account for GST.10
[46] On this basis alone, with respect to Judge Bouchier, it is difficult to appreciate how Her Honour reached the conclusion that the agreement was GST exclusive, given the explicit factual findings. If any further statement is needed to remove all equivocation from the position, resort may be had to the judgment of
Master Venning in Apple Fields Ltd v Northington Partners Ltd:11
[22] Mr Austin’s evidence is that it is standard professional firm practice that unless a quoted fee is specified to be GST inclusive that GST will be added. However, there are a number of authorities that have held if a price for a good or service instalment is silent as to GST then the price is inclusive of GST: Tri-Star Customs & Forwarding Ltd v Denning (1998) 18 NZTC
13,982 and Buy Sell Publications v Lea (1993) 15 NZTC 10,314.
[47] Apple Fields is on all fours with the current proceeding. There was evidence purporting to establish an accepted business practice. Nonetheless, the default position under the Act, and in accordance with the authorities, removes all doubt from the position; where a contract is silent as to GST, the price will be inclusive of GST.
[48] That is not to say, however, the words of a contract are the sole frame of reference for determining a purchaser’s liability for GST.12 The decision Waterwings
9 Goods and Services Tax Act 1985, s 8(1).
10 Smale v Fletcher Homes Ltd CA162/94, 12 December 1994; New Zealand Refining Co Ltd v
Attorney-General (1992) 17 TRNZ 400 (CA).
11 Apple Fields Ltd v Northington Partners Ltd HC Christchurch M138/99, 25 May 1999. See too
Pyne Gould Guiness Ltd v O’Gorman (1990) 12 NZTC 7,001 (HC).
12 For example, it may be possible to argue that the payment of GST is governed by a term implied by custom. Though there may be some difficulty is establishing this given the clear presumptive position.
Airways (Te Anau) Ltd v Air Safaris and Services (NZ) Ltd is on point.13 Though the original contract in that case made no mention of GST, the parties subsequently discussed GST. It was held that where an earlier agreement is supplemented by an oral agreement, it was possible to say the written and oral agreement represented in aggregate the contract between the parties. The result, in that case, was that the parties had agreed that should GST become payable, then the purchaser would pay the amount of GST to the vendor.
[49] This is a case where the result obviously flows from the legal analysis. There are no express terms as to GST. The parties never discussed GST. I therefore find that Judge Bouchier erred in holding the contract was GST exclusive. The presumptive position discussed above clearly has application, and no reason has been advanced which would justify departure from that position.
Was painting within the scope of works?
[50] An issue in the District Court was whether the scope of works agreed upon by the parties included Mr Kidd repainting the areas of the RV that would be affected by the works.
[51] Judge Bouchier concluded that “painting was not discussed and that was not part of the work that the plaintiff was to do”.14 Her Honour was fortified in this view by the fact that there was a lack of any reference to painting in contemporaneous documentation.
[52] On appeal Mr Beirne concedes the painting was not discussed, but that there was an agreement that the RV “was to comeback in the condition it went down in”.15
On this basis, in the absence of contradictory evidence, Mr Beirne submits that painting of altered aspects of the RV was part of the agreement. This, it is submitted, was either an express term, or one implied to give business efficacy to the
agreement. Developing this argument, counsel contends it would be illogical for Mr
13 Waterwings Airways (Te Anau) Ltd v Air Safaris and Services (NZ) Ltd (1991) 13 NZTC 8,238 (HC).
14 Kidd v Beirne DC Invercargill CIV-2012-025-513, 7 November 2014 at [54].
15 At [26].
Beirne to contract someone to do half of the job, namely the engineering works but not the painting.
[53] Counsel argues the fact that Mr Kidd undercoated the parts of the bus that were altered supports the contention that he intended to also paint the bus. All arguments lead to the overarching submission that the RV should have been returned in the condition it was provided.
[54] Mr Kidd’s position is that the price did not include any painting. When challenged under cross-examination, Mr Kidd maintains that Mr Beirne communicated to him that he did not want the painting done, by Mr Kidd, and that he had professional painters t do the work.
Analysis
[55] It is clear that the issue of painting was not discussed. The real question is whether a term needs to be implied into the agreement that the RV was to be painted in order to give business efficacy to the agreement.
[56] In my view, such a term does not need to be implied. Mr Kidd was contracted to undertake the structural alterations. There is a substantial difference between such work and the trade of painting. Mr Kidd’s expertise in structural alterations does not automatically require an imputation of expertise in painting.
[57] I do not find the submission that Mr Kidd undercoated the bus only because he knew he was to paint it as persuasive. This could have been done in a reasonably rudimentary manner for the reason of protecting the works from the elements.
[58] Finally, I find the submission of Mr Beirne that the RV was to be returned to him in the same condition it was supplied to Mr Kidd to lack merit. To be truly returned in the same position, the entirety of the RV would need to be painted, not just the altered aspects.
[59] I therefore agree with Judge Bouchier that the agreement did not include the painting.
Damage to the headlining
[60] Judge Bouchier did not uphold Mr Beirne’s counterclaim in relation to the headlining. In describing the damage, Her Honour stated that a leak in the roof, caused by Mr Kidd’s workmanship, “badly stained the hood lining of the RV”.16
Further, the evidence was that the bus was returned to Mr Beirne in a generally
“disgusting condition”.17
[61] Judge Bouchier upheld Mr Beirne’s counter claim for fixing the roof leak. But she did not uphold the claim for replacement of the headlining. On this ground, Judge Bouchier stated “there is shown a stain but there is no claim to support new headlining throughout the bus”.
