Tugaga v Westend Painters Limited
[2017] NZHC 2130
•1 September 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2016-404-2294
CIV-2016-404-3008 [2017] NZHC 2130
BETWEEN FIONA TUGAGA
Appellant
AND
WESTEND PAINTERS LIMITED First Respondent
LEE TERRENCE DONALD Second Respondent
Hearing: 16 and 17 May 2017 Counsel:
DA Cowan and CJC McLean for appellant
SJ Neville for first and second respondentsJudgment:
1 September 2017
JUDGMENT OF FITZGERALD J [Appeal against decision of District Court]
This judgment was delivered by me on 1 September 2017 at 4 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: DA Cowan, Auckland (D Cowan) Ellis Gould, Auckland
Tugaga v Westend Painters Limited [2017] NZHC 2130 [1 September 2017]
Introduction
[1] The dispute between the appellant (“Ms Tugaga”) and the respondents (collectively referred to “Westend”) centres on a repaint of Ms Tugaga’s residential property in Titirangi, Auckland (the “Property”). The Property is a two-storey wooden villa.
[2] In 2013, Ms Tugaga contracted Westend to carry out a full repaint of the Property.1 All of the day-to-day communications in relation to the repaint, however, were between Ms Sharp and Westend. Ultimately, Ms Sharp gave evidence that, in her view, there were a number of workmanship issues with the painting work. Ms Tugaga also alleged that, in or about March 2014, Westend repudiated the painting contract by “walking off the job” and refusing to complete the works.
[3] Westend said there were no workmanship issues. And Westend said that in any event, the work was not complete, such that it was premature to consider whether there were workmanship issues or defects that could not be remedied prior to completion. It also disputed that it walked off the job, saying it was always willing to return and complete the project. Rather than it repudiating the contract, Westend says Ms Tugaga herself wrongfully cancelled the painting contract by, at the latest, commencing the underlying proceedings in the District Court.
[4] Judge Harrison heard the competing claims over a five-day hearing. He concluded that Ms Tugaga had wrongfully cancelled the contract and therefore declined to grant the relief sought on her contractual cause of action.2 The Judge also made various findings on other (related) causes of action advanced on Ms Tugaga’s behalf.3 Judge Harrison also entered judgment against Ms Tugaga on a
counterclaim by Westend for unpaid scaffolding costs.
1 There was some issue at trial as to who Westend’s contractual counterparty was. Ms Shirley- Ann Sharp, who is Ms Tugaga’s sister-in-law, had actually signed the contract. It was ultimately agreed at trial that Ms Sharp had entered into the contract on behalf of Ms Tugaga, as owner of the Property. No issue was taken in relation to this on appeal. I accordingly proceed on the basis that the contractual parties were Ms Tugaga and Westend.
2 Tugaga v Westend Painters Ltd [2016] NZDC 19921.
3 Claims in negligence, under the Fair Trading Act 1986 and the Consumer Guarantees Act 2003,
as well as claims against Westend’s director personally.
[5] Ms Tugaga now appeals from Judge Harrison’s findings.
Factual background
[6] Before the hearing, counsel filed a helpful agreed chronology of facts. Much of the factual background described in this section of my judgment is drawn from that chronology (although I interpose where there are key factual matters in dispute).
[7] It seems that Mr Lee Donald, one of Westend’s two directors,4 first engaged with Ms Sharp in relation to the painting works in or around mid-August 2013. Ms Sharp gave evidence that in these early discussions, Mr Lee Donald represented that the painting works would be carried out by three qualified painters on site at all times, and would be completed in approximately eight weeks. Mr Lee Donald denied making any such representations to Ms Sharp.
[8] On 15 August 2013, Westend sent Ms Sharp a quote for the painting works of
$46,704 (excluding GST). Ms Sharp, on behalf of Ms Tugaga, accepted the quote on
4 September 2013.
[9] In addition to painting, the Property needed a considerable amount of other work, including building works. Initially, Mr Lee Donald and Ms Sharp considered whether this other work ought to be completed first, before Westend started painting. However, Mr Lee Donald gave evidence that he and the builder had discussions in around early September 2013, and they agreed they could work around each other so that both streams of work could start at the same time.
[10] On this basis, the painting preparation work commenced on or about
8 September 2013. This started with cleaning the Property. Scaffolding on the property was erected by 7 October 2013.
[11] There were various communications between the parties and invoices rendered by Westend over the ensuing months. By at least late November 2013,
Ms Sharp was raising concerns about some of the workmanship, including certain
4 At all relevant times, Mr Lee Donald’s brother, Mr Paul Donald, was also a director. Mr Paul
Donald resigned as a director in September 2015.
downstairs windows which had been sealed shut by paint. Mr Lee Donald gave evidence that Ms Sharp had in fact asked Westend to seal shut two windows for security reasons. Ms Sharp denied this.
[12] Mr Lee Donald gave evidence that in early December 2013 he received a telephone call from Ms Sharp, telling him that she wanted to put the paintwork on hold until August 2014, when the builder would be able to return and complete his works. Mr Donald noted that this was not ideal from Westend’s perspective, as they wanted to get the works completed. He suggested that Ms Tugaga consider getting an alternative builder to complete the works, rather than put the job on hold until the August of the following year.
[13] Ms Sharp said that she and Ms Tugaga discussed the matter, but did not want to change builders at that time. Ms Sharp also gave evidence that Ms Tugaga had instructed her that no further money was to be paid to Westend until their concerns with the painting workmanship were sorted out and the job completed. Ms Sharp advised Mr Donald of this in an email dated 2 December 2014.
[14] Also around this time, Mr Lee Donald emailed Ms Sharp a “job completion form” on which he suggested she list any workmanship issues she considered needed to be corrected and so on. On the same day, Ms Sharp replied to Mr Lee Donald saying that the job completion form was a “great idea”, and that she had started a list, however noted that the completion of the form should be done in sections, as some of the work would not be complete until 2014.
[15] Ultimately this job completion form assumed some importance at the trial, as Ms Tugaga’s initial expert, a Mr Neill, had said it was inappropriate to provide a job completion form to the client when the job was not in fact complete. The purpose and nature of the “job completion form” is not of any direct relevance to the matters I must determine on appeal, as it was not in dispute that the works were not complete when they ceased. Nevertheless, having reviewed the evidence, it seems to me that the form had been provided so that any issues raised by Ms Sharp could be collated in one place, as and when sections were completed.
[16] There were further discussions and emails between Ms Sharp and Mr Lee Donald about the works during mid-December 2013. There is no dispute that these communications led to a breakdown in the relationship between Mr Lee Donald and Ms Sharp. As a result, on 11 December 2013, Mr Paul Donald, who is Mr Lee Donald’s brother, emailed Ms Sharp stating that he was going to take over the job to completion. He stated that he would contact Ms Sharp in the coming days to arrange to go through what work needed to be completed.
[17] To this end, on 17 December 2013, Mr Paul Donald had a site meeting with Ms Sharp to discuss what was required to complete the works. The following day, Ms Sharp arranged for Mr Neill (a member of the Auckland Painting Contractors Association) to inspect the Property and view the exterior of the house (from the ground level, the first floor deck level and through the open first floor window). Mr Neill issued a report on 20 December 2013. He noted some areas of incomplete painting, some joinery that appeared to have been painted shut and that some base boards were “marked with dried overspray, dust”. Importantly, however, Mr Neill concluded:
As the painting contract has not yet attained practical or sectional completion, I am not in a position to comment on the acceptability or otherwise of the standard of workmanship on the exterior painting of 2 Kohu Rd, Titirangi.
[18] Mr Paul Donald emailed Ms Sharp on 11 January 2014 about a visit by a master painter, to prepare a report for Ms Sharp to satisfy her as to the quality of the works. Ms Sharp responded that she did not need a further report as she had already received Mr Neill’s report. Mr Paul Donald asked for a copy of Mr Neill’s report, but this was not provided by Ms Sharp.
[19] On 24 January 2014, Mr Paul Donald emailed Ms Sharp an invoice in relation to the scaffolding (which by that time, had largely been taken down).
[20] Ms Sharp replied the same day, informing Mr Donald that she was not happy with the job and was “seeking legal advice”. I interpolate to note that the Judge recorded in his judgment that this was “a clear statement of a possible cancellation of the contract”.
[21] Around February or March 2014, a meeting was held on-site between Ms Tugaga, Mr Paul Donald, Ms Tugaga’s husband Mr Peter Tugaga, Ms Sharp and a Mr Geoff Kerridge (a family friend). Ms Tugaga, Ms Sharp and Mr Kerridge gave evidence that it was agreed at this meeting, including by Mr Paul Donald, that the workmanship was poor and that Westend would start the whole house paint again. Mr Paul Donald disputed this, and also gave evidence that there was never any mention, nor agreement, that the whole job would be started again.
[22] In parallel to these events, Westend commenced proceedings in the Disputes Tribunal in relation to the unpaid scaffolding invoice. There were discussions between Ms Sharp and Mr Paul Donald about cancelling the hearing in the Disputes Tribunal. Mr Paul Donald said that he would need to discuss this with Lee Donald (as co-owner of Westend). On 20 March 2014, Ms Sharp emailed Mr Paul Donald to say that she had contacted the Disputes Tribunal and that the hearing had not been cancelled. She asked whether he could see to this, as “[I] would really like to move forward with the list and getting the job sorted out”.
[23] By early April 2014, Ms Sharp had sought and obtained two further quotes for painting the house (from JR Webb & Son Ltd and Mr Painta Ltd). Subsequently, around April or May 2014, Ms Sharp said she had a telephone conversation with Mr Paul Donald, who said that Mr Lee Donald was not withdrawing the Disputes Tribunal claim and that Westend were not going to come back to the Property to complete the works. Mr Paul Donald denied this. This particular phone call, and the allegation that Mr Paul Donald had said that Westend would not return to complete the works, was not put to Mr Paul Donald in cross-examination.
[24] A Disputes Tribunal hearing was held in relation to the scaffolding invoice (though there is nothing in the evidence confirming the date on which this occured). At that hearing, Ms Sharp confirmed that proceedings were going to be brought against Westend in relation to the painting contract. As a result, the Disputes Tribunal referee directed that the painting contract dispute and the dispute over the scaffolding invoice be heard together in the District Court.
[25] Ms Tugaga filed proceedings in the District Court on 3 June 2014. She did not seek specific performance of the painting contract. Rather, she sought damages for remedial works (based on the alternative quotes provided to Ms Sharp) claiming a total of $78,000. Westend counterclaimed for unpaid scaffolding costs of approximately $8,000.
The District Court judgment
[26] As noted, Judge Harrison heard the claims over a five-day hearing. Eleven witnesses gave evidence, including at least four expert witnesses on the painting workmanship. In a judgment delivered on 27 October 2016, Judge Harrison made the following conclusions: 5
(a) That Ms Sharp (on behalf of Ms Tugaga) had purported to cancel the painting contract.
(b)That there were two possible bases upon which Ms Sharp (for Ms Tugaga) had purported to cancel the contract being the refusal to pay for scaffolding and the alleged poor standard of work). Neither justified Ms Tugaga’s purported cancellation.
(c) It was doubtful whether Mr Lee Donald had represented that three experienced painters would be allocated to the works (in the Judge’s view, there was no need for three experienced painters, given the 15- year Wattyl warranty which would issue at the completion of the works), and Mr Lee Donald had not undertaken to complete the works in eight weeks.
(d)The works were not complete when the painting contract was cancelled.
(e) At no stage did Westend declare that it would not rectify any identified defects.
5 Tugaga v Westend Painters Ltd [2016] NZDC 19921.
(f) The expert opinion was that the works that had been completed were to an acceptable standard.
(g)Westend had given no indication of not being prepared to complete the works.
(h)As the works had not been completed, and given Westend had given no indication of not being prepared to complete the works, there was no lawful basis for Ms Tugaga’s cancellation of the contract.
(i)Ms Tugaga’s negligence claim amounted to no more than allegations that Westend was in breach of its contractual duties, but it was not given the opportunity to complete the works as a result of the unwarranted purported cancellation of the contract.
(j)Mr Lee Donald made no representations outside the terms of the contract which misled Ms Tugaga or Ms Sharp into entering into the painting contract.
(k)There was nothing in the pre-contractual advice of Mr Lee Donald which amounted to a personal assumption of responsibility by him (i.e. rather than by Westend itself).
The issues
[27] The hearing in the District Court, and at least the first day of the two-day appeal before me, covered a wide range of matters, claims and evidence. However, through discussion with counsel at the hearing of the appeal, it became apparent that the core issues to be determined on appeal could be considerably narrowed.
[28] In light of these discussions, counsel helpfully agreed the following four issues, which they jointly submitted “are central to this honourable Court’s final determination on the substantive painting contract”:
(a) Was the Judge in error to find the contract was cancelled by the appellants?
(b) Was the Judge’s finding that the contract was cancelled by 24 January
2014?
(c) Was there a repudiation by Westend Painters to justify cancellation?
(d) Was the contract cancelled by filing of claim [sic] in District Court on
3 June 2014?
[29] I observe at this juncture that counsel for Ms Tugaga (Mr Cowan) accepted (quite rightly in my view) that to the extent the painting contract had not already been brought to an end, it was cancelled by Ms Tugaga as a result of her filing proceedings in the District Court on 3 June 2014. Mr Cowan acknowledged (again rightly in my view) that this would have conveyed to Westend that Ms Tugaga no longer intended to continue the contract with Westend. However Mr Cowan’s central proposition was that this was a valid cancellation, in response to Westend’s earlier repudiation of the contract (by refusing to complete the works).
[30] Therefore, I consider the key issues for determination on this appeal are:
(a) Did Westend repudiate the painting contract by effectively “walking off the job”?6
(b) If the answer to (a) above is “no”, were there any other grounds upon
which Ms Tugaga could have lawfully cancelled the painting contract?7
6 In other words, did the Judge err in concluding that Westend did not repudiate the contract (by walking off the job)?
7 In other words, did the Judge err in concluding that there was no poor workmanship which
would have justified Ms Tugaga’s cancellation of the contract?
Approach on appeal
[31] The leading decision in relation to the approach to be taken on appeal of this kind is the Supreme Court’s decision Austin, Nichols & Co Inc v Stichting Lodestar. The following key principles may be drawn from the Supreme Court’s judgment:8
(a) Appeals proceeding by way of general appeal require the appeal court to come to its own view on the merits.
(b)The weight an appeal court gives to the decision under appeal is a matter of judgment. For example, if the High Court is of a different view from the District Court, it must act on its own view.
(c) The appellant bears the onus of satisfying the appeal court that it should differ from the decision under appeal.
(d)It is only if the appeal court considers that the trial court is wrong that it is justified in interfering with it.
(e) The appeal court may or may not find the reasoning of the trial court persuasive in its own terms.