[62] On appeal, Mr Beirne submits that it logically follows from Her Honour’s upholding of the counterclaim for the roof leak, that the claim for the headlining should have been upheld. Further, that Mr Kidd appears to accept, by stating that the discolouration could be cleaned, that it was caused by the roof leak. Mr Beirne, pragmatically, suggested that Mr Kidd should be afforded an opportunity to attend on the bus and clean the headlining. If this is successful, that will be the end of matters. If not, then Mr Kidd should be ordered to meet the cost of replacement.
[63] Mr Kidd’s response is that the claim for the headlining was disproportionate as it required the removal of all cabinets to get access to the headlining. Further, that the counter claim was dismissed because Mr Beirne had not proved that complete relining was required. In addition, Mr Kidd submits there “was no claim for cleaning or the type of order that is now sought on appeal”.
Analysis
[64] It logically follows that where the roof leak, accepted to be through fault of
Mr Kidd, has caused damage to another aspect of the RV, that Mr Kidd bears responsibility for the necessary remedial work.
16 At [21].
17 At [23].
[65] The only outstanding question is the form of remedy when Mr Kidd has seemingly sought to disavow himself of the ability to clean the bus, seemingly leaving this Court in the position that replacement is the only option on the table.
[66] Notwithstanding the formal position Mr Kidd has taken, a certain amount of pragmatism and common sense must prevail. I will therefore afford Mr Kidd the opportunity to remediate the damage by attempting to clean the headlining, at his cost. If this removes the discoloration, that will be the end of matters. If it does not, Mr Kidd will have to bear responsibility for the replacement of the headlining.
Windscreen urethane
[67] The outcome of the urethane finish in the District Court is not clear. The parties appear to be agreed that there was no express finding on this issue by Judge Bouchier.
[68] On appeal, Mr Beirne submits that the cost of replacing the urethane seal should be the responsibility of Mr Kidd. He states that there was no aesthetic issue with the urethane seal when the bus was provided to Mr Kidd and that there should be no issue with it now. Further, that if the work was undertaken by a third party, Mr Kidd could claim from that third party for any deficiencies. In the first instance, however, Mr Beirne’s recourse is against the party he contracted with, Mr Kidd. He therefore claims $920 (including GST) for repair of the urethane finish.
[69] Mr Kidd’s riposte is that Judge Bouchier must have concluded that the work was done to an adequate standard. It follows, presumably, that this factual finding should not be disturbed on appeal.
Analysis
[70] One aspect of undertaking work to a satisfactory standard is the aesthetic component of the work. It would appear from close-up photographs the aesthetics of the urethane finish leaves much to be desired. Photographs taken from a position further away, perhaps unsurprisingly, do not highlight the standard of this work. Mr Kidd is clearly responsible to Mr Beirne for the quality of the work.
[71] The difficulty for Mr Beirne in his counterclaim is that I do not have any evidence of the standard of finish that might be expected in such work. There is no question that the work completed is functional. For the Court to conclude that its aesthetic standard is deficient would require the Court to make an assessment from photographs in an evidential vacuum. Compared to the rubber trim of windows of manufactured cars, the urethane finish appears poor, but that may not be a fair comparison in respect of a customised modification. This is not something which I can take judicial notice of. I do not even know the process by which the work is done, nor what the appearance might be expected to be. It is therefore apparent that in the absence of expert or specialist evidence it would not be appropriate for the Court to speculate.
Outcome
[72] Mr Beirne has substantially succeeded in this proceeding. By way of summary, I have concluded:
(a) the maximum price of the works was $35,000;
(b) the maximum price included the cost of the windscreen; (c) the quoted price was GST inclusive;
(d) the painting work was not included in the agreement;
(e) the damage to the headlining is to be remedied by Mr Kidd, whether by attempting to clean first, or by replacement; amd
(f) the urethane seal around the window is has not been proved to be so deficient as to require its replacement or remediation.
[73] The orders required to give effect to this outcome are as follows:
(a) The District Court decision in favour of Mr Kidd is set aside.
(b)Mr Kidd is entitled to judgment in the sum of $22,167.48 (including GST) (which represents the difference between the sum paid by Mr Beirne of $12,832.52 (including GST) and the maximum liability of Mr Beirne, $35,000 including GST).
(c) The District Court counterclaim judgment in favour of Mr Beirne in the sum of $3,128.62 (including GST) stands. To be added to that award are the following sums:
(i)Mr Beirne is entitled to judgment in the sum of $4,571.25 (including GST) for the replacement windscreen.
(ii)Mr Kidd is to be afforded the opportunity to clean the headlining, as outlined at [66] above. If this remedy proves unsuccessful, Mr Beirne is entitled to judgment in the sum of
$4,600 (including GST).
[74] Mr Beirne is entitled to costs on this appeal. If the parties are unable to agree on the appropriate costs award, memoranda not exceeding five pages are to be filed sequentially.
Solicitors:
Duncan Cotterill. Christchurch
Cruickshank Pryde, Invercargill
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