(f) The trial court may have had a particular advantage (such as the opportunity to assess the credibility of witnesses, where such assessment is important). In such a case, the appeal court may rightly hesitate to conclude that findings of fact or fact and degree are wrong, and it may take the view that it has no basis for rejecting the reasoning of the trial court and its decision should stand.
(g)The extent of consideration the appeal court gives to the decision of the trial court is a matter for judgment. The appeal court makes no
error in approach simply because it pays little explicit attention to the
8 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103; [2008] 2 NZLR 141 at [3] to
[5].
reasons of the trial court, given the appeal court has the responsibility of arriving at its own assessment of the merits of the case.
[32] The Court of Appeal has also recently commented on the proper approach to be taken on a general appeal. In Green v Green, the Court made the following observations:9
[29] Austin, Nichols reaffirmed the appellate court’s obligation to form its own independent judgment on the merits of an appeal by way of rehearing. But two fundamentals remain constant.
[30] First, it is still axiomatic that the appellant bears the onus of persuading the appellate court to reach a different conclusion. Of necessity, in discharging that onus the appellant must identify the respects in which the judgment under appeal is said to be in error.
[31] Second, it is also axiomatic that in determining whether the judgment was wrong the appellate court will take into account any particular advantages enjoyed by the trial court. The advantages possessed by a trial judge in determining questions of fact are obvious, especially where assessments of credibility and reliability are involved. The trial judge gets to see and hear the witnesses, and is able to evaluate the strength of the evidence as it progressively unfolds within the context of the trial as a whole. As this Court pointed out in Rae v International Insurance Brokers (Nelson Marlborough) Ltd:
As the evidence unfolds the trial Judge gains an impression from the evidence which is not necessarily or usually apparent from the cold typeface of the transcript of that evidence on appeal. The Judge forms a perception of the facts in issue from which he or she adds or subtracts further facts as witnesses give their evidence, and so obtains as complete a picture as is possible of the events in issue. The Judge perceives first hand the probabilities inherent in the circumstances traversed in the evidence and can obtain a superior impression of those probabilities as a result.
[32] It was for those reasons the Supreme Court in Austin, Nichols expressly stated an appellate court should exercise caution in considering challenges to findings of credibility.
[33] The Court of Appeal made similar observations in Fonterra Co-operative Group Ltd v McIntyre and Williamson Partnership, affirming that “compelling grounds” will need to be shown before an appeal court will reverse factual
findings.10
9 Green v Green [2016] NZCA 486, [2017] NZLR 321.
10 Fonterra Co-operative Group Ltd v McIntyre and Williamson Partnership [2016] NZCA 538, (2016) 14 TCLR 435 at [153] to [160], citing Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA) at 198.
[34] I am bound by these principles. In particular, and while I have carefully reviewed all the briefs of evidence and the transcript of the evidence given at trial, I am conscious that many of the key issues in this case turn on intensely factual matters, and also involve assessments of credibility and reliability. Dense and detailed expert evidence was also given at trial. Judge Harrison had the advantage of hearing all the viva voce evidence over a five-day period, and was in a position to assess that evidence as it unfolded. While of course it is open to me to differ from the Judge on key factual findings where I consider it is appropriate to do so, I proceed with the “customary caution” when intensely factual findings are challenged.
Contractual cause of action - analysis
[35] A key issue for this appeal is the Judge’s finding that Ms Tugaga had
cancelled the painting contract and that she had had no lawful basis to do so.
[36] The Judge was clear in his view that Ms Tugaga had unlawfully cancelled the contract, but did he not state (expressly at least) when she had purported to effect that cancellation. I have therefore reviewed the Judge’s findings and the key evidence on this issue, and make the following observations:
(a) By 11 December 2013, Westend clearly intended to complete the painting works. Mr Paul Donald had emailed Ms Sharp on that day, stating that he was going to take over the job to completion.
(b)A similar position existed as at 17 December 2013, when Mr Paul Donald and Ms Sharp had an on-site meeting to discuss the works and what was required to complete them.
(c) As noted above, on 24 January 2014, Ms Sharp had emailed Mr Paul Donald informing him she was not happy with the job “and was seeking legal advice”. The Judge observed that this was “a clear statement of a possible cancellation of the contract”. I do not read this aspect of the Judge’s decision as a finding that Ms Tugaga had actually cancelled the contract at this point. Rather Judge Harrison
was saying was that, by this point, Ms Tugaga (through Ms Sharp) was communicating her intention to take legal advice, a possible consequence of which would be that the contract would not continue.
(d)That there was no cancellation of the contract at this time is evidenced by the fact that, in her later email to Mr Paul Donald of 20 March
2014, Ms Sharp requested that Mr Paul Donald take steps to arrange for the Disputes Tribunal hearing on the scaffolding invoices to be cancelled, “as I would really like to move forward with the list and get this job sorted out”. It is clear from this email that, if the Disputes Tribunal hearing had been cancelled, Ms Sharp (for Ms Tugaga) was content for Westend to complete the painting works. Nor was it suggested before me that Westend had taken steps by this time to cancel the contract.
[37] Accordingly, I conclude that, as at 20 March 2014, neither party had purported to cancel the painting contract.11
Did Westend repudiate the contract by “walking off the job”?
[38] It seems, however, that at least by early April 2014, Ms Tugaga and Ms Sharp were considering their options, as Ms Sharp had obtained two quotes from alternative painters to carry out a full repaint of the Property. These quotes were dated 10 and 16 April 2014 respectively.
[39] Ms Sharp’s evidence was that Mr Paul Donald said to her in a telephone call “circa April-May 2014” that the Disputes Tribunal claim would not be discontinued and that Mr Lee Donald had told him that he was not allowed to come back to the
Property to complete the job.
11 For completeness, I note that in her amended statement of defence to Westend’s counterclaim, Ms Tugaga pleaded that “the defendant is in breach of the contract for painting services in that the work was approximately eight weeks overdue when the contract was cancelled by the plaintiffs’ (sic) agent” (emphasis added). On Ms Tugaga’s case that the works should have taken only eight weeks to complete, this pleading envisages that Ms Sharp (on Ms Tugaga’s behalf) had cancelled the painting contract in or around January 2014. This is of course inconsistent with the approach adopted on behalf of Ms Tugaga on the appeal before me, namely that Ms Tugaga had not cancelled the contract until 3 June 2014 at the earliest, when she filed her District Court claim.
[40] Mr Paul Donald disputed that he told Ms Sharp that he could not come back and finish the job. His evidence was that that he was still waiting on the “touch up sheet” to be provided by Ms Sharp, setting out the works which she did not consider to be up to standard and which she considered needed to be done again. As noted, Mr Donald was not cross-examined on the alleged telephone call.
[41] Judge Harrison found that “Westend at no stage declared that it would not rectify any identified defects”12 and that “Westend had given no indication of not being prepared to complete [the contract]. Indeed it was at pains to do so, persisting in the requests that Ms Sharp provide a list of items she wished to have attended to.”13
[42] These are clear and positive factual findings made by the trial Judge who, as noted earlier, had the benefit of hearing all of the evidence over a five-day period. I have nevertheless carefully reviewed the briefs of evidence, the notes of evidence and the contemporaneous documentary record. Having done so, I find myself in agreement with the Judge’s factual findings on this issue.
[43] In particular, I note that there is nothing in the contemporaneous documentary record indicating that Westend had repudiated the contract by “walking off the job”. The Judge’s conclusions on this issue otherwise turned on credibility and reliability assessments of the competing evidence. As noted above, compelling grounds need to be shown before an appeal court interferes with factual findings turning on such assessments. Nothing in the evidence here compels me to reach a different conclusion.
[44] Accordingly, on the basis that there was no earlier repudiation of the contract by Westend (by “walking off the job”) which would have justified Ms Tugaga’s cancellation of the contract, I now turn to consider whether the alleged poor
workmanship justified Ms Tugaga’s cancellation of the contract.
12 At [56].
13 At [63].
Did poor workmanship justify cancellation of the contract?
[45] Ms Sharp was obviously of the view that the standard of workmanship was poor. Mr Lee Donald (and Mr Edgehill, who worked with Mr Lee Donald at the Property) gave evidence to the opposite effect. It is difficult to resolve the question of the quality of workmanship solely on the basis of these witnesses’ evidence, given their vested interest in the issue. Moreover, Ms Sharp rightly accepted in cross- examination that she is not an expert in painting or painting workmanship.
[46] A range of expert evidence was given at the trial on the quality of Westend’s
work. Evidence on this issue was given by:
(a) Mr Geoff Kerridge (for Ms Tugaga);14
(b) Mr David Neill (for Ms Tugaga);
(c) Mr Phillip Coveny (for Ms Tugaga);
(d) Mr Ryan McKenzie (for Westend); and
(e) Mr Grant McCauley (for Westend).15
[47] The expert evidence was detailed and in parts, highly technical and specialised (particularly the evidence of Mr Coveny). The witnesses also made extensive reference to exhibits, including a large number of photographs of various aspects of the Property.
[48] The Judge had the benefit of hearing all of this expert evidence as it was given, as well as following the extensive reference to exhibits. The Judge was
14 Though Mr Kerridge’s evidence was not advanced primarily as expert evidence. The focus of his evidence was factual evidence as to certain discussions between Ms Tugaga, Ms Sharp and Mr Paul Donald in or around March 2014. Mr Kerridge nevertheless offered his opinion on the paint workmanship.
15 Counsel for Ms Tugaga also referred to and placed some reliance on observations on the paint
job made by “Mr Painta Ltd”, in one of the alternative quotes received by Ms Sharp in April
2014. However, those statements are (inadmissible) hearsay (given they are relied on for the truth of their contents) and I accordingly ascribe no weight to them.
engaged in the evidence, and asked a number of questions during and at the
conclusion of the experts’ evidence.
[49] Having heard the expert evidence, the Judge concluded that the expert opinion was that the work that had been completed was to an acceptable standard.
[50] The Judge did not provide a detailed analysis of the competing expert evidence, or his reasons for preferring certain experts over others. However, I have read the briefs of evidence for each of the experts, together with the notes of evidence given at trial, in order to assess whether I should take a different view to that of Judge Harrison.
Mr Kerridge
[51] Mr Kerridge is an assistant manager at Valspar Paint (NZ) Ltd, formerly known as Wattyl NZ Ltd. He states he is a trained and qualified furniture finisher polisher, and has worked in the furniture and paint industry for 35 years. In cross- examination, Mr Kerridge accepted that he is very close with Ms Sharp and they “always called each other bro and sis”.
[52] Mr Kerridge gave evidence that, during the course of the works, he was invited to the Property and shown the painting works. He said that in his opinion, the job was very poor and “the thickness felt like it may not have had the required number of coats or microns thickness”. He also stated that in places, the paint which was sprayed looked like it was dry before it hit the weatherboard and base, giving a rough sandpaper look and feel.
[53] I do not place significant weight on Mr Kerridge’s evidence as to the quality of the painting works. First, he is not independent (though that would not itself preclude him from giving expert evidence). Nor does Mr Kerridge purport to have fully inspected the Property for the purposes of providing an expert opinion on the quality of the painting works. Rather, his evidence is limited to one or two high level observations, from what appears to have been a brief inspection of the Property at the request of his friend Ms Sharp.
Mr Neill
[54] Mr Neill is a director of DA Neill Ltd, through which he provides independent advice on painting, including proper workmanship standards. He gave evidence that he visited the Property on 18 December 2013, and viewed the exterior of the house from the ground level, the first floor deck level and through the open first floor windows. As noted above, he provided a report at that time, recording his observations. He noted some areas of incomplete painting, some joinery that appeared to have been painted shut and that some base boards were “marked with dried overspray, dust”. But the focus of his comments was that the painting works were incomplete. As noted earlier, Mr Neill’s conclusion at that time was:
As the painting contract has not yet attained practical or sectional completion, I am not in a position to comment on the acceptability or otherwise of the standard of workmanship on the exterior painting of 2 Kohu Rd, Titirangi.
[55] I pause to interpolate that it was unfortunate that this report was not provided to Mr Paul Donald at the time, as he requested. It may have enabled the parties to come to a common view as to what work, if any, needed to be rectified, and led to the completion of the painting work in 2014.
[56] Mr Neill returned to the Property some two and a half years later, on 13 June
2016, to carry out a further inspection. He was advised that no further painting work had been carried out since his initial inspection on 18 December 2013. Importantly, in his brief of evidence, Mr Neill stated:
The exterior is starting to deteriorate mainly because the contract in my opinion has never been completed.
[57] Mr Neill then set out a range of items that he considered would need to be carried out to “initiate a commencement of the work”, and that a competent contractor would be able to undertake that work under a fixed price contract.
[58] Mr Neill then went on to set out the results of his inspection. Most of this was focused on the painting being incomplete. He did, however, comment on some other matters, such as two of the windows needing to be remediated and painted (but does not say why); that the spouting needed to have paint removed, and that some
window joinery was painted so that it was sealed shut and “they have been painted
incorrectly”.
[59] Mr Neill also noted that the paint work of the Property appeared to have been undertaken by spraying the paint on broad wall areas, with brush stroke application on joinery items. He stated that “there is doubt whether the correct film build has been achieved”. He also stated that he viewed the paint left on site, and it appeared appropriate for the job and in accordance with the contract.
[60] Mr Neill went on to conclude that:
The application of the paint generally is inadequate and incomplete in a number of locations. There was inadequate and incomplete painting of weatherboards, and incomplete painting of joinery. It would appear that the decks had only been primed.
[61] He also noted that a paint manufacturer (Wattyl) 15-year guarantee was to have been issued, but had not been. He made the (somewhat obvious) point that “this could be due to the fact that the job is at this stage incomplete”.
[62] Mr Neill attached to his brief of evidence a schedule setting out the alleged defective or inadequate workmanship. Counsel for Ms Tugaga described this in his submissions as “an incredibly long list of defects and allegations of inadequate work”. I disagree. A notable theme of the schedule is that the painting is incomplete. Some other broad comments are made, such as “joinery needs to be painted correctly” and the base boards “have been painted over without adequate preparation”.
[63] In his reply brief, and based on evidence given by Mr Lee Donald, Mr Neill gave his opinion that:
…for the painting of the weatherboards it would appear that the requirements in the Wattyl specification finishing schedule have not been followed and it is therefore highly unlikely that Wattyl would issue the 15- year guarantee which is part of the contract ...
[64] Mr Neill also gave evidence in response to Mr McCauley’s evidence in
respect of the testing of paint thickness. In this context, he emphasised that the
painting job had not been completed and there was therefore no information as to how Mr McCauley would have known which areas were said to have been completed by Westend. Mr Neill also took issue with certain aspects of the technical paint thickness testing carried out by Mr McCauley. He agreed with Mr McCauley that it was not possible to fully assess the preparation work undertaken, but stated that it is possible to draw an inference from the painting work as to the preparation undertaken and assess the painting preparation using that information. Based on photographs supplied of the work undertaken to date, he stated that in his view, the “substrate” had not been adequately prepared.
[65] In relation to the weatherboards, Mr Neill stated as follows:
I disagree with paragraph 25 and 26 of Mr McCauley’s brief. There was not a smooth even finish overall. When I rubbed my hand over the paint it had a dusty dry surface in various areas.
Mr McCauley is correct that there were areas at different stages of painting. Not having been involved throughout the painting work I cannot categorically say at what stage the work was added in which location; however, using my experience I would be able to estimate where the work was up to in the various locations. As there were areas which were probably being prepared, areas which probably had a coat of primer and other areas which probably had only one or two top coats this job is nowhere near finished.
[66] In relation to the corrugated roof, Mr Neill disagreed with aspects of Mr McCauley’s evidence, though acknowledged he has not inspected the roof in detail.
[67] Notably, in his examination-in-chief, Mr Neill stated “from my point of view that top level looked reasonable”. He also confirmed in response to questions from the Judge that the one area that could be considered complete would be, with maintenance (under a maintenance contract) “up to the standard”. Similarly, in cross-examination, he agreed that the area that he considered complete was up to standard.
[68] In relation to the defect listed in his schedule to his brief of evidence that spouting needed to have paint removed, Mr Neill confirmed that there was a six metre length of spouting where there was some over-spray on the inside of the
spouting itself, but confirmed that could be cleaned off. Mr Neill also accepted in cross-examination that the issues he had identified of bubbling on the roof, indicating a lack of preparation, could also be due to a failure of the coat underneath and delamination. Mr Neill also accepted that there were no issues from a workmanship perspective on the balustrade.
Mr Coveny
[69] Mr Coveny gave evidence in response to Mr McCauley’s expert brief of evidence for Westend. In summary, Mr Coveny took issue with certain aspects of Mr McCauley’s evidence on the testing of paint thickness. Mr Covney said that the testing method utilised by Mr McCauley would not be able to differentiate between recent coats of paint and earlier coats of paint (which he observed, in a hundred year old villa, could be numerous). He noted that in all the locations he had tested (through taking samples from the Property at an inspection carried out in August
2016), he found that either one or two new coats had been applied. He therefore disagreed with an assumption made by Mr McCauley that three layers of paint had been applied.
[70] Mr Coveny went on to give detailed technical evidence as to his testing of the thickness of paint samples taken from various areas of the Property. Mr Coveny reached the broad conclusion that in certain of the areas tested, aspects of the primer were too thin, some top coats were too thin and some samples had no new paint at
all. He concluded that “the DFT16 at all locations indicate that three top coats were
probably not applied”. He noted that “for samples 2, 3, 5, 7 and 8 at the south, south-west and western elevations it appeared that one top coat had been applied however it is difficult to tell exactly”.
[71] The following exchange took place between Mr Coveny and counsel for
Westend in cross-examination:
Q. Would you say that visually there was no indication of any issue with the paint thickness, the levels of the paint?
16 “Dry film thickness” – being the required minimum film thickness, as specified in technical data sheets provided by the paint manufacturer.
A. Yes I would agree with that statement.
Q. Did you agree on that inspection that there were no issues with the gloss or sheen once the paintwork had been cleaned?
A. Yes I did.
Q. And would you agree that there was good adhesion of the paint to that area where you inspected on the second inspection?
A. Yes there was.
[72] Mr Coveny also accepted that in his experience, he has never had to provide the type of invasive testing that he had carried out to a paint manufacturer before they would issue a warranty.
Mr McKenzie
[73] Mr Ryan McKenzie gave evidence on behalf of Westend.17 At the time that the painting contract was entered into, Mr McKenzie worked for Wattyl NZ Ltd and had been approached by Westend to prepare the specification for the painting works at the Property.
[74] Mr McKenzie gave evidence that he attended the Property four times to inspect the works, while the painting works were being undertaken by Westend. He observed that “at the start of the painting works the Property was neglected. It is one of the most neglected properties I have seen”.
[75] Mr McKenzie said the following in his evidence:
It was my view that when I attended on-site during the painting works, the job was going well. My experience with Westend Painters is that the works are undertaken in line with good trade practice.
Each time I attended on-site I was satisfied that the right products were being used for the works.
[76] Mr McKenzie also gave evidence of an inspection he carried out as a result of
Ms Sharp’s complaint about bubbles in the paint in an area of the weatherboards. He
said that he attended and inspected the area of concern with Ms Sharp and “we could
17 Like Mr Kerridge, his evidence was primarily factual, rather than strictly expert evidence, though he did give opinion evidence as to his view of the painting work that had been carried out by Westend.
not see any problem with the painting job”. He went on to state in his evidence “that was the only issue that [Ms Sharp] called me out for and when I attended there was no issue”.
[77] Mr McKenzie also gave evidence of his other site visits (made at the request of Westend, following concerns raised by Ms Sharp in relation to brush marks on the balustrades, doors and window frames). Mr McKenzie said:
I attended on the property and inspected the areas that Ms Sharp complained about, not all the work in these areas had been completed or even finished at this stage. I did notice some brush marks but no more than was reasonable considering the previous condition of the areas.
[78] Mr McKenzie also clarified (in response to a question from the Judge) that the Solagard 10 to 15-year warranty was given in relation to the product, not the painter’s workmanship. Mr McKenzie explained that the contractor who undertakes the painting works will undertake to the paint manufacturer that the work has been carried out in line with the specification and in line with good trade practice. On this basis, Wattyl would then issue a guarantee in relation to the product.
[79] Mr McKenzie was not cross-examined.
Mr McCauley
[80] Mr McCauley was called to give expert evidence on behalf of Westend. The focus of Mr McCauley’s evidence was paint film testing, to measure the thickness of layers of paint. Mr McCauley concluded that all DFT he measured were in excess of manufacturer’s specifications data.18 He concluded that:
The overall painting was good with all preparation and paint application (where completed) undertaken to a good tradesman-like standard. As no work had been done for two years and there was no evidence of paint failure in any form, the only issues that were evident were cracking, which is out of the painter’s control and bubbling to roof paint, which is not the responsibility of the painting contractor as this is an existing failure which is impossible to predict.
It is my opinion that if the painting contractor was left to complete if the unfinished works would likewise have been completed to a good standard.
18 As noted above, Mr Coveny did take issue with some of the technical aspects of Mr McCauley’s
paint thickness testing.
[81] Mr McCauley also considered that more than five per cent of the Property had been completed, and therefore disagreed with Mr Neill’s assessment of that percentage completion.
[82] Mr McCauley was taken through Mr Neill’s evidence in some detail, including his evidence in relation to cracking in the paint. Mr McCauley disagreed that this was indicative of faulty workmanship, and gave evidence that even if fillers are used, the cracks will generally return. In this context, he was asked whether he had seen any even evidence that there was inadequate preparation and cracks being simply painted over, to which he replied “no. I was more than happy with the preparation that was done. More than happy”.
[83] Mr McCauley also stated that, in his opinion, it was unusual to see invasive testing on a residential property of the type carried out by Mr Coveny, and that this was “probably the first domestic job I’ve ever seen with invasive testing like that”.
[84] The following exchange took place between counsel for Westend and Mr McCauley in his evidence-in-chief (in respect of an area of the Property in respect of which there had been a joint inspection by the experts at the commencement of the trial):
Q. And did you see anything that gave you a concern about how it looked in the completed area?
A. No, I was, I was more than happy with the areas that were definitely finished and the process of the other areas were well on the way. I mean there was nothing, you know, it’s been up there for three years, two and a half years, you would’ve thought by now if there were areas that were failing it would be evident but none of the areas that I particularly saw where I’d put down and say, “That’s a real problem” you know, well adhered and still well adhered.
[85] The Judge also questioned Mr McCauley on what he (i.e. Mr McCauley) saw as the distinguishing feature between Mr Neill’s conclusions and his own conclusions. Mr McCauley stated as follows:
A. When we went and visited the site (inaudible 15:07:19) they inspected parts of the house that were completely different to mine. They were looking at the side of the house that wasn’t finished or anywhere near, there was still building works to be done, and you
know, so they went and inspected completely other side of the house, we were inspecting the areas that were finished, up on the other side of the house. So to me the reports were so far apart because we were inspecting two totally different parts of the building. (Inaudible
15:07:46) I think we are so far apart as far as the painting. When we met on the site there with the three of us we basically all agreed that the areas that were finished up to were no real issue and even was stated by Dave saying he would’ve had no problem, if the carried on like that they would’ve had no trouble finishing the job.
Q. Yes I remember he conceded that but insisted that really the entire building needed to be re-painted and that if you did that you'd have to re-do the finished part to have a consistent finish. Would you accept that?
A. Only on the base - look I suppose you're looking at it from two perspectives. You're looking at what would it cost to complete against what you're wanting another contractor to accept liability for. If I was a painting contractor looking at that building I'd be re- painting the areas that were already done just for I wouldn't want to accept responsibility for. But if you were looking at it from the perspective of what would I need to finish on the building well that's a different thing altogether. Those areas that finished up top, if, let me put it this way. If these areas were done three years ago and I'm now going to do those areas which one's going to fail first from a repaint point of view. I don't - from a perspective of completion there was nothing wrong what was done but if you're looking at it from a basis of another painting contractor coming in and accepting liability you're going to want to re-do the whole thing.
Q. So in essence does your view come down to the ability to complete the job that if that had been permitted the job would've been okay?
A. Perfectly fine. It was well, you know, the finish was good. Well on the way. I've seen some absolute disasters and that was no way a disaster. Looks good. It's definitely going to do the duration.
[86] Finally, in cross-examination, Mr McCauley stated:
I find it hard to really offer a — if the place isn’t finished it’s very hard to put a — you’re asking me to accept that it’s up to the design standard when it’s not actually finished.
Conclusions on expert evidence
[87] Having carefully reviewed the expert evidence, I find that the work that had been completed was of an acceptable standard. In particular, Mr Neill confirmed that the area he accepted as being complete was “up to the standard”. And while there may have been some defects (such as overspray on some spouting), these
appear relatively minor and there was no evidence that these matters could not have been remedied had Westend completed the contract.
[88] Further, much of the expert evidence was, in reality, focused on the painting job being incomplete, rather than inadequate. In this context, I attach some weight to Mr McCauley’s evidence that it is difficult to give an expert opinion as to the quality of workmanship on a partially completed project. This is consistent with Mr Neill’s observation in his first report that, given the project was incomplete, he was not able to comment on the quality of workmanship. This is also consistent with the
commentary and authorities referred to by the Judge,19 to the effect that defective
workmanship can generally only be measured at completion (i.e. to determine if the works have been completed to specification).
[89] It follows that poor workmanship could not have provided a lawful basis for cancelling the contract.
Conclusions on the contractual cause of action
[90] Having found that neither party had purported to cancel the painting contract as at 20 March 2014, and having found that there was no other basis for lawful cancellation, it follows that Ms Tugaga cancelled the contract when she filed proceedings in the District Court on 3 June 2014.
[91] Accordingly, Judge Harrison made no error in finding that Ms Tugaga had cancelled the painting contract. Mr Tugaga’s appeal on the contractual cause of action is therefore dismissed.
Negligence
[92] In parallel with her contractual claim, Ms Tugaga sued Westend in negligence, primarily in relation to the alleged defective workmanship the Property.
19 At [54] to [62], citing Oxborough v North Harbour Builders Ltd [2002] 1 NZLR 145 (CA) at
[20] and Yu v T & P Developments Ltd [2003] 1 NZLR 363 (CA) at [56].
[93] In her notice of appeal, Ms Tugaga states that “the negligence causes of action against Westend and Mr Donald were not considered”. That is strictly incorrect, as the Judge did observe that:
The claims of negligence amount to no more than allegations that Westend was in breach of its contractual duty to complete the work in a proper and workmanlike manner, but it was not given that opportunity by the unwarranted purported cancellation.
[94] Nevertheless, the Judge did not provide a separate analysis of the negligence claim.
[95] In her fourth amended statement of claim, Ms Tugaga pleaded the following duty of care on Westend:
(a) Prepare the surface so it was free of all loose material such as flaking or peeling paint, mould, lichen, dust and heavy chalk.
(b) Sand windows using electric sanders with dust extractors, apply one coat of oil base primer and three top coats of Taubmans acrylic enamel paint.
(c) Strip areas that require stripping using Sea 2 Sky, or Maxistrip or paint stripper pro.
(d) Fill all holes and imperfections.
(e) Apply one coat of oil base primer.
(f) Address small areas of rot by applying epoxy resin.
(g) Apply three topcoats of Wattyl Solagard paint to weatherboards and other areas.
(h) Not paint the gutter, downpipes and spouting. (i) Mask off windows during spraying.
(j) Coordinate the painting work adequately provide appropriate instructions to his employees and contractors.
(k) Ensure three experienced and qualified painters undertook the painting work.
(I) Ensure three experienced and qualified painters undertook the painting work over a period of eight weeks.
(m) Ensure an appropriate system of supervision and quality control of the painting work was in place and followed.
(n) Ensure the painting preparation work, and the painting, were undertaken in a proper and workmanlike manner.
(o) Exercise all reasonable skill and care in carrying out its obligations pursuant to the agreement.
[96] However, those matters at (a) to (m) above are (broadly) a recital of the specific contractual terms Westend undertook in the painting contract with Ms Tugaga, or specific representations that Ms Tugaga alleges Mr Lee Donald made in the pre-contractual negotiations.
[97] Putting aside the (complex) issue of concurrent liability in contract and tort, and assuming for present purposes that Westend did owe Ms Tugaga a duty of care in the terms pleaded at paragraphs 31(n) and/or (o) of the fourth amended statement of claim, Ms Tugaga’s appeal on the negligence cause of action against Westend must also fail. This follows from the finding that the work that was completed was up to standard.
[98] In short, Ms Tugaga’s claim in negligence adds nothing to the contract claim.
[99] Ms Tugaga’s appeal in respect of the negligence cause of action against
Westend is accordingly dismissed.
Fair Trading Act claim
[100] The Judge did not expressly address the claim against Westend under the Fair
Trading Act 1986 (“FTA”).
[101] Having reviewed the pleaded FTA claim, I consider that the claim is flawed. [102] For a representation to be actionable, including under the FTA, it must be a
representation as to a present or past fact. The mere fact that representations as to
future conduct or matters do not come to pass does not make them misleading or
deceptive.20
[103] Nevertheless, a statement relating to the future may carry with it an implicit representation as to present or past facts, for example, that at the time of making the statement, its maker intends to deliver the future state of affairs.21 As such, if it can be shown that the maker of the statement did not, at the time of making the statement, intend to deliver on the promise, liability for misleading and deceptive conduct can arise.22 The Court of Appeal has observed that the circumstances in which a plaintiff will be able to prove this will be rare.23
[104] Ms Tugaga’s FTA claim is pleaded at paragraph 36 of the fourth amended statement of claim.24 All of the pleaded representations are to as future facts or circumstances. There is no allegation in the pleading that at the time Westend made the alleged representations, Westend had no intention to deliver on them. This alone is sufficient to dispose of the FTA claim. However, I make the following observations in relation to two of the alleged representations.
[105] Ms Tugaga pleads that Mr Lee Donald represented that he would “ensure three experienced and qualified painters undertook the painting work over a period of eight weeks”. This is a representation as to a future state of affairs. As noted, there is no pleading that at the time the statement was alleged to have been made, Mr Lee Donald did not intend to deliver on it. Moreover, there is a sharp dispute in the evidence of Ms Sharp and Mr Lee Donald as to whether such a representation was made at all. The Judge clearly had doubts that it had been made and, having reviewed the evidence, I share those doubts. I also note Mr Lee Donald’s evidence that at the time the representation was alleged to have been made, he did not employ three experienced and trained painters. This further casts doubt on the likelihood of him making this particular representation. So again, I can see no basis to interfere
with the trial Judge’s factual finding in this regard.
20 Gunton v Aviation Classics Ltd [2004] 3 NZLR 836 (HC) at [240], citing with approval James v Australia and New Zealand Banking Group Ltd (1986) 64 ALR 347 (FCA) at 372. See also Muollo v Creative Engineering Design Ltd (2006) 8 NZBLC 101,675 at [25].
21 Gunton v Aviation Classics Ltd at [240].
22 Muollo v Creative Engineering Design Ltd at [25].
23 Muollo v Creative Engineering Design Ltd at [25].
24 Most are simply a further recital of the express contractual terms.
[106] The flawed nature of the FTA claim is further evidenced by the loss pleaded. For example, it is pleaded that the statements were misleading because, inter alia, three top coats were not applied to the weatherboards and other areas; a 15-year warranty was not issued by Wattyl; and a five-year workmanship warranty was not issued. However, these circumstances were the result of the works not being complete, rather than as a consequence of any misleading and deceptive conduct.
[107] Ms Tugaga’s appeal on the FTA cause of action is accordingly dismissed.
Consumer Guarantees Act 1993
[108] Ms Tugaga also appeals against Judge Harrison’s finding that Westend was
not liable to Ms Tugaga for her losses for breach of the Consumer Guarantees Act
1993 (“CGA”).
[109] As Mr Cowan highlighted at the appeal hearing, this cause of action had not previously been pleaded by Ms Tugaga, but was rather a matter raised by the Judge during the trial itself. In her notice of appeal, Ms Tugaga states that the CGA cause of action against Westend was not considered.
[110] It is correct that the District Court judgment does not expressly address the CGA cause of action, which is unfortunate. However, that is likely to be because the result under this cause of action inevitably follows from the Judge’s findings on the contractual cause of action. As the Judge (rightly) noted at the conclusion of his analysis of the contractual cause of action, “that effectively resolves the litigation.”
[111] In the fourth amended statement of claim, Ms Tugaga pleads that, pursuant to s 28 of the Consumer Guarantees Act, there was a guarantee that Westend would carry out the preparation and painting services with reasonable care and skill. Ms Tugaga that pleads that Westend breached that guarantee, in that it:
(a) Failed to meet the preparation, painting, paint thickness and other requirements of the Wattyl technical data sheets.
(b) Failed to meet the preparation, painting and other requirements of
AS/NZS 2311:2009 Guide to the Painting of buildings.
(c) Failed to obtain meet the requirements of the Wattyl Specification.
(d) Did not provide the fifteen year Wattyl guarantee.
(e) Did not take reasonable skill and care in training, supervising and/or directing employees and/or contractors.
(f) Did not take reasonable skill and care in undertaking preparation, painting and other work.
(g) Did not take reasonable skill and care to avoid the defects, poor and/or incomplete work such as those specified in schedule 1.
[112] Given my findings in relation to the contractual cause of action, as well as my assessment of the expert evidence, the appeal on to this cause of action also cannot succeed.
[113] A similar conclusion is reached in relation to the pleaded claim in relation to s 29 of the Consumer Guarantees Act. Paragraph 44 of the fourth amended statement of claim pleads that:
… there was a guarantee that Westend would carry out the preparation and painting services so that there was a guarantee the service and product resulting would be reasonably fit for any particular purpose and of a nature and quality that it could be expected to provide a protective, functionable, useable exterior to the property.
[114] Again, the evidence (and in particular the expert evidence) does not demonstrate that any such guarantee has been breached. Furthermore, the nature of the guarantee pleaded further serves to reinforce the difficulty, if not impossibility, of assessing whether any such a guarantee has been breached prior to the painting works being completed. This again highlights that the central issue on this appeal was who was responsible for the works not being complete.
[115] For these reasons, Ms Tugaga’s appeal in relation to the CGA cause of action
is also dismissed.
Personal claims negligence and under the Fair Trading Act against Mr Lee
Donald
[116] In light of my findings in relation to the negligence and FTA causes of action against Westend itself, it necessarily follows that the claims against Mr Lee Donald personally cannot succeed. Ms Tugaga’s appeal in these respects is also dismissed.
Scaffolding claim
[117] As noted earlier, Westend counterclaimed in relation to an unpaid scaffolding invoice (in the sum of $8,210.05), plus interest (from the date of filing of the counterclaim to judgment). Judge Harrison found the counterclaim proved and entered judgment against Ms Tugaga in the sum of $8,210.05. He did not address the question of interest.
[118] Ms Tugaga appeals against the Judge’s findings on the scaffolding
counterclaim. Westend cross appeals and seeks an order for interest.
The source and nature of the obligations regarding scaffolding
[119] There was some dispute between the parties as to whether the provision of scaffolding was a term of the painting contract itself:
(a) Westend’s counterclaim pleaded that “on behalf of Shirley-Ann Sharp the defendant arranged scaffolding for the painting works at 2 Kohu Road, Titirangi”.
(b)Ms Tugaga’s amended statement of defence to the counterclaim pleaded that “it was a term of the contract for painting services that the trust would pay the defendant’s reasonable costs in engaging scaffolding subcontractors”.
[120] I do not consider that the provision of scaffolding by Westend (either by itself, or via a third party contractor) was a term of the painting contract. This is made clear in the painting contract itself. Clause 9.1 provides as follows:
It is the intention of Westend and agreed by the Client that it is the responsibility of the Client to provide and have erected scaffolding to enable the Services to be undertaken (where in Westend’s opinion it is deemed necessary).
[121] On this basis, the “Services” to be provided by Westend under the painting
contract did not extend to the provision of scaffolding. Rather, the provision of the
scaffolding was Ms Tugaga’s responsibility. It does not appear to have been
disputed, however, that Westend organised the scaffolding on Ms Tugaga’s behalf.
[122] Mr Alexander Miller, the builder on site at the Property, confirmed in his evidence that the scaffolding was used not only by Westend, but also by the builders themselves, as well as the roofers and a glazier who was also on site. Mr Miller gave evidence that he had some “small form scaffolding” of his own, but this was only used by his team a few times, mainly in inside areas.
[123] Westend’s scaffolding invoice dated 21 January 2014 included a charge for “commission” of $1,004.75, said to be for “providing contract service on the clients [sic] behalf - under the terms of trade cl 4.8 10% commission applies to total job”.
[124] However, cl 4.8 of the painting contract between Ms Tugaga and Westend provides as follows:
Where Supplier has provided additional contractor to carry work on behalf of Westend Painters, an [sic] ten per cent (10%) commission fee will apply to contractors [sic] quoted price.
[Emphasis added]
[125] As noted above, the provision of scaffolding falls outside the Services to be provided by Westend under the painting contract. For that reason, the provision of scaffolding cannot be work “carried out on behalf of Westend Painters” for the purposes of cl 4.8. Accordingly, and absent any evidence of a separate agreement between Ms Tugaga and Westend for the payment of a 10 per cent commission, the sum of $1,004.75 (plus GST) ought not to have been charged in Westend’s invoice of
21 January 2014.
[126] The balance of the invoice is also disputed by Ms Tugaga.
[127] As a preliminary point, Ms Sharp initially denied (in her email dated
24 January 2014) having seen or agreed to the 13 August 2013 quote from Summit Scaffolding Ltd. However, she later accepted in cross-examination that she had been provided with a copy of the scaffolding quote at the time it was received by Westend. She continued to dispute, however, that she had agreed to the quote. I note that there
is no contemporaneous documentary evidence of Ms Sharp disputing the scaffolding quote at the time it was provided to her in mid-August 2013.
[128] Ms Sharp said in her reply evidence that there was an agreement between her and Mr Lee Donald that Ms Tugaga/Ms Sharp would pay $4,500.00 as a “cash job” for the scaffolding, plus a further $1,000 at the completion of the job. Westend denies this, and says that its scaffolding invoice is properly payable in line with the quotation received from Summit Scaffolding Ltd.
[129] The trial Judge, having heard all of the evidence in relation to the scaffolding claim, concluded that he was satisfied that the claim had been proved. The Judge did not expressly address the alleged oral agreement for a “cash job”, but it is implicit in his finding that he rejected Ms Sharp’s evidence on this issue. He also refers to the
$4,500 cash payment as a “part-payment” towards the scaffolding costs. The Judge also commented on Ms Sharp’s evidence in relation to the scaffolding issue at [41] to [45] of his judgment, and concluded that he could discern no valid basis for the refusal to pay the invoice.
[130] Having reviewed all of the evidence on this particular issue, I am not persuaded that (other than in respect of the commission charge as discussed above), I should interfere with the Judge’s findings on the counterclaim.
[131] In particular, it is notable that at no point in the pleadings did Ms Tugaga allege or plead anything in relation to the alleged “cash job” of $4,500 (or $5,500). Rather, Ms Tugaga’s amended statement of defence to Westend’s counterclaim made it clear that the scaffolding invoice was disputed on the basis the painting job had taken too long, and accordingly the scaffolding had been hired for longer than it
ought to have been. 25 In my view, the absence of any pleading on this point casts
considerable doubt on Ms Sharp’s allegation of a “cash job” of $4,500, which only
emerged in her reply evidence.
[132] The contemporaneous documents are also inconsistent with there being an agreement for a cash job of only $4,500 (or $5,500) for the scaffolding. When first
25 Amended statement of defence to counterclaim, paragraph 3.2.
presented with the invoice for the scaffolding in January 2014, Ms Sharp did not refer to the alleged “cash job” of $4,500 plus a further $1000 on completion. Rather, her initial response was that “we are not happy with the job and are seeking legal advice”. And, when Mr Paul Donald followed up on the scaffolding invoice a week later, Ms Sharp simply denied seeing or agreeing to the original Summit Scaffolding Ltd quote. Again, she did not refer to any alleged cash job for only $4,500 (or
$5,500). Further, Ms Sharp did not refer in her original brief of evidence to any alleged agreement for a cash job for the scaffolding of $4,500 (or $5,500). Rather, she said that in around January 2014, she was asked for more money in relation to the scaffolding “but did not feel comfortable with having any more money paid to Westend until my concerns had been sorted out”.
[133] Moreover, the Summit Scaffolding Ltd quotation was for a sum of $5,278.00 plus GST to erect the scaffolding, and then a weekly hire of $718.00 plus GST. If Ms Sharp’s evidence were correct, a cash lump sum payment of only $5,500 (plus GST)26 would be very low when compared to the quote for erecting the scaffolding plus the weekly hire (which totalled some $11,000 plus GST).27 I consider this
further undermines the likelihood that Westend agreed to accept only $5,500 for the scaffolding.
[134] Counsel for Ms Tugaga also sought to make something of the fact that the invoice was not rendered until January 2014, and that it recorded an earlier cash payment of $4,500. I am not persuaded that this provides a foundation to intervene in the trial Judge’s findings. It appears that the invoice was rendered once the paint works had been put on hold and the majority of the scaffolding had been removed. Moreover, the invoice itself indicates that 21 days hire for the remaining scaffolding at the back of the Property had not been charged for at all, and seven days labour and hire for scaffolding on the roof to access the chimney has also been provided at no cost. I also note that the invoice charged only 70 per cent of what had originally
been quoted for the erection of the scaffolding itself.
26 Being the $4,500 paid by Ms Sharp, plus the further $1,000 that she accepts would be payable
on the basis of the alleged ‘cash job’ agreement.
27 Being $5,278 plus GST for scaffolding erection, and $5,744 plus GST for scaffolding hire (over an eight week period).
[135] Taking all of these matters into account, and save for the observation above in relation to the commission charge, a total of $7,054.59 remains to be paid by Ms Tugaga in relation to the scaffolding invoice.28
[136] Westend cross-appealed on the question of interest. Given the invoice (in the reduced amount, once the commission charge is removed) was due and payable at the time it was received by Ms Sharp, I can see no principled reason why interest should not be awarded. Westend sought interest at the prescribed rate of 5 per cent per annum for the period 26 June 2014 (being the date the counterclaim was filed) to
27 October 2016 (being the date of judgment).29 On the basis of the reduced sum
due under the invoice of $7,054.59, interest of $825.30 is awarded.
[137] The District Court judgment on the counterclaim is accordingly quashed and judgment is entered in favour of Westend against Ms Tugaga in the sum of $7,979.89 (including interest).
Concluding observations
[138] Given the relatively small sums involved in this case (at least as compared to the time and cost inevitably involved in bringing this proceeding to a five-day hearing in the District Court, with multiple expert witnesses, followed by a two-day appeal in the High Court), I must express my concern that the matter was not resolved more speedily or efficiently than it has been.
[139] It is unfortunate (for all parties concerned) that the legal and expert witness costs involved have in all likelihood exceeded the sums in issue. It is also most unfortunate that determination of the claim has spanned some three years since originally filed. I do not know whether the parties attempted alternative dispute resolution, for example mediation, which may have enabled matters to be progressed
in a more timely and efficient manner.
28 Being $6,134.43 plus GST of $920.16. The sum of $6,134.43 is arrived at by deducting the commission charge of $1,004.75 from the (GST exclusive) invoice total of $7,139.18.
29 A total of two years, four months and one day.
Costs
[140] As the appeal has been dismissed, my initial view is that costs ought to follow the event in the ordinary way (on a 2B basis). However, I should emphasise that this is my initial view only, and is offered in the hope it enables the parties to reach an agreed position on costs.
[141] If that is not possible, then costs memoranda may be filed. A memorandum on behalf of the first and respondents may be filed within 15 working days of the date of this judgment. A memorandum on behalf of the appellant may then follow within a further five working days. Absent a request by either party for a hearing on the question of costs, and unless the Court directs otherwise, I will then proceed to
determine costs on the papers.
S Fitzgerald J
